The URL can be used to link to this page

2005 10 12 IABP.O. Box 1504 La Qu1NTa, CALIFORNIA 92247-1504 78-495 CALLS TAMPICO (760) 7 7 7 - 7 0 0 0 LA QUINFA, CALIFORNIA 92253 FAX (760) 777-7101 AGENDA INVESTMENT ADVISORY BOARD Study Session Room 78-495 Calle Tampico- La Quinta, CA 92253 October 12, 2005 - 5:30 P.M. CALL TO ORDER a. Pledge of Allegiance b. Roll Call II PUBLIC COMMENT- (This is the time set aside for public comment on any matter not scheduled on the agenda.) III CONFIRMATION OF AGENDA IV CONSENT CALENDAR Approval of Minutes of Meeting on September 14, 2005 for the Investment Advisory Board. V BUSINESS SESSION A. Transmittal of Treasury Report for August, 2005 VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - September 2005 B. Pooled Money Investment Board Report — July 2005 VII BOARD MEMBER ITEMS Vill ADJOURNMENT INVESTMENT ADVISORY BOARD Business Session: A Meeting Date: October 12, 2005 ITEM TITLE: Transmittal of Treasury Report for August 31, 2005 BACKGROUND: Attached please find the Treasury Report for August 31, 2005. RECOMMENDATION: Review, Receive and File the Treasury Report for August 31, 2005. John M. Falconer, Finance Director T4'y,l 4 XP Q" MEMORANDUM TO: La Quinta City Council FROM: John M. Falconer, Finance Director/Treasurer SUBJECT: Treasurer's Report for August 31,2005 DATE: August 31, 2005 Attached is the Treasurer's Report for the month ending August 31, 2005. The report is submitted to the City Council each month after a reconciliation of accounts is accomplished by the Finance Department. The following table summarizes the changes in investment types for the month: Investment Be innin $ (296,745) Purchased $ 14,705,033 Notes (1) Sold/Matured Other tnam $25,858,208 25,858,208 ��a 33 $(9,000,000 (9,000,000) Cash (3) LAIF 34,858,208 1,000,000 (2) (10,000,000) 154,349 115,675,363 154,349 US Treasuries (2) 115,521,014 (2) 0 (20,6 59) 28,570,797 20,659 (20,659) US Gov't Sponsored Enterprises (2) 28,591,456 0 0 Commercial Paper (2) 0 0 Corporate Notes Mutual Funds - 3,561,182 7,838 1 c 14n nnn nnm 133.690 3,569,020 $ 188,081,676 71,838 $ 5,846,561 I certify that this report accurately reflects all pooled investments and is in compliance with the California Government Code; and is in conformity with the City Investment Policy. As Treasurer of the City of La Quinta, I hereby certify that sufficient investment liquidity and anticipated revenues are available to meet the pools expenditure requirements for the next six months. The City of La Quinta used the Bureau of the Public Debt, U.S. Bank Monthly Statement and the Bank of New York Monthly Custodian Report to determine the fair market value of investments at month end. { 3aZ 1� Date John M. Falconer Finance Director/Treasurer Footnote (1) The amount reported represents the net increase (decrease) of deposits and withdrawals from the previous month. (2) The amount reported in the other column represents the amortization of premium/discount for the month on US Treasury, Commercial Paper and Agency investments. (3) The cash account may reflect a negative balance. This negative balance will be offset with transfers from other investments before warrants are presented for payment by the payee at the bank. N C C CD C C C C C C C d O O Z O Z O Z O Z O Z O Z O Z O Z O Z W N c O O- (O > c E n oy v a00. �» c nvn� 7 U N C N C a N o �, U ao0 c _ � N CO U _U LL LL d U) a o y C 0 H N y d d > C C j2 � >. l0 T 7 E_ (0 a)d (0 (C d N T 'm0 0)d >. v N N N N OOi N N O O y d jj N N j N N o O Y C fI) «> N o N C C C G Q o 0 0 0 0 V H Q N d N N d U N a d> L N a a 0 T-i a d o a o a o E E E E n d 2 > d c E TN y O 000 O �(j O O o N N H d o o 0 o o E m c y. �0000 E 0 0 0= g n- o o nc o i»»»ei C) 0 0= W 0) d 0 y O O O m fA 69 U- X d V Cl) fA Cl) (A O V V V di Q fA O C C o 0 0 J V p co O O 0 O Q j C G Iq Iq O tO O Z V 0 �v M 7 > 0 0 0 0 0 00000 O O O O O o 0 y c o 0 o o C ID 0 N O O O u O O O 0 0 O O) O p O O ems- N(DOON oo c, O N O O fA 4Y O O O O O y E 0 0 0 0 c c 0 0 0 C o o 0 0 0 0 0 0 0 0 0 Q aE o 000000 O O O O o M u� LO N o N Z � N O 0 O C d 0 0 O O o O O O U7 0)Q O M O O m O (O (n O O N O Z d O 0 o o 0 0 N- O O O c O Oo a o o O o o O O O O LL7 O LL7 (OD O u O u) 00t00 O (,y O O Q p N (O 0 c N O _ Q O O O O O y E 0 0 0 0 o 0 0 0 0 0 o o 0 o o O E LL O O O O o O O O m O N (OO z O � y y C C N d C o Z .G C o - U Q C O •7 N O E m L U d U N m N N 'O m f0 L Z m J o 3 (7 Q= LL N y o da O U N v d U m y y z C C LL O - >, O J y y C C C c o (p N .... N C 'U C C N> O o a > ) d O f0 co N O O o O N (i d 0 (0 m as U U In C O _a N 2 Q o m O Q N N o d d (D c)M N d in 20 .J.. N o. C E c o Q v y O a d L o Z v rn zO o y Q -d0 a rnYcn c 0 LL 0 c c 12 c o 3 m v m m o � N 75 N -U� Cmco a m c E c C ` E m o c c fi y m a E N ooy y d E N C m O =_ o a (2 d l6 J U J N > E '] N E m �� ZEE€E a) o> Boa m S "> _� O E o c m o m o x E Z U m0cn E Q > c (n y E d EZxLL do cmmm�o E Ucc d N Q d T aTicc d N E O C �C O �= F O d d d d d U C '0 d 0 (0 C l0 O V O) N y YO d r y vi E UiLLLLLL E o o Ewa H U U 7 4. U J - to 0 0 0 0 h M V O (MO .�- cq (00 (V th N co 0 0 0 0 0 0 o 0 >rrrr»r 3aa33t33 zzzzzzzz y o000'3500 C C C C C C C C mmmmco e-eee eepe O a M h N N N N jp OWN OI NN W O �. Ci N.-(V .-�0 V M M� M tNl f7 V M O 1.00 W 0 0 0 t9 N N IA N� N 1� N O N N N N 0 0 00 0000 O O O O O N O N N 0 0 QCO Oe`�°'v�M� 0BgSogg0 ggggg c sv O 'oOcornMrnro 0, co W W I.: Ili O O M � 80mrm 0 � N N N tV tO tpNN W fpO tD yh M (q NCO c1t cl co m 0 0 0 0 0 0 0 rrrr>rr zzzzzzz o 0 0 0 0 0 0 C C C C C C C mmmmmmm C ^0DM0 ° 1� iO W coW O In N � n N t0 W � OI W O 0 0 0 0 0 0 O O O W m Or O' •- ? N N O O O N O O O O O O NN O O L� O W O N a 080000 $08$$8 SgoS§ N N V N N O 'o }}�pp O �p O MO) TO.§) N c') N N N W t W 1O m O7 O O O N po W N (OhN�0�pp1 W O^O W O01 000100?� Ol Ul N N N N 2 z z Z Z Z Z Z zzzzzzz N V=1 N V'1 UI N N d y d v v w a rr-F-F-rr-� viuivivivi�v N 71 N N N Cl N C �C C C C C C C j C C C C C C C E E E E E� E �EEeE E N 2a vd 0 00000�$0c z2 ooQm000 c o 0 o o `O o 0 OE -D a o o 0 0 o o 0 a OOOOOO000ID Z Z Z Z z z Z Z Z Z Z Z Z Z Z o$000000U? NN o0 ZZZ-C X Y Y Y X Y Y Y Y Y Y Y Y Y Y C c C C C C C C, U C C co C C C C C mmmm9C'o mmmmmm¢ n m c c c YC mm m w w � N > > 7 =) 0 0 o � � °� �ornmN m Nm m m 0 « N N N N 0 0 0 Q) O g Q m m N o o,p-- N 0 N N O O O O M thNm O O O O 69 y m o m �d ornrn a� H9 f9 0) ID D V m N 0 0) IDm .0 N o T O m l i C N O - N CND aee -T N >. 0 a rn c cc � LL 'a c C a a a U U T E T T c C C ' U C W N 2' j- L y v > NQ C N C Q C U U d O o E N ¢ �a O m m c=o$ N N q oV; N Np 1L lL d y uqi o V N LL a. N oE�� E w O, U cnUQ T B v E OI � C) C a O O V N N N N N N N - .- .- .- .- .- - p O Ta a Q Q Q a] m a Q Q o 0 0 0 0 0 0 0 0 0 0 0 0 R� «Q�K��R�2KK L_L_ 'D 'cp N O O O C C C C O O O Cp Cp C coO O'V G1O (OG OwO mo mmyy(Gm 0� t3 'cZ CO CO CO c i0 t6 Of T C�1 N Of N N N N N N N N N C 'C C 'yyC 'C 'C 'C 'C 'C 'C C C C y «N urLLv[7t� Nh(n(n(nU)p w wp� o w 00 V U M== 0 0 0 O Mp OO 0'p O pj W NNNOt Ol y7 W 0000000NN N N N N N O T.-.-.-.-.-.- � e-.--.-- - -.-.- Q M N o m m O O N N m m m N ri 0 ri t9 � N np y N J y C N � � N �vaaa¢aaa¢aaaaaaaaaaa Q zzzzzzzzzzzzzzzzzzzzzzzz H 0 0 N i O i i m 0I m m N M f9 N O � N M � a? o o o 0 O o o o 0 0 o 0 0 0 o 0 0 0 0 I� n 0 r m a0 m w o? m m m m aD m co m (ORa0 m m OR N N N N N N N N N N N N N N N N N N N Y N lCp �a �c �c cc C �cp �c �cC �c {c �aq �Cp �Cp �Cp (c IC �E E E E E E E T w E E E E0 E E E dE E dE dE ¢¢ ¢¢Q¢¢¢ �3¢¢¢¢a¢¢¢ O N VI N Nlui` VI VI N N VI N N N N N i� N ------------ N N N d W N UOl N N N W N N 4) W N N N N �»>r>r>r»r>>r»>r> a ° v to d i v ., N o j O YV C� a w `_`arn LL ?'m in a`_` al'n grnaYYYVU� vaL) �YU15 uUa V a�? mm c �a Q C) Cl N y O' O f0 m c Y O C mm CY ) CY �Uj (n �n mm O LL N Y C Y t2 C1 C C m �m C m Cm �m hN"' mm0 g 6m jcoo T g CR 05 O�fn co70>>VJ (a OtliO i c �O7�fn 7 QO 00 Q07 Q 7O N W vQQ� y c 0 0 ¢_ $ O Q O K O R LL iT a m NNN C U m N N N O 000 U' O ao p � N N N N 5 .c O z Q rn c �U C ca C LL N C := ca Q aci c Q a) E LO c C p 00 d o > N_ J co m M O E C j E L) U) ll), 00co •- 1— O 0 1` r CO O CO (0 L CV O CM Mr-OMCO —7 L Q L Q N h 0— 0 a Z ILZ N to o O � v ao O 69 ER Q m .•' �- M Z Y M Z U') O w U*)0 N Q rm+ !O N M co C , O R actO O 0. 0 O r` T a O O O o� r� 0 1 : .r o o C to C •L O O M '` IL r P' a �' r � v c rn LL rn c Li c m O O 75 O O O m O O O O o,,o aaaaa i c.0s aan. >� ~ rn d N a) 2?2 >% O, O) m m c :° co m c m U fn fn (n to (n N U fn fn fn N N m N U ~ U ~ ui vi m m C f0 L Ci N ca 0) O) fl m c O U L m L w v m U C m U a� 2 C 8 M � 4f co « Z r-6 E `-0, (ya Z UN O O E t� C Z IL '0 c Z m mmd C a- C w E m N w m a` C .y. a 4)am M IL ca cn E U) �E m c�wE Ev c y }}}}} c m w C } 06 co c C 4 N 'om c UUUU� c E 0000 _N p E c oE WU- m m Y i (O m°J°tLtLlLtLtL �;a df m Y f0 otiu a w 4 E ra YJ m .. O H y m c > COL =z0ul-: 2 g� �F- O > CO _=z0U- m L N___ 7 �f- O C > Saa-j •_ m C O a « t , 3 LL . 8 2 ) A ~;/\$\(f/§kk§(ƒ& $}§R §&I ) )\k§§§%k§}!\§§fAbK ] _ M f w J Cl! . J R Ct k a- \ « ¢¢E! E / n=�■ A ea%F''Re k§ . . a-}0w ®CD d . $ ! l 0 c � \ LLLL ! � /. ■ �#) ! f j ffff� k [\�_ § k}. k /)))# \�\ ;I2(fkk2}/ƒ!k}!■� ��2 `!/2 �!�_ 2]5 2 �; z ƒ\§I)k��/2i2 )U)2 �0— \k\ k I 0!]))kk$k$§Wf2\kk City of La Ouinta Reconciliation of Actual and Surplus Funds City, Redevelopment Agency and Financing Authority Augusl3l, 2005 of Actual Funds 188,081,676 FLesstry cash Funds (1•�)n-Surplus Funds of Sur lus Funds (2,295,336) $185,785,340 City Cash & Investments Surplus Surplus Bank Accounts Sur lus T e Book Yes Ad' Yes Name - Availablli Wells Fargo - Demand No Checking $14,380,023 $ $ Petty Cash - Demand No N/A 1 •�272 72 - 27,285 Wells Far o/Housi -Demand Total - Bank Accounts Yes Checki $14,408,288 $ 27,265 $ - $ 27,265 Amortized U. S. Treasury „e Bank of New York -Demand Yes Yes U.S. Treasury No[e U.S. Treasury Nole 4,970,248 5,000,605 Bank of New York • Demand Bank of New York - Demand Yes U.S. Treasury Note 3,997,500 Bank of New York - Demand Yes U.S. Treasury Note 5,001,856 Bank of New York - Demand Yes U.S. Treasury Note 4,996,909 3,990,989 Bank of New York - Demand Yes U.S. Treasury Note Ad' Surplus Yes 48 4.970.248 05 5,000,605 08 "32,959,433U.. 3,997,508 856 5,001.856 909 4,996,909 989 3,990,989 315 5 001 315 430 32,959,430 Bank of New Vork -Demand Yes FNMA 5:052,876 °•��•°rO 1,997,741 Bank of New York - Demand Yes FHLB 1,997,741 1,997,741 1 997.952 Bank of New York •Demand Yes FHLB 1,997,952 1,997,952 2,517,881 Bank of New York •Demand Yes FHLB 2.517.881 2,517:881 1,979,641 Bank of New York - Demand Yes FNMA -Discount 1,979,641 1,979,641 Bank of New York • Demand Yes FHL Mortgage 7,558.150 7,558.150 7,558,150 Yes FARM CREDIT 4,935,271 4,935,271 4,935,271 Bank of New York •Demand 2531.285 _ 2,531,285 Investment Fund T e Bookame 7Localency •Availabili Sur lusF Yes State Pool 23 - Clty - Demand - Yes State Pool 638.603F 3 838,603 -RDA -Demand 25,858,208 Surplus Surplus No Ad No $14,380,023 $(12,084,687) $ 2,295,336 1,000 1.000 $14,381,023 12,084,687 $ 2,296,336 Surplus Surplus Yes Ad Yes 22,219,605 22.219,605 3,638603 3638,603 25,858,208 25,858.208 E urplus Surplus No Ad No All Funds Surplu Actual % �0.0157j% 7.66 77% All Funds Surplus Actual % Yes 17.5240% 18.9748% Ali Funds Surplus Actual % Yes 15.1906% 16,4483% All Funds Surplus Actual % Yes 13.7484% 14.8866% Total - Stale Pool 48.4830X 50.3098X 87,388,435 87,388,435 87 388,435 Total City Investments 101,796,723 14,381,023 12,084,887 2,298,336 54.1237% 50.3255X 87,415,700 87,415,700 Total City Cash & Investments ------------ Fiscal Agent Investments Surplus All Funds Surplus Portfolio -City Investments Amortized Surplus Ad' Surplus P Yes Surplus No Ad No Actual % Yes Custodian • Availabili Sur lus Issuer/T e Value Yes 2002 RDA U.S. Bank-CIP Yes U.S.Treasury Bill 27,949,117 9,978,787 27,949,16 9•g76'767 2g•97e.7'17 - 2004 Finance Authority •CIP Yes Yes U.S.Treasury Bill U,S.Tfeasury Bill 14,981,628 14,981.628 14,981,62. 2004 Finance Authority -CIP 2004 Finance Authorit -CIP Total • U.S. Treasu Yes U.S.Treasur Bill 29,808,421 82,715,933 29.808,421 82,715,933 29,808,421 82,715,933 g3.9787% 47.6198% Civic center u.a.°eun - �,.jo Civic Center U.S.Bank - Debt Svc • -- YES 1994 RDA U.S. Bank -Debt Svc YES 1995 RDA U.S.Bank -CIP YES 1995 RDA U.S.Bank - Special Fund YES 2004 Fin Auth - 1995 US Bank - Escrow YES 1998 RDA U.S.Bank -CIP YES 1998 RDA U.S.Bank - Dbt Svc YES 1998 RDA U.S.Bank - Special Fund YES 1998 RDA U.S.Bank -CIP YES 2001 RDA U.S. Bank - Dbt Svc YES 2001 RDA U.S. Bank - CIP YES 2002 RDA U.S. Bank - Dbt Svc YES 2002 RDA U.S. Bank - CIP YES 2003 Taxable RDA U.S. Bank - DS YES 2003 Taxable RDA U. S. Bank -COI YES 2003 Taxable RDA U. S. Bank-CIP ES YES 2004 Fin Auth US Bank • CIP 2004 Fin Auth US Bank - COI YES Subtotal • Mutual Fund Total Fiscal Agent Investments Grand Total 1 at American 1st American 1st American 1 st American t st American 1st American 1 st American 1 sl American 1st American 1st American 1st American 1st American 1st American 1 st American 1 st American 1 st American 1 st American 1 st American 1st American 7Surplus Surplus No Ad No 86,284,953 86,284,953 86,284,953 45.8783% 49.6745% 188,081,fi76 173,700,653 - 173,700,653 14,381,023 12,084,687 2,298,338. 100.0000% 100.000OY. 63 6,904 ) 3,561.952 Surplus Ad' Yes 63 7101 63 101 6,904 6,904 3,561.952 3,561.952 3,569,020 3,569,020 A O F- O O A 0 0e} a0 OOi C to N O CO N W to N O O t0 A O 0 0O N A h Cep N CAI NN C .-A N NaD O .�. kc) to 4 �n'ooAv �oof7'a RR�u a CV m a p f0 rn N ppj N ��pp CAI O M rn M t+f l6 t�1 W O 1O 0 O .0.. IL lL • N Q N O A O cOtpO C�O O M$ A� n W m NN •n ' �OrA coNCQ con WOg tO_ wO O to 1- p v N C6 �� (V � O eo l0 t0 9tlM ryry � P7 0 0 N tN0 l0 0 a0 tD N p ' m 10 M taCtoo0p o.�{ � O C O t/ LL C4 thMM^N aD��NN n tO10 • V nI. N aN E 1 �tONo' o M' 0000� `t tO a0 A A N O O A y� O Cl) A O U. �� N M �Cl) p p� c to�ni�� W V C4 Acli Z a �Cpp Q f00 O n bpp a0 r p O pp 'S Nj �. ° O 0) O L(Lo � ok m C Av C MLL0 N OtOO cm 1oO04 N A L C2to co pp oo � E 9 °cy c+;gP- A OtA t(op dti h l7 N A LL 0 COO � p� t o tV O (V O O pOp N O L MOORS O ° to p O M 1 - 7 A M tMq N co 0 e! tD O co m I,Y Qa �r..� M W fl��MrO�N fhtpp C7 O CCoo L CO cV ch Et F0 i c L C<t Q c c ~ c N cc a a _ c • d 2 C • :� A O Eq qC m C C c m d G 71� M we a) • a r {7 >�° 4C( o y t3 c C L' c t c�;•—yu'f as wv)woctiaF- 0 C L 2 a- 6 Ir i o eeee e eeee e -e —e e 0eee 3O O'c'I NIP- CO Ih N Ma N CMOO tD �O CNOMI��O CaOOO VCO (0 M N r t0 7 O O Ih ffh� O M R M "Z V O O M M O o 0 0 0 0 o e o 0 0 0 0 e e 0 0 0 0 t�OLr) OOM M N �-� MOM'70 �0 W OOMONO 00�c0�O �N� M000Ot0 2N(o W On �OhO�haD �O''� N OMV M NNNMO N 0 0 0 o t 0 e e e 0-0 1� W Ol Cl) N `' t00 M ` r r N M (0 O (O N O M 0 0 r tO ` t0 ( M 01.0 M .- O I, ao N (0 V O O n Q O ^ '- O M a.-O.-� Q Cl � (V.-N- N a 10a OM N N N CO Cj L o 0 0 L 0 0 0 o e L o 0 O o o 10 O Of (D (0 (O L o 0 0 0 O N N r t0 n M (O N O (D V M r. M O O M .- M (0 (0 M O O M O f� t� O �G M N O O M ap N r- N N M CO (D V O '7 N N N N N .- O .' fV O 0 (0 0 o a M t0 ID N (0 0 0 0 o e L O O l0 O M N o 0 0 0 0 L M OJ 7 0 10 M M 0 0 0 o e 'n (D O N (0 M 1� M O O M (0 W M 0 0 o e p N (O (O CO M O O t0 p M N N c0 .- M y V LL f0 M M O y LL O O f` N I N LL �j (V LL (D M (D o\\\\ c M 0 0 0 o O O o 0 0 0 o O 0 0 0 0 O (0 N (D O V O m O M O t� O N C (0 M M O :- O N t0 C M 0 1� M t� n M tO O M N O t0 M M N C M 0 0 0 O N- 10 N N N N` n( r. O -Wi r. p M N O- N -M N e- co ' to (D t0 (D 0 0 0 e e o 0 0 e o o e o oCO e 0 0 0 0 O O r DD V QNOaODNM M OMm v, (�i -ODVN ��OM1�� -0-0 N` N N N '- M t0 .0 ID O go, IcM M N I IIZN ONO O OONON cDOO N r � I� a, Z< N V M 0 N ZM-pM��D M M O N O- I II pp 0 o - o N O O V N V 0 e o o ° M U O M tO V D( o 0 0 0 0 O M O O 0 0 0 0 o t d 0 r r O O O N O O N t) e � e M N O U v N M M N O O O O M O O O y 0 0 N V N .- N .- N 7 N M N M t0 (O (0 t0 0 e o 0 O Lh c) _ O O M V N 0 o e o M O M O M O N (O N O M V N "' 0 0 0 0 7 M (0 M M N M N N O (� M tp r O t0 O) r N (O N O w V O O ^ (D (O .M- O (n N �- cV N N Nr Cl) (+l Cl) co (D (O (D 0 o e a N N N e o 0 0 7 o 0--0 7 O f• a 0 0 0 0 u M M N r N�� r 10 Y'1 O (O �O M n a N 0 (D � O 7 W N N 0 -ee o o O 0 o e o 0 0 0 0 y O o e o 0 O O N o O O O M O) M O e^- M N M O M V p IQ) lz�w O a 0 0 r n h V (0 a C M M N N N 1p -7i O .- O N N •- N 7 co a t M Cc " Q~C C C may C C c N N ' E E E E ai E E E E E w N E y y H H N W W j >> C C N C C V) C C >> C C C L C M C N G 01 L N a d U ca M F N U W E rnE ; V rnE Q m UQ m UQ w a c ID C 7 d O aN v p w > 0 O Np O N M lLQD_ 0.2 (.LLQ = H aLL 0 0 0- >. � y O O O T = h m T 0 0 0- j, N m M y O O O m T y N U1 M O O O m N N N m N Vl m M m 0 0. V Ol Ol C O N N N M OOO a C C v N N OOO�"OV C C C 7 C(CC�� ?-'• �00='� N TJ GWC j� CCCy My E O C C E E--' M 'c .T. E E E C .c M M M E E N E M 'i. M M M d« `. E E MMM M .0 N r M M M M c M 7 W W W M M M �+ W W W M m M M W W W W W W N wpp r M v v v~ - m r m N N N M N - N N ,1� .y C N N lp M �p N N N" M (p C O M M N C 01 T4 N N N M M O m LL M. .N N N c M i6 O O� N N N O O 0.' M N W 7 7 N !O N O O 7 7 7 L� LL (0 f0 M O co Ix 7 7 7 LL C C C N- C U O M M M O 7 7 7 L� M 7 7 LL €��x>a 7 7 7 m IL C C C N- ��Cx>a 7 C C C X N LL C C C x j- aaa�nag C C C X> aaav�ag �� €X>a aaatna� Qaacnaa a`aQ`Una'g U=a aaav�a� W N _ C EC Q —a i o N � I w N O = 7 Q I ■ �I c y j I C I N C d I � Q ■ N 1 LL. � w O m E w �+ _ (0 m ■ 11 Co c LL T1 N '1 d > C I 'L y ■ � U O •I Q �' N :: N I a of l0 I i N m CY L N � � ■ I U N � o c � 0 LO I V L N V V o 0 0 0 0 0 0 L O p O In O O O LO O O O In O O O O LO O co cM N ;ua¢ljlad — I- O O 11 INVESTMENT ADVISORY BOARD Correspondence & Written Material Item A Meeting Date: October 12, 2005 TITLE: Month End Cash Report — September 2005 BACKGROUND: This cash report is not a complete Treasury Report (exclude petty cash, deferred compensation and fiscal agent balances), but would report in a timely fashion selected cash balances. RECOMMENDATION: Information item only. ohn M. Falconer, Finance Director m O 0 N a) tf O o Lc N C C3 CT v � -1wE p L � w O n � O N N LO O fOD to V) ONO 7 o o C, m - O�PO (07 _ O'04 CO w CO V MM m � �� W NN�Mm cM1'RL� N F-m OCpN W V) h41 a0 V N M r O 0 n O Cl) N N f� N lV) O O C LO N LO N U� O c0 wLo N n o a) v E O cNONO�ONaO V M��O N O O O O cc!M N n n m 0 W O M CO CO m O O V )O :� V I'M., N V 7 N- � n n C',- P� co V 00 V co V O W V Q LL O Cl) O p 0 0 O) f- m a) 0 O (O O N d' co CO co V ONO p Cl) lc of Cl) (D Cl) Cl)p O Gi CO c0 (D M O O O O N Cl! Cl! N O O O C)> LL LL') O LO CO LO O O O cp0 N CD Cl) co CD m r a0 M c0 M W O h n O co Cl) O N co O) o cc) 0 LL a) Op cA M 00 C) N C:; M M O CD O O N N C m.co t0 U) )O O m Cl) CC) Cl) � M n N A o O M co M M Cl) Cl) C_'oM V' c0O W LL U 0 OO N N Oi cOj 04 c) 04 Cl) N L cj � cj N N N U o o c m O to co cocc 0) to N c(0 a o YO cp0 m 2 m N O O C) -0 00 U N Q1 O m V Q U) CNLO OL LON N U a)� U C ma) m N C m C C m m C o o Qmmm m m mom m o Em��2m m d E 0 a) a) j U- m m aa)) 'm @ LL c LL "a in > >) m 0 >o m@ m n v Om�Fa W QaQ W �QfAOZOLL�Q�'Q m rn N O C-, O co CO o of r O O co V (D � M 0 M N N m > 0) C U 3 m In C a O a) O. a) y c N_ L U ~ 1 a m m � O U m N L, O` o a N O Q o m C N O O E �, N m N N C C CL O L a) w In O 'O w N 0 7 0 N U w y >. a) `j COL O w N a 7 (a � L Q � U m r r c O c Oa m d o a LL N L N N a) " 0 V Q L p d V y p r a) U 3 d :5 d 0 7 E ain o 8 0 N N ID F N N oQ L am E C N O m L > n c m (D o y n E m o. o m am m c o? N U C c0 4D n c a) d m a o � O. -'0 30 0 r 0 o CL C)C O d N C a) m 0) In L C L L F- LL I-- H rp a O) m aci 2 a) CL N O ate) m O C L U a) C C a) 7 OW O L 0 N C U) a) M la � L a) U m C l6 2 Phil Angelides, State Treasurer Inside the State Treasurer's Office -- Local Agency Investment Fund (LAIF) LAIF CONFERENCE IS OCT. 6. PLEASE CALL 916-653-3001 TO RSVP. PMIA Performance Report LAIF Performance Report 3.32 3.16 178 9/15/2005 9/16/2005 3.33 3.16 177 9/17/2005 3.33 3.16 177 9/18/2005 3.33 3.16 177 9/19/2005 3.34 3.17 172 9/20/2005 3.34 3.17 172 9/21 /2005 3.35 3.17 170 9/22/2005 3.36 3.17 169 9/23/2005 3.37 3.17 169 9/24/2005 3.37 3.18 169 9/25/2005 3.37 3.18 169 9/26/2005 3.37 3.18 167 9/27/2005 3.37 3.18 162 9/28/2005 3.37 1 3.19 167 Quarter Ending 6/30/05 Apportionment Rate: 2.85% Earnings Ratio: .00007802193586025 Fair Value Factor: .997747553 PMIA Average Monthly Effective Yields August 2005 3.179% July 2005 3.083% June 2005 2.967% Pooled Money Investment Account Portfolio Composition $51.2 Billion 08/31/05 Loans Reverses 9.93% -0.78% Corporate Bo 2.13% Commercial Pape 10.71 % Time Deposit: 14.36% CDs/BNs 22.02% Treasuries 4� MCO/ ortgages 0.98% Agencies 27.00% 3 FRB:Commercial Paper Rates and Outstandings Page 1 of Federal Reserve release Commercial 'aper Release ( About I Outstandings ( Historical discount rates I Historical outstandincs Data as of September 29, 2005 Commercial Paper Rates and Outstandings Derived from data supplied by The Depository Trust Company Trade data insufficient to support calculation of the 60-day AA nonfinancial and 90-day AA nonfinancial rate(s) for September 29, 2005 . Posted September 30, 2005 Discount rates AA AA A2/P2 Term financial nonfinancial nonfinancial 1-day 3.77 3.76 3.85 7-day 3.80 3.75 3.92 15-day 3.78 3.73 3.90 30-day 3.79 3.73 3.91 60-day 3.86 ND 3.91 90-day 3.93 ND 3.78 Yield curve Monev market basis Financial — - Nonfinancial nancial .......... Ate' -- 1 7 15 30 Days to Maturity t Percent 3.8 M 4 http://www.federalreserve.gov/Releases/CP/ 9/30/200 FRB:Commercial Paper Rates and Outstandings Page 2 of Tiienniv"f rate c"re wi Basis points 1.20 11)0 80 60 40 20 Q 2001 2002 2003 2004 2QU3 Discount rate history 'dirty -day commercial Paper (daily) 2001 2002 2003 Outstandings Weekly (Wednesday), seasonally adjusted Percent C Fins�ncl�kl Nonfinamiai A2tP2 2004 2005 5 http://www.federalreserve.gov/Releases/CP/ 9/30/200 FRB:Commercial Paper Rates and Outstandings Page 3 of 1480 1450 1420 1390 1360 1330 1300 1270 1.240 1210 1180 1150 Billions of dollars `1 t W —\^ rr vl A 1 t 1 Billions of dollars ..� — 1290 e naal (left wWi:) — — — Nonfinancial (right scale) 21 2002 200 250 210 1'70 Y r 130 1�� f AnJ 90 2004 2005 The daily commercial paper release will usually be available before 11:00am EST. However, the Federal Resery makes no guarantee regarding the timing of the daily commercial paper release. When the Federal Reserve is closed on a business day, yields for the previous business day will appear in the historical discount rates table. This policy is subject to change at any time without notice. Commercial paper outstanding Commercial paper outstanding, miscellaneous categories Volume Statistics 2005 :Q2 Release I About I Outstandings I Historical discount rates I Historical outstandings Home I Statistical releases Accessibilityl Contact Us Last update: September 30, 2005 6 http://www.federalreserve.gov/Releases/CP/ 9/30/200 Bureau of the Public Debt : Recent Treasury Bill Auction Results Page 1 of Recent Treasury Bill Auction Results Price Issue Maturity Discount Investment Per CUSIP Term Date Date Rate % Rate % $100 28-DAY 09-29-2005 10-27-2005 3.150 3.202 99.755000 912795VX6 91-DAY 09-29-2005 12-29-2005 3.440 3.518 99.130444 912795WG2 182-DAY 09-29-2005 03-30-2006 3.745 3.870 98.106694 912795WV9 28-DAY 09-22-2005 10-20-2005 3.210 3.263 99.750333 912795VW8 91-DAY 09-22-2005 12-22-2005 3.495 3.575 99.116542 912795WF4 182-DAY 09-22-2005 03-23-2006 3.715 3.839 98.121861 912795WUl 28-DAY 09-15-2005 10-13-2005 3.230 3.283 99.748778 912795VVO 91-DAY 09-15-2005 12-15-2005 3.450 3.529 99.127917 912795WE7 182-DAY 09-15-2005 03-16-2006 3.670 3.791 98.144611 912795WT4 6-DAY 09-08-2065 09-14-2005 3.450 3.500 99.942500 912795TP6 28-DAY 09-08-2005 10-06-2005 3.245 3.298 99.747611 912795VU2 91-DAY 09-08-2005 12-08-2005 3.435 3.513 99.131708 912795WD9 182-DAY 09-08-2005 03-09-2006 3.570 3.686 98.195167 912795WS6 13-DAY 09-02-2005 09-15-2005 3.470 3.523 99.874694 912795VR9 14-DAY 09-01-2005 09-15-2005 3.470 3.523 99.865056 912795VR9 28-DAY 09-01-2005 09-29-2005 3.395 3.451 99.735944 912795VT5 91-DAY 09-01-2005 12-01-2005 3.495 3.575 99.116542 912795WC1 182-DAY 09-01-2005 03-02-2006 3.705 3.828 98.126917 912795WR8 28-DAY 08-25-2005 09-22-2005 3.275 3.329 99.745278 912795VS7 92-DAY 08-25-2005 11-25-2005 3.460 3.539 99.115778 912795WB3 182-DAY 08-25-2005 02-23-2006 3.690 3.812 98.134500 912795WQO 28-DAY 08-18-2005 09-15-2005 3.260 3.314 99.746444 912795VR9 91-DAY 08-18-2005 11-17-2005 3.470 3.549 99.122861 912795WA5 182-DAY 08-18-2005 02-16-2006 3.705 3.828 98.126917 912795WP2 28-DAY 08-11-2005 09-08-2005 3.330 3.385 99.741000 912795VQ1 91-DAY 08-11-2005 11-10-2005 3.460 3.539 99.125389 912795VZ1 182-DAY 08-11-2005 02-09-2006 3.680 3.802 98.139556 912795WN7 28-DAY 08-04-2005 09-01-2005 3.285 3.339 99.744500 912795VP3 91-DAY 08-04-2005 11-03-2005 3.400 3.477 99.140556 912795VY4 182-DAY 08-04-2005 02-02-2006 3.600 3.718 98.180000 912795WM9 28-DAY 07-28-2005 08-25-2005 3.190 3.242 99.751889 912795VN8 91-DAY 07-28-2005 10-27-2005 3.345 3.420 99.154458 912795VX6 182-DAY 07-28-2005 01-26-2006 3.540 3.655 98.210333 912795WL1 28-DAY 07-21-2005 08-18-2005 3.065 3.115 99.761611 912795VMO 91-DAY 07-2.1-2005 10-20-2005 3.220 3.292 99.186056 912795VW8 182-DAY 07-21-2005 01-19-2006 3.420 3.529 98.271000 912795WK3 28-DAY 07-14-2005 08-11-2005 2.960 3.008 99.769778 912795VL2 91-DAY 07-14-2005 10-13-2005 3.135 3.204 99.207542 912795VVO 7 http://wwws.publicdebt.treas.gov/AI/OFBills 9/30/200 Bureau of the Public Debt: Recent Treasury Bill Auction Results Page 2 of 182-DAY 07-14-2005 01-12-2006 3.355 3.460 98.303861 912795WJ6 28-DAY 07-07-2005 08-04-2005 3.000 3.049 99.766667 912795VK4 Effective with the 11/2/98 auction, all bills are auctioned using the single -priced method. Return to Auction Information Page Privacy & Security Notices I Terms & Conditions I Accessibility I Data Quality Last Updated September 30, 2005 1: 07: 09 PM EDT 8 http://wwws.publicdebt.treas.gov/AI/OFBills 9/30/200 FRB: H.15--Selected Interest Rates, Web -Only Daily Update --September 29, 2005 Page I of Federal Reserve Statistical Release H.15 Selected Interest Rates (Daily) Skip to Content Release Date: September 29, 2005 Weekly._release dates and announcements. I Historical_data I About Daily update Other formats: Screen reader I ASCII The weekly release is posted on Monday. Daily updates of the weekly release are posted Tuesday through Frida; H.15 DAILY UPDATE: WEB RELEASE ONLY SELECTED INTEREST RATES Yields in percent per annum Instruments Federal funds (effective) 1 2 3 Commercial paper 3 4 5 Nonfinancial 1-month 2-month 3-month Financial 1-month 2-month 3-month CDs (secondary market) 3 6 1-month 3-month 6-month Eurodollar deposits (London) 3 7 1-month 3-month 6-month Bank prime loan 2 3 8 Discount window primary credit 2 9 U.S. government securities Treasury bills (secondary market) 4-week 3-month 6-month Treasury constant maturities Nominal 10 1-month 3-month 6-month 1-year 2-year 3-year 5-year 7-year 10-year For use at 4:15 p.m. Eastern Time September 29, 2005 3 4 2005 2005 2005 Sep Sep Sep 26 27 28 3.83 3.73 3.76 3.72 3.72 3.72 3.77 3.77 3.78 3.84 3.85 3.85 3.74 3.75 3.77 3.82 3.82 3.83 3.86 3.90 3.83 3.79 3.80 3.80 3.96 3.97 3.99 4.13 4.15 4.17 3.77 3.78 3.78 3.94 3.95 3.96 4.11 4.12 4.14 6.75 6.75 6.75 4.75 4.75 4.75 3.10 3.10 3.06 3.46 3.42 3.39 3.76 3.75 3.75 3.19 3.15 3.12 3.52 3.49 3.46 3.88 3.87 3.87 3.95 3.95 3.95 4.07 4.08 4.09 4.08 4.09 4.09 4.11 4.13 4.11 4.18 4.20 4.17 4.30 4.30 4.26 2005 Sep 29 9 http://www.federalreserve.gov/Releases/H 15/update/ 9/30/200 FRB: H.15--Selected Interest Rates, Web -Only Daily Update --September 29, 2005 Page 2 of 20-year 11 Inflation -indexed 5-year 7-year 10-year 20-year Inflation -indexed long-term average Interest rate swaps 14 1-year 2-year 3-year 4-year 5-year 7-year 10-year 30-year Corporate bonds Moody's seasoned Aaa 15 Baa State & local bonds 16 Conventional mortgages 17 4.60 4.60 4.55 12 1.48 1.47 1.44 1.64 1.63 1.59 1.78 1.77 1.73 1.99 1.95 1.90 13 1.95 1.92 1.86 4.37 4.40 4.42 4.46 4.48 4.50 4.50 4.52 4.53 4.53 4.55 4.56 4.57 4.59 4.59 4.64 4.66 4.65 4.74 4.76 4.74 5.00 5.02 4.98 5.23 5.24 5.17 6.13 6.14 6.08 See overleaf for footnotes FOOTNOTES 1. The daily effective federal funds rate is a weighted average of rates on brokered trades. 2. Weekly figures are averages of 7 calendar days ending on Wednesday of the current week; monthly figures include each calendar day in the month. 3. Annualized using a 360-day year or bank interest. 4. On a discount basis. S. Interest rates interpolated from data on certain commercial paper trades settled by The Depository Trust Company. The trades represent sales of commercial paper by dealers or direct issuers to investors (that is, the offer side). The 1-, 2-, and 3-month rates are equivalent to the 30-, 60-, and 90-day dates reported on the Board's Commercial Paper Web page (www.federalreserve.gov/releases/cp). 6. An average of dealer bid rates on nationally traded certificates of 7. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. 8. Rate posted by a majority of top 25 (by assets in domestic offices) insured U.S.-chartered commercial banks. Prime is one of several base rates used by banks to price short-term business loans. 9. The rate charged for discounts made and advances extended under the Federal Reserve's primary credit discount window program, which became effective January 9, 2003. This rate replaces that for deposit. adjustment credit, which was discontinued after January 8, 2003. For further information, see 10 http://www.federalreserve.gov/Releases/H 15/update/ 9/30/200 FRB: H.15--Selected Interest Rates, Web -Only Daily Update --September 29, 2005 Page 3 of www.federalreserve.gov/boarddocs/press/bcreg/2002/200210312/default.htm. The rate reported is that for the Federal Reserve Bank of New York. Historical series for the rate on adjustment credit is available at www.federalreserve.gov/releases/hl5/data.htm. 10. Yields on actively traded non -inflation -indexed issues adjusted to constant maturities. Source: U.S. Treasury. 11. A factor for adjusting the daily nominal 20-year constant maturity in order to estimate a 30-year rate can be found at www.treas.gov/offices/domestic-finance/debt-management/interest-rate/ltcompositeindE 12. Yields on Treasury inflation protected securities (TIPS) adjusted to constant maturities. Source: U.S. Treasury. Additional information on both nominal and inflation -indexed yields may be found at www.treas.gov/offices/domestic-finance/debt-management/interest-rate/index.html. 13. Based on the unweighted average bid yields for all Inflation Protected Securities with remaining terms to maturity of more than 10 years. 14. International Swaps and Derivatives Association (ISDA(R)) mid -market par swap rates. Rates are for a Fixed Rate Payer in return for receiving three month LIBOR, and are based on rates collected at 11:00 a.m. Eastern time by Garban Intercapital plc and published on Reuters Page ISDAFIX(R)l. ISDAFIX is a registered service mark of ISDA. Source: Reuters Limited. 15. Moody's Aaa rates through December 6, 2001 are averages of Aaa utility and Aaa industrial bond rates. As of December 7, 2001, these rates are averages of Aaa industrial bonds only. 16. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Thursday quotations. 17. Contract interest rates on commitments for fixed-rate first mortgages. Source: FHLMC. DESCRIPTION OF THE TREASURY NOMINAL AND INFLATION -INDEXED CONSTANT MATURITY SERIES Yields on Treasury nominal securities at "constant maturity" are interpolated by the U.S. Treasury from the daily yield curve for non -inflation -indexed Treasury securities. This curve, which relates the yield on a security to its time to maturity, is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market. These market yields are calculated from composites of quotations obtained by the Federal Reserve Bank of New York. The constant maturity yield values are read from the yield curve at fixed maturities, currently 1, 3 and 6 months and 1, 2, 3, 5, 7, 10 and 20 years. This method provides a yield for a 10-year maturity, for example, even if no outstanding security has exactly 10 years remaining to maturity. Similarly, yields on inflation -indexed securities at "constant maturity" are interpolated from the daily yield curve for Treasury inflation protected securities in the over-the-counter market. The inflation -indexed constant maturity yields are read from this yield curve at fixed maturities, currently 5, 7, 10, and 20 years. Weekly_ release dates and_ announcements I Historical data I About Daily update Other formats: Screen reader I ASCII Statistical releases Home I Economic research and data Accessibility I Contact Us 11 http://www.federalreserve.gov/Releases/H 15/update/ 9/30/200 m Lo c . o QU N J O M LL y N (LA O U co U 00 Q U N E a U C N J O O C � U (n O E 'c 0 N � N N O Z O Q O N �2 U A 6 It $cg ov`CN M �(R ca ��tM �r M a}} LO00 O (0UO V O� O C (a In(O .0 3 ¢ co U)O NM O M O CO O W m n (D ID U) N M 1- !0 V (D (O M M U1 M V O O O M 7 N W Oi O N cc � -0. a U.)N O N M 7 9 � C N N U 3 N > ¢ a N O Co U7 O 00 U7 O Q, co N 0 Cl)C O N @ 76Un) y ccc ((q Cl �"�OV e� co((00 7 M d V CO 7 V LO a00.O (00O co O L U ¢ `t a V y T o Z ¢ M m r F N In N M U) O O N O 0O U) ; O CD (p Qom! O (O d' O V O 40 U7 2 N � C a0 v� pp a0 Cl) V U) M O r r N a0 (O CAU7 N N c0 M v (� .N_. (0 (� (O W d-lhCf— N O (M co N M O' 0( 0(V a0 aDOLO cm TLS C = a (� N L N ca ¢ Co L O O L C L ~ N a N co (0 0 co 7 ~ }} °1 3 N a F- F W W J x w C rn w w W U Oa Uw d � �F C d } z —W ou mN c � �Y d0x Wa¢�w� ' � �w y ZY ZYQ �JQ0 OzUp EC � Nd w JgQ�Wmo ¢ =000zm0 3:wUwaU— m aaa a d HFUzDUw WZwoU) x>U C C d CC CO ( W Cc w N Q W WNF )ZOUFO- }OJ� U j C N @UwdaX 1 L Dr G1zx_W�00 O a WO C9Uw?inw ¢ an0 W(nOC) z o 12 INVESTMENT ADVISORY BOARD Meeting Date: October 12, 2005 TITLE: Pooled Money Investment Board Report for July, 2005 BACKGROUND: Correspondence & Written Material Item B The Pooled Money Investment Board Report for July 2005 is included in the agenda packet. RECOMMENDATION: Receive & File ohn M. Falconer, Finance Director Phil Angelides July 2005 STATE OF CALIFORNIA STATE TREASURER'S OFFICE POOLED MONEY INVESTMENT BOARD REPORT July 2005 TABLE OF CONTENTS SUMMARY................................................................. 01 SELECTED INVESTMENT DATA .................................... 02 PORTFOLIO COMPOSITION ........................................ 03 INVESTMENT TRANSACTIONS ..................................... 04 TIMEDEPOSITS........................................................ 16 BANK DEMAND DEPOSITS .......................................... 28 POOLED MONEY INVESTMENT BOARD DESIGNATION... 29 POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF JULY 2005 WITH JULY 2004 (DOLLARS IN THOUSANDS) Average Daily Portfolio Accrued Earnings Effective Yield Average Life -Month End (in Days) JULY 2005 JULY 2004 CHANGE $ 55,782,241 $ $ 146,075 $ 3.083 183 53,183,962 $ +2,598,279 72,433 $ +73,642 1.604 +1.479 201 .18 1 Total Security Transactions Amount $ 18,728,973 $ 15,277,594 $ +3,451,379 Number 428 329 +99 Total Time Deposit Transactions Amount $ 4,221,190 $ 4,465,790 $ -244,600 Number 146 158 -12 Average Workday Investment Activity $ 1,147,508 $ 940,161 $ +207,347 Prescribed Demand Account Balances For Services $ 415,737 $ 842,824 $ -427,087 For Uncollected Funds $ 170,156 $ 136,044 $ +34,112 1 PHIL ANGELIDES TREASURER STATE OF CALIFORNIA INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED) TYPE OF SECURITY Government Bills Bonds Notes Strips Total Government Federal Agency Coupons Certificates of Deposit Bank Notes Bankers' Acceptances Repurchases Federal Agency Discount Notes Time Deposits GNMAs Commercial Paper FHLMC/Remics Corporate Bonds AB 55 Loans GF Loans Reversed Repurchases Total (All Types) INVESTMENT ACTIVITY Pooled Money Other Time Deposits Totals PMIA Monthly Average Effective Yield Year to Date Yield Last Day of Month July 31, 2005 DIFFERENCE IN PERCENT OF PERCENT OF PORTFOLIO FROM AMOUNT PORTFOLIO PRIOR MONTH $ 2,369,922 0 4,222,435 0 $ 6,592,357 $ 7,092,224 10,845,107 1,300,060 0 0 7,260,922 7,245,995 314 5,328,644 521,470 1,260,553 5,167,152 0 0 $ 52,614,798 JULY 2005 NUMBER AMOUNT 428 $ 18,728,973 12 133,941 146 4,221,190 586 $ 23,084,104 3.083 3.083 2 4.50 +1.07 0.00 0.00 8.03 +2.04 0.00 0.00 12.53 +3.11 13.48 +2.34 20.61 -3.26 2.47 -0.22 0.00 0 0.00 0 13.80 +1.68 13.77 +2.01 0.00 0 10.13 -7.30 0.99 +0.09 2.40 +0.26 9.82 +1.29 0.00 0 0.00 0 100.00 JUNE 2005 NUMBER AMOUNT 628 $ 30,725,808 32 418,850 154 2,993,500 814 $ 34,138,158 2.967 2.256 Pooled Money Investment Account Portfolio Composition $52.6 Billion 7/31 /05 Corpora 2.-� Commercial Par 10.13% Time Deposits 13.77% Loans Treasuries 9 R20/n .11) rz1oi CDs/l3Ns 23.08% iges Agencies 27.28% 07/01/05 REDEMPTIONS BN WORLD 2.950% 07/01/05 3.000 $50,000 67 $ 279,686.81 3.042 BN WORLD 2.950% 07/01/05 3.000 50,000 67 279,686.81 3.042 CD SOC GEN 3.045% 07/01/05 3.045 50,000 36 152,250.00 3.087 CD SOC GEN 3.045% 07/01/05 3.045 50,000 36 152,250.00 3.087 CD MONTREAL 3.040% 07/01/05 3.040 50,000 63 266,000.00 3.082 CD MONTREAL 3.040% 07/01/05 3.040 50,000 63 266,000.00 3.082 CD BARCLAYS 3.040% 07/01/05 3.040 50,000 63 266,000.00 3.082 CD BARCLAYS 3.040% 07/01/05 3.040 50,000 63 266,000.00 3.082 CD CALYON 3.030% 07/01/05 3.030 50,000 94 395,583.33 3.072 CD CALYON 3.030% 07/01/05 3.030 50,000 94 395,583.33 3.072 CD CALYON 3.030% 07/01/05 3.030 50,000 94 395,583.33 3.072 CD CALYON 3.030% 07/01/05 3.030 50,000 94 395,583.33 3.072 CD BNP PARIBAS 3.000% 07/01/05 3.000 50,000 99 412,500.00 3.042 CD BNP PARIBAS 3.000% 07/01/05 3.000 50,000 99 412,500.00 3.042 CD BNP PARIBAS 3.000% 07/01/05 3.000 50,000 99 412,500.00 3.042 CD BNP PARIBAS 3.000% 07/01/05 3.000 50,000 99 412,500.00 3.042 CD US BANK 3.030% 07/01/05 3.030 50,000 99 416,625.00 3.072 CD US BANK 3.030% 07/01/05 3.030 50,000 99 416,625.00 3.072 CD US BANK 3.030% 07/01/05 3.030 50,000 99 416,625.00 3.072 CD US BANK 3.030% 07/01/05 3.030 50,000 99 416,625.00 3.072 CD RABO 3.000% 07/01/05 3.000 50,000 101 420,833.33 3.042 CD RABO 3.000% 07/01/05 3.000 50,000 101 420,833.33 3.042 CD RABO 3.000% 07/01/05 3.000 50,000 101 420,833.33 3.042 CD UBS 2.850% 07/01/05 2.845 50,000 135 533,447.40 2.885 CD UBS 2.850% 07/01/05 2.845 50,000 135 533,447.40 2.885 CD UBS 2.850% 07/01/05 2.845 50,000 135 533,447.40 2.885 CD CS/1ST BOSTON 2.840% 07/01/05 2.825 50,000 137 537,565.08 2.864 CD CS/1ST BOSTON 2.840% 07/01/05 2.825 50,000 137 537,565.08 2.864 CD CS/1ST BOSTON 2.840% 07/01/05 2.825 50,000 137 537,565.08 2.864 CD CS/1ST BOSTON 2.840% 07/01/05 2.825 50,000 137 537,565.08 2.864 CP GECC 07/01/05 3.220 35,000 3 9,391.67 3.266 CP GECC 07/01/05 3.220 50,000 3 13,416.67 3.266 CP GECC 07/01/05 3.220 50,000 3 13,416.67 3.266 CP GECC 07/01/05 3.220 50,000 3 13,416.67 3.266 CP GECC 07/01/05 3.220 50,000 3 13,416.67 3.266 CP GECC 07/01/05 3.220 50,000 3 13,416.67 3.266 CP GECC 07/01/05 3.220 50,000 3 13,416.67 3.266 CP GECC 07/01/05 3.220 50,000 3 13,416.67 3.266 CP GE CO 07/01/05 3.080 25,000 11 23,527.78 3.126 CP GE CO 07/01/05 3.080 50,000 11 47,055.56 3.126 CP GE CO 07/01/05 3.080 50,000 11 47,055.56 3.126 CP GE CO 07/01/05 3.030 50,000 16 67,333.33 3.076 CP GE CO 07/01/05 3.030 50,000 16 67,333.33 3.076 CP GE CO 07/01/05 3.030 50,000 16 67,333.33 3.076 CP GE CO 07/01/05 3.030 50,000 16 67,333.33 3.076 CP CITICORP 07/01/05 3.070 50,000 30 127,916.67 3.121 CP CITICORP 07/01/05 3.070 50,000 30 127,916.67 3.121 CP CITICORP 07/01/05 3.070 50,000 30 127,916.67 3.121 CP CITICORP 07/01/05 3.070 50,000 30 127,916.67 3.121 CP GE CO 07/01/05 3.020 40,000 36 120,800.00 3.071 07/01/05 REDEMPTIONS (continued) CID GE CO 07/01/05 3.020 50,000 36 151,000.00 3.071 CID GE CO 07/01/05 3.020 50,000 36 151,000.00 3.071 CID NISSAN 07/01/05 3.070 43,500 38 140,964.17 3.123 CID DEERE 07/01/05 3.080 25,000 50 106,944.44 3.136 CID GECC 07/01/05 2.970 50,000 93 383,625.00 3.035 CID GECC 07/01/05 2.970 50,000 93 383,625.00 3.035 CID GECC 07/01/05 2.970 50,000 93 383,625.00 3.035 CID GECC 07/01/05 2.970 50,000 93 383,625.00 3.035 CID GECC 07/01/05 2.970 50,000 93 383,625.00 3.035 CID GECC 07/01/05 2.970 50,000 93 383,625.00 3.035 CID GECC 07/01/05 2.970 50,000 93 383,625.00 3.035 CID GECC 07/01/05 2.970 50,000 93 383,625.00 3.035 CID CITIGLOBAL 07/01/05 2.900 5,000 109 43,902.78 2.966 CID CITIGLOBAL 07/01/05 2.900 50,000 109 439,027.78 2.966 CID CITIGLOBAL 07/01/05 2.900 50,000 109 439,027.78 2.966 CP CITIGLOBAL 07/01/05 2.900 50,000 109 439,027.78 2.966 07/01/05 PURCHASES CD BNP PARIBAS 3.585% 12/01/05 3.585 50,000 CD BNP PARIBAS 3.585% 12/01/05 3.585 50,000 CD BNP PARIBAS 3.585% 12/01/05 3.585 50,000 CD RABO 3.615% 12/28/05 3.615 50,000 CD RABO 3.615% 12/28/05 3.615 50,000 CID W/F 07/05/05 3.200 50,000 CID W/F 07/05/05 3.200 50,000 DISC NOTES FHLMC 12/01/05 3.440 50,000 DISC NOTES FHLMC 12/01/05 3.440 50,000 DISC NOTES FHLMC 12/01/05 3.440 50,000 DISC NOTES FHLMC 12/01/05 3.440 50,000 DISC NOTES FHLMC 12/01/05 3.440 50,000 DISC NOTES FHLMC 12/01/05 3.440 50,000 TREAS BILLS 12/01/05 3.200 50,000 TREAS BILLS 12/01/05 3.200 50,000 TREAS BILLS 12/01/05 3.200 50,000 TREAS BILLS 12/01/05 3.200 50,000 07/05/05 REDEMPTIONS BN B/A 3.030% 07/05/05 3.030 50,000 91 382,958.33 3.072 BN B/A 3.030% 07/05/05 3.030 50,000 91 382,958.33 3.072 BN B/A 3.030% 07/05/05 3.030 50,000 91 382,958.33 3.072 BN B/A 3.030% 07/05/05 3.030 50,000 91 382,958.33 3.072 CD W/F 3.250% 07/05/05 3.250 50,000 7 31,597.22 3.295 CD W/F 3.250% 07/05/05 3.250 50,000 7 31,597.22 3.295 CD W/F 3.250% 07/05/05 3.250 50,000 7 31,597.22 3.295 CD W/F 3.250% 07/05/05 3.250 50,000 7 31,597.22 3.295 CD SVENSKA 3.050% 07/05/05 3.040 50,000 67 282,894.12 3.082 CD SVENSKA 3.050% 07/05/05 3.040 50,000 67 282,894.12 3.082 CD WA MU, FA 3.040% 07/05/05 3.040 50,000 97 409,555.56 3.082 07/05/05 REDEMPTIONS (continued) CD WA MU, FA 3.040% 07/05/05 3.040 50,000 97 409,555.56 3.082 CP W/F 07/05/05 3.200 50,000 4 17,777.78 3.246 CP W/F 07/05/05 3.200 50,000 4 17,777.78 3.246 CP MERRILL 07/05/05 3.250 50,000 6 27,083.33 3.297 CP MERRILL 07/05/05 3.250 50,000 6 27,083.33 3.297 CP MERRILL 07/05/05 3.250 50,000 6 27,083.33 3.297 CP MERRILL 07/05/05 3.250 50,000 6 27,083.33 3.297 CP MERRILL 07/05/05 3.250 50,000 6 27,083.33 3.297 CP MORG STAN 07/05/05 3.280 50,000 6 27,333.33 3.327 CP MORG STAN 07/05/05 3.280 50,000 6 27,333.33 3.327 CP MORG STAN 07/05/05 3.280 50,000 6 27,333.33 3.327 CP MORG STAN 07/05/05 3.280 50,000 6 27,333.33 3.327 CP MORG STAN 07/05/05 3.280 50,000 6 27,333.33 3.327 CP MORG STAN 07/05/05 3.270 50,000 8 36,333.33 3.318 CP MORG STAN 07/05/05 3.270 50,000 8 36,333.33 3.318 CP GECC 07/05/05 3.030 50,000 12 50,500.00 3.075 CP GECC 07/05/05 3.030 50,000 12 50,500.00 3.075 CP MORG STAN 07/05/05 3.050 50,000 77 326,180.56 3.113 CP MORG STAN 07/05/05 3.050 50,000 77 326,180.56 3.113 CP TOYOTA 07/05/05 3.000 50,000 92 383,333.33 3.065 CP TOYOTA 07/05/05 3.000 50,000 92 383,333.33 3.065 CP CITIGLOBAL 07/05/05 2.980 50,000 95 393,194.44 3.045 CP CITIGLOBAL 07/05/05 2.980 50,000 95 393,194.44 3.045 CP CITIGLOBAL 07/05/05 2.980 50,000 95 393,194.44 3.045 CP MORG STAN 07/05/05 3.000 50,000 95 395,833.33 3.066 CP MORG STAN 07/05/05 3.000 50,000 95 395,833.33 3.066 DISC NOTES FHLMC 07/05/05 2.750 50,000 144 550,000.00 2.819 DISC NOTES FHLMC 07/05/05 2.750 50,000 147 561,458.33 2.820 DISC NOTES FHLMC 07/05/05 2.750 50,000 147 561,458.33 2.820 07/05/05 PURCHASES CD WA MU, FA 3.630% 12/01/05 3.630 50,000 CD WA MU, FA 3.630% 12/01/05 3.630 50,000 CD WA MU, FA 3.630% 12/01/05 3.630 50,000 CD WA MU, FA 3.630% 12/01/05 3.630 50,000 CD ABN AMRO 3.645% 12/28/05 3.645 50,000 CD ABN AMRO 3.645% 12/28/05 3.645 50,000 CD CIBC 3.650% 12/28/05 3.650 50,000 CD CIBC 3.650% 12/28/05 3.650 50,000 CD CIBC 3.650% 12/28/05 3.650 50,000 CD CIBC 3.650% 12/28/05 3.650 50,000 CD BNP PARIBAS 3.665% 12/28/05 3.665 50,000 CD BNP PARIBAS 3.665% 12/28/05 3.665 50,000 CD CS/1ST BOSTON 3.665% 12/28/05 3.650 50,000 CD CS/1ST BOSTON 3.665% 12/28/05 3.650 50,000 CD CS/1 ST BOSTON 3.665% 12/28/05 3.650 50,000 CD CS/1 ST BOSTON 3.665% 12/28/05 3.650 50,000 CD US BANK 3.690% 12/28/05 3.690 50,000 CD US BANK 3.690% 12/28/05 3.690 50,000 6 07/05/05 PURCHASES (continued) CD US BANK 3.690% 12/28/05 3.690 50,000 CD US BANK 3.690% 12/28/05 3.690 50,000 CD CALYON 3.670% 12/30/05 3.670 50,000 CD CALYON 3.670% 12/30/05 3.670 50,000 CD CALYON 3.670% 12/30/05 3.670 50,000 CD CALYON 3.670% 12/30/05 3.670 50,000 CID FCAR 12/12/05 3.600 50,000 CID FCAR 12/12/05 3.600 50,000 CID FCAR 12/12/05 3.600 50,000 CID FCAR 12/12/05 3.600 50,000 07/06/05 REDEMPTIONS BN B/A 3.030% 07/06/05 3.030 25,000 92 193,583.33 3.072 BN B/A 3.030% 07/06/05 3.030 50,000 92 387,166.67 3.072 BN B/A 3.030% 07/06/05 3.030 50,000 92 387,166.67 3.072 BN B/A 3.030% 07/06/05 3.030 50,000 92 387,166.67 3.072 BN B/A 3.030% 07/06/05 3.030 50,000 92 387,166.67 3.072 CD STNRD CH 3.030% 07/06/05 3.030 50,000 96 404,000.00 3.072 CD STNRD CH 3.030% 07/06/05 3.030 50,000 96 404,000.00 3.072 CD STNRD CH 3.030% 07/06/05 3.030 50,000 96 404,000.00 3.072 CD STNRD CH 3.030% 07/06/05 3.030 50,000 96 404,000.00 3.072 CD WA MU, FA 3.040% 07/06/05 3.040 50,000 98 413,777.78 3.082 CD WA MU, FA 3.040% 07/06/05 3.040 50,000 98 413,777.78 3.082 CD CS/1 ST BOSTON 3.015% 07/06/05 3.015 50,000 99 414,562.50 3.057 CD CS/1ST BOSTON 3.015% 07/06/05 3.015 50,000 99 414,562.50 3.057 CD MONTREAL 2.800% 07/06/05 2.800 50,000 148 575,555.56 2.839 CD MONTREAL 2.800% 07/06/05 2.800 50,000 148 575,555.56 2.839 CD RB CANADA 2.830% 07/06/05 2.830 30,000 148 349,033.33 2.869 CD RB CANADA 2.830% 07/06/05 2.830 50,000 148 581,722.22 2.869 CD RB CANADA 2.830% 07/06/05 2.830 50,000 148 581,722.22 2.869 CD RB CANADA 2.830% 07/06/05 2.830 50,000 148 581,722.22 2.869 CID MORG STAN 07/06/05 3.080 50,000 58 248,111.11 3.138 CID MORG STAN 07/06/05 3.080 50,000 58 248,111.11 3.138 CID TEXT FIN 07/06/05 3.110 50,000 62 267,805.56 3.170 CID FCAR 07/06/05 3.020 50,000 93 390,083.33 3.086 CID FCAR 07/06/05 3.020 50,000 93 390,083.33 3.086 CID CITIGLOBAL 07/06/05 2.980 50,000 96 397,333.33 3.046 CID CITIGLOBAL 07/06/05 2.980 50,000 96 397,333.33 3.046 CP CITIGLOBAL 07/06/05 2.980 50,000 96 397,333.33 3.046 CID CITIGLOBAL 07/06/05 3.000 20,000 99 165,000.00 3.067 CID CITIGLOBAL 07/06/05 3.000 50,000 99 412,500.00 3.067 CID CITIGLOBAL 07/06/05 3.000 50,000 99 412,500.00 3.067 CID FCAR 07/06/05 2.870 50,000 140 558,055.56 2.943 CID FCAR 07/06/05 2.870 50,000 140 558,055.56 2.943 DISC NOTES FHLMC 07/06/05 2.750 35,000 145 387,673.61 2.819 DISC NOTES FHLMC 07/06/05 2.760 37,500 145 416,875.00 2.830 DISC NOTES FHLMC 07/06/05 2.760 50,000 145 555,833.33 2.830 DISC NOTES FHLMC 07/06/05 2.760 50,000 145 555,833.33 2.830 DISC NOTES FHLMC 07/06/05 2.760 50,000 145 555,833.33 2.830 7 07/06/05 PURCHASES CD TORONTO 3.655% 12/28/05 3.640 50,000 CD TORONTO 3.655% 12/28/05 3.640 50,000 CP TOYOTA 12/23/05 3.550 50,000 CP TOYOTA 12/23/05 3.550 50,000 DISC NOTES FHLMC 12/12/05 3.530 50,000 DISC NOTES FHLMC 12/12/05 3.530 50,000 DISC NOTES FHLMC 12/27/05 3.520 50,000 DISC NOTES FHLMC 12/27/05 3.520 50,000 TREAS BILLS 12/01/05 3.200 50,000 TREAS BILLS 12/01/05 3.200 50,000 TREAS BILLS 12/01/05 3.200 50,000 TREAS BILLS 12/01/05 3.200 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 TREAS BILLS 12/01/05 3.205 50,000 07/07/05 REDEMPTIONS CP MORG STAN 07/07/05 3.270 50,000 10 45,416.67 3.318 CP MORG STAN 07/07/05 3.270 50,000 10 45,416.67 3.318 CP GECC 07/07/05 3.030 50,000 14 58,916.67 3.076 CP GECC 07/07/05 3.030 50,000 14 58,916.67 3.076 CP GECC 07/07/05 3.030 50,000 14 58,916.67 3.076 CP FCAR 07/07/05 2.870 25,000 140 279,027.78 2.943 CP FCAR 07/07/05 2.870 50,000 140 558,055.56 2.943 CP FCAR 07/07/05 2.870 50,000 140 558,055.56 2.943 07/07/05 PURCHASES CP GECC 07/08/05 3.230 50,000 CP GECC 07/08/05 3.230 50,000 CP GECC 07/08/05 3.230 50,000 CP GECC 07/08/05 3.230 50,000 CP GECC 07/08/05 3.230 50,000 CP GECC 07/08/05 3.230 50,000 CP GECC 07/08/05 3.230 50,000 TREAS NOTES 1.625% 09/30/05 3.102 50,000 8 07/07/05 PURCHASES (continued) TREAS NOTES 1.625% 09/30/05 3.102 50,000 TREAS NOTES 1.625% 09/30/05 3.102 50,000 TREAS NOTES 1.625% 09/30/05 3.102 50,000 TREAS NOTES 1.875% 11/30/05 3.287 50,000 TREAS NOTES 1.875% 11/30/05 3.287 50,000 TREAS NOTES 1.875% 11/30/05 3.287 50,000 TREAS NOTES 1.875% 11/30/05 3.287 50,000 TREAS NOTES 1.875% 11/30/05 3.277 50,000 TREAS NOTES 1.875% 11/30/05 3.277 50,000 TREAS NOTES 1.875% 11/30/05 3.277 50,000 TREAS NOTES 1.875% 11/30/05 3.277 50,000 07/08/05 REDEMPTIONS CD WACHOVIA 3.040% 07/08/05 3.040 50,000 38 160,444.44 3.082 CD WACHOVIA 3.040% 07/08/05 3.040 50,000 38 160,444.44 3.082 CD WACHOVIA 3.040% 07/08/05 3.040 50,000 38 160,444.44 3.082 CD WACHOVIA 3.040% 07/08/05 3.040 50,000 38 160,444.44 3.082 CD WACHOVIA 3.040% 07/08/05 3.040 50,000 38 160,444.44 3.082 CD WACHOVIA 3.040% 07/08/05 3.040 50,000 38 160,444.44 3.082 CP GECC 07/08/05 3.230 50,000 1 4,486.11 3.275 CP GECC 07/08/05 3.230 50,000 1 4,486.11 3.275 CP GECC 07/08/05 3.230 50,000 1 4,486.11 3.275 CP GECC 07/08/05 3.230 50,000 1 4,486.11 3.275 CP GECC 07/08/05 3.230 50,000 1 4,486.11 3.275 CP GECC 07/08/05 3.230 50,000 1 4,486.11 3.275 CP GECC 07/08/05 3.230 50,000 1 4,486.11 3.275 CP MORG STAN 07/08/05 3.270 50,000 11 49,958.33 3.319 CP MORG STAN 07/08/05 3.270 50,000 11 49,958.33 3.319 CP MORG STAN 07/08/05 3.270 50,000 11 49,958.33 3.319 CP MORG STAN 07/08/05 3.270 50,000 11 49,958.33 3.319 CP AMER EXP 07/08/05 3.180 50,000 15 66,250.00 3.228 CP AMER EXP 07/08/05 3.180 50,000 15 66,250.00 3.228 CP AMER EXP 07/08/05 3.180 50,000 15 66,250.00 3.228 CP AMER EXP 07/08/05 3.180 50,000 15 66,250.00 3.228 CP AMER EXP 07/08/05 3.200 25,000 18 40,000.00 3.250 CP AMER EXP 07/08/05 3.200 50,000 18 80,000.00 3.250 CP B/A 07/08/05 3.030 50,000 37 155,708.33 3.082 CP B/A 07/08/05 3.030 50,000 37 155,708.33 3.082 CP B/A 07/08/05 3.030 50,000 37 155,708.33 3.082 CP B/A 07/08/05 3.030 50,000 37 155,708.33 3.082 CP GECC 07/08/05 3.040 50,000 38 160,444.44 3.092 CP GECC 07/08/05 3.040 50,000 38 160,444.44 3.092 CP GECC 07/08/05 3.040 50,000 38 160,444.44 3.092 CP GECC 07/08/05 3.040 50,000 38 160,444.44 3.092 CP GECC 07/08/05 3.040 50,000 38 160,444.44 3.092 CP GECC 07/08/05 3.040 50,000 38 160,444.44 3.092 CP CITIGLOBAL 07/08/05 3.050 50,000 38 160,972.22 3.102 CP CITIGLOBAL 07/08/05 3.050 50,000 38 160,972.22 3.102 CP CITIGLOBAL 07/08/05 3.050 50,000 38 160,972.22 3.102 07/08/05 REDEMPTIONS (continued) CID CITIGLOBAL 07/08/05 3.050 50,000 38 160,972.22 3.102 07/08/05 PURCHASES CID GECC 12/23/05 3.570 50,000 CID GECC 12/23/05 3.570 50,000 CID GECC 12/23/05 3.570 50,000 CID GECC 12/23/05 3.570 50,000 CID GECC 12/23/05 3.570 50,000 07/11/05 REDEMPTIONS CID BEAR 07/11/05 3.250 40,000 14 50,555.56 3.299 CID BEAR 07/11/05 3.250 50,000 14 63,194.44 3.299 CID BEAR 07/11/05 3.250 50,000 14 63,194.44 3.299 CID AMER EXP 07/11/05 3.180 50,000 18 79,500.00 3.229 CID AMER EXP 07/11/05 3.180 50,000 18 79,500.00 3.229 CID CITIGLOBAL 07/11/05 3.000 50,000 104 433,333.33 3.068 CID CITIGLOBAL 07/11/05 3.000 50,000 104 433,333.33 3.068 CID CITIGLOBAL 07/11/05 3.000 50,000 104 433,333.33 3.068 CID CITIGLOBAL 07/11/05 3.000 50,000 104 433,333.33 3.068 07/11/05 PURCHASES BN B/A 3.660% 12/28/05 3.660 50,000 BN B/A 3.660% 12/28/05 3.660 50,000 BN B/A 3.660% 12/28/05 3.660 50,000 BN B/A 3.660% 12/28/05 3.660 50,000 CID GECC 07/14/05 3.220 25,000 CID GECC 07/14/05 3.220 50,000 CID GECC 07/14/05 3.220 50,000 CID GECC 07/14/05 3.220 50,000 CID GECC 07/14/05 3.220 50,000 07/12/05 NO REDEMPTIONS 07/12/05 PURCHASES AGENCY FHLB 3.800% 01/16/07 4.002 50,000 CID GECC 07/13/05 3.210 25,000 07/13/05 SALES TREAS BILLS 09/01/05 2.995 50,000 72 292,722.22 2.999 TREAS BILLS 09/01/05 2.995 50,000 72 292,722.22 2.999 07/13/05 REDEMPTIONS CID GECC 07/13/05 3.210 25,000 1 2,229.17 3.255 10 07/13/05 PURCHASES AGENCY FHLB AGENCY FHLB AGENCY FHLB 07/14/05 REDEMPTIONS CID GECC CID GECC CID GECC CID GECC CID GECC 07/14/05 PURCHASES CD ANZ CD ANZ DISC NOTES FHLMC DISC NOTES FHLMC 07/15/05 REDEMPTIONS MTN GMAC MTN GMAC 07/15/05 PURCHASES AGENCY FHLB AGENCY FHLB AGENCY FHLB 07/18/05 REDEMPTIONS CD W/F CD W/F CD HSBC CD HSBC 07/18/05 NO PURCHASES 07/19/05 NO REDEMPTIONS 07/19/05 NO PURCHASES 07/20/05 REDEMPTIONS CD CHASE CD CHASE CD CHASE CD CHASE CD CHASE 3.800% 01/16/07 4.005 50,000 3.800% 01/16/07 4.000 50,000 3.800% 01/16/07 4.000 50,000 07/14/05 3.220 25,000 3 6,708.33 3.266 07/14/05 3.220 50,000 3 13,416.67 3.266 07/14/05 3.220 50,000 3 13,416.67 3.266 07/14/05 3.220 50,000 3 13,416.67 3.266 07/14/05 3.220 50,000 3 13,416.67 3.266 3.700% 12/27/05 3.700 3.700% 12/27/05 3.700 12/28/05 3.550 12/28/05 3.550 7.500% 07/15/05 6.477 7.500% 07/15/05 5.820 3.750% 11/30/06 4.020 3.800% 01/16/07 4.020 4.000% 01/23/07 4.020 25,000 50,000 50,000 50,000 10,000 1,002 1,806,333.33 10,000 1,479 2,439,513.85 50,000 50,000 50,000 6.436 5.696 3.270% 07/18/05 3.270 50,000 21 95,375.00 3.315 3.270% 07/18/05 3.270 50,000 21 95,375.00 3.315 3.060% 07/18/05 3.060 50,000 89 378,250.00 3.103 3.060% 07/18/05 3.060 50,000 89 378,250.00 3.103 3.180% 07/20/05 3.180 50,000 33 145,750.00 3.224 3.180% 07/20/05 3.180 50,000 33 145,750.00 3.224 3.180% 07/20/05 3.180 50,000 33 145,750.00 3.224 3.180% 07/20/05 3.180 50,000 33 145,750.00 3.224 3.180% 07/20/05 3.180 50,000 33 145,750.00 3.224 11 07/20/05 REDEMPTIONS (continued) CD CIBC 3.030% 07/20/05 3.030 50,000 112 471,333.33 3.072 CD CIBC 3.030% 07/20/05 3.030 50,000 112 471,333.33 3.072 CD CIBC 3.030% 07/20/05 3.030 50,000 112 471,333.33 3.072 CD CIBC 3.030% 07/20/05 3.030 50,000 112 471,333.33 3.072 CID NCAT 07/20/05 3.020 10,000 112 93,955.56 3.091 CID NCAT 07/20/05 3.020 50,000 112 469,777.78 3.091 CID NCAT 07/20/05 3.020 50,000 112 469,777.78 3.091 CID GECC 07/20/05 2.880 25,000 153 306,000.00 2.956 CID GECC 07/20/05 2.880 50,000 153 612,000.00 2.956 DISC NOTES FHLMC 07/20/05 3.010 50,000 112 468,222.22 3.081 DISC NOTES FHLMC 07/20/05 3.010 50,000 112 468,222.22 3.081 DISC NOTES FHLMC 07/20/05 3.010 50,000 112 468,222.22 3.081 DISC NOTES FHLMC 07/20/05 3.010 50,000 112 468,222.22 3.081 DISC NOTES FHLMC 07/20/05 3.010 50,000 112 468,222.22 3.081 DISC NOTES FHLMC 07/20/05 3.010 50,000 112 468,222.22 3.081 07/20/05 NO PURCHASES 07/21/05 NO REDEMPTIONS 07/21/05 NO PURCHASES 07/22/05 NO REDEMPTIONS 07/22/05 NO PURCHASES 07/25/05 SALES TREAS BILLS 09/01/05 3.115 50,000 84 335,458.32 2.945 TREAS BILLS 09/01/05 3.115 50,000 84 335,458.32 2.945 TREAS BILLS 09/01/05 3.115 50,000 84 335,458.32 2.945 TREAS BILLS 09/01/05 3.115 50,000 84 335,458.32 2.945 07/25/05 REDEMPTIONS CD TORONTO 3.090% 07/25/05 3.080 50,000 94 402,121.53 3.123 CID BEAR 07/25/05 3.050 50,000 97 410,902.78 3.118 CID BEAR 07/25/05 3.050 50,000 97 410,902.78 3.118 CID NCAT 07/25/05 3.060 20,000 118 200,600.00 3.134 CID NCAT 07/25/05 3.060 50,000 118 501,500.00 3.134 07/25/05 NO PURCHASES 07/26/05 SALES TREAS BILLS 09/01/05 3.140 50,000 85 338,500.00 2.936 TREAS BILLS 09/01/05 3.140 50,000 85 338,500.00 2.936 TREAS BILLS 09/01/05 3.140 50,000 85. 338,500.00 2.936 TREAS BILLS 09/01/05 3.140 50,000 85 338,500.00 2.936 12 07/26/05 REDEMPTIONS CD BARCLAYS CD BARCLAYS 07/26/05 NO PURCHASES 07/27/05 SALES 3.070% 07/26/05 3.070 3.070% 07/26/05 3.070 50,000 97 413,597.22 3.113 50,000 97 413,597.22 3.113 TREAS BILLS 09/01/05 3.170 50,000 86 340,513.89 2.920 TREAS BILLS 09/01/05 3.170 50,000 86 340,513.89 2.920 TREAS BILLS 09/01/05 3.175 50,000 86 340,263.89 2.917 TREAS BILLS 09/01/05 3.175 50,000 86 340,263.89 2.917 TREAS BILLS 09/01/05 3.175 50,000 86 340,263.89 2.917 TREAS BILLS 09/01/05 3.175 50,000 86 340,263.89 2.917 TREAS BILLS 09/01/05 3.175 50,000 86 340,263.89 2.917 TREAS BILLS 09/01/05 3.175 50,000 86 340,263.89 2.917 07/27/05 REDEMPTIONS CD W/F 3.270% 07/27/05 3.270 50,000 30 136,250.00 3.315 CD W/F 3.270% 07/27/05 3.270 50,000 30 136,250.00 3.315 CD W/F 3.270% 07/27/05 3.270 50,000 30 136,250.00 3.315 CD W/F 3.270% 07/27/05 3.270 50,000 30 136,250.00 3.315 CD W/F 3.270% 07/27/05 3.270 50,000 30 136,250.00 3.315 CD W/F 3.270% 07/27/05 3.270 50,000 30 136,250.00 3.315 CD STNRD CH 3.250% 07/27/05 3.250 50,000 33 148,958.33 3.295 CD STNRD CH 3.250% 07/27/05 3.250 50,000 33 148,958.33 3.295 CD CS/1 ST BOSTON 3.070% 07/27/05 3.070 50,000 97 413,597.22 3.113 CD ABN AMRO 3.070% 07/27/05 3.070 50,000 120 511,666.67 3.113 CD ABN AMRO 3.070% 07/27/05 3.070 50,000 120 511,666.67 3.113 CD RABO 3.070% 07/27/05 3.070 50,000 120 511,666.67 3.113 CD RABO 3.070% 07/27/05 3.070 50,000 120 511,666.67 3.113 CD CS/1ST BOSTON 3.085% 07/27/05 3.085 50,000 120 514,166.67 3.128 CD CS/1ST BOSTON 3.085% 07/27/05 3.085 50,000 120 514,166.67 3.128 CD FORTIS 3.090% 07/27/05 3.090 50,000 120 515,000.00 3.133 CD FORTIS 3.090% 07/27/05 3.090 50,000 120 515,000.00 3.133 CD RABO 3.080% 07/27/05 3.080 50,000 121 517,611.11 3.123 CD RABO 3.080% 07/27/05 3.080 50,000 121 517,611.11 3.123 CD WA MU, FA 3.100% 07/27/05 3.100 50,000 121 520,972.22 3.143 CD WA MU, FA 3.100% 07/27/05 3.100 50,000 121 520,972.22 3.143 CP COUNTRY 07/27/05 3.300 50,000 30 137,500.00 3.355 CP COUNTRY 07/27/05 3.300 50,000 30 137,500.00 3.355 CP COUNTRY 07/27/05 3.300 50,000 30 137,500.00 3.355 CP BEAR 07/27/05 3.250 50,000 33 148,958.33 3.305 CP BEAR 07/27/05 3.250 50,000 33 148,958.33 3.305 CP BEAR 07/27/05 3.250 50,000 33 148,958.33 3.305 07/27/05 PURCHASES FR SBA 3.550% 07/25/30 3.550 15,011 13 07/28/05 NO REDEMPTIONS 07/28/05 NO PURCHASES 07/29/05 REDEMPTIONS CD MONTREAL 3.070% 07/29/05 3.070 40,000 121 412,744.44 3.113 CD MONTREAL 3.070% 07/29/05 3.070 50,000 121 515,930.56 3.113 CD BARCLAYS 3.080% 07/29/05 3.080 50,000 122 521,888.89 3.123 CD BARCLAYS 3.080% 07/29/05 3.080 50,000 122 521,888.89 3.123 CD RABO 3.080% 07/29/05 3.080 50,000 123 526,166.67 3.123 CD RABO 3.080% 07/29/05 3.080 50,000 123 526,166.67 3.123 CD SOC GEN 3.090% 07/29/05 3.090 50,000 123 527,875.00 3.133 CD SOC GEN 3.090% 07/29/05 3.090 50,000 123 527,875.00 3.133 CD CALYON 3.100% 07/29/05 3.100 50,000 123 529,583.33 3.143 CD CALYON 3.100% 07/29/05 3.100 50,000 123 529,583.33 3.143 CD WA MU, FA 3.100% 07/29/05 3.100 50,000 123 529,583.33 3.143 CD WA MU, FA 3.100% 07/29/05 3.100 50,000 123 529,583.33 3.143 CP TOYOTA 07/29/05 2.970 50,000 150 618,750.00 3.049 CP TOYOTA 07/29/05 2.970 50,000 150 618,750.00 3.049 CP TOYOTA 07/29/05 2.970 50,000 150 618,750.00 3.049 07/29/05 PURCHASES CP W/F 08/01/05 3.220 50,000 CP W/F 08/01/05 3.220 50,000 CP W/F 08/01/05 3.220 50,000 CP W/F 08/01/05 3.220 50,000 CP W/F 08/01/05 3.220 50,000 CP GECC 08/01/05 3.280 50,000 CP GECC 08/01/05 3.280 50,000 CP GECC 08/01/05 3.280 50,000 CP GECC 08/01/05 3.280 50,000 CP GECC 08/01/05 3.280 50,000 CP GECC 08/01/05 3.280 50,000 14 a/ The abbreviations indicate the type of security purchased or sold; i.e., (U.S.) Bills, Bonds, Notes, Debentures, Discount Notes and Participation Certificates: Federal National Mortgage Association (FNMA), Farmers Home Administration Notes (FHA), Student Loan Marketing Association (SLMA), Small Business Association (SBA), Negotiable Certificates of Deposit (CD), Negotiable Certificates of Deposit Floating Rate (CD FR), Export Import Notes (EXIM), Bankers Acceptances (BA), Commercial Paper (CP), Government National Mortgage Association (GNMA), Federal Home Loan Bank Notes (FHLB), Federal Land Bank Bonds (FLB), Federal Home Loan Mortgage Corporation Obligation (FHLMC PC) & (FHLMC GMC), Federal Farm Credit Bank Bonds (FFCB), Federal Farm Credit Discount Notes (FFC), Corporate Securities (CB), US Ship Financing Bonds (TITLE XI'S), International Bank of Redevelopment (IBRD), Tennessee Valley Authority (TVA), Medium Term Notes (MTN), Real Estate Mortgage Investment Conduit (REMIC). b/ Purchase or sold yield based on 360 day calculation for discount obligations and Repurchase Agreements. c/ Repurchase Agreement. d/ Par amount of securities purchased, sold or redeemed. e/ Securities were purchased and sold as of the same date. f/ Repurchase Agreement against Reverse Repurchase Agreement. E/ Outright purchase against Reverse Repurchase Agreement. h/ Security "SWAP" transactions. 1 Buy back agreement. RRS Reverse Repurchase Agreement. RRP Termination of Reverse Repurchase Agreement. 15 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE ALAMO Diablo Valley Bank ALHAMBRA Omni Bank, N.A. Omni Bank, N.A. Omni Bank, N.A. Omni Bank, N.A. Omni Bank, N.A. The Bank of East Asia (USA), N.A. The Bank of East Asia (USA), N.A. The Bank of East Asia (USA), N.A. ARROYO GRANDE Mid State Bank and Trust Mid State Bank and Trust Mid State Bank and Trust Mid State Bank and Trust Mid State Bank and Trust Mid State Bank and Trust BREA Pacific Western National Bank CALABASAS First Bank of Beverly Hills, FSB First Bank of Beverly Hills, FSB First Bank of Beverly Hills, FSB First Bank of Beverly Hills, FSB CAMARILLO First California Bank First California Bank First California Bank CAMERON PARK Western Sierra National Bank Western Sierra National Bank 04/08/05 3.170 4,500,000.00 10/07/05 05/13/05 2.910 2,000,000.00 08/12/05 05/20/05 2.900 4,000,000.00 08/19/05 06/01/05 3.000 4,000,000.00 09/01/05 06/10/05 3.080 6,000,000.00 09/09/05 07/08/05 3.260 4,000,000.00 10/07/05 05/12/05 2.950 3,000,000.00 08/11/05 02/16/05 2.880 6,000,000.00 08/17/05 07/14/05 3.260 3,095,000.00 10/13/05 02/09/05 2.810 5,000,000.00 08/10/05 03/10/05 3.070 5,000,000.00 09/08/05 04/13/05 3.170 5,000,000.00 10/12/05 05/18/05 3.160 5,000,000.00 11/16/05 06/10/05 3.170 5,000,000.00 12/09/05 07/14/05 3.510 5,000,000.00 01/12/06 02/02/05 2.770 4,000,000.00 08/03/05 03/03/05 3.050 10,000,000.00 09/01/05 05/05/05 3.220 10,000,000.00 11/03/05 06/01/05 3.180 10,000,000.00 11/30/05 06/15/05 3.210 10,000,000.00 12/14/05 06/22/05 3.230 6,000,000.00 11/16/05 06/03/05 3.160 6,000,000.00 12/02/05 07/27/05 3.720 6,000,000.00 01/25/06 04/06/05 3.130 8,000,000.00 10/05/05 07/13/05 3.480 7,000,000.00 01/11/06 16 NAME CHATSWORTH Premier America Credit Union Premier America Credit Union Premier America Credit Union Premier America Credit Union CHICO Tri Counties Bank CITY OF INDUSTRY EverTrust Bank EverTrust Bank EverTrust Bank CONCORD Cal State 9 Credit Union DUBLIN Operating Engineers Local # 3 FCU Operating Engineers Local # 3 FCU Operating Engineers Local # 3 FCU EL CENTRO Rabobank Rabobank Rabobank Rabobank Rabobank EL SEGUNDO First Coastal Bank, N.A. First Coastal Bank, N.A. First Coastal Bank, N.A. First Coastal Bank, N.A. Xerox Federal Credit Union Xerox Federal Credit Union Xerox Federal Credit Union TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE 05/09/05 2.930 10,000,000.00 08/05/05 05/06/05 2.930 10,000,000.00 08/05/05 05/12/05 3.050 20,000,000.00 09/09/05 07/07/05 3.240 20,000,000.00 10/06/05 06/16/05 3.060 20,000,000.00 09/15/05 05/04/05 2.940 5,000,000.00 08/03/05 07/28/05 3.480 6,000,000.00 10/27/05 06/10/05 3.170 6,000,000.00 12/09/05 05/25/05 2.960 10,000,000.00 08/24/05. 02/09/05 2.790 5,000,000.00 08/11/05 04/06/05 3.160 5,000,000.00 10/05/05 06/10/05 3.150 10,000,000.00 12/09/05 05/06/05 2.930 25,000,000.00 08/05/05 06/02/05 3.020 25,000,000.00 09/01/05 07/15/05 3.270 47,500,000.00 10/14/05 07/22/05 3.370 32,500,000.00 10/21/05 07/08/05 3.490 20,000,000.00 01/06/06 06/01/05 3.010 2,000,000.00 09/01/05 03/18/05 3.140 5,000,000.00 09/16/05 04/21/05 3.180 2,000,000.00 10/20/05 05/19/05 3.230 2,000,000.00 11/17/05 03/14/05 3.090 7,000,000.00 09/14/05 05/18/05 3.240 20,000,000.00 11/18/05 06/02/05 3.190 20,000,000.00 12/02/05 17 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE FAIRFIELD WestAmerica Bank 05/11/05 2.900 5,000,000.00 08/10/05 WestAmerica Bank 05/18/05 2.830 75,000,000.00 08/17/05 WestAmerica Bank 07/07/05 3.230 60,000,000.00 10/06/05 WestAmerica Bank 07/15/05 3.270 65,000,000.00 10/14/05 WestAmerica Bank 07/28/05 3.480 5,000,000.00 10/19/05 WestAmerica Bank 07/20/05 3.310 10,000,000.00 10/19/05 WestAmerica Bank 07/22/05 3.370 25,000,000.00 10/21/05 FRESNO United Security Bank 04/20/05 3.170 40,000,000.00 10/19/05 FULLERTON Fullerton Community Bank, FSB 05/18/05 3.170 9,000,000.00 11/16/05 Fullerton Community Bank, FSB 05/17/05 3.190 10,000,000.00 11/16/05 Fullerton Community Bank, FSB 07/22/05 3.630 8,000,000.00 01/20/06 GOLETA Pacific Capital Bank, N.A. 02/11/05 2.820 72,000,000.00 08/12/05 Pacific Capital Bank, N.A. 06/17/05 3.030 10,000,000.00 09/08/05 Pacific Capital Bank, N.A. 03/09/05 3.040 20,000,000.00 09/08/05 Pacific Capital Bank, N.A. 04/01/05 3.210 78,000,000.00 09/30/05 Pacific Capital Bank, N.A. 06/08/05 3.170 85,000,000.00 12/07/05 GRANADA HILLS First State Bank of California 06/02/05 3.180 7,000,000.00 12/01/05 First State Bank of California 06/17/05 3.260 2,000,000.00 12/16/05 First State Bank of California 07/20/05 3.560 3,000,000.00 01/19/06 HAWTHORNE Western Federal Credit Union 06/30/05 3.240 25,000,000.00 09/30/05 Western Federal Credit Union 07/22/05 3.380 30,000,000.00 10/21/05 IRVINE Commerce West Bank 06/30/05 3.240 5,000,000.00 09/30/05 Commercial Capital Bank 05/18/05 2.830 90,000,000.00 08/17/05 Commercial Capital Bank 07/08/05 3.260 60,000,000.00 10/07/05 Commercial Capital Bank 07/15/05 3.270 105,000,000.00 10/14/05 18 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE IRVINE (continued) Commercial Capital Bank 06/22/05 3.290 11,000,000.00 12/15/05 Commercial Capital Bank 06/16/05 3.240 39,000,000.00 12/15/05 LA JOLLA Silvergate Bank 06/10/05 3.190 5,000,000.00 12/09/05 LIVERMORE Valley Community Bank 03/18/05 3.130 6,000,000.00 09/16/05 LODI Farmers & Merchants Bk Cen CA 07/14/05 3.260 35,000,000.00 10/13/05 Farmers & Merchants Bk Cen CA 07/07/05 3.440 25,000,000.00 01/05/06 LOS ANGELES Broadway Federal Bank, FSB 03/11/05 3.080 3,000,000.00 09/09/05 Broadway Federal Bank, FSB 07/08/05 3.500 2,500,000.00 01/06/06 Cathay Bank 02/28/05 2.990 25,000,000.00 08/31/05 Cathay Bank 04/07/05 3.180 38,000,000.00 10/06/05 Cathay Bank 04/21/05 3.170 25,000,000.00 10/20/05 Cathay Bank 05/11/05 3.240 25,000,000.00 11/09/05 Cathay Bank 05/19/05 3.220 15,000,000.00 11/17/05 Cathay Bank 06/01/05 3.180 17,000,000.00 11/30/05 Cathay Bank 06/09/05 3.160 55,000,000.00 12/08/05 Cedars Bank 05/04/05 2.940 10,000,000.00 08/03/05 Cedars Bank 06/29/05 3.150 10,000,000.00 09/28/05 Cedars Bank 07/13/05 3.500 5,000,000.00 01/11/06 Center Bank 03/16/05 3.110 20,000,000.00 09/14/05 Center Bank 06/22/05 3.070 20,000,000.00 09/21/05 Center Bank 06/22/05 3.300 25,000,000.00 12/21/05 Center Bank 07/21/05 3.580 15,000,000.00 01/19/06 CHB America Bank 02/18/05 2.900 4,000,000.00 08/19/05 CHB America Bank 03/02/05 3.030 4,000,000.00 08/31/05 CHB America Bank 03/11/05 3.080 8,000,000.00 09/09/05 CHB America Bank 04/14/05 3.190 4,300,000.00 10/13/05 Citibank (West), FSB 04/07/05 3.180 150,000,000.00 10/06/05 Citibank (West), FSB 07/14/05 3.260 100,000,000.00 10/13/05 Citibank (West), FSB 07/20/05 3.310 100,000,000.00 10/19/05 Citibank (West), FSB 04/27/05 3.200 50,000,000.00 10/26/05 Eastern International Bank 05/04/05 3.220 900,000.00 11/02/05 19 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE LOS ANGELES (continued Eastern International Bank 06/09/05 3.160 1,000,000.00 12/08/05 Far East National Bank 05/04/05 2.950 25,000,000.00 08/03/05 Far East National Bank 05/11/05 2.910 25,000,000.00 08/10/05 Hanmi Bank 05/05/05 2.960 25,000,000.00 08/04/05 Hanmi Bank 02/03/05 2.830 40,000,000.00 08/04/05 Hanmi Bank 03/03/05 3.040 20,000,000.00 09/01/05 Hanmi Bank 03/16/05 3.110 20,000,000.00 09/14/05 Hanmi Bank 07/14/05 3.240 10,000,000.00 10/13/05 Hanmi Bank 06/02/05 3.180 25,000,000.00 12/01/05 Hanmi Bank 06/15/05 3.210 25,000,000.00 12/14/05 Hanmi Bank 07/14/05 3.490 25,000,000.00 01/12/06 Hanmi Bank 07/29/05 3.730 10,000,000.00 01/27/06 Manufacturer's Bank 05/16/05 2.940 25,000,000.00 08/17/05 Manufacturer's Bank 06/22/05 3.300 25,000,000.00 12/21/05 Mellon First Business Bank, N.A. 06/16/05 3.070 50,000,000.00 09/15/05 Mellon First Business Bank, N.A. 07/15/05 3.270 25,000,000.00 10/14/05 Mellon First Business Bank, N.A. 07/15/05 3.270 50,000,000.00 10/14/05 Mirae Bank 02/22/05 2.900 2,500,000.00 08/24/05 Mirae Bank 03/24/05 3.150 2,500,000.00 09/22/05 Mirae Bank 04/15/05 3.200 4,000,000.00 10/14/05 Nara Bank, N.A. 02/02/05 2.770 10,000,000.00 08/03/05 Nara Bank, N.A. 02/02/05 2.770 10,000,000.00 08/03/05 Nara Bank, N.A. 07/14/05 3.280 5,000,000.00 10/20/05 Nara Bank, N.A. 04/21/05 3.170 25,000,000.00 10/20/05 Nara Bank, N.A. 05/12/05 3.250 5,000,000.00 11/10/05 Nara Bank, N.A. 05/19/05 3.220 10,000,000.00 11/17/05 Nara Bank, N.A. 06/10/05 3.170 10,000,000.00 12/09/05 One United Bank 03/24/05 3.160 5,000,000.00 09/22/05 One United Bank 06/08/05 3.170 10,000,000.00 12/07/05 One United Bank 07/14/05 3.530 5,000,000.00 01/12/06 One United Bank 07/14/05 3.530 5,000,000.00 01/12/06 Preferred Bank 02/04/05 2.810 4,000,000.00 08/05/05 Preferred Bank 06/17/05 3.050 31,000,000.00 09/16/05 Saehan Bank 02/18/05 2.880 2,000,000.00 08/19/05 Saehan Bank 02/18/05 2.880 5,000,000.00 08/19/05 Saehan Bank 03/15/05 2.990 9,000,000.00 08/19/05 State Bank of India (California) 05/19/05 2.930 2,000,000.00 08/18/05 State Bank of India (California) 07/07/05 3.250 3,000,000.00 10/06/05 State Bank of India (California) 04/28/05 3.240 3,000,000.00 10/27/05 Wilshire State Bank 02/09/05 2.810 8,000,000.00 08/11/05 Wilshire State Bank 03/04/05 3.040 6,000,000.00 08/31/05 Wilshire State Bank 03/02/05 3.030 30,000,000.00 08/31/05 Wilshire State Bank 06/17/05 3.050 8,000,000.00 09/16/05 20 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE LOS ANGELES (continued) Wilshire State Bank 06/17/05 3.050 15,000,000.00 09/16/05 Wilshire State Bank 07/15/05 3.250 19,000,000.00 10/14/05 Wilshire State Bank 06/01/05 3.180 22,000,000.00 11/30/05 Wilshire State Bank 06/17/05 3.260 3,000,000.00 12/16/05 MERCED County Bank 06/03/05 3.030 5,000,000.00 09/02/05 County Bank 06/09/05 3.070 10,000,000.00 09/08/05 County Bank 07/15/05 3.270 10,000,000.00 10/14/05 NATIONAL CITY Neighborhood National Bank 02/02/05 2.780 2,000,000.00 08/03/05 Neighborhood National Bank 07/22/05 3.640 2,000,000.00 01/20/06 NEWPORT BEACH Independence Bank 06/24/05 3.180 1,000,000.00 09/23/05 Orange County Business Bank, N.A. 05/16/05 2.920 4,000,000.00 08/17/05 Orange County Business Bank, N.A. 06/24/05 3.070 4,000,000.00 09/23/05 Orange County Business Bank, N.A. 07/14/05 3.240 4,000,000.00 10/13/05 Orange County Business Bank, N.A. 07/28/05 3.480 4,000,000.00 10/27/05 NORTH HIGHLANDS SAFE Credit Union 05/13/05 2.920 20,000,000.00 08/12/05 SAFE Credit Union 07/15/05 3.280 5,000,000.00 10/14/05 OAKDALE Oak Valley Community Bank 06/16/05 3.060 3,500,000.00 09/15/05 Oak Valley Community Bank 07/15/05 3.270 2,500,000.00 10/14/05 OAKLAND Metropolitian Bank 02/24/05 2.930 1,000,000.00 08/25/05 Metropolitian Bank 03/23/05 3.160 2,000,000.00 09/21/05 Metropolitian Bank 06/02/05 3.180 1,500,000.00 12/01/05 Metropolitian Bank 07/22/05 3.630 1,000,000.00 01/20/06 Metropolitian Bank 07/28/05 3.720 1,500,000.00 01/26/06 21 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE ONTARIO Citizens Business Bank 05/19/05 2.920 30,000,000.00 08/18/05 Citizens Business Bank 03/04/05 3.040 25,000,000.00 09/02/05 Citizens Business Bank 03/23/05 3.160 30,000,000.00 09/21/05 Citizens Business Bank 04/01/05 3.210 25,000,000.00 09/30/05 Citizens Business Bank 05/06/05 3.220 30,000,000.00 11/04/05 PALO ALTO Greater Bay Bank, NA 03/02/05 3.030 25,000,000.00 08/31/05 Greater Bay Bank, NA 03/10/05 3.070 20,000,000.00 09/08/05 Greater Bay Bank, NA 04/20/05 3.160 50,000,000.00 10/19/05 Greater Bay Bank, NA 05/12/05 3.250 25,000,000.00 11/10/05 Greater Bay Bank, NA 05/18/05 3.160 33,500,000.00 11/16/05 Greater Bay Bank, NA 05/25/05 3.210 25,000,000.00 11/23/05 Greater Bay Bank, NA 06/01/05 3.180 30,000,000.00 11/30/05 Greater Bay Bank, NA 06/02/05 3.180 25,000,000.00 12/01/05 Greater Bay Bank, NA 06/08/05 3.170 24,000,000.00 12/07/05 Greater Bay Bank, NA 06/09/05 3.160 22,000,000.00 12/08/05 Greater Bay Bank, NA 06/14/05 3.170 30,000,000.00 12/14/05 Greater Bay Bank, NA 07/13/05 3.500 15,000,000.00 01/11/06 Greater Bay Bank, NA 07/13/05 3.500 25,000,000.00 01/11/06 PALOS VERDES ESTATES Malaga Bank, FSB 02/18/05 2.900 10,000,000.00 08/19/05 Malaga Bank, FSB 03/04/05 3.040 4,000,000.00 09/02/05 Malaga Bank, FSB 04/07/05 3.180 5,000,000.00 10/06/05 Malaga Bank, FSB 05/11/05 3.240 7,000,000.00 11/09/05 Malaga Bank, FSB 06/15/05 3.210 9,000,000.00 12/14/05 PASADENA Community Bank 02/02/05 2.770 25,000,000.00 08/03/05 Community Bank 03/16/05 3.110 10,000,000.00 09/14/05 Community Bank 04/07/05 3.180 10,000,000.00 10/06/05 Community Bank 04/13/05 3.170 15,000,000.00 10/12/05 Community Bank 05/05/05 3.220 15,000,000.00 11/03/05 Community Bank 06/15/05 3.210 10,000,000.00 12/14/05 Community Bank 07/08/05 3.500 10,000,000.00 01/06/06 Wescom Credit Union 05/19/05 2.940 35,000,000.00 08/18/05 Wescom Credit Union 03/18/05 3.150 15,000,000.00 09/16/05 Wescom Credit Union 04/28/05 3.250 25,000,000.00 10/27/05 Wescom Credit Union 06/22/05 3.320 50,000,000.00 12/21/05 22 NAME PASADENA (continued) Wescom Credit Union Wescom Credit Union PLACERVILLE El Dorado Savings Bank PFF Bank and Trust PFF Bank and Trust PFF Bank and Trust PFF Bank and Trust PFF Bank and Trust PORTERVILLE Bank of the Sierra RANCHO SANTA FE La Jolla Bank, FSB La Jolla Bank, FSB La Jolla Bank, FSB La Jolla Bank, FSB La Jolla Bank, FSB La Jolla Bank, FSB La Jolla Bank, FSB La Jolla Bank, FSB REDWOOD CITY Provident Central Credit Union Provident Central Credit Union RICHMOND The Mechanics Bank The Mechanics Bank The Mechanics Bank The Mechanics Bank The Mechanics Bank The Mechanics Bank TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE 07/13/05 3.520 25,000,000.00 01/11/06 07/13/05 3.520 40,000,000.00 01/11/06 04/29/05 3.390 5,000,000.00 04/28/06 02/25/05 2.970 20,000,000.00 08/26/05 03/04/05 3.040 20,000,000.00 09/02/05 05/05/05 3.220 20,000,000.00 11/03/05 06/08/05 3.170 20,000,000.00 12/07/05 07/21/05 3.580 20,000,000.00 01/19/06 04/21/05 3.170 10,000,000.00 10/20/05 05/04/05 2.920 25,000,000.00 08/03/05 05/13/05 2.890 15,000,000.00 08/12/05 05/18/05 2.810 25,000,000.00 08/17/05 06/03/05 2.990 10,000,000.00 09/01/05 06/02/05 2.990 10,000,000.00 09/01/05 06/16/05 3.060 10,000,000.00 09/15/05 06/23/05 3.090 5,000,000.00 09/22/05 05/05/05 3.200 20,000,000.00 11/03/05 04/28/05 3.230 20,000,000.00 10/27/05 06/02/05 3.180 20,000,000.00 12/01/05 08/04/04 2.180 10,000,000.00 08/04/05 09/10/04 2.180 10,000,000.00 09/14/05 10/15/04 2.250 10,000,000.00 10/14/05 04/21/05 3.180 10,000,000.00 10/20/05 10/29/04 2.320 10,000,000.00 10/28/05 11/05/04 2.380 10,000,000.00 11/04/05 23 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE RICHMOND (continued The Mechanics Bank 06/09/05 3.170 10,000,000.00 12/08/05 The Mechanics Bank 07/08/05 3.500 10,000,000.00 01/06/06 The Mechanics Bank 07/27/05 3.720 20,000,000.00 01/25/06 The Mechanics Bank 03/03/05 3.250 10,000,000.00 03/03/06 The Mechanics Bank 04/01/05 3.490 10,000,000.00 04/05/06 RIVERSIDE Provident Savings Bank 02/02/05 2.780 25,000,000.00 08/03/05 Provident Savings Bank 03/24/05 3.150 25,000,000.00 09/22/05 Provident Savings Bank 04/07/05 3.180 25,000,000.00 10/06/05 ROCKLIN Five Star Bank 05/13/05 2.890 3,000,000.00 08/12/05 Five Star Bank 06/16/05 3.040 3,000,000.00 09/15/05 Five Star Bank 03/30/05 3.200 2,000,000.00 09/28/05 Five Star Bank 03/30/05 3.200 10,000,000.00 09/28/05 Five Star Bank 07/27/05 3.400 2,000,000.00 10/26/05 SACRAMENTO American River Bank 02/25/05 2.950 2,000,000.00 08/26/05 American River Bank 03/17/05 3.120 1,000,000.00 09/08/05 American River Bank 03/18/05 3.120 1,250,000.00 09/15/05 American River Bank 03/24/05 3.130 2,000,000.00 09/22/05 American River Bank 04/06/05 3.150 1,500,000.00 10/05/05 American River Bank 06/16/05 3.240 1,250,000.00 12/15/05 American River Bank 07/08/05 3.490 1,000,000.00 01/06/06 American River Bank 07/28/05 3.720 1,500,000.00 01/26/06 Bank of Sacramento 03/18/05 3.130 2,000,000.00 09/16/05 Bank of Sacramento 05/11/05 3.240 1,500,000.00 11/09/05 Bank of Sacramento 06/01/05 3.180 2,000,000.00 11/30/05 Merchants National Bank of Sacramento 04/13/05 3.170 2,000,000.00 10/12/05 Merchants National Bank of Sacramento 06/22/05 3.300 2,000,000.00 12/21/05 Merchants National Bank of Sacramento 07/21/05 3.580 2,000,000.00 01/19/06 River City Bank 04/06/05 3.160 2,000,000.00 10/05/05 River City Bank 05/26/05 3.240 2,000,000.00 11/23/05 River City Bank 07/29/05 3.750 3,000,000.00 01/27/06 The Golden One Credit Union 05/27/05 2.990 25,000,000.00 08/26/05 U.S. Bank, N.A. 05/12/05 2.990 50,000,000.00 08/11/05 U.S. Bank, N.A. 02/09/05 2.810 50,000,000.00 08/11/05 U.S. Bank, N.A. 05/20/05 3.000 50,000,000.00 08/19/05 24 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE SACRAMENTO (continued U.S. Bank, N.A. 02/18/05 2.900 50,000,000.00 08/19/05 U.S. Bank, N.A. 05/04/05 3.250 75,000,000.00 11/02/05 U.S. Bank, N.A. 05/27/05 3.200 25,000,000.00 11/23/05 U.S. Bank, N.A. 07/07/05 3.440 100,000,000.00 01/05/06 Union Bank of California, N.A. 02/03/05 2.830 150,000,000.00 08/04/05 Union Bank of California, N.A. 06/16/05 3.240 150,000,000.00 12/15/05 Union Bank of California, N.A. 07/15/05 3.530 175,000,000.00 01/13/06 SAN DIEGO First Future Credit Union 03/04/05 3.040 15,000,000.00 09/02/05 First Future Credit Union 03/16/05 3.110 8,000,000.00 09/14/05 First Future Credit Union 05/27/05 3.200 15,000,000.00 11/23/05 First United Bank 02/11/05 2.820 1,000,000.00 08/12/05 First United Bank 04/14/05 3.210 2,000,000.00 10/13/05 Mission Federal Credit Union 03/02/05 3.040 10,000,000.00 08/31/05 Mission Federal Credit Union 07/14/05 3.270 10,000,000.00 10/13/05 SAN FRANCISCO America California Bank 06/03/05 3.000 2,000,000.00 09/02/05 America California Bank 07/07/05 3.420 6,000,000.00 01/05/06 Oceanic Bank 09/10/04 2.160 4,000,000.00 09/13/05 Trans Pacific National Bank 02/03/05 2.840 1,000,000.00 08/04/05 Trans Pacific National Bank 03/02/05 3.040 1,000,000.00 08/31/05 Trans Pacific National Bank 06/22/05 3.080 1,000,000.00 09/21/05 Trans Pacific National Bank 03/24/05 3.160 1,000,000.00 09/22/05 Trans Pacific National Bank 04/13/05 3.180 1,000,000.00 10/12/05 United Commercial Bank 05/25/05 2.950 20,000,000.00 08/24/05 United Commercial Bank 07/14/05 3.260 90,000,000.00 10/13/05 United Commercial Bank 07/27/05 3.440 40,000,000.00 10/26/05 United Commercial Bank 06/01/05 3.180 50,000,000.00 11/30/05 United Commercial Bank 06/03/05 3.150 25,000,000.00 12/02/05 United Commercial Bank 06/10/05 3.170 25,000,000.00 12/09/05 United Commercial Bank 06/17/05 3.260 65,000,000.00 12/16/05 United Commercial Bank 07/14/05 3.510 55,000,000.00 01/12/06 SAN JOSE Comerica Bank 04/08/05 3.150 50,000,000.00 10/07/05 Comerica Bank 04/27/05 3.190 25,000,000.00 10/26/05 Heritage Bank of Commerce 02/09/05 2.820 4,000,000.00 08/10/05 25 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE SAN JOSE (continued Meriwest Credit Union 03/16/05 3.120 5,000,000.00 09/14/05 Meriwest Credit Union 04/13/05 3.180 10,000,000.00 10/12/05 Meriwest Credit Union 07/21/05 3.600 5,000,000.00 01/19/06 Santa Clara Co. Federal Credit Union 02/04/05 2.830 7,500,000.00 08/05/05 Santa Clara Co. Federal Credit Union 02/18/05 2.920 5,000,000.00 08/19/05 Santa Clara Co. Federal Credit Union 05/06/05 3.240 5,000,000.00 11/04/05 SAN LUIS OBISPO First Bank Of San Luis Obispo 02/09/05 2.810 6,000,000.00 08/10/05 First Bank Of San Luis Obispo 06/03/05 3.020 4,500,000.00 09/02/05 First Bank Of San Luis Obispo 03/16/05 3.110 7,000,000.00 09/14/05 First Bank Of San Luis Obispo 03/25/05 3.190 5,000,000.00 09/23/05 First Bank Of San Luis Obispo 07/07/05 3.210 2,000,000.00 10/06/05 Mission Community Bank 03/03/05 3.020 1,000,000.00 09/01/05 Mission Community Bank 04/06/05 3.130 2,500,000.00 10/05/05 Mission Community Bank 04/27/05 3.170 2,500,000.00 10/26/05 Mission Community Bank 06/09/05 3.140 1,000,000.00 12/08/05 San Luis Trust Bank 04/20/05 3.120 1,700,000.00 10/19/05 SAN MARINO East West Bank 02/17/05 2.890 38,000,000.00 08/18/05 East West Bank 02/23/05 2.930 25,000,000.00 08/24/05 East West Bank 03/11/05 3.080 85,000,000.00 09/09/05 East West Bank 04/13/05 3.170 42,000,000.00 10/12/05 East West Bank 05/06/05 3.220 35,000,000.00 11/04/05 East West Bank 05/11/05 3.240 25,000,000.00 11/09/05 East West Bank 06/15/05 3.210 25,000,000.00 12/14/05 East West Bank 07/08/05 3.490 50,000,000.00 01/06/06 SANTA ROSA Summit State Bank 06/20/05 3.040 6,000,000.00 09/21/05 Summit State Bank 06/20/05 3.260 6,000,000.00 12/21/05 Summit State Bank 07/29/05 3.750 4,000,000.00 01/27/06 SONORA Central California Bank 03/25/05 3.170 5,000,000.00 09/23/05 M TIME DEPOSITS NAME STOCKTON Pacific State Bank Pacific State Bank Washington Mutual Bank, FA Washington Mutual Bank, FA Washington Mutual Bank, FA TORRANCE China Trust Bank (USA) China Trust Bank (USA) China Trust Bank (USA) China Trust Bank (USA) TRACY Service 1 st Bank VACAVILLE Travis Credit Union WALNUT CREEK Bank of the West Bank of the West Bank of the West Bank of the West WHITTIER Banco Popular Banco Popular Banco Popular TOTAL TIME DEPOSITS JULY 2005 DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE 04/06/05 3.130 1,000,000.00 10/05/05 07/07/05 3.420 1,000,000.00 01/05/06 02/18/05 2.910 60,000,000.00 08/19/05 06/15/05 3.220 45,000,000.00 12/14/05 07/21/05 3.590 75,000,000.00 01/19/06 05/13/05 2.910 06/10/05 3.080 07/15/05 3.280 07/22/05 3.380 06/16/05 3.240 20,000,000.00 08/12/05 35,000,000.00 09/09/05 40,000,000.00 10/14/05 30,000,000.00 10/21 /05 2,000,000.00 12/15/05 06/01/05 3.160 40,000,000.00 11/30/05 05/20/05 2.910 242,000,000.00 08/19/05 06/16/05 3.060 82,000,000.00 09/15/05 07/15/05 3.270 134,000,000.00 10/14/05 07/29/05 3.470 176,500,000.00 10/28/05 02/14/05 2.840 25,000,000.00 08/17/05 04/14/05 3.220 24,000,000.00 10/13/05 07/29/05 3.490 16,000,000.00 10/28/05 7,245,995,000.00 27 BANK DEMAND DEPOSITS July 2005 ($ in thousands) DAILY BALANCES DAY OF BALANCES WARRANTS MONTH PER BANKS OUTSTANDING 1 $ 772,642 $ 2,783,008 2 772,642 2,783,008 3 772,642 2,783,008 4 772,642 2,783,008 5 554,450 2,200,139 6 882,588 2,253,833 7 388,555 2,173,411 8 424,046 2,321,001 9 424,046 2,321,001 10 424,046 2,321,001 11 642,433 2,244,802 12 509,468 2,166,346 13 181,491 2,499,987 14 507,824 2,384,147 15 650,979 3,069,531 16 650,979 3,069,531 17 650,979 3,069,531 18 786,121 3,275,786 19 260,103 2,664,343 20 551,795 2,379,583 21 486,750 2,318,225 22 258,014 2,011,479 23 258,014 2,011,479 24 258,014 2,011,479 25 712,765 1,855,378 26 501,425 2,257,380 27 274,806 2,244,489 28 800,413 2,294,486 29 965,553 2,149,328 30 965,553 2,149,328 31 965,553 2,153,879 a/ AVERAGE DOLLAR DAYS $ 581,527 - P1 The prescribed bank balance for July was $585,893. This consisted of $415,737 in compensating balances for services, balances for uncollected funds of $172,520 and a deduction of $2,364 for July delayed deposit credit. 28 DESIGNATION BY POOLED MONEY INVESTMENT BOARD OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS No. 1673 In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its meeting on July 20, 2005, has determined and designated the amount of money available for deposit and investment under said sections. In accordance with sections 16480.1 and 16480.2 of the Government Code, it is the intent that the money available for deposit or investment be deposited in bank accounts and savings and loan associations or invested in securities in such a manner so as to realize the maximum return consistent with safe and prudent treasury management, and the Board does hereby designate the amount of money available for deposit in bank accounts, savings and loan associ• actions, and for investment in securities and the type of such deposits and investments as follows: 1. In accordance with law, for deposit in demand bank accounts as Compensating Balance for Services $ 415,737,000 The active noninterest-bearing bank accounts designation constitutes a calendar month average balance. For purposes of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above amount provided that the balances computed by dividing the sum of daily balances of that calendar month by the number of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management. 2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest - bearing deposits in banks and savings and loan associations as follows: Time Deposits in Various Financial Institutions In Securities (sections 16503a Estimated From To Transactions (section 16430)* and 16602)* Total ( 1) 07/18/05 07/22/05 $ (149,000,000) $ 47,471,405,000 $ 7,200,995,000 $ 54,672,400,000 (2) 07/25/05 07/29/05 $ (659,600,000) $ 46,811,805,000 $ 7,200,995,000 $ 54,012,800,000 (3) 08/01/05 08/05/05 $ 457,400,000 $ 47,269,205,000 $ 7,200,995,000 $ 54,470,200,000 (4) 08/08/05 08/12/05 $ 784,800,000 $ 48,054,005,000 $ 7,200,995,000 $ 55,255,000,000 (5) 08/15/05 08/19/05 $ 172,000,000 $ 48,226,005,000 $ 7,200,995,000 $ 55,427,000,000 From any of the amounts specifically designated above, not more than 30 percent in the aggregate may be invested in prime commercial paper under section 16430(e), Government Code. Additional amounts available in treasury trust account and in the Treasury from time to time, in excess of the amounts and for the same types of investments as specifically designated above. Provided, that the availability of the amounts shown under paragraph 2 is subject to reduction in the amount by which the bank accounts under paragraph 1 would otherwise be reduced below the calendar month average balance of $ 415,737,000. POOLED MONEY INVESTMENT BOARD: Signatures on file at STO and SCO Chairperson Member Dated: July 20, 2005 * Government Code Member BOARD MEMBER ITEMS Milt Olander's Ha ndout AL. OPINION TUESDAY, OCTOBER 11, 2005.0 ` 1By Armando Falcon Jr. Over the past several years, corporate Amer - lea has been rocked by major scandals involving billions of dollars of financial restatements, sig- nificant losses for investors, reputation prob- lems for big business. and, in some cases, jail dine for senior executives. Whether it was En- ron. Adelphia or WorldCom, Congress wasted no time examining and strengthening the oversight hmctions and regulatory authority of various fed - nit agencies, including passage of the wide- ranging Sarbanes-Oxley Act. 7b date, there remains one glaring exception. In the past two years, . accounting failures at mantle Use and Freddie Mac, known as Govern• tent Sponsored Enterprises (GSEs), have led to :he largest financial restatements in history—to- :aling more than $20 billion —dwarfing the com- Aned restatements of both Enron and World- :wn. In recent days. news reports indicate the 'financial misconduct could be wider and deeper :tan has emerged thus far. Left undetected and unchecked, the web of misconduct at Fannie Mae and Freddie Mac not have unraveled in a way that caused seri- hus disruptions to our financial system. The ikely collateral damage was presciently spelled but in a report on systemic risk that their regula- r, the Office of Federal Housing Enterprise Wersight (Ofheo) issued in 20M. Yet the report, like the subsequent scandals t both companies, illustrates the need to ad - bus statutory shortcomings in our regulatory ,yatem. Otheo did its job despite being ham- strung by substandard statutory powers, inade- luate resources and political interference. Nithout a doubt, future .regulatory oversight vill always be a difficult struggle as long as hose problems remain unaddressed by Con- ;ress. Yet, two and a halt years after Freddie Mac's scandal unfolded, legislation to strengthen regulation remains mired in gridlock. One of the key areas of disagreement is the hpplopriatenem and size of the mortgage pwtfo- los these enterprises retain. Unfortunately, nuch of the discourse around the portfonos is bancteri ed by misinformation and scare tac- ks. it is critical to have a candid diwivAnn Adult Supervision about the portfolios. The fact is that they have groom 12-fold in 14 years for one reason: to gen- erate additional profits for the 03Es. That is nonjudgmental, just a fact. Other stated pur- poses for the portfolios, such as enhancing the liquidity of the mortgage -backed security mar. ket and promoting affordable housing, would be no less well -served if the Fannie and Freddie continued to buy mortgage products as they do today but retained much smaller portfolios. Failure to diacipllne Fannie and F*ddle could lead to financial meltdown. Currently, there are no real limits on the size of the portfolios. Ofheo's statutory mandate is to ensure that the enterprises manage the risks of their portfolios in a safe and sound manner, not to limit their amount. However, hued Chairman Greenspan and other economic leaders have re- peatedly warned policy makers that they should be concerned not just about the safety and sound- ness of Fannie and Freddie. but more broadly concerned about the risks to our financial system. Reducing their portfolios will certainly leave the GSEs with much smaller balance sheets and less systemic risk. However, the enterprises would still be able to earn a fair return for roves• tors from their guarantee business, and be more focused on their affordable housing mission. Is this then an appropriate trade-off? This was not a judgment felt empowered to make when I was at Ofheo, but it is an issue on which I have advice for Congress. After reflect- ing on six years of serving as the regulator of these companies, my answer is YES. The amount of time and resources the enterprises must deli- sate to managing the risks associated with their portfolios is very substantial and dwarfs any mar- ginal benefit to their affordable housing misahah. In addition, the recent scandals at both compa- nies illustrate the problems they can get theta selves Into as they try to manage the volatility associated with very large portfolios. Smaller, mission -focused portfolios would bet- tor iPf w P.vPrvmP.. PvPn sh1arAhlf on Tf woll managed, they are capable of a fair return to investors and a strong return to the public inter- est. But as it is now all too clear, the enterprises never were the steady earnings juggernauts they held themselves out to be. disawtion to Legislation age the site of � portt�but be clear as to the regvtatoc's mandate. The mmkistes in the Senate and House hills are very different and would produce different results. The Senate bill would direct regulators to design and implement an orderly reduction in the enterprises portfolios without harm to affordable housing efforts. But the House bill would preserve the status quo, which permits the enterprises to maintain portfo• ft of any site as long as safety and soundness considerations are met. The House bill should be amended to put the proper mandate in place. Time is not necessarily a luxury in passing legislation to strengthen regulation. Fannie Mae and Freddie Mac have constructed their portfolio risk -management strategies around hedging techniques that remain untested by adverse mar- ket conditions. Even assuming the companies employthe very best risk -management prac- tices,'prudence demands that we h we the stron- gest regulatory structure in place to deal Vdt h the fallout If they just get it wrong. Remember Long Term Capital Management. The growth of the portfolios held by these two GSBs has wincided with a strong economy, except dor a mild recession in 2W1 that left the housing sector unaffected largely bewise Interest rates fell to historic laws However, ioftterm leterest rates are more Idkeay to begba an wsatd trend that may coal off the housing market. OK)vne has an Interest in ensuring that a fully empowered regulator is in place to deal with any pressures such market changes place on the enterprises. Freddie Mac and Fannie Mae play an impor- tant tant roe in our housing finance syaton and I sup- port their public mission. The bey it to ease dhsy are truly focused on this misrdon in a sate and effective maraw. It this public -private arrange- ment Is to work, the eatsrprlses MUK have a MY empowered reguldw and grit bade to serving the public interest. not the ambitions of management. Mr. Pakon. a pratczpat hadth the Cbsonbwv amp, was dfi ecfor of "M from no halal May Af ibis "NW Handout - Item C Cyrille P. Mahfoud, CIA 3167 Juniper Street San Diego, CA 92104 October 4, 2005 John Falconer PO Box 1504 La Quinta, CA 92247-1504 Dear John, This letter is to inform you of my decision to retire from my position as board member of the Investment Advisory Board for the city of la Quinta upon immediately. It has been a great privilege, indeed, to have served as a member of the board for over 6 years. I will leave it with enormous respect for the integrity of this committee and its role under our investment policy. Sinc , Cyrille P. Mahfoud, CFA Handout - Item D MEMORANDUM TO: Investment Advisory Board Members FROM: John Falconer DATE: October 7, 2005 RE: Joint Meeting with City Council Please be advised that the joint meeting with the City Council has been scheduled for October 25' at 7:15 p.m. in the Study Session Room. Thank you. JMF:vlo Handout - Treasurers Report - Replacements E E M E a) _o J y y C E N m a yp U F- y r rn U 0 a y FL- a y C C C C C C C C C O Z O Z O Z O Z O Z O Z O Z O Z O Z W c o QQ d v v d C 15v (7 c a a o yU L m N 0 U a o C N m y N m > C C y LI P T � f0 La>. y O N f0 0 J� Ln ccM E J y , a`) a v d T a J O J « J C y N y N V J y y U L C C C " C� 0 3 C C C C N O 2 y - Q y M a i y a N m Ea m ---_ oa o E.�.E.� O 0 3 y &p n�o >�N y 00000 0 o 0 o N > N d 0 0 c°E> a°i� ^0000 E 0 0 0 0._ 0-5 cM ac o i»iAu9w 0CL 0 Uo O o 0 f0 v v -_ y V M M 0 000 o y y c e e 000 c o o 0 O u u u a J'o ro 0 0 0 o O o o Q n� o a 2 0 vo, o Lq 0 o On o' z � 4 T ro 0 �� o o vi r� > O '00000 O O O o o e y J o 0 0 o O c C 0 o o o 0 oo o u 01 u u O po N O O O o ,O M o a o o o o 8 o 8 o o o O O O o 0 0 O O N O o N O f0 �,DhON f9 Z4 O O O O O E O O o 0 O O O O o O y 0 0 ` Q a E 0 0 o o o M O N N Z J'x W o O O O O O O O y O O O 0 c o 0 O Q M O h OtqC W o CI! O Z U-c r O 00 c �v� O M � OD N Q 19 M > O 00000 00000 0 vo o 0 0 0 00000 0p000 e o 0 0 0 c J W CO 0 o rn O 0 Cc,r ,n MO o 0 LL J CO NOON o Cl) O o O Q N 00 O 00 y E 0000000 J o C O O 0 o e o E o 0 0 0 0 0 0 0 n o Z a� O O O O �0000� O M N t0 6 M O w N 0 C V 0 y N .O ca l0 L Z M -i 3 UQ= d N y y U LL > o c Z m Qc n C y C E C ,p y l0 "V N C V C I`0 M p M > V J U0) V a o 0 O y CO X LAC .0 pp m Q my N a N 'O y O 2 do N v N I.'y N ULL CM N O M CL O E c .O-. o O,y N ov o,Q0z�m N N C c J C ��'c C �o N L L 3 Z ui D ' O C C C m �v,mmo LL C G mM O v Y c $V E c ocm� m °' .`°J. o f y C .y O N C N O lO D 0 0 N a W J y N E E C E y c O ul m N N N J U J d 0 z O E E E` M > c E= E U m U> o J Eg d60M0 E z LL E z d °0 Q c �? c a, w d c m m —L°L° @ O1 >vvvo a U d L rn a >. o c�i rC c c{ m d °' E V Y O N F- Uo V LL d E o U 2 x Q H > O U U U% E CJ IL IL IL a U H ] h M V O o .0o fV <h N M y r E E > > C C y N C E U Q is V > d c y aLLQ� oo`om N W W W F- N N N C 0 c c c x x Q Q Handout — Treasurers Report - Replacements >"3d� �0 zzzzzzzz L�fn C C C C C C C C m s � O a��aapYpapa�a'aeaea' �. 7Nt+l a1 A I�tNONN aD N !n N tD 0 T 0 c �tpp OI pp1OM N C O O" C � p Ow n S U) � 888888888 §§§.H U to fV tV N tV 1 to N N a � 0^'rN,�th O (0 NOt� f0 Of M OI (O a .M- QNNtn� oo)00 aNDa aM-N VmSS�00Mi � N(V fV N�fh7 NN lD 10 N N GD 1O GD c^�f tON�N�M tNy NO Mvvvvlbh�M C ID y toO N o wo Ml(tp�ph pVp N � �O NtD Nap C Q � to !A toe-N�a co arDr ONE tOO �ONN^ N Nfr ht•. Of �� M^ O �� O; No' ONO N fV V N N QE N V9 C7 0 2E 3pp8E 3"eP 2pp42ppt �'2' iff tND NN�t00, b yNN tD.-6 Nto Y Q o °m p' t m K m m w U C < o U o N (5 z x x m N LL LLLLLLLL N y N C N C C C C C C C Cj w_EE 0 0°e 8a �°e y y 0 M 1 9 9� o ZoZ$ZoZZo`2ZZ EEa�g ENo,, U c c c c C c C c vi oo0 }}}}}}} z z zzz v z z o _ C C C C C C C aaa2m22 9 2' 0 2e 3e 2` 3e 3e tq�O'NN� � } M l O m l n< M — fV N fV w o m m rn Cm � O O T O N N N O 80SScoo �� C C C2 Q Q�7 M� O v 0 0 gQQ $O 8888888Ct 88888888 N M<�tn Otn� 7 a w �c 0 to M O N M �MtDOO N O �tpp pp �p N a V M l0 O N n y N h a O M tG O ^Ci OiN Oi of Ct 0 0 pmf 00D00 0 to i Y Y1 V L6,6 M O W 00 i0 mfpDp Opl W N pp C 'q H {{pp 1p y N M N N N CqM Q C H ((pp 'Od' O In S N pO S t`M W. 0)) N j a Ct C 0 C A Ol 01 O Ln !h Vf V th � M Q Vi 7 N $ Z ppNy p y N N C4 N f R h f0 10 t0 00 m NN N N W N N N N O O O O O O O zzzzzzz rzazzz y y(7 tQyyy 7 M D =1 7 N W W N a W N ;= C C C C C C C EEEEEEE z C !a zzzzzzzj F"$ 0 U C c c c C C c~ m 12 12 12 12 m N C ad c a8 cm U UU 33 1212 The Week Ahead 3 October 2005 UBS U.S. Economic Forecasts: What and Why? Forecast impact from Hurricane Katrina ■ Hurricane Katrina aftermath accompanied by new UBS energy analyst upping projected crude oil prices by $4 per barrel in 2005 and $16 to $64 in 2006 ■ Net impact of these two developments was to trim 2005 & 2006 real GDP growth by just 0.2 percentage point on Q4/Q4 basis and only 0.1 point on a calendar average basis. However, expected CPI inflation on Q4/Q4 basis upped by 0.5 point to 3.9% in 2005 and by 0.4 point to 2.6% in 2006. ■ Mounting reconstruction costs and spending should almost offset near -term energy price drain on purchasing power "Bottom Line" on UBS U.S. Economic Forecasts ■ Real 2005 GDP growth in mid 3's slows to around 3% in 2006 after interest rates rise ■ 4 1/4% fed funds and 4 1/2% to 5% 10-yr Treasury yield range ■ Core CPI up 2.3% in 2005 & 2.8% in 2006; core PCE prices up 2.0% and 2.5% (market -based core 1.7% and 2.2%) Growth Forecast Drivers ■ Purchasing power momentum (i.e., recent good gains in profits and personal income) ■ Reduced slack (e.g., wages and capex accelerate with lower unemployment and higher capacity utilization, respectively) ■ Lagged export impacts from three years of a declining dollar Major Growth Risks ■ Major downside risk is that the incremental real purchasing power drag from high energy prices intensifies ■ Major upside risk is hard -to -forecast household formation generating surprisingly strong underlying demand Key Growth Signposts ■ Jobless claims ■ Capital goods orders Inflation Forecast Drivers ■ UBS leading inflation index ■ Eventual wage acceleration ■ Productivity slowing to trend ■ Projected lower dollar Positions on Five Key Controversies ■ Households are not yet dangerously over leveraged. Do not compare current high repayment/income ratios to lower ratios in past decades with less affluent households. Affluence lowers the necessities share of spending in budgets, thus raising credit worthiness and the ability to service higher repayment/income ratios. Consequently, delinquency rates have not accompanied secular rises in repayment/income ratios. ■ The low personal savings rate unlikely to rebound sharply. Above -average income families incrementally saving less than in past due to higher valued overall savings in stocks and real estate. (Household net worth at around 5 1/2 times disposable incomes is relatively high.) Many below -average income families do not save due to being either young working adults or retired and also because of expected retirement benefits from their "forced savings" via Social Security contributions. ■ Historically high U.S. reliance on foreign financing currently is not necessarily dangerous. It partly reflects higher savings preferences versus limited investment opportunities abroad. It is not very worrisome as long as U.S. borrowers reliably service debt and foreign savings patterns and investment opportunities do not change much. ■ Each $10 sustained rise in crude oil prices subtracts only around 0.2 percentage point per year from real GDP growth in each offollowing two years. 7.5 bil barrels annual crude consumption times +$10/barrel = +$75 billion rise in consumption times 63% import ratio = +$47 bil "oil import tax" = 0.4% of $12 trillion nominal GDP Effect spread over two years. National average home prices are unlikely to decline despite some regional weakness. Tax, liquidity and expected financial return issues all boosting housing "fair value." And mortgage rates should not increase much without better growth in household incomes— (� r,rLV-eApne key to housing demand. i i ii Gee4 i e44 !goP4 Rate Forecast Drivers ■ 4 1/4% "neutral" Fed funds rate "data dependent" on enough growth slowing by 2006 ■ 2.3% "core" CPI inflation in 2005; 2.0% for core PCE prices ■ High foreign savings rates are why 5% 10-year T-note yield target has real yield under normal 3% sr-t 4 o de L"Qo , 3 October 2005 www.ubs.comleconomics Maury N. Harris Economist maury.hams@ubs,com +1-212-713 2472 UBS 1 The Week Ahead 3 October 2005 Required Disclosures This report has been prepared by UBS Securities LLC, an affiliate of UBS AG (UBS). For information on the ways in which UBS manages conflicts and maintains independence of its research product; historical performance information; and certain additional disclosures concerning UBS research recommendations, please visit www.ubs.com/disclosures. •e, Global Disclaimer This report has been prepared by UBS Securities LLC, an affiliate of UBS AG (UBS). Head Office: UBS Limited, 1 Finsbury Avenue, London, EC2M 2PP, UK Phone: +44-20-7567 8000 Local Office: UBS Securities LLC, 1285 Avenue of the Americas, New York, NY 10019 Phone: +1-212-713 2000 This report has been prepared by UBS AG or an affiliate thereof ('UBS'). In certain countries UBS AG is referred to as UBS SA. This report is for distribution only under such circumstances as may be permitted by applicable law. It has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. It is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, except with respect to information concerning UBS AG, its subsidiaries and affiliates, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the report. The report should not be regarded by recipients as a substitute for the exercise of their own judgement. Any opinions expressed in this report are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or groups of UBS as a result of using different assumptions and criteria. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. The analyst(s) responsible for the preparation of this report may interact with trading desk personnel, sales personnel and other constituencies for the purpose of gathering, synthesizing and interpreting market information. UBS is under no obligation to update or keep current the information contained herein. UBS relies on information barriers to control the flow of information contained in one or more areas within UBS, into other areas, units, groups or affiliates of UBS. The compensation of the analyst who prepared this report is determined exclusively by research management and senior management (not including investment banking). Analyst compensation is not based on investment banking revenues, however, compensation may relate to the revenues of UBS Investment Bank as a whole, of which investment banking, sales and trading are a part. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Options, derivative products and futures are not suitable for all investors, and trading in these instruments is considered risky. Mortgage and asset -backed securities may involve a high degree of risk and may be highly volatile in response to fluctuations in interest rates and other market conditions. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related instrument mentioned in this report. For investment advice, trade execution or other enquiries, clients should contact their local sales representative. Neither UBS nor any of its affiliates, nor any of UBS' or any of its affiliates, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this report. Additional Information will be made available upon request. United Kingdom, Sweden and Netherlands: Except as otherwise specified herein, this material is communicated by UBS Limited, a subsidiary of UBS AG, to persons who are market counterparties or intermediate customers (as detailed in the FSA Rules) and is only available to such persons. The information contained herein does not apply to, and should not be relied upon by, private customers. France: Prepared by UBS Limited and distributed by UBS Limited and UBS Securities France SA. Germany: Prepared by UBS Limited. Distributed by UBS Limited and UBS Deutschland AG. UBS Limited is regulated by FSA. UBS Deutschland AG is regulated by Bundesanstall fur Finanzdienstleislungsaufsicht. Spain: Prepared by UBS Limited and distributed by UBS Securities Espana SV SA, a member of the Comision Nacional del Mercado de Valores. Russia: Prepared and distributed by Brunswick UBS ( a division of UBS Securities LLC). Switzerland: Distributed by UBS AG to persons who are institutional investors only. Italy: Should persons receiving this research in Italy require additional information or wish to effect transactions in the relevant securities, they should contact Giubergia UBS SIM SpA, an associate of UBS SA, in Milan and a member of the Commissions Nazionale per Is Societe a Is Borsa. South Africa: UBS South Africa (Ply) Limited (incorporating J.D. Anderson & Co.) is a member of the JSE Securities Exchange SA. United States: Distributed to US persons by either UBS Securities LLC or by UBS Financial Services Inc., subsidiaries of UBS AG; or by a group, subsidiary or affiliate of UBS AG that is not registered as a US broker -dealer (a 'non -US affiliate'), to major US institutional investors only. UBS Securities LLC or UBS Financial Services Inc. accepts responsibility for the content of a report prepared by another non -US affiliate when distributed to US persons by UBS Securities LLC or UBS Financial Services Inc. All transactions by a US person in the securities mentioned in this report must be effected through UBS Securities LLC or UBS Financial Services Inc., and not through a non -US affiliate. Canada: Distributed by UBS Securities Canada Inc., a subsidiary of UBS AG and a member of the principal Canadian stock exchanges & CIPF. A statement of its financial condition and a list of its directors and senior officers will be provided upon request. Hong Kong: Distributed by UBS Securities Asia Limited. Singapore: Distributed by UBS Securities Singapore Pte. Ltd. Japan: Distributed by UBS Securities Japan Ltd to institutional investors only. Australia: Distributed by UBS AG (Holder of Australian Financial Services Licence No. 231087) and UBS Securities Australia Ltd (Holder of Australian Financial Services Licence No. 231098) only to 'Wholesale' clients as defined by s761 G of the Corporations Act 2001. Now Zealand: Distributed by UBS New Zealand Ltd. ® 2005 UBS. All rights reserved. This report may not be reproduced or redistributed, in whole or in part, without the written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect. N UBS 2 `=w=r+0 �n �• m CD = 1= rot- ►p O CC ,:� r„r � • n `C 0 ow M 5 �� O � � ►� ° cD O p O. C CD 01 o M v CA !"r CD � O � � � O CA rD N cam. O O � N O O N O O C!1 r-r- O O O O n � OW ow .J � � O CD y o c� o c W N �-+ � F..�► �D jmw o OW �. o� N � � w. Owe OEMW''' aw �. o y y 0 �CrQ c� Owe o' o o �- o fD Qn ° ,.. ` OMEW MOw•' � o ,EW 0 rA •,,- �. 4 00-01, � t9 " 1 A�.R,,,y 7 i ES$ 'M �f;f ' a e j Y, r a ax qty" a t 0. q [ Y r � S � �i°�i`9tfE Y, 2"*"� ?.bt G✓t � ��k a T ,i ey �i�¢ � ��p w i Ya3 � t �MIT— i a b� 4 st� ,� r 1 3 $ d d B v",� kd ale .�. 1 ffkvfM � ) 9 7 P vus p'� ��E NO ' SUN "'tubd�T' !k jo & M^xttsa4 c 4 n NEWz �,� Yield N W O cn j Cn N Cr W Cn A Un Cn J N .P cn C07 ■ C— CD W O N O O CDCL 0 C CD a Ri t Y h A� i i 4 y 1 A Alq � sy�a a 9 I 4 � i✓" s � �e � � 1i % 7 CE," f'} 7 t Y k �hb"�y i �aro aS" G fledI �' h t �4b t > ig ,�f da tik� e o1,13 Y ' 'sz N IN R f - ��Tn „&� i �'?`T r'f� �, � i� ffi .`Rdy}��y1 R,iid�iY�' � j�� 3 �4��'{� ,k ��(, r'o {✓ � � y�" § �e �i24 F R MUD �, 3 ��s MA y ". P` A 6d 5: �Wie: i� WI, I ?.,323. S 1 bb q^ � e 1 F ,�.`� Ntas r i 24,. �a;128,b 'r i9�st kN�� , i ,, ydey did P x!'s:/'�."3�, qtp ��`` tv'1t{ ' ��; NO a U Y: j \ Y-F 1 �4 I5L D !� z � o memrf' t• 1�� a� ° �� a ' xw not d fir$ d as s `�, d" s yM„ Ems .gyp 3�f. li 99d i ii a f t4 �'V:1J >r "Ao- P + �5 pIN ebY c8 w 7 d, '3, * * d'' d ± �s I N i UlR� !L..`d R�4 kF #t' # g Y{,r' Ni IMAM—Y '' '�gKAM Y@ e q, ri`r 1 6 V=i aNZ VNk�R frAN fEhtr y t J Id i �l' '4P K; +5y� �i £� � e" t& " R� a I* mn + HAS 6R ON .ql 5 { w € u > � r f Wk fi »' 'fieCA F m Imamslilt I CNN 0711 is d s a`` t^ • • MA fl h F� r } gg. k �,t a p � • 9 1• 1• 1• • C� ow. POIL cm 0 arQ 0 0 0 0 pi n Ll EVI r r r) LA I r r r) 9 . L `am Ll Old l 1 O v r r r) tml r n D m D D <m m cni m of K 'c d t�°D < a m CD r m v 3 a o ' 0 O N O ? O a ° 5 0 d to O) N " t0 N W tW71 s m UI Ul t011 W 00) -+ ;oQDOmoQ=!mx00om -4 Q O eD T CO O 2 0 Z 0 0 M M m 0 O to Z O w O Er CD r- N o 3� r.y m m C pr W: O1 a. � 3- m G0 0 n 3 j/� @ n O z n @ �% (/1 a y K G y d 9 N O o N D ��pp O 3 A N N CD i0 7 N N N 3 y CD N r Ur 2(A �C NN D m mto v CD 3 O fIJ O • -n n C U) H C N w p m th C z o m 40 a 4 ON O :1 V A OI �71 W N U{a1 J A W 00D -t�71 o N -tW71 tN71 O 1 A CD 2 A j N O V W 10 V N - 01 V O V co N t0 -+ to 4m A W t0 O O N A O O N V T t0 V tr 0 0 Of O tO N O O O N [0, OCDOO N O V 40 N 40O N Wt0O tTl O WL&t0AO �I 00 CD m-+ i► O10 C? O O O W AO W 001 NOO t0V A N 0 w 0 W �► 40 a a a r A -► U j t0 A Y I N N ; V (r j M t0 Of W V N N N V N A O Co W t0 N t0 co N t0 01 O CO O A Of O CD,W N- l M 01 .1610 W A 00 UI "CO Z C -+ A O V Of -► N In W A V t0 t0 O V 00 Cn 1 t0 m 01 to N t0 t0 O t0 " N to UI N W CD V O 01 co V to O CD W CIO V W N 0 Cl 0 U1 to — OD 0 co 0 U1 N O m O N n �m OO O O N O t000 tO 00 N p V W OtOO A O CD 40 0) GD 01 W O 0 AA CD CD if W O CD CD z �-4 0 O 00NAODN OOIN O O W W O V OOf O m m n M m+ m AO Z nt oob6O+ o+to+++ oWob -•oo�w OmA co?" O COS V NCC VWOCC OONO.Nt000OO.Om Amy At O V OO ;a "n left CS v � O O O v O -41 O O A O CD 0 0 N 0 0 0 N O CJ1 O w O Cn O �A O Cn 0 Cn O Cn 0 rn O Cn P� H O $ in Billion N N O Cn O Cn 0 0 00 0 O O N N p W O O O O 00 0 0 O 0 Percentage Yield x z 0 ., we 'y1 -n U) U) Cl) U) CL W -N .P 4:b. 4Ph. :.1 :.& : �& iD -I .p �I O 00 Cn CW IV I O Cn Cn Ul al to Co 00 �I O 0 IV N O W O O CJ1 C�7 O O ti7 C37 C�7 Cn Ln CA .p .p 4h- .p :.& O O Cfl 11 dN Cn O �1 t?1 CJ1 O O C�7 O O C� N C?1 C31 C37 •� -N 44- � -� O co 0o m W cn O N O O 10 1 CA I Ln I CA 10 1 m 0 N O Iowa o Pat C) oowe CD o palcr Pat O N rA i 0 (n -u O cn 00-rn_n >CD0 m rn m�� Z CD m o co D 0 coo m 0 y � ao m N N D o c cp o m o m 0 J a W � W NIL O O N .p e R Z d r O ►% t~D jog. CrQ CD 00 � � w O A to � O W A U1 O O O O O O O O O Q 'A 00 3 C CD M 00 M o O cP'-n cn C Z aCA 0 �„ � G o N 0 0 0 0 0 O O O O O O r v .� w r ,� r N O r N O O W A W O N O O IA r O C� r z z c H hh Z y V C� �d O y O t� W O V N O O 0 0 G a z -I m N c�G > 0 0 m n ,mw0> 3 (D "• o y 0CD r y 0 O Z y co co co CD a v a ca j O tC O W O O O �p O O ap co O1 O O 0 0 0 0 0 V N N O O -4 0 0 0 O 0 0 0- 0 0 0 > 9 `� r 2. __�NIT O O �4 O O o \\\ W 0 0 O O CD,p 10--0 0 0 0 0°° 0 • • ► • \ •� 0-1 • •• • ml o • e_ • • 00 ,a • • • • • hN St 5. ./ • k.. • i • i \ • • • • OR • Cil CD -P�lCA) ry �0 m �' O o v a 0 0 m m 0 O ., y �► m O o o o Din m cn-4-0 + n N 0 v, m T Z O Z Z G o ^' H '� C 4ft vi v, 40 4ft 4ff cu �' 0 co =0 CD Q. _ �1 N v C11 Cil C� N W 0 (gyp D m. 0\D° W A N -4 A W w W cc 0 O A 0 O W Q m� o o c�, o ul v, 40 40 40 Cn cn O 0 o 3 CD V O W N 1 Q CDd N 1 co O v C C SD w° ul C0f O O O w O (D l ¢1 .D 0 � CDCD 40 f�! 64 40{A EA d! CD (DC O CAN i a 11 _ R. O A CD W O to w co �C 00 _ 7 O o Cl) w N cn0 0 0) O CD Q ? 0 (D d! d0 iA fA d! :!! w w CD J Ch _a W W cn -A ca O V � O 2) C p ° t0 � O O A O m 0 40 VI =. � 0 w r* ° \ 146 cc al Ul V O cD a Vi � ¢1 OVO W O O co :�? to ER fA ;/! ER � 0 (p C c J ° cn O (D N V O O cn O _ C) o N 0a v � � A w 0 m ° cn Ul oo �a y Z 44cn 0,0 IV Ul Ul N co W N O df d1, tD w m O C cn p o O W N o a. 46 40 c O Zn N N_ '< 7 O HO r* 3 cD o o o n O C N N � CJ1 O O Ut O CJ7 O O O O (J� O 0 v O CJi O (Ji p UT O O O O O O O O o �019ipp 801 c rzpp 0107 6107 < 9101 rZpr 0/p2 O 6102 9102 .3. ►C O2 �p 3/0 Q 0 610,9 9/p3 'Z03 N 0104 7 6104 0 9j04 O 'z04 Sips C Gips � O O O Ul aC z ► ► �- m h1 „ m - -o D Q N W pop N o N 0 0 0 Z rIt r r x s s s 4CIO G i D I rZ9 2 O OCV93 � 7Z93 co p� v o n 94 �. �Iz s 00,96 r2,9S a O% co i ;I OCY9) a w rZ9) oey 98 w rZ p 98 O D �99 ao rZ99 O'I'lp0 rim 0610, v rZpr cop6102 a rZO2 0a/ 3 'v rZp3 O % v rZ� 06106 O N W C31 co CO rn O O O O O O O Yield % W G� T r 0 n mn c CL 7v 70 � 7v 70 3 o (D F1 I a F 3 � 0 w< _. _. ° 3 U) � m 70 c A foll. o U) p C (D a 3 U CD -� r� _. 3 fu 3 � l n. MINNOW � 3 a � m c� a n a c� 3 A ■ ■ H O (D A � —. � O CL (D � O �D —•lu (D A � (D O O. O `< r+ O � � n =: A —■ r+ � o � o M cn _. o cn Cl m r+ m mn A� f+ m (D C. h O (D O m r+ -s O A 't f+ _. :r m O C. w r+ h Ul O. DU tDwh CL O X O A O (D D) n 0 z r+ Ct O O O. o< ul O A O 3 i x U2 �D f+ O CL O F)7 U3 4c .31 V 01 U1 .p W N .� U) a (D N' O �D r* 0. 0 M _ r* -h ul -� (A ca a p O CL �< r* _ (D fu cr rr m _. f+ r* Mi A s m a m O -.h on O n O a h Gi A (D a r* O Mi f+ rD 1111111 cr 0 �. �D O CL' Mfa C fl. rt �p U) rr ul n n _ O �.O O CL ml CL �U) a O s � r-F -� -� + z �- w N 3 w N Im _= N z z Z �7 a = co co n > a OM � o0 = N z z ? z a a a G) m X 2) r+ Q ul x m Y/ WE -S on 117 O�c 910, 'oo O 9G`910 o � a O) CL t oQ 0 cn 9� 9 b� Odo bQ ■ r O m MR nDi � oDi aDi aDi � V M �7 rDcr Vf rt < n M Ul a, P* ul r+ ml m z 9 Im 0 CL 3 (D� CL 0 ■ m f+ _. O 1 CL CL ml m ul U2 i rn l< p C o cn CD rn N CD � o O0 CD m CD m 0 FD 9 O i O orq iv =:3d rt a) CU • • • • •n • CD M 7 G CD a -r CD ►-r CD ~ • r� �--+ �'' 0 CD cn CD �CD n N o CD 7d lTJ -=i CD Np• ` O a � O CD N 0 CD CD !CDCD .ram-• CD' p (TD CD CD L CD ► COD CT o r CD �.P � CD CD � o CD CD CLCD n v� 1 a w c D c� y N 3 0 C N 0 < O (D n (AC r+ N O C L f�/! O N CD CD D1 CAD o CD(%G p A.. CD • 0 CD P CCD '"r � CD USG CD `0 0 o O � CD CD Q. � . COD CD CD Q <D y A� UD CD 3 CD CD � � CD (i4 A� (CD o o CD 0 o CD o CD � CD N I �-n I N N•M m 0 O Af 'p �` -n C. O O O 2 y r .a .O =. O ° O = (D = y n A) C Q. 3 jk C- CL O (D O 3 O -9 y r (D �O (D ips �°. BCD 3 �pC° �d c(D 0 = v o� (D (f) _ (D n ��=• CD O O (D At A► = ° CD CD 'f = O (C yCL C n C. Al N O (D to0) .1 y A) CO0 CD(D y C CD 'a (D (a O ri (C Awl `< (A 0) Q O C 2 0 O O = CD (D tC O < O CD 3 N.., 2 O x N g N N co 00 co 03 co cn 0 CD f^ D ° e a (D O C O O C C 4 N C W m CD 3 a 'n A m Z O CA (1) W O N n m m C (D N o T a n Q n y y CD W 0 n 3 (D = C -n ^. i N Q' 4 N � <D (D v o m S CD Ov 7 �i c nn rn o cND rn rn n i9 0 0 0 0 o O o 0 0 C) ,n T d W OWO � Oy .NA � V A CJi A,, � CD Ch w V W 3 co 4M C)N -A,(71 0 v � T CA 0) CD m 2 N A O A I C11 O O 0 W (D -! N (D --! N -n a cc N D O N a N m A 1 co � l N C ic N O im (0 (D n (D y • Q' S -i Y li i G f) O V J w O 3 • n N "n Al D_ < o to 3 �► �D (D fl. 0 _. CD i ; cD a 0o �d C/) (ACLm °,� a, r� ju Q. D� r O m CD ��o i CD �� ;` ` W ;oy 3 m(D( y o . -..._.- O m Mto ., �. (D y N a. cD I ; ; ; o 0 CD CD to fl1 y ff I CD M Q- SU CD CD— Q. G CD i #- -- f0 O O O O O O O O (D M C ^ CD y 1 v m V j a CD 1 N O CDCD A t"r t N 7 0 CD 0 O'J V �f • i S co i i O a a� O o3 0 �0Cl) (D �� aaa-� �� SZ Cf a� O x�.�D fu �G c Q. O,`G fl. N Q. N (A = <D lv tf► O c N C a = CL < 7 N I N� O (D W'< S O CD _L O n 0 su �D to ju a IV y N N W n rt N 01 O .� S CD CD Q CD _'i�D aN O SC. < H QO < fu N CD w to Co. N O C. �= O N a c y N N a N c 0 Co a-T 0 N (D W O CD 0. 7' N O N N Op n A 2 r W .A O O O O O O O O O CDa-D^ ci 4 CO) '"Yid' `Wi1 3 ?s� �R _L M �r C. W G) O a C. € N 3,AM � ar im A CD W co O C. 411 O N co v N W F, V V W V ` �u] CD O O—A w , CJ !—I 0--► CD rr C ' !rram^^ V/ CD n H� CD rI=. V1 CD N O O N C 3 N O �D N ApO o =O 0 a0000�� a (D-1--o_ (D y _(�O u�,a cU� p o c w cD�toCDC' �D 3L�CQf.c C y Dp o�. _ - p CD N' y O o y •+ a� T ca o 0 C) caCD (T1 (D p �D '► C cD (O C o O O y � a �D d! a 0 -CD Q CD tea- as p 3 ,< o< O CD CD `< c Cr Cs .� to r. CD 0 rn CL CA W . C cD O y C D< cD 0 CO <D O p C CD .� n p W �"� O• N - cD O '' y 3 7 a .+ O CD to cD 7 a cD 0 p, O cD r„ CD D N N 0 T O y N 7 7 (D 9 D) (D CD 0 T N a W (D 0 n T N W N O A to N N W C) C) O O O O O tj A a v O O 0 C Z 0 (D " N N O O _a to N W W (P N O� I O O N c3 O 0 N � d O i CD (D =l< ,.« N WN O OIQ =3d r t- CD l< 0 0 0 d cn ON I I N crCD = I I c TI I I m (p M (D a CL 3 •* m CAD O O N CD (AA m ° CD a CD 7 CD ° CD O- C. bi 'O ° y 03i Om1 < A (D C D) D) (C N 3 y N 3 c Oy, 7 a= �i rn (�/ 7 (D a (D fl 0) w y `G a O°, w n S 3. Op n CD 0) 3 ' -° CD to X <'D -0 (OD ni '=O � v N < C � CD m N ((a a � D) n " � 7 O N � =. O � C y �• � � C> � N -n w C C ��j °_ 3, m w Zr W CD C. O y w CD N a y 7 O a n (D O �. N CD a s =. � 7 c ' mm y 3 v m o m y� xa °''c ° m0, CD 3 3 .� ° oroc a< CD (a —0 (n cm (D d 3 ymf 09 °mo CD 0 CD K ? C to w CD cn N m -n -n -+ TI -n -n m -1 m W m m -1 N y a m oo � W a ni W a , v� co CD cp CD (b n 0) n n CD n (D ^ n CD n O O O O 1 0 c A A A A A W W W A A A p W W W N 00 00 OD 4 V -I N (yi v v V N O cn Ul U7 Ul (T O V7 Ul Cn (n O O .'. �I O co Co OD Oo O) v O 00 co N_a -I (n 11 OD (n N (n CA OD -1 (n 3 . \ \ \ \ \ \ \ \ \ N N N N N N N N N N N .d. O_ O_ O_ O_ O_ O O O O O O Ui (n O CD O OOp OD OW O O O r w , 0 -► 4 w -� Cl -• O O A :-I N O) W -• m N iv v, o (n Cl (n (n in iv (n -4 a_ c (n O O O O O O Cl (n O U, A r O W N N �I O v v 00 OD CA O O Ui V Cr Ui V N O CA � o O O O O Ut O O CJl CJi O O O. N m N Ut O O -I O N O CT -4 3 v O O O N O OO v p p v m C/) a O ►� 0 y n C CD (D (D CD N V CL C V1 r MH W O Pd (D N O CO =3d CIO CO l< A W N Z DD»0 O O c C A -1 N N W W w o 00—co to M6U) (D' = fa --I 0 7 = O 0 7 0CD C) W 0 CD OD W N ffl O N � W N N ' W t0 -I O A I I N C A) D � V. ? C y (A N s: N3 p Cr0. 1 D = D ID (D r* to N 0 3 MN BCD (AS a cr f/) ? °- Cr a �' o s <' (D = .a T. -i 0 � c � D CD .7 lu X O u� a W � Ln N to ul 0) W CT W Ui co w tH W s (0 N C7 CD OD A 4 A W 0)A, o ; W C7 10 N .p CO U1 -1 7 O^ W A ^ ^ D rn -N o CD b OD A CD O OD W N D (D N Q H� CD cn CD rCDr^ V` lw C CD CCD CD O O CD p CCD 0 � CD CD � O CD o CD CD CD 0 CD ... CD 0 CD UQ U CD CD � CD 0- CD CD CD o � CD CD CLCD CD o CD •� a CD CD CL CD CD. D a ... o• �3 CD A. O O o� o 00 a CD Q. CD CD CD QU En O CD CD ~' U4 A� CD CD CD CD CD 0 CD w 0 • CD CD N CD O a. cD CD a 0 CD CD m O CD CD CD a CD CD v4' CD CD CD, 0 0 o' S.-O ... O O' O <D C O Vj to 0 G)0) CLso � o 3 O a3i N rt N D U2 C 7 n O y N co • a 0. � 0CD CD � � V O CD CD W CD CD �1 CD o CD CD CD UQ' CD 0 c CD CD 0 UQ O � � O � � O F CD 2CD CD v"N r+ N d � CD ��. CD s � J � s' O O Z w m V 41* O 0 W 03 N CD o � CD C a. w �. c P7A o . CD �..� O cr1 C-+ � O �. CD d �z C C!1 404 �■■� o ct 4ol; O U ,r•_, 4� O � ct ct ct ' U ct cn cn �..� 4-j Ei 03 w U ;>1U i an Cd U O 0 0 N F ctCld bb d--� ct o • a� 4-j u Ct O O • r--4 WD . r..� • r-I C/� `V V I I 1 Cct � O A n7 (D O � CAD CD CAD CD C a �. On cn o C T ^CD CD �--t �• CD �• CD �• O CD rt co CD co cn CD CD U w CA 20: • • • 11 c�3 0 .. N O 0 V M••i 0 W 01 cD o cc 0 • o CD CD CD CD � r O CD CD �� CD O CD CD t� 0 ow `D CD CD y CD Mom+ v � � o � 0 r c� • wj t�� W 0 C� 4� 4� r� Oct � O � A W GN �ct V ct U O e� O Vs �X1 N C� 0 CD n CD w � ' �r CD j b AR U • • N hr-H ct u r4 W ON W w v • P—I Cam• V CA • rl cd ^O � W �� • 03 O U 4� rtw UO i� • • CD �CD C � CD O CD O CD O CD o CD CD O � � O w 0 *NEW CL M..r • PM M M Owe M �I 1I77 n (A) L � O CD CD O � O O N olmodOwe co To � o0 > CC) m rn mX0 Om zm n Oom D Dom 0 m N to D O C CO o m o m 0 R r 1 a o O N 46 ti W�;n W \O r 0 O CI o� Oil � o�C � o -+ N GJ P CA CA O O O O O O O m 0 0 6 Q. 0 0 c 00 M o 0 o � -n cn 3 ' c M Z a C 0 0 i 0 0 0 0o c 0 0 0 0 0 0 0 0 0 0 CD 0 0 0 0 r m w r V N b N O Y+ N O O 4 N 41 O N O O N N O O A o C N m m U) -L O z v y ..a N 0 OR =1 ME o Im 0 CA �D r o c � S1 � N CD N N N ti OC r* 0 o N N pr 0 y 07C' CD � W Z O <D N A� (D N ca C y 7 C) (D 0 CO O CA) O O O O O O O co 'p 0 \\\ O O O \ \ 0 O10 0101-0 00 (O O N O V N N O O V i 0 O -0-0c� 0 -0-0 c-° c o o j O CD o 0 1-0 0 0 W O 0) , Oo 0) O P O G � \ 0 O O '� � � ; i fir. .k � -.-. __ _ .... _ • • • 1 • p. W N o m `!� O 0 > o v m m .� CD rn H m H m � o 0 m �-0 + n O N cn -% co Z O W W C 0O cQ 0 W v N �"► N CD ¢1 N 7 CD CI) . « (i fl.CA Cn Of N D CD tD o ca Cn�� C ago cn Co cn o 0 o as bs tft to 46 a, a, CD CDv tD ti, N .a C1 C L p o \ -+ co O V 01 N CD � C" 0 O O O to O CD Cv n Al CD CAD = CD CD df EA f if 49 d! 4& fA CD CD SD � Oo t71 N J C- 07 \ (a Q O co 0) C CD N - . x :3 Off 40). fA fA 44 iH 1� w Q j � N N Y r CP c °j W Ul(D O CoO O O =m �N t"t i rF o w o o 0 v c N iv cc cc � tff as M. to 46 d► _ C CD a in w O CD N V O O O Cif .^Z C / 4ff 4ff O O O � ��7777 W o J j �, v 40 �4 A --CO Cam o m I'll cn Cn O -+ O w+ 7 VA d! 40 d! M w� Z oo w ... v o Ul i Ul N m co cn o o co N O to C" N N O O 0 O ©�Mmmlz m O a H k C) W 0 O tr O s -► N N W W J� V1 (n O O V . O O O 0 0 0 O O O 0 0 0 O 0 O O O O O O O 0 0 0 0 0 0 0 9100 rZ00 3/0, 610, 910, m 3i02 0 6101.) 9102 .0 rZ02 FD .?i0 3 a n 6/03 C 3 9i00 rZ°3 O 3j04 610, � 910. O 0106 C �Q O O O cn a + =,ac : C H m + -n 3 N W N 0 n D Q coto 4W O) c Z I N .'It y i D I 7Z9 2 O 0�93 co 7Z9? CD z 4-9S 7Z9S m 0% a m °� 7Z a 00-9,> y 7Z9) 0% 23 96 O D 99 do 7Z99 0% � O'�-o7 7Z07 0610 02 0 7Z02 0CY03 " /03 3 0%m v rZ� I� oevos I O N W CJ7 OD CO rn O O O O O O O Yield % W Local Government Finance Legislation Update 2005 LAIF Conference October 6, 2005 Presenter • Frank Moore, Senior Investments Researcher, CDIAC I Lc D I A C CDIAC Agenda • Recent federal and state legislation that will or may affect the investment of public funds and debt issuance by local governments. • 41h Quarter 2004 AB 943 Investment Reporting Requirement • Recent CDIAC reports • Future CDIAC seminars Big Picture • Again, there have been relatively few local agency investment bills chaptered in the 2004-05 legislative session. • There were also a small number of debt issuance - related bills, some of which are discussed here. • One of the most significant impacts on local agencies occurred in the State Budget. • Since this is the first year of a two-year session, those bills that do not make it to the Governor's desk this year pick up where they left off next year. CDIAC 2 2004-05 Legislative Session 2005-06 State Budget Act • SB 77 and SB 80, Committee on Budget and Fiscal Review • State Mandates — Proposition 1 A protected local governments in the Budget Act by suspending mandates for which no funding was provided and broadened the scope of what constitutes a mandate. The Budget Act provided $239 million in non -education mandate funding. • VLF Gap Loan Repayment — The Budget Act used increased tax revenues to pay, one year early, and in its entirety, $1.2 billion in VLF funds that were lost by local governments when the offset program was suspended. CDIAC 2005-06 State Budget Act (continued) • Proposition 42 Transportation Funding — The Budget Act fully funded Proposition 42 at an estimated cost of $1.3 billion. — $127 million to cities, $127 million to counties, and $1 billion for state -managed projects, many of which benefit local communities. This money is used for local street and road repairs. — The Budget Act is an urgency statute, taking effect immediately upon the signature of the Governor. Mandates • AB 138, Budget Committee — Enacts budget trailer bill legislation to implement 2005-06 Budget agreements for state -mandated programs. • General: Lengthens from 5 to 15 years repayment period for previously deferred mandates • Repeals: Presidential Primaries, Redevelopment Agencies • Optional: Handicapped Voter Access Information • Recasts: Open Meetings Act and Brown Act Reform requirements (implements a voter -approved measure) • Reconsider: Peace Officer Procedural Bill of Rights and statutory mandate reimbursement procedure • This is an urgency statute. CDIAC 4 Mandates (continued) • AB 500, La Malfa — In 1986, the legislature established the minimum threshold for mandate claims at $200. — Because of the severe budget deficit in 2002, the legislature raised the minimum amount for state mandate claims to $1,000. — This bill would reduce the minimum amount to $200 again. — This is a two-year bill. • AB 279, Calderon — This bill was sponsored by the State Treasurer's Office. — Allows the State to invest Pooled Money Investment Account (PMIA) surplus money in asset -backed commercial paper issued by limited liability corporations. — This is an urgency statute. CDIAC 5 Local Agency Investment • SB 268, Campbell — Sponsored by the Orange County Treasurer and supported by CACTTC. — Allows counties to invest up to 25 percent of their total assets in the "first tier securities" of a single issuer for up to three business days after acquisition. — "First tier securities" are defined by SEC Rule 2a-7 of the Investment Company Act of 1940 as: 1) receiving the highest short-term rating, 2) if unrated, of comparable quality to a security meeting the highest short-term rating requirement, 3) a money market fund, or 4) is a government security. Local Agency Investment (continued) • AB 1216, Leslie — Existing law specifies the types of investment in which a local agency generally may invest its funds for deposit. — This bill would, notwithstanding those limitations, allow a school district to invest any portion of the funds that it receives by gift or bequest from private sources, in any manner it deems wise or expedient. — This is a two-year bill. CDIAC 6 Local Agency Investment (continued) • SB 554, Alarcon — Intent language stating that the definition of "surplus" with respect to local government financing and budgets needs to be better defined. — This is a two-year bill. Community Services Districts (CSDs) • SB 135, Kehoe — Original CSD statutes are from 1951 (amended in 1955). — There are 137 CSDs in the State. — Repeals current statute and enacts a new CSD Law. — Reduces the bulk of CSD law from over 300 separate sections to 83 sections. — Strengthens CSD governance, authorizes CSD to exercise some regulatory powers and public services, requires CSD to get other agencies' permission before conducting certain functions, promotes accountability and responsiveness, and makes conforming changes to specific state laws. CDIAC 7 Omnibus Bills • Omnibus bills cover minor, non -controversial legislation in a single bill. • SB 966, Senate Local Government Committee — Would shift County Treasurer duties. — County officials deposit program fees in criminalist laboratory funding and alcohol testing special account. Each year, the County Treasurers determines how much is spent and distributes surplus amounts. — CACTTC asked that these duties be shifted to the County Auditors instead. The Board of Supervisors (instead of the County Treasurers) would then determine how the surplus funds are to be spent. Federal Legislation that Affects Local Agency Investment • HR 1185 and S 1562: FDIC Reform Bills - HR 1185 • General limit raised to $130,000 • Retirement accounts: double the general limit • Municipal deposits: in -state municipal deposits insured up to $130,000 plus 80 percent over $130,000, up to a maximum of $2 million • Indexing for inflation: uses Personal Consumption Expenditures Index, adjusted every five years, first adjustment on April 1, 2007, adjustments rounded to the nearest $10,000. • Credit union coverage parity: NCUSIF to provide the same insurance limits and indexing as FDIC CDIAC 8 Federal Legislation that Affects Local Agency Investment (continued) — S 1562 • General limit: no change, except indexed for future inflation • Retirement accounts: $250,000, indexed for future inflation • Municipal accounts: no change, except indexed for future inflation • Indexing for inflation: same as for HR 1185, except first adjustment to take place January 1, 2010 • Credit union coverage parity: expected to be amended to be equivalent to FDIC coverage • Look for the difference between these two bills to be worked out in conference committee. • These are both two-year bills. AB 943 Investment Reporting Requirement • The mandate for all local agencies to update investment policies and send investment reports to respective legislative bodies was permanently rescinded last legislative session by Chapter 889, Statutes of 2004 (AB 2853, Laird): • For counties and cities only: — The requirement to send copies of your investment policies and reports to CDIAC was not rescinded. — Therefore, if you continue to update your policies and send your investment reports to your legislative bodies, you are still required to send copies to CDIAC. CDIAC 9 AB 943 Investment Reporting Requirement (continued) • AB 943 results for the quarter ending December 31, 2004 Number of Different Investment Instruments in County Portfolios thv PnWnlin Siva% Under,x S94M to 5299M1Q'to f, Types of Investments "`� $94M � " '$299M - $1.213 Over $1.213 1 to 3 4 1 2 1 4to6 9 1 10 4 4 7 or more 1 3 7 10 Number of Different Investment Instruments in City Portfolios rhv PnWnlin Riga► . , Under, 51-1 M to - i" $32M to,' - Type. of Investments 3111V! $32M $79M " "Over $79M 1 to 3 14 10 6 6 4to6 0 4 8 8 7 or more 0 0 0 0 AB 943 Investment Reporting Requirement (continued) By County (Portfolio Size) Under $94M to 9 to Over investment Instrument $94M ."" -:$299M '" $12B S1.2B U.S. Treasury Obligations 64 h 14% 77 h 67% A9encypbllpadone 100% a";100%' Commercial Paper 21% 57 % 69% 100% RePud>eso %rpreertlortts v:...> .,' . 4 ,_ =z; o%,IM Medium -term Notes 57% 71% 69% 73% MoneyMarke(Ftndai; a..' -x ," 6794 „ .43%.,s" �i.. .,389C, . , a � '`'20S Negotiable Certificates of Deposit 7% 43% 54% 80 Local A' 1lvestmeltR FtirWFs;'; .a r. r , . '938A 93% k" 88% 539E By City (Portfolio Size) nder,. 1 Investment Instrument $11M ".:.a $32M 3 to S79M " Over ;79M U.S.TreasuryObflgations 21% 7% 43% 64% U.S:AOencyObppaBondd",67%.:`.._ ,.xs, s71%, Commercial Paper 0.6 0 % 7% 21% RePtiroheaeAprriemerlts„a,aa ,.z... 'r.0%a % Median -term Notes 8% 7% 29% 50% Money Merkel Fud5 ,;29% Negotiabb Certificates of Deposit 7 % 21% 14% 0% looalA`e ` VimstmantFvW r;:w 1W% a 93% 1110°% 8896 CDIAC 10 AB 943 Investment Reporting Requirement (continued) Counties roa -vV : Veld (°i6) ^.aDTM (days)' a 4z alze � v � 7 , - AXera9e��°�� Low Average ,� ' Low, High Jnder $94M 2.5 2.1 2.9 423 1 658 694M to $299M 2.6 2.1 3.1 490 111 1,003 MW to $1.2B 2.5 2.0 3.8 358 72 713 Over $1.2B 2.3 2.0 2.8 243 47 576 Cities Yield (° DTM (days)i.. size Average ; Low _ High Average : Low High Jnder $11M 2.1 2.0 2.1 16 1 164 0 1 M to $32M 2.7 2.1 3.2 345 1 1,141 02M to $79M 2.5 2.0 3.4 358 1 868 Over $79M 2.8 2.3 3.5 531 256 748 Recent CDIAC Publications • 2004 General Election Results (CDIAC #05-01) • California Public Fund Investment Primer (CDIAC #05-02) • Local Agency Investment Guidelines: Update for 2005 (CDIAC #05-03) • Twenty Questions for Municipal Interest Rate Swap Issuers (CDIAC #05-04) • Securities Lending Agreements Issue Brief (CDIAC #05-05) CDIAC Upcoming CDIAC Seminars Seminar Name Data Location - Advanced Portfolio Management Decision Making Workshop October 14, 2005 San Francisco, CA Fundamentals of Land -secured Financing Workshop November 18,2005 Pomona, CA CDIAC and CASBO: ABCs of School Debt Financing Janu-ary 12, 2006 Sacramento, CA January 19, 2006 San Diego, CA Alternatives for Managing Your Investment Portfolio Workshop May 2006 Southern California CDIAC at the CSMFO Annual Conference February 12-14, 2006 Palm Springs, CA Mechanics of a Bond Sale March 2006 Northern California Current Practices in Assessing and Using Developer Fees March/April 2006 TBD Dynamics of Marketing and Pricing Bonds Workshop April 2006 San Francisco, CA Bond Administration Workshop May 2006 TBD UCLA Extension Smart Grcwthl5th Annual CDIAC Tools to Revitalize California Communities May 2006 Southern California Summary • The 2005-06 Budget Act is probably the single RF with the most impact on local governments this year: State Mandates, VLF Gap Loan Repayment, Proposition 42 Transportation Funding. • Other state and federal bills: mandates, PMIA, local agency investment, CSDs, Omnibus Bill, deposit insurance. • Although the investment reporting mandate has been eliminated, CDIAC suggests that local agencies consider continued reporting. • AB 943 results for 4Q04. • CDIAC reports and upcoming seminars. CDIAC 12 Where to Get More Information • Log onto Legislative Counsel website and develop a subscription list. Website address is www.leginfo.ca.gov. • Sign up for CDIAC's monthly Debt Line publication — quarterly legislative updates. Call us at (916) 653-3269 or visit us online at vrww.treasurer.ca.gov/cdiac. • The League of California Cities has a very good legislation section on their website: www.cacities.org. CDIAC 13 Analysis UNITED STATES Americas December 2004 New York Brian Harris 1.212.553.1653 Maria Maslovsky John J. Kriz Federal Farm Credit Banks Strengths • GSE status and strong ties to the US Government provide low funding costs and excellent access to the capital markets • Continued strong US Government support for agriculture reinforces the significance of the Farm Credit System's mission • Joint and several liability of the Farm Credit Banks, and the Farm Credit System Insurance Corporation, enhance bondholder protection • Voluntary interbank agreements, such as the Market Access Agreement, the Contractual Interbank Performance Agreement, and the common minimum liquidity standard boost the System's credit profile Challenges • Permanent, single industry concentration • Dependence on US Government subsidies of agriculture • Meaningful reliance on short-term funding • Sensitivity to trends in worldwide agricultural, commodity and currency markets GSE Status and Strong Political Support are Key Credit Strengths The Farm Credit System (FCS or the System), the oldest GSE (government -sponsored enterprise) in the USA, was estab- lished in 1916 by the US Congress to provide a reliable source of credit to US agriculture. The System's mission is to ensure availability of stable, dependable financing for agricultural producers, cooperatives, and farm related businesses l . Support for agriculture remains one of the goals of the US domestic policy, and Moody's believes the Farm Credit System will continue to enjoy close ties to the US Government, as long as it is perceived as an effective means to make credit available to agriculture. The US Government continues to demonstrate its steady backing of the agricultural sector, as evidenced by the passage of a $3 billion national agriculture disaster assistance package in October 2004, as well as the 2002 Farm Security and Rural Investment Act, aimed, among other issues, at stabilizing the income of agri- businesses. One of the greatest benefits of the governmental support enjoyed by the Farm Credit System is its GSE status. As a government -sponsored enterprise, FCS is able to raise funds in the marketplace at a lower cost than a comparable private company. In addition, its debt securities are treated favorably under a number of investment rules and regula- tions; also, the System is largely exempt from state and local taxes (except for real estate tax). These factors are impor- tant to FCS's credit profile and ratings. While any significant change in the System's relationship with the US Government would likely be a credit negative, Moody's perceives such an event as highly unlikely due to the impor- tance of Farm Credit's mission to US social and economic policy. 1. For Me detailed description of the entities comprising the Farm Credit System please see Appendix I. Moody's Investors Service Global Credit Research Dominant Role in Agri -Finance Remains a Strong Credit Positive In fulfillment of its mission to provide stable credit to the farm sector, the Farm Credit System is a leading agricultural lender in the United States, commanding approximately a 30% market share. The four Farm Credit Banks (FCBs), one Agricultural Credit Bank (ACB) and 97 Associations, which comprised the Farm Credit System as of September 30, 2004, provide credit to farmers, ranchers, farm -related businesses and cooperatives, as well as producers or harvest- ers of aquatic products. The System's competitors include commercial banks, life insurance companies, as well as indi- vidual merchants and dealers providing farm credit. FCS's solid competitive position is an important credit positive for the rating, as it provides additional support to the System's profitability and stability of cash flows. Agriculture continues to be an important sector of the US economy. Based on the historical data collected by the USDA, as well as the projections for 2004, since the year 2000, farm assets have experienced approximately a 4% growth per annum, which is in line with the overall GDP growth rate. Notably, while the US economy as a whole was a net importer of goods and services, the agricultural sector posted a positive trade balance2, underscoring the global nature of US farmers' end markets. However, the benefits derived from the diversity of the sector's customers are off- set, to some extent, by exposure to the highly volatile global commodity and currency markets. Despite uncertainties associated with nature, frequent oversupply, reliance on government support and vulnerabil- ity to commodity prices and worldwide export markets, Farm Credit's substantial market position in this sector is a strong credit positive. Furthermore, Moody's anticipates the System will defend its franchise in agricultural lending over the foreseeable future. Joint & Several Liability and the Insurance Fund Enhance Bondholder Protections Together with its GSE status and leading role in agricultural lending, the joint and several liability of the five System Banks for Systemwide Debt Securities is a key rating driver supporting FCS's Aaa senior unsecured rating. System- wide Debt Securities, which include medium -term notes, bonds and discount notes, are issued by the Farm Credit Sys- tem's fiscal agent, the Federal Farm Credit Banks Funding Corporation, to finance the lending activities of the System's Banks and Associations. None of the Systemwide Debt Securities are the obligations of, or guaranteed by, the US Government or any federal agency. Instead, Systemwide Debt Securities are the general unsecured joint and several obligations of the five System Banks. Although the proceeds received from the sale of Systemwide Debt Secu- rities are available to the System's Associations (via borrowings from the Banks), the Associations are not obligors with respect to Systemwide Debt Securities; therefore, the Associations' capital may not be available to satisfy principal and interest payments on Systemwide Debt Securities. In addition to excluding the System's Associations from direct obli- gation for any payments on Systemwide Debt Securities, the joint and several liability also does not cover any pre- ferred stock issues or derivative instruments written by the Banks. In the 88-year history of the Farm Credit System the joint and several liability has never been invoked; therefore, its actual operation has not yet been tested. Moody's also notes that prior to joint and several liability being invoked, another layer of protection for bondholders is comprised of the funds held by the Farm Credit System Insurance Corporation, an independent US Government -con- trolled corporation, not under the control of any System institution. The Insurance Corporation's Insurance Fund is financed through annual premiums paid by the System Banks, as well as by earnings on the fund's assets. In addition to the joint and several liability and the resources of the Insurance Fund, the FCS's credit profile is bolstered by a number of voluntary agreements entered into by the Farm Credit Banks, which are delineated in the following section, as well as by the common minimum liquidity standard, which is discussed later in the report, in the section addressing the System's liquidity. Systemwide Agreements Contribute Positively to FCS's Sustained, Steady Performance The System Banks have voluntarily entered into two agreements providing mutual protection between the banks and enhancing the System's performance and risk management. In Moody's view, the Market Access Agreement (MAA) and the Contractual Interbank Performance Agreement (CIPA) positively contribute to the stability of the System's cash flows and governance. The Banks, the Funding Corporation and the Financial Assistance Corporation have entered into the CIPA, which provides for the calculation of a score measuring the performance and financial condition of each District. The CIPA score takes into account the District's earnings, capital, asset quality, interest rate risk and liquidity. Under CIPA, a Bank may face monetary penalties if it fails to meet the agreed upon standard of financial condition and per- formance. During the first nine months of 2004, all of the System's Banks met their requirements under CIPA. 2. in July and August of 2004, US became a net importer of agricultural goods for the first time since 1986. 2 Moody's Analysis The Funding Corporation and the Banks entered into the Market Access Agreement to establish the criteria (which incorporate CIPA scores) for the Banks' creditworthiness and access to System funding. If any one of the Sys- tem Banks does not meet the criteria outlined in the MAA, it may be required to supply additional information or, under certain circumstances, its participation in the issuance of Systemwide Debt Securities may be restricted or pro- hibited. This procedure also fulfills the Funding Corporation's statutory responsibility for determining conditions for each Bank's participation in each issuance of Systemwide Debt Securities. During the first nine months of 2004, all Banks were in compliance with the MAA. Regulatory Oversight and System Management add to the System's Stability The Farm Credit Administration (FCA) is an independent federal agency, similar to commercial bank regulators, that has jurisdiction over the System's institutions3. As of September 30, 2004, no enforcement actions have been brought by the FCA against any System institutions. FCA's role as a stabilizing factor ensuring independent oversight of the System's oper- ations is a fin-ther credit plus for the System. Moody's does not expect the System's regulatory structure to change. Some of the recent regulations proposed by the FCA include raising the minimum liquidity reserve requirement for Farm Credit System banks to the minimum level established by the Banks, allowing all FCS associations to invest in Farmers' Notes sold by non-FCS financial institutions and other agricultural lenders. In addition to the strong supervision provided to the System by the FCA, in February 2004 the Funding Corpora- tion appointed Jamie B. Stewart, Jr. as its President, following the retirement from this position of James A. Brickley in November 2003. Mr. Stewart brought to the Farm Credit System over 30 years of experience with such institutions as Bank of America, Mellon Bank and the Federal Reserve Bank of New York. Borrower Diversity Helps Offset Single Industry Focus In compliance with its mission mandated by Congress, the Farm Credit System's lending authority is limited to the agricultural sector. Moody's perceives the resulting exposure to farm and related businesses as a significant and perma- nent credit risk. Still, despite the industry concentration, the System has been able to achieve and gradually increase its loan portfolio differentiation in terms of commodity types, geography and loan size exposure: Di�tiation by Commodity 4V FCS Loan Diversification by Commodity Type 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% ,4p oQ10J`f IF,a� er��C,�� Q o� �Q\I'- n"�O, oF5 \�� e l\��QJgoa�t"5a�0050 v° �a p4i o �O� ■ 2002 ■ 2003 Source. FCS 2003 Annual Information Statement a Fora corWlete discussion of the structure and au#io* of the Farm Credit Administration please see Appendix ll. Moody's Analysis 3 Difrerentiati n eo a h FCS Loan Diversification by State 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% �O 02001 02002 02003 Source: FCS 2003 Annual Information Statement Differentiation by Loan Size In addition to the System's diversification efforts with respect to its loan portfolio, farmers' total assets and income have increased between 2000 and 2003, according to the USDA. In 2004, both farm assets and farm income are expected to grow further while the overall leverage of the farm sector remains level at approximately 14% (measured as farm debt / farm assets). Such leverage -neutral growth in the farm sector is a credit positive for the FCS. Moody's Analysis Farm Sector Economics 1,600 90 80 $1,379 $1,429 1,400 $6 70 1,200 $1,203 $74 60 $51 $57 1,000 $59 50 o 800 $48 $51 40 a $37 30 20 400 $178 $186 $193 $198 204 10 200 ,n5 0 0 2000 2001 2002 2003 2004 ® Farm Assets Farm DebtNet Cash income —■—Farm income Source: USDA i _ _ _ _—c t:.. .... .. ....o,1;r rvicirivP and also aclrnow Moody's views the System's diversification ettorts with respect to its 1`1 lxn uO110 as a -- jr--- I -- - - edges that the continued overall health of the US farm sector is a key contributor to the System's steady performance. In addition, Moody's notes positively that FCS has improved its disclosure with respect to its loan portfolio composition. Asset Quality is a Key Credit Consideration Farm Credit's asset quality experienced a slight decline in 2002 primarily due to overall reduction in farm income in that year; however, it recovered in 2003 and strengthened further through the first half of 2004. 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% FCS's Asset Quality 5.58% 5.84% 6.16% 0.93% 1.04% 1.13% 0.74% 0.09% 0.00% 0.09% 2001Y 2002Y 2003Y 3D04YTD -#—Total Risk Loans + Net REO/Equty + Reserves(%) —*— Net Charge-ofts/Avg. Gross Loans + Net RED(%) -stir- Nonacctual Loans/Gross Loans(%) Source: FCS Information Statements In addition, both real and nominal farm real estate values have been on a steady rise, further supporting the stre^^*h of the ITS farm sector. Average Real and Nominal Values of US Farm Real Estate $1,300 d $1,200 $1,100 $1000 iu $900 o. v3 $8W $700 $600 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Source: USDA . Nominal -,L - Real (1996 $) Moody's Analysis 5 Moody's views the combination of improving asset quality and rising farm real estate values as further backing for the System's stable and sustainable performance. Also, the strength of farm cash flows is supported by the significant nrouortion of off -farm income received by many farmers. Off -farm income includes earnings or profits from non -farm businesses, interest, dividends, and transfer pay- ments. It is particularly significant since off -farm income sources typically are not correlated with farm production and can serve as a cushion during agricultural recessions. While the USDA percentage for off -farm income may not be reflective of the System's borrowers, Moody's considers high levels of off -farm income enjoyed by US farmers as a credit positive for the Farm Credit System. Interest Rate Risks are Modest :..A�.�_ _.... _.............. The System faces a number of risks associated with changes in market interest rates, as well as the interest rates and maturity profiles of its assets and liabilities. Moody's believes that the System Banks' interest rate risks are conservatively managed. This is one of the key credit risks for FCS. The System's Banks have established asset -liability management committees (ALCOs) that oversee interest rate risk management. In addition, CIPA and MAA incorporate certain provisions regarding interest rate risk management. Some of the main interest rate risk management tools available to the System include the structural flexibility resulting from its GSE status to issue fixed and variable, as well as callable, debt of varying maturities to match -fund its assets, as well as to offset some prepayment optionality. In addition, FCS is able to utilize derivatives markets to manage risk At Septem- ber 30, 2004, all of the System's derivatives counterparties were rated Al or higher by Moody's, and the Banks' total credit exposure to derivatives (net of collateral) was $49 million, or 0.24% of total capital. These are positive figures. Beginning in 2003, the System began reporting a number of risk management metrics it has utilized. Moody's Analysis In particular, Moody's notes that the impact on FCS's net income directionally correlates with the prevailing trend of interest rates movement, which is a plus in the current rising interest rate environment Also positive is the greater sensitivity of the System's net income to the rise, rather than to the decline, in the market interest rates. The duration gap, although increasing, remains well within a moderate range at 0.4 months at the end of the third quarter of 2004. Market Value of Equity Sensitivity to Changes in Interest Rates 2.00% 0.52% 0.98% 0.98% 179% 1.03% Contrary to the trends observed in the changes in net interest income, FCS's market value of equity increases with a decline in interest rates and decreases with a rise in interest rates. Liquidity is Improving Liquidity management has grown in importance for the FCS. The Farm Credit System's liquidity has been steadily improving since 2000, as measured by both liquid assets as a percent of total assets and liquid assets as a percent of short-term debt. Liquidity Trends 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.(p/o - 2000Y 2001Y 2002Y 2003Y 200401 200402 200403 Source: FCS —♦--liquid Assets/rotalAssets —*—Liquid Assets/Short-term Debt Moody's is encouraged by the System's efforts to enhance its stand-alone liquidity. In particular, the Banks have agreed upon a Common Minimum Liquidity Standard, which required each bank to maintain a minimum of 90 days liquidity, assuming no access to the capital markets. As of year-end 2003, as well as throughout the first nine months of 2004, all of the System Banks exceeded the minimum liquidity standard. At September 30, 2004, the System's com- bined liquidity position was 133 days. Moody's Analysis Moody's is encouraged by the System's efforts to enhance its stand-alone liquidity. In particular, the Banks have agreed upon a Common Minimum Liquidity Standard, which required each bank to maintain a minimum of 90 days liquidity, assuming no access to the capital markets. As of year-end 2003, as well as throughout the first nine months of 2004, all of the System Banks exceeded the minimum liquidity standard. At September 30, 2004, the System's com- bined liquidity position was 133 days. Moody's Analysis Capital Levels are Stable, in Good Shape FCS Capital Metrics 100.00% 80.00% 77.66% 79.93% 78.35% 78.85% Moody's also notes that the System's capital consists of the Banks' capital, which is owned by the Associations in their respective Districts. The Associations' capital, in turn, is held by the respective Association's borrowers4. While the cooperative structure complicates the assessment of the System's capital position, Moody's is encouraged by mate- rial and stable levels of combined System surplus as a percentage of total risk capital. The FCA establishes capital stan- dards for the System. Currently, according to FCA regulations the Banks and Associations must achieve and maintain a total surplus ratio of at least 7 % of risk -adjusted assets and a core surplus ratio or at least 3.5 % of risk -adjusted assets. In addition, Banks maintain a net collateral ratio of 103 % of total liabilities. As of September 30, 2004, all of the Sys- tem's institutions were in compliance with the capital adequacy ratios. Profitability is Steady and Sound FCS's profitability has remained relatively stable since 2000, with slight deterioration beginning in 2002 due to lower interest rates and farm income. The System's return on assets of 1.61 % at September 30, 2004, was somewhat higher than the mean/median return on assets of 1.26%/1.28% for Aa-rated banks as of June 30, 2004 (the latest available data). At the same time, FCS's net interest margin of 2.58% at September 30, 2004, was somewhat lower than the mean/median net interest margin for Aa-rated banks of 3.30%/3.64% at June 30, 2004. The combination of higher return on assets and lower net interest margin in comparison to its peers, is due to low non -interest expenses and his- torically high allowance for loan losses used by the Farm Credit System, which reduced total assets. Moody's expects FCS's profitability to remain broadly in line with its comparably rated peers. FCS Profitability Measures 3.0% 2. 2. 1. 1. 0. 0.0% 2000Y 2001Y 2002Y 2003Y 3004YfD Source: FCS —#—Net Interest Margin(%)-f—Retum on Average Assets(%) 2.5% 5% 2.8% 5% � 5% 2 8% 2.6% 0% 1.6 1.7% 1.6% The System Banks are Fundamental Elements of the FCS The four Farm Credit Banks and one Agricultural Credit Bank, together with affiliated Associations, comprise Districts within the Farm Credit System, each with geographically specified lending authorities. The Banks lend to their respective Associations on a wholesale basis, while the Associations lend directly to farmers, with the exception of CoBank, ACB, which has a nationwide charter and lends directly to certain cooperatives and Associations. The Banks depend on Systemwide Debt Securities to finance their lending to the Associations, and, consequently, the Associations depend on the borrowings from the banks to fund their loans to borrowers. 4. For a diagram detailing the capital flows among the System's Banks and Associations please see Appendix lll. 8 Moody's Analysis The System Banks are Fundamental Elements of the FCS The four Farm Credit Banks and one Agricultural Credit Bank, together with affiliated Associations, comprise Districts within the Farm Credit System, each with geographically specified lending authorities. The Banks lend to their respective Associations on a wholesale basis, while the Associations lend directly to farmers, with the exception of CoBank, ACB, which has a nationwide charter and lends directly to certain cooperatives and Associations. The Banks depend on Systemwide Debt Securities to finance their lending to the Associations, and, consequently, the Associations depend on the borrowings from the banks to fund their loans to borrowers. 4. For a diagram detailing the capital flows among the System's Banks and Associations please see Appendix lll. 8 Moody's Analysis The individual Farm Credit Banks' profitability varies, due primarily to the differences in loan pricing strategies, as well as asset and investment mix. Farm Credit Banks' Profitability Measures (YE 2003) 1.79% 1.62% 2.00% 1.17% 1.50% 0.85% 0.92% 0.71 % 1.00% 0% 0.27% 30% 0.50%ux�: 0.00% ROAA Net Interest Marge AgArst 0 AgriBank ■ CoBank ■ Texas ■ USAgBank Source: Farm Credit Banks' Information Statements While the same differences apply to the Banks' asset quality, Moody's feels that the System as a whole benefits from diversification that cannot be achieved by each individual Bank due to its geographically limited mandate. The variability in asset quality statistics is primarily due to adjustments to the Bank's allowance for losses. In April 2004, the Farm Credit Administration issued an "Informational Memorandum" requiring that all System institutions examine their allowance for loan loss methodologies. These studies are anticipated to be completed in 4Q04. Given that as of September 2004, the allowance for loan losses was 242 % of FCS's total nonperforming loans, as compared to an average of 140% for Aa-rated US banks, the reductions to the allowance for loan losses may be material. Moody's does not expect any rating impact as a result. Farm Credit Banks' Asset Quality (YE 2M) 30.00% 10.78% 20.00% ° 10.00% 0.00% 7 2.36% 0.00% 10.00% -20.00% -30.00% 0 -40.00% Total Risk Loans + Net Loan Loss ProvisiaVPre- REO/Equty + Reserves(%) Provtbn Pro"0/6) AgFist 0 AgrBank ■ CoBa* ■ Texas ■ US AgBank Source: Farm Credit Banks' Information Statements Moody's Analysis 9 All of the Banks' liquidity positions, however, are similar, as could be expected given the constraints of a coopera- tive system reliant on external funding. Farm Credit Banks' Liquidity (YE 2M) 83.48% 100.00% 80.00% g• 60.00% .� 2 .80% 19.42% 20.87% 40.009'0 20.00% 7 T: y 0.00% Liquid Assets/Total Assets('Yo) Net Loans + Net REO/Assets(%) ■ AgFist El AgriBank ■ ODBank ■ Texas ■ LISAgBank Source: Farm Credit Banks' Information Statements Related Research Financial Reporting Assessment: Federal Farm Credit Banks, December 2004 (89749) Corporate Governance Assmt: Federal Farm Credit Banks, December 2003 (80771) To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of this report and that more recent reports may be available. All research may not be available to all clients. 10 Moody's Analysis Congressional Oversight Regulation/Examination Other Agent for Banks System Banks Appendix I: Structure of the farm Credit System Congressional Agriculture Committees Farm Credit Administration Farm Credit System Insurance r The Farm (Regulator) I r Corporation I I Credit Council CoBank,ACB I Federal Farm Credit Banks Funding Corporation st, FCB AgriBank, FCB FCB of Texas ,es and Other Associations Borrowers Fanners, Ranchers, Rural Homeowners and Other Eligible Borrowers U.S. AgBank, FCB Moody's Analysis 11 Nx C.2 LL. @ � 0 � � ca � � w "0 ■ e SL a k�\ a _s \2 edk£ 6a±° ca kkEk � «(E %/'■» f}7& -~k §C3 § % #2Ec 2#e §a3°r o £ ■CL m°Sco /k23 -�-t \p$a \/Ik fR� §�D §_$ k5 ■ E, 2aae f)tk oms a® t) k/ 12 dody9anZsyis Appendix III: Capital Flows *...... Roft -*to &M&S, to marWd OffW dodo Moody's Analysis 13 Appendix IV: Farm Credit System Financial Profile Federal Nm Credit Banks ($ in millions) Ralanrw Shortt 3Q04YTD 2004Q3 2004Q2 2004Q1 2003Y 2002Y 2001Y 2000Y Cash & Casb Equivalents Cash 197 197 214 188 408 461 494 376 Federal Funds 2,813 2,813 2,148 3,595 2,348 2,411 1,339 1,672 BA's, CD's & Other Securities - - System Funding Reserve US Treasury Securities US Agency Securities - - Unamortized Premium or (Discount) - - Asset -backed Securities Available for Sale - 19,705 - 19,705 19,700 18,811 17,365 14,466 13,081 13,410 Investments Held to Maturity 731 731 732 1,143 1,166 820 739 971 Unrealized gain (loss) Total Cash & Investments (Total Liquid Assets) - 23, 6 - 3,44 - 2, 94 - 23,737 21,287 18,1 15, 3 16,429 Loans, Gross 94,899 94,899 94,289 94,279 93,129 90,040 82,644 75,223 Reserves 2,019 2,019 2,011 2,061 2,075 2,101 2,079 1,957 Loans, Net 92, 9 ,8 2,27 92,218 91,054 7, 80, 2 66 Other Assets: Accrued Interest Receivable on Loans 1,275 1,275 992 865 965 1,048 1,136 1,361 Other Real Estate Owned, Gross Reserve - Other Real Estate Owned, Net Premises and equipment and other assets - 1,512 1,512 1,405 1,621 431 397 388 348 Restricted Assets 2,142 2,142 2,122 2,078 2,033 1,839 1,718 1,626 Other - - - - 1,124 1,266 1,350 1,006 Total Other Assets 4,929 4,929 4,519 4,564 4,553 4,550 4,592 4,341 Total Assets 121,255 121,255 119,591 120,519 116,894 110,647 100,810 94,036 Short-term Borrowing Current Maturity of Cons. Systemwide Bonds 28,296 28,296 26,807 27,317 26,204 28,190 28,590 21,965 Consolidated Systemwide Notes 9,305 9,305 9,567 11,629 10,639 14,793 17,593 19,957 Current Maturity of Cons. Bank & Other Bonds - - - " Notes Payable & Other Interest -bearing Liabilities - - Total Short-term Borrowings 37,601 37,601 36,374 38,946 36,843 42,983 46,183 41,922 ong term Borrowings: Consolidated Systemwide Bonds 59,422 59,422 59,953 58,801 57,399 068 Total Borrowings 97,023 97,023 96,321 97,747 94,242 89,426 89,426 80,747 80,747 75,990 75,990 Other Liabilities: Consolidated Bank & Other Bonds 928 928 610 487 743 775 40 Financial Assistance Corporation Bonds 325 325 325 325 325 775 75 775 7 75 75 Accrued Interest Payable 541 541 475 494 468 518 608 850 Notes Payable and Other Interest -Bearing Liabilities 453 453 225 285 242 244 272 217 Other 1,608 1,608 1,717 1,565 1,698 1,590 1,366 1,267 Total Other Liabilities 85 ,8 2 3,1 47 3, 0 3, Wndatorily redeemable preferred stock (re-classified at YE2003) 225 225 225 225 225 - _ Protected Borrower Capital (re-classified at YE2003) - - - 28 Total Liabilities 101,103 101,103 99,904 101,128 97,971 93,332 84,585 79,639 Mandatorily redeemable preferred stock - - - - - 226 226 Protected Borrower Capital - - - - - 36 44 54 Unprotected (Risk) Capital Preferred Stock 93 1 931 923 924 863 300 300 - Capital Stock & PCs 1,416 1,416 1,416 1,413 1,432 1,492 1,511 1,595 Restricted Capital 2,142 2,142 2,122 2,078 2,033 1,839 1,718 1,626 Accumulated Other Comprehensive Loss (227) (227) (270) (195) (232) (209) 36 15 Surplus 15,890 15,890 15,496 15,171 14,827 13,631 12,390 11,107 Total Unprotected (Risk) Capital 20,152 20,152 19,687 19,391 18,923 17,053 15,955 44,343 Tr tal I iahilitias K Canital 121,255 121,255 119,591 120,519 116,894- 110,647 100,810 94,036 14 Moody's Analysis Federal Fain Credit Banks ($ in millions) Balance Sheet 3Q04YTD 2004Q3 2004Q2 2004Q1 2003Y 2002Y 2001Y 2000Y Income Statement Interest Income Loans 3,566 1,233 1,167 1,166 4,727 5,004 5,781 6,029 Investment Securities 387 145 124 118 445 521 811 1,013 Total Interest Income 3,953 1,378 1,291 1,284 5,172 5,525 6,592 7,042 Interest Expen�: Consolidated Systemwide Bonds 1,609 574 518 517 2,095 2,285 2,955 3,413 Consolidated Systemwide Discount Notes 67 25 20 22 119 337 873 1,100 Financial Assistance Corporation Bonds 53 17 20 16 60 78 78 84 Notes Payable & other Interest -bearing Liabilities - - - - 16 13 30 46 Total Interest Expense 1,729 616 558 555 21290 2,713 3,936 4,643 Net Interest Income 2,224 762 733 729 2,882 2,812 2,656 2,399 Provision for Loan Losses 11 6 (12) 17 99 144 190 140 Net Interest Income after Provisions 2,213 756 745 712 2,783 2,668 2,466 2,259 Losses (Gains) on Other Real Estate Owned - - - - (35) (8) (10) Other Income 272 91 91 90 382 377 401 288 Net Revenues 2,485 847 836 802 3,200 3,053 2,877 2,547 SalaEx rn ries & Employee Benefits 619 206 202 211 794 722 679 637 Occupancy & Equipment 349 126 113 110 109 105 100 96 other Operating Expense 5 1 4 - 331 333 320 305 Merger Implementation Costs - - - - 4 25 10 Miscellaneous - - - - 10 3 1 5 Total Expenses 973 333 319 321 11244 1,167 1,125 1,053 Income Before Extraordinary Item 1,512 514 517 481 1,956 1,886 1,752 1,494 Taxes 97 27 39 31 131 113 (33) 72 Extraordinary Item - - - Accounting Change: Post -Retirement Benefits Other Than Pensions Income Taxes Net Income 1,415 487 478 450 1,825 1,773 1,785 1,422 Moody's Analysis 15 Federal Farr Credit Banks (a in millions) Balance sheet 3QO4YTD 2004Q3 2004Q2 2004Q1 2003Y 2002Y 2001 Y 2000Y Profitabili 1.S6°% 1.61 % 1.60% 1.49°% 1.56% 1.60% 1.77% 1.51 % Return on Period -end Assets(%) 1.61 % 1.62% 1.59% 1.52% 1.61 % 1.69% 1.84°% 1.59% Return on Average Assets(%) 9.36% 9.67% 9.71 % 9.28% 9.64% 10.40% 11.19% 9.91 % Return on Period -end Equity(%) 9.96% 9.78% 9.79% 9.40% 10.15% 10.74% 11.78% 10.31 % Return on Average Equity(%) 60.85% 60.68% 61.84% 59.98% 61.13% 61.78% 60.90°% 58.66% Pretax Earnings/Net Revenue (%) Net Interest Income/Pretax Earnings (%) 147.09% 148.25% 141.78% 151.56% 147.34% 149.10% 151.600/. 160.58% 2.52% 2.58% 2.49% 2.50% 2.61 % 2.76% 2.82% 2.75% Net Interest Margin(%) Net Revenue/Average Equity(%) 17.50% 17.01 % 17.11 % 16.75% 17.79% 18.50% 18.99% 18.46% Net Income/Net Revenue(°%) 56.94% 57.50% 57.18% 56.11 % 57.03% 58.07% 62.04% 55.83% Net Int. IncJNet Revenue(%) 89.50% 89.960/. 87.68% 90.90% 90.06% 92.11 % 92.32% 94.19% Total Expense/Net Revenue(%) 39.15% 39.32% 38.16% 40.02% 38.88% 38.22% 39.10% 41.34% Total Expense/Average Assets(%) 1.100/0 1.11 % 1.06°% 1.08% 1.10% 1.11 % 1.16% 1.18°% Compensation & Benefits/Net Revenue(%) 24.91 % 24.32% 24.16% 26.31 % 24.81 % 23.65% 23.600/. 25.01 % Compensation & Benefits/Average Assets(%) 0.70% 0.68% 0.67% 0.71 °% 0.70% 0.69% 0.70% 0.71 % Operating Expenses- Compensation & Benefits/ Net Revenue(%) 14.25% 14.99% 14.00% 13.72% 14.06% 14.58% 15.500/6 16.33% Operating Expenses - Compensation & Benefits / 0.40% 0.42% 0.39% 0.37% 0.40°% 0.42% 0.46% 0.460/6 Average Assets(%) Compensation & Benefits/Operating Expenses(°%) 63.62% 61.86% 63.32°% 65.73% 63.83% 61.87% 60.36% 60.49% Net Interest Income/Operating Expense(%) 228.57% 228.83% 229.78% 227.10% 231.67% 240.96% 236.09% 227.83% Loan Loss Provision/Pre-Provision Profits(%) 0.73% 1.17% -2.32% 3.53% 5.060/. 7.64% 10.84% 9.37% Interest Coverage(X) 1.9x 1.8x 1.9x 1.9x 1.9x 1.7x 1.4x 1.3x Asset Quality Net Charge-offs/Avg. Gross Loans + Net REO(%) 0.100/0 -0.01 % 0.160/. 0.13% 0.14% 0.14% 0.09% 0.17% Loan Loss Provision/Average Gross Loans(%) 0.02% 0.03°% -0.05% 0.07% 0.11 % 0.17% 0.24% 0.20% Loan Loss Reserve/Gross Loans(%) 2.13% 2.13% 2.13% 2.19% 2.23% 2.33% 2.52% 2.600/6 Nonaccrual Loans/Gross Loans(%) 0.74% 0.74% 0.84% 1.02% 1.13% 1.04% 0.93% 0.94% Restructured Loans/Gross Loans(%) o.08% 0.08% 0.08% 0.09% 0.10% 0.12% 0.14% 0.16% Other High -Risk Loans/Gross Loans(%) 0.061/. 0.06% 0.06% 0.07% 0.05% 0.09% 0.090/. 0.07% Total Risk Loans + Net REO/Gross Loans(%) 0.91 % 0.91 % 1.01 % 1.23% 1.32% 1.31 % 1.22% 1.23% Total Risk Loans + Net REO/Assets(%) 0.71 % 0.71 % 0.80% 0.96% 1.05% 1.07% 1.000/0 0.98% Total Risk Loans + Net REO/Equity(%) 4.28°% 4.28% 4.85% 5.96°% 6.48% 6.92% 6.31 % 6.43% Total Risk Loans + Net REO/Reserves(%) 42.69% 42.69% 47.44% 56.04% 59.13% 56.16% 48.44% 47.11 % Total Risk Loans + Net REO/Equity + Reserves(%) 3.89% 3.89% 4.40% 5.38% 5.84% 6.16% 5.58% 5.66% Total Reserves + Equity / Total Risk Loans + Net REO(%) 25.7x 25.7x 22.7x 18.6x 17.1 x 16.2x 17.9x 17.7x Total Risk Loans + Net REO/Pre-Provision Profits (years) 0.43 0.42 0.46 0.60 0.63 0.63 0.57 0.62 Liquidi Liquid Assets/Total Assets(°%) 18.73% 18.73% 18.45% 18.75% 17.21 % 15.67% 14.79% 16.44°% Liquid Assets/Short-term Borrowings(%) 60.41 % 60.41 % 60.65% 58.01 % 54.61 % 40.34% 32.29% 36.87% Liquid Assets/Long-term Borrowings(%) 38.23% 38.23% 36.80% 38.42% 35.05% 37.33% 43.15% 45.37% Net Loans + Net REO/Assets(%) 76.609/6 76.60% 77.16% 76.52% 77.89% 79.48% 79.92% 77.91 % Average Net Loans + Average Net REO/Average Assets(%) 77.38% 76.90% 76.87% 77.21 % 79.07% 80.49% 79.31 % 78.97% Capital AdeclUTd(i 6.Ox 6.Ox 6.1 x 6.2x 6.2x 6.5x 6.3x 6.6x Assets/Equity(X) Average Assets/Average Equity(X) 6.2x 6.Ox 6.1 x 6.2x 6.3x 6.3x 6.4x 6.5x 16.62% 16.62% 16.46% 16.09% 16.19% 15.41 % 15.83% 15.25% Equity/Assets(%) Average Equity/Average Assets(%) 16.12% 16.54% 16.28°% 16.14% 15.88% 15.76% 15.61 °% 15.41 % Equity + Reserves/Assets(%) 18.28% 18.28% 18.14% 17.80% 17.96% 17.31 % 17.89% 17.33% Average Equity + Average Reserves/Average Assets(%) 17.85% 18.21 % 17.97% 17.88% 17.73% 17.75% 17.69% 17.59% Equity + Reserves/Gross Loans + Net REO(%) 23.36% 23.36% 23.01 % 22.75% 22.55% 21.27% 21.82% 21.67% Average Equity + Average Reserves/Average Gross 23.57% 23.18% 22.87% 22.65% 21.91 % 21.52% 21.74% 21.68% Loans + Average Net REOM) Short-term Borrowings(Long-term Borrowings+ Equity(%) 47.25% 47.25% 45.67% 49.81 % 48.27% 67.69°% 91.42% 86.600/6 Long-term Borrowings/Long-term Borrowings + Equity(%) 74.68% 74.68% 75.28% 75.20% 75.21 % 73.14% 68.42% 70.37% short-term Borrowings/Equity(%) 186.59% 186.59% 184.76% 200.85% 194.70% 252.06% 289.460/6 292.28% Long-term Borrowings/Equity(W 294.87% 294.87% 304.53% 303.24% 303.33% 272.35% 216.63% 237.52% Total Borrowings/Equity(%) 481.46% 481.460/. 489.29% 504.08% 498.03% 524.40% 506.09% 529.81% Total Liabilities/Equity(%) 501.70% 501.70% 507.46% 521.52% 517.74% 547.31% 530.15% 555.25% 16 Moody's Analysis To order reprints of this report (100 copies minimum), please call 1.212.553.1658. Report Number: 90807 Author Brian Harris Associate Analyst Production Specialist Maria Maslovsky Cassina Brooks ® Copyright 2005, Moody's Investors Service, Inc. and/or its licensors including Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY TRANSMITTED, TRANSFERRED, N WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSO MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, such information b provided "as is" without warranty of any kind and MOODY'S, in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any such information. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any lossor damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees t, agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (bl any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings and financial reporting analysis observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider of credit support for, each security that it may consider purchasing, holding or selling. MOOT an hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial gaped and preferred stock rated by MOODY'S have, prior to assignment of any grating. agreed to pay to MOODY'S for appraisal and rating services rendered by it fees ranging from $1,500 to $2,400,000. Moody's Cand orporation 's Investors Service oces)ses and lnformation regarding cerrtain affiliations hatr ay existbetween direr ors of MICO land rated so ren�les, and bicies and etween en�Gties to who hold raess the tings fromcMIS ane of ld have also publiclg reported to the SEC an ownership interest in MCO of more than 5%, is posted annually on Moody's website al www.moodys.com under the heading "Shareholder Relations — Corporate Governance — Director and Shareholder Affiliation Policy."