2008 10 08 IABP.O. Box 1504
LA QUINTA, CALIFORNIA 92247-1504
78-495 CALLE TAMPICO
LA QUINTA, CALIFORNIA 92253
AGENDA
INVESTMENT ADVISORY BOARD
Finance Conference Room
78-495 Calle Tampico- La Quinta, CA 92253
October 8, 2008 - 4:30 P.M.
CALL TO ORDER
a. Pledge of Allegiance
b. Roll Call
(760) 7 7 7 - 7 0 0 0
FAX (760) 777-7101
II PUBLIC COMMENT- (This is the time set aside for public comment on any matter not scheduled on the agenda I
III CONFIRMATION OF AGENDA
IV CONSENT CALENDAR
Approval of Minutes of Meeting on September 10, 2008 for the Investment
Advisory Board.
V BUSINESS SESSION
A. Transmittal of Treasury Report for August, 2008
B. Continued Discussion of the Investment Advisory Board 2008/09 Work Plan
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report - September 2008
B. Pooled Money Investment Board Report - July 2008
VII BOARD MEMBER ITEMS
VIII ADJOURNMENT
C
INVESTMENT ADVISORY BOARD Business Session: A
Meeting Date: October 8, 2008
ITEM TITLE:
Transmittal of Treasury Report
for August 31, 2008
BACKGROUND:
Attached please find the Treasury Report for August 31, 2008.
RECOMMENDATION:
Review, Receive and File the Treasury Report for August 31, 2008.
4
John M. Falconer, Finance Director
MEMORANDUM
TO La Quinta City Council
FROM John M. Falconer, Finance Director/Treasurer
SUBJECT Treasurer's Report for August 31, 2008
DATE September 30, 2008
Attached is the Treasurer's Report for the month ending August 31, 2008. 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
Beginning
Purchased
Notes
Sold/Matured
Other
Ending
Change
Cash (3)
$ (3,914 458)
$ 14.794,394
(1)
$ 10,879,936
$ 14,794,394
LAIF
47,903,920
5,000,000
(6,400,000)
0
46,503,920
(1,400,000)
US Treasuries (2)
42,760,593
(14,000,000)
72,839
28,833,432
(13,927,161)
US Gov4 Sponsored Enterprises (2)
54,764,871
3,000,000
(2,598)
57,762,273
2.997,402
Commercial Paper (2)
27,954,094
15,000,000
(20,000,000)
(37,378)
22,916,716
(5,037,378)
Corporate Notes
7,976,235
4,878
7,981,113
4.878
Mutual Funds
11,506,388
14,714
1
11,521,102
14.714
Total
$ 188.951.643
$ 37,809,108
$ 40,400,000
$ 37,741
$ 186.398.492
$ 2,553.151
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
10I112-00,?
John M Falconer Date
Finance DirectorlTreasurer
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
2
Treasurer's Commentary
For the Month of August
Cash Balances - The portfolio size decreased by $2.5 million to $186.4 million. The major
reason for the decrease was payments for the Dune Palms Housing Project.
Investment Activity - The average maturity of the portfolio decreased by 11 days to 51 days
at the end of August. The Treasurer follows a buy and hold investment policy and has not
sold investments before maturity to take advantage of market conditions. At month end the
sweep account had a month end balance of $11.8 million which was necessary to pay an
$11 million debt service payment on September 2"1. The Treasurer purchased a $3 million
FHLB GSE based upon the additional authority granted in the FY 08/09 Investment Policy and
reduced holdings in Commercial Paper to stay within the 15% overall limitation. The maturing
Treasury Bill was used to pay the aforementioned debt service and accounts payable. The
sweep account earned $3,290 in interest income for the month of August and the bank fees
for the month were $ 1,897 which resulted in a net increase of $ 1,393 in real savings.
Portfolio Performance - The overall portfolio performance increased by eleven (11) basis
points from the prior month and ended at 2.88% for the month, with the pooled cash
investments yielding 3.16%. This increase was partly a result of the maturing $14 million
Treasury Bill. With the average maturity of 51 days, the portfolio yield should remain at these
levels for the next three months with a small downward trend based upon reinvestments at
lower rates. The Treasurer has more of a barbell maturity schedule with the longer term
investments helping to keep yields higher as interest rates will gradually be falling. At this
time last year, the portfolio was yielding 5.17% which reflects the current interest rate
environment.
Future Thoughts
In the short term, the Treasurer will be investing more in LAIF because its rate declines slower
in a declining rate environment. Based upon current 30% limitation imposed by the
investment policy the Treasurer will not be increasing holdings investing in GSE's, however,
maturing GSE's will be rolled over to the highest yield on curve taking into consideration cash
flow needs and policy limitations. Due to the liquidity crisis in corporates, the Treasurer will
not be investing in corporate notes and will continue to look at Commercial Paper with 30 to
90 day maturities. Bond proceeds will be laddered in three- and six-month Treasury bills as
they mature.
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CM of La omma
Rmmakwm of Actual ant SnVus Fwtle
Cry, RMewlofanenl Agency ant Financing AMU"
Asgusf 31, 2000
BaSoFX Mual FU. 185.390 b2
Less Petry Gs0 FunCe It 2`AI
_sum'us FUMe Boa. Balance Of rpl �1 iB639]N2
Suglus
SURIus
Bank AcwuM
T
Bwk
Ym
IW
Vea
Name-Avaradt
A sk Fa,o-DemanE
5
No
CBeWtg
E (9i6.,Il
5
-
E
Wi Fargo - Sweep
No
Sweep
11,603.3it
po,y n- Darr.
No
NIA
1250
5 31 G]6
f
-
3106
3
31 <i6
WeISF oRbuv -CemaN
Trial -Bank A¢mmis
Yes
CC'ecki
S 106i9,935
E
J1A]fi
Ey
Dark
Lca'Aonnyinlecarreari
or on
I
E
r
yen
ate Pool
E
Total US, inkestannents
Tool Cry Cash 61NARiance.
Flatal enllnveslmanh
$
Surylus
yes
Y¢s
al
Yes
2996667
3996ran]
A99e 0111
0 99G,On'
<,912,79
09IIJ17
4,9D.423
4973423
4.979900
A9]9.900
22916 ]10
-
Y2916]t6
Surplus
SUTIus
Yee
qC
Y¢s
$"plus
Surylus
AG
Vm
39i9G0io96
(SM.131)
38i981955
6555.03A
6555,63<
ifi,5o3920
(A.'S)
Surpus
Surplus
No
AG
No
f (956.1311
f 956,131
$ -
11 W],3e1
;11,]OG,01]I
90,52<
0
2 0
Asysi yen
S 10,048 Ba $1o]I0606 E 99,]]< 59J0)%
Surplus
No
AA
Surgm
o
NI FUMe Surqua
Actual% Yez
6 aoro% g6go6%
$u�m
No
AG
$wqus
No
NI FUNS
Annual%
SoRans
Yes
298193%
3193G2%
_
Mual%
Accai
Yen Y
Yes
Surgm
No
M
Surylus
No
-
-
V 35c6°4
I6be%
6urpus MFuNa
Surplw
Surgm
No
fd
No
Autos' M
Yes
120.92t%
1J 3512%
_
_
Surylm
MFimi
Surplus
$,edam
No
All
No
an %
Yin
O CIXfPb
o0%U%
Surplus
NI FUMe
$wpNa
Surplus
No
AG
No
Muil%
Yes
-
253C9]%
265]60%
1J2,215,202 tJ2.215,203 9581J1 1]1,258,01t RO]18% ]01)t2%
10.3,095,1J0 1J2,2 ee)5 9SS.iJI 1Jt,290.5!) t0,010A00 tO,TMp06 W.)]A>S.b9M
PorHolq-CMlnvealmenh
Cu9cdan Ava�ladl
$u a
Issur
Ann. Z.
Value
Si
Yes
AG
Sur(Yus
Yes
13.905411
9,93,11
139.5^.itt
9.93],1a1
2o02 R0AUS 0ankLIP
201}1 Fnance AUNary LIP
ANM LIP
Yesa
Ves
Yea
USireawry0ill
USTrewuy Be
UBTreaw Sir
13905 C11
9,933.15t
Alf?3
2WA Finance
T.1-U 5 Tea"
J32
20,033,e10
32
20833C32
$uryN9 Nofn
Sorm s
Sao
An Funki
SUOM
Money Marked
Book
Sri
Sensors
pari .�Bmsl F..
:8W.9.
U56 N
2
2R.,
Y
NO3 Terrace RDA U S Basis CO'
YES
as
an S
2004 Fin Any US Bank CIF
YES
Ye
IOX Fin Aran US Bank CO'
YF.
I is Anke-s
Total Fiscal AgentlnvesMenis
Grant Total
io,35a,s3A a0.]N SJ< i0,]H,S11 219918% 3]5105%
IB],M8.6R 1T2.601312 95fi iJ1 111.6A5.1181 1U,Ba5,A60 10.)b,656 99,T< IYp fO t110
City of La Ouinta
Comparative Rates of Interest
August 31, 2008
Year
Month
FY OD03
July 2002
August2002
Sept2002
Oct 2002
Nov 2002
Dec 2002
Jan 2003
Feb 2003
Mar2003
Apr2003
May 2003
June 2003
FY 03104
July 2003
August 2003
Sept 2003
Cold 2003
Nov 2003
Dec 2003
Jan 2004
Feb 2004
Mar2004
Apr2004
May 2004
June 2004
F Y 04105
July 2004
August 2004
Sept2004
Got 2004
Nov 2004
Dec 2004
Jan 2005
Feb 2005
Mar 2005
Apr2005
May 2005
June 2005
FY 05106
July 2005
Augurt2005
Sept2005
Oc12005
Nov 2005
Dec 20D5
Jan 2006
Feb 2006
Mar 2006
Apr 2006
May 2006
June 2006
FY 06107
duty 2006
August2006
Sept2006
002006
Nov 2006
Dec2006
Jan 200]
Feb 2007
Mar 200]
Apr 20W
May 2007
June 2007
FY 07108
July 2007
August 2007
Sep12007
002007
Nov 2007
Dec 2007
Jan 2006
Feb 2006
Mar2008
Apr2008
May 200E
June 2008
FY 08109
July 2008
Augus12008
Se0t2008
Oc12008
Nov 2008
Dec 2008
Jan 2009
Feb 2009
Mar 2009
Apr2009
May 2009
June2009
Annualrzed Eamm s
Pooled Cash
Fiscal Agent
Overall
246%
100%
205%
245%
127%
207%
246%
126%
210%
241%
100%
208%
232%
100%
202%
223%
100%
1 an%
211%
080%
162%
1 99%
0 59%
1 74 %
201%
075 %
1 78%
108%
072%
176%
186%
073%
154%
173%
049%
140%
166%
052%
143%
165%
045%
135%
165%
049%
126%
159%
048%
136%
164%
048%
138%
167%
057%
141%
158%
030%
137%
165%
030%
138%
150%
050%
133%
150%
050%
133%
15,1
050%
136%
169%
047%
162%
173%
050%
168%
173%
050%
157%
1 ]9%
107%
168%
1 ]9%
1 14%
1 72 %
179%
143%
173%
189%
223%
208%
200%
225%
212%
216%
226%
222%
216%
267%
243%
227%
269%
249%
247%
270%
258%
259%
310%
283%
265%
311%
287%
264%
311%
281%
307%
348%
320%
333%
351%
334%
370%
353%
355%
381%
363%
367%
411%
400%
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129
116
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96
86
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82
63
80
62
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Six Month
One Year
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322%
354%
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375%
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339%
231%
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1 ]0 %
1 92 %
2 14%
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188%
229%
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214%
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259%
2 60%
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12
INVESTMENT ADVISORY BOARD
Meeting Date: October 8, 2008
TITLE:
Business Session: B
Continued Discussion of the Fiscal Year 2008/07 Work Plan
BACKGROUND:
At the August meeting, Staff was directed to carry over the cash flow information
that was handed out by Board Member Moulin to this meeting (Attachment 1) and
to analyze the State Code and the Treasurers Report (Attachment 2).
In addition, Board Member Moulin has also included correspondence regarding the
presentation of the monthly Treasurers Report (Attachment 3).
RECOMMENDATION:
Continued Discussion of the Investment Advisory Board 2008/09 Work Plan.
John M. Falconer, Finance Director
ATTAOMENT 1
John Falconer
From: donbarm@aol.com
Sent: Friday, August 08, 2008 3:44 PM
To: John Falconer
Subject: Cash Flow Forecasts
John, in my Google search of cash flow forecasts, I noted a couple of web sites that may be helpful
http://www,estoregfoa.org/StaticContent/statiep4ges/TM0407,htm
http:Hwwtiv l .worldbank.org/publicsector/pe/befa05/Executio nfmis.doc
Also noted is the Ethics and Conflicts of Interest section of the IP of Bloomington, Minnesota. Please
copy and distribute at the next meeting of the IAB. For information only
Ethics and Conflicts of Interest
Officers and employees involved in the investment process shall refrain from conducting personal
business activity that could conflict with proper execution of the investment program, or which could
impair their ability to make impartial investment decisions. Investment officials shall annually disclose
to the City Clerk any material financial interests as required by state statute on an annual Statement of
Economic Interest form. Employees and officers shall subordinate their personal investment transactions
to those of the City, particularly with regard to the time of purchases and sales, and shall refrain from
undertaking personal investment transactions with the same individual with whom business is conducted
on behalf of the City.
11 1
It's time to go back to school! Get the latest trends and gadgets that make the grade on AOL Shopping.
2
8/8/2008
4. Treasury and Government financial management information systems
4.1 Managing cash
Cash (mostly in the form of money held at the bank) is a scarce resource and must be
managed to provide optimum benefit. Some cash is held for transaction needs and some
is held against contingencies. But above this level, idle balances should be invested in a
form that gives quick access and little risk in order to earn interest. Money can be
borrowed, but this costs money and should be carefully controlled because it increases
financial risk. Borrowing may also take time to put in place and this will effect how
much cash has to be held for contingencies. A government is ill-advised to borrow, if it
already has the available cash resources because the rate of interest on borrowing is
higher than the rate of interest received on surplus cash balances, which in many cases
may be zero.
With such principles in mind, governments monitor movements in their cash resources.
They seek reports on cash balances (e.g. bank statements from the central bank). They
also consider the likely incidence of cash flows both inward and outward. A cash flow
occurs when the cash actually moves, so cash flows have very little to do with accrual
accounting, which is based on different principles. To estimate cash flows involves
forecasting cash flows associated with revenues and expenditures (both current and
capital); and with borrowing and lending (including repayments). Expected cash
balances can be forecast at dates into the future. Often cash flow forecasts are carried out
monthly showing cash balance (positive or negative) at each month -end for the following
12 months. Forecast balances provide input to revenue, expenditure and borrowing
policies. For instance a large expected cash surplus implies the need to invest cash, while
a large expected deficit implies the need to borrow. The cash flow profile will also
indicate for how long surplus funds are likely to be available to invest and for how long
cash deficits will persist and therefore the period over which borrowing will be needed.
The ease of monitoring and managing bank balances depends on their number, the
efficiency of the banks involved in supplying information and how quickly the sums
involved can be transferred to alternative (temporary) uses. Obviously a treasury single
account will be easy to monitor and manage. But a system in which spending agencies
keep their own bank accounts (maybe more than one for each agency as in Mongolia)
does not permit easy monitoring or management.
4.2 Bank accounts
In some cases, government's cash resources are held in many bank accounts (hundreds or
even thousands in the case of the republics formerly part of the Soviet Union at the time
of and its break). In such cases, cash management is more complex and less efficient.
Borrowing may occur even though sufficient cash resources may exist for borrowing to
be unnecessary. The problem is two -fold. Multiple bank accounts make it very difficult
to monitor aggregate cash resources. And releasing the idle money from all of these
accounts is also extremely cumbersome. In addition where spending agencies have their
3
own bank accounts, MOF control is weaker because these agencies have greater control
over their own spending. MOF receives financial statements from them but is not party
to detailed transactions.
A treasury single account (TSA) avoids these difficulties. A TSA receives all
government revenues, and out of it come all government expenditures. Or at least that is
the case in principle. In practice, exceptions are necessary (for instance public
enterprises are likely to retain their revenues, hold bank accounts and make their own
payments from them). The case in favour of a TSA is clear enough. Establishing one is
not always straight -forward:
• spending agencies may be unwilling to give up their bank accounts
• paying revenues into a single bank account is often physically impossible at
locations outside the capital city
• the central bank may be happy to administer the TSA but may not wish to be
involved in "retail" banking. Anyway it is unlikely to have a sufficiently
extended branch network to operate the TSA without help
• the participation of the commercial banks is essential. They have branch
networks and are active in retail banking. But their services have to be paid
for (either via interest/fees or via a concession which allows them to hold
money in transit longer than is strictly necessary). Of course such costs have
to be set against the interest gains expected from establishing a TSA
• a mechanism is needed between the central bank and the commercial banks so
that they open credits in response to specific government needs, and pay
surplus cash balances into the TSA at regular intervals
43 The need for treasury systems
The word treasury has several meanings. In this context it refers to related functions of
the Ministry of Finance in the fields of budget execution, accounting, management of
debt and cash, financial control and banking (See paper two for a more detailed
discussion). Essentially, a treasury system addresses these issues in an integrated
manner. It is therefore a type of government financial management information system.
Treasury systems address problems of missing information, weak and fragmented
information systems, inadequate and inappropriate controls and the adverse impact on
decision -making arising from such deficiencies. When in 1993 the IMF advised
Government of Moldova on setting up a government treasury system, it listed the
following "severe problems" facing budget management:
• Poor short-term control over expenditures as reflected in large fiscal deficits
and significant expenditure arrears
0
• Lack of current information about the magnitude of expenditures
• Highly inefficient cash management, reflected in the large amounts of
involuntary lending to government.... at the same time significant cash
balances lie idle
• As -yet undeveloped capacity to borrow from sources other than the banking
system...
• A system of budget classification that undermines efforts to improve
forecasting, analysis and management
Other countries experience different problems such as:
• Budget execution systems lacking appropriate information, controls and links
with accounting
• Accounting systems which are incomplete and untimely; cannot be reconciled
with each other; cannot communicate with each other; require manual transfer
of data; generate financial statements only with difficulty; do not respond
easily to users' needs for information; lack reliable information
• Existence of multiple bank accounts, aggravating problems of control and
rendering efficient cash management very difficult or impossible
• Break -down of system of budgetary control
• Lack of timely information on public finances for decision -making and
accountability purposes
• Line ministries entering into large commitments without MOF having prior
knowledge; line ministries frustrated by abrupt changes in funding (lack of
stability in budget allocations)
Treasury systems are designed to address such issues.
4.4 Functional processes of a treasury system
Hashim and Allan write about information systems for fiscal management (1998). They
identify the following eight processes: macro -economic forecasting; budget preparation;
budget execution, accounting and fiscal reporting; cash management; debt management;
revenue administration; personnel administration; and auditing. In practice, treasury
modernization projects tend to concentrate on only three of these: budget execution,
accounting and fiscal reporting and cash management. However they also have to
address the last phase of budget preparation (finalization of the budget and in -year
5
changes to it) and auditing (the needs of auditors are covered in system design). Other
fiscal management processes are commonly covered by separate, stand-alone systems.
In summary, treasury modernization projects usually cover:
• The enacted budget including supplementary and revised budgets, budget
allocations, budget transfers and warrants to incur expenditure
• Accounting and reporting including the general ledger of government
• Banking and cash management (via a single treasury account)
• And by implication, the audit trails needed for auditing
Treasury systems differ from country to country. For instance, the project to improve
Ukraine's treasury system focuses on the following: legal regulatory and operational
framework (guidelines, procedures, regulations, forms and operating manuals); budget
classification and coding; developing better methods of forecasting expenditures and
managing cash; improving fiscal reporting; developing detailed functional specifications
of the treasury ledger system; and training and institutional development. The detailed
functional specifications for the Ukraine general ledger provide the capability to:
• Record initial and revised budgets
• Distribute budget appropriation and authority to incur expenditure to spending
units
• Record expenditure in the form of cash and commitments against budget and
authority to incur expenditure
• Allocate funds to spending units
• Permit checks on the availability of appropriation, funds allocation and
commitments prior to approving payment
• Print consolidated payment instructions to banks
• Record revenue and other receipts against appropriate account heads
• Print checks (or instruct electronic payment) against payment instructions
• Consolidate data, facilitate reporting, provide for easy data retrieval for MOF,
ministries, spending units etc.
0
C^:
4.5 Introducing a treasury system
Assessment and planning
• Analysis of status quo and justification for introducing a treasury system
• Identification of public finance components to be covered, government
entities to be covered and their interface with the treasury system
• Adequacy of institutional processes: budget process and act; classification and
coding system; banking arrangements; accounting records; basis of
accounting; financial statements; the treasury itself
• Analysis of user needs; matching with national capacity; choice of approach
(the old system computerized or a new system with bells and whistles?)
• Analysis of relevant skills to create the system; to manage its implementation;
to provide technical back-up; to operate the system (users) and to use its
outputs
Specification
To embark on the modernization process, the system design has to be specified,
permitting bidding documents to be prepared and contractors to submit bids. The
specification has several components:
Functional design Each public finance component and each element making
up each component will be specified (for instance data to be entered, its
format, the classifications and codes to be used, the sub -divisions of the
general ledger into which data are to be sorted, the format and destination of
planned reports, the built-in controls, the content of screen data displays etc.).
Also included will be the functions of each organizational entity involved, the
data flows between them and specifications for how their actions are to be
communicated and reflected in records (e.g. approvals, rejections etc.).
Software This involves the choice of IT platform and of software
applications (whether off -the -shelf, customized or created anew); the
protocols for information exchange, requirements for suppliers to provide
technical back-up, etc.
Bankin¢ The banking services to be offered (by Central Bank/second tier
banks); establishment of Treasury Single Account and sub -accounts;
authoriization and format of instructions to bank; means of accepting
instructions and processing transactions; bank statements; arrangements for
the clearing of balances to TSA; other banking services.
7
• Hardware configurations.
• Staffing requirements.
• Project supervision arrangements
Implementation
• Resolving institutional inadequacies (laws, procedures, coding schemes,
institutional deficiencies etc.)
• Training staff
• Creating or customizing software
• Testing the adequacy of programs and systems
• Piloting the system at selected locations
• Validation
• Extending the system
• Validation
• Abandoning the old system
4.6 Challenges
• How to develop/ acquire/retain the necessary expert resources?
• How to deal with staff redundancy caused by the move to computerized
systems?
• How to negate possible illicit pressures in procurement?
• How many processes should be integrated? In principle, the more integrated
processes, the larger advantages from computerization. But the more modules
there are to integrate, the more difficult it is to achieve a working system.
• What to do about processes either not computerized or not part of the treasury
system (problem of interfaces)?
• Treasury projects are usually slow in implementation, the causes being the
subject of debate. The multi -stage nature of implementaion; the need for
F9
testing, piloting, fine-tuning, training and extensive adoption; and
procurement complications are all possible candidates. How to deliver
something timely and of good value?
The control implications of treasury systems are also the subject of debate.
Treasury systems increase the information available to the ministry of finance,
and therefore its possibilities of control and power. Depending on country
circumstances and system design this may result in an over -intrusive ministry
of finance and resentful spending agencies. How to give line ministries a
genuine stake in the new system?
Sources
Asian Development Bank, "Cash management and the treasury function", Chapter 8 of
Managing Government Expenditure, 1999.
IMF (1993), "Red books" on the introduction of treasury systems such as Moldova.
setting up a government treasury system Washington.
Organization for Economic Cooperation and Development (2001) ManagingPublic
EEMenditures: A Reference Book for Transition Countries. Richard Allen and D.
Tommasi, editors. (Chapter 9)
World Bank (1998), Information systems for government fiscal management, Ali Hashim
and Bill Allan, PREM, Washington.
World Bank (date?), Information systems strategies for public financial management,
Hywel M. Davies, Ali Hashim and Eduardo Tatero, Discussion Paper 193, Washington.
US Government (1998), Core financial management system requirements, Joint
Financial Management Improvement Program, Washington.
W
E
Annex
Assessing a treasury system
(based on notes by Ali Hashim)
Policy framework and institutional setting
1. Status of the budget law with specific emphasis on:
• receipt and custody of public funds; consolidated fund
• public expenditure controls and significance of control by appropriation
• role and responsibilities of the central bank and second tier banks
• role of MOF and its departments (in particular those responsible for treasury
functions)
• asset and liability management (including public debt)
• accounting records, reports and statements and their audit
• financial regulations
2. Budget classification system and chart of accounts:
• How complete?
• Compliant with IMF?
• Sufficient for control purposes?
3. Payment processing:
• Does a treasury single account (TSA) exist and where is it located?
• Which entity/entities control/s the TSA/bank accounts and how?
• Are payment requests of spending units routed through the treasury or are they
sent directly to the bank/s
4. Steps in the budget execution cycle. Which agencies carry out the following?
• Recording of appropriations
• Distribution of appropriations/sub-appropriations
1.1
10
• Budget revisions and transfers
• Funds allocations
• Spending limits (cash; commitment; authority to incur expenditure or
"warrant")
• Cash allocations
• Commitment controls
• Payment controls
• Receipt of tax and non -tax revenue
• Loan accounting
5. Institutional arrangements for cash management
• Which agency is responsible?
• On what basis are revenue and expenditure forecasts made?
• How frequently are agencies required to produce estimates of cash
requirements?
• How does government determine periodic cash requirements?
• What are the links between cash and debt management?
Functional design
6. How is the treasury system designed: how do the processes listed in point four above,
operate?
7. What is the coverage of the system?
• Number of ministries
• Number of spending units
• Size distribution of payments (number/value)
• Number of transactions of various types
M
11
• Application to central/local government
• Coverage and treatment of extra -budgetary funds
8. Are there subsidiary accounts of the TSA? How frequently are these accounts cleared
to the TSA? Can idle balances build up in these accounts?
9. What information is recorded for receipts? Are taxes deposited directly in the TSA or
are they first paid to second tier banks? How large is the "float" of undeposited receipts?
10. How long does it take for a payment instruction to be processed and acted upon?
How many stages are there in this process and are they all strictly necessary?
11. How quickly are accounting reports made for budgetary and accountability
purposes? What is the required standard for timeliness? What is the normal delay and to
what is it attributable?
12. Is payroll automated and how does it interface with the treasury system? Which
agency carries out payroll processing? How are personnel -related transactions sourced,
recorded and authorized?
13. What other parts of government's financial management systems are automated (e.g.
debt management, tax administration, customs administration, personnel management,
pensions) and how do these interface with the treasury system?
Information technology
14. Technical architecture:
• Hardware/software platform
• Number and nature of sites
• Nature of communications between the nodes of the network; volume and
nature of transactions at each node; means of transferring information to and
from the treasury; and to and from the Central and other banks
• Application software: custom -developed; off -the -shelf; or customized?
• Degree of automation of spending units' processes
• Nature of information security and other controls
• Intemet/iintranet capabilities
10
12
Management training and institutional capacity
15. Which government agency manages information systems?
• How does this agency relate to the treasury, ministries, spending units etc?
• Who is responsible for the functional design of the treasury system?
• Are changes to the functional design easy to accomplish?
• How are information systems supervised?
16. What are the training arrangements (technical, end -user, end -user support, technical
maintenance, change management, foreign/local, start-up/ongoing)?
17. How many staff have been trained and in what subjects (financial staff, technical
staff)? Are there problems of staff loss to the private sector?
18. Technical staffing issues: number of technical staff in place to build/maintain the
system; types of technical staff available; salaries/compensation of technical staff.
11
13
UPUA treasuryManagement
rays r ur rw
Inside This Issue
Feature Articles and Resources
• Getting Started with Cash Flow Forecasting
• Steps to Cash.Flow Forecasting
• Enhancing Cash, Forecasting
• Seven Ways to Enhance Cash Fore -casting
• Useful_ Resources on Cash Flow Forecasting
Economy and Interest Rates
• Panel of Economists: Economic Outlook
• Interest Rate Outlook
• Snapshot of Economy and Interest Rates
Investment Performance Benchmarks
Performance Benchmarks
0
10-Bill Index
o
Money Market Fund Index
o
LGIP Index
o
Key Rates: Cash Markets
o
Relative Value Yield Chart
-I. �1 •, •
Ar
Vol time 25,
Tip for Printing
1. Go to "File," "Page Setup.
2. Change all margins to .05 or less.
Getting Started with Cash Flow Forecasting
By Keith Sawdon
Many of us responsible for investing the public's funds have many tools in place
to help us. We have a written investment policy that has been adopted by our
oversight board, a sound system of internal controls (for investment activity) that
has been reviewed by our external auditors, solid methods for competitively
bidding our securities purchases, and we have developed a good set of reports
that help convey our investment activity.
11 In Brief: Cash Flow Forecasting 19
Cash flow forecasting is an estimate of receipts and disbursements during a given
penod. When used as a cash management guide, this tool can lead to the optimization
of funds as well as insuring sufficient liquidity is present to meet liabilities. Cash
14
http://www.estoregfoa.org/StatieContent/staticpages/TM0407.htm 8/8/2008
UrUA treasury Management rags L ui 1w
�ecasting is distinct from governmental accounting and budgeting in that the forecast
done with intent to measure the organization's ability to meet needs in light of
sources with the ultimate goal of negating the need for any short-term borrowing and
avoid the liquidation of any long-term securities (investments). When done on an
ganizational level, spending patterns can be coordinated to mitigate any potential
ortfalls and level off flow of funds.
One tool that may be overlooked is a cash flow forecast. To effectively manage
the public's funds, it is important to know your future cash flow position.
What is Cash Flow Forecasting? Cash flow forecasting is the process of
predicting cash flow (at least on a monthly basis) for the purpose of managing
liquidity needs and for investment control. An accurate forecast provides the
investment official with the essential information needed for making sound
investment decisions.
A good cash flow forecast should answer the following questions:
. How much cash is available?
. When will it become available?
. How long will it be available?
Building a good cash flow forecasting model takes time and effort. Are the
benefits greater than the costs? To answer that question it is important to
understand the benefits of cash flow forecasting. Those benefits include:
improved investment earnings, ensured liquidity, and identification of any cash
flow shortfalls.
Improved investment earnings and ensured liquidity go hand in hand. If you do
not know when funds will be needed for disbursements, your tendency will be to
only hold investments with exceptionally short maturities. This ensures that you
will be able to meet your payment obligations — but to get that liquidity,
investment yield is normally given up (in an upward sloping yield curve
environment). If you can predict when funds will actually be needed, you will still
be able to ensure liquidity, and at the same time, improve investment
performance by taking advantage of longer maturities in an upward sloping yield
curve environment.
Another benefit of cash flow forecasting is that it can help identify any periods
where you may actually have a negative cash position requiring some form of
short-term financing.
The type of forecast you undertake will, in part, depend on the time and
15
http://www.estorcgfoa.org/StaticContent/statiepages[fM0407.htm 8/8/2008
GFOA'freasury Management
rage -) or i,+
resources you have available to commit to the program and the benefits to be
received. For the most part, building cash flow models that provide you with
monthly estimates (of your cash position) will be the norm. But some
governments may need weekly estimates, and very large investment portfolios
may need daily estimates. The forecast timeframe chosen should be based on
the time and resources available.
How to Build a Cash Flow Forecast. First, start with your current cash and
investment balances. Then, look back at your actual cash collection and
expenditure history by month. Apply the actual receipts collected or expenditures
made against your amended budget for that year. The result is a percentage that
represents actual cash collections or expenditures made against the budget for
that month. Once you have looked back in history for three years, apply the
three-year monthly average of those monthly percentages against the current
year's budget.
History will be a good predictor of normal, recurring operating revenues and
expenditures, but it doesn't address all the issues you will need to forecast.
Issues such as new revenue sources or capital spending programs (nonrecurring
expenditures) have no history to look back to, so you will need to work with
departmental personnel to determine when funds will be coming in and when
funds will be going out.
Whenever you are working with historical data, remember that changes in the
economy, state law, user fees, etc., can cause the past data to give a false
reading on future cash positions. That is why it is important to validate your
forecasting model. Compare your projected cash position with the actual cash
position. This comparison of actual to predicted helps you ensure that historic
cash activity can be a good predictor of the future and that the assumptions that
you used are correct. If you have large variances between actual and predicted
you need to ask, "What caused the variance? Do I need to change my
assumptions? Has something changed?" Finding out why will help you improve
your cash flow forecast for the future.
Just Do It. Like exercising, getting started is the hardest part of cash flow
forecasting. Like most of us, the hardest part of exercising is not using the
equipment, it is getting to the room to use the equipment. Once you get to your
exercise room, using the exercise equipment is not that bad. Cash flow
forecasting is the same. Once you have decided that you need or want a
forecasting model, getting going is the hardest part. But once you begin to gather
your historical data and build the model, the process tends to flow pretty
smoothly. It is the getting going that is the hardest. Once the forecast model is
laid out, keeping it updated requires only a few hours a month. All in all, the
benefits are worth the effort.
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KEITH SAWDON is the chief deputy treasurer for Oakland County Michigan and author of the Association of
Public Treasurers publication Cash Flow Forecasting.
TOP
Steps to Cash Flow Forecasting
By Lee Buffington
When most of us analyze our personal budgets, we know our fixed expenses like
rent, mortgage, insurance, and utilities. We also can plan for elective
expenditures like a new car or a nice vacation. In addition, most of us know the
amount of our paycheck and when we will receive it. In other words, we are in
control.
In the public sector, however, we do not always know what to expect. The
legislative body may decide to spend our money on an unanticipated project. Or
perhaps the state legislature will work their magic on what was once our
expected revenue. Budgets are frequently built based on expected yearly
expenditures, while cash inflows and outflows vary by month. Expenditures and
receipts may balance at the end of the year, but chances are they will not
balance month -by -month, which results in negative balances.
Why Should You Forecast? A good cash flow forecast enables good cash flow
management and reduces the need for borrowing. Forecasting also helps
maximize investment earnings by showing when funds will be available for
investment. As a finance officer, forecasting gives you the confidence to certify
that you have sufficient funds to cover the next six months of expenditures.
How to Do a Cash Flow Forecast.
1. Decide on the time period your forecast should cover. For us, a 16-month
forecast provides a better view into the future than the typical 12-month
forecast. We use a 16-month forecast because California counties only have
a positive cash flow three or four times a year, so it takes 16 months to
include up to two income cycles in the forecast.
2. Review your accounting history for revenue and expenditures — get the
general picture.
3. Create a simple, one -page forecasting form to begin tracking your revenue,
expenditures and investments.
a. Use tracking categories that are simple and meaningful to you.
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b. Include the following: net cash flow balance, negative cash flow,
and maturing securities that could be called.
c. Use your morning bank report and daily forecast to determine
how much money you need to place each day to be fully invested.
4. Start with what you know and gradually build up the reliability of your
forecast. Remember: keep it simple.
5. Monitor and fine tune your forecast. Beware of fluctuations in near term
numbers. Watch the revenue side for significant changes. Review heavy
user expenditure patterns. Monitor the incidental user. Make adjustments to
your forecast to accommodate changes.
Lee Buffington is the tax collector -treasurer of San Mateo County, California.
TOP
Enhancing Cash Forecasting
By Kathy King -Griswold, CTP, CBM
A recent survey conducted by the Association of Financial Professionals of
Canada revealed that the most important issue among financial professionals is
improving the cash forecasting process. Due to the inverted yield curve, the
economic slowdown, and the lack of general liquidity in the market, cash flow
forecasting has become more important during recent years. An accurate
estimate of future revenues and expenditures allows the treasury officials to gain
greater visibility into business performance. It also helps to keep decision making
on track and maximize investment opportunities. A good cash forecast gives an
organization sufficient time to devise remedies for anticipated temporary cash
shortfalls and arrange short-term investments for temporary cash flow surpluses.
Cash forecasting is important, but organizations often find it difficult to accurately
identify a correct estimate. Some factors that contribute to poor quality forecasts
include:
1. Manual processes
2. Seventy-five percent of treasury's time spent on data collection, which
results in time lost for analyzing positions and effective management
3. Inconsistent assumptions
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4. Junior -level forecast responsibility
5. Lack of incentives and accountability in business units.
Cash flow plans are living entities and must constantly be modified as new
information becomes available on future cash inflows and outflows. Each budget
should be analyzed and the cash flow effect should be determined. After
reviewing the budget, look for significant discrepancies between the planned and
actual figures and make timely adjustments to the model. Some previous
experience is necessary t o make proper adjustments. The last step in the
process is to review and approve the cash flow forecast. Review by upper
management will help to insure the accuracy and reliability of the forecast.
Seven Ways to Enhance Cash Fo
1. Improve availability of data and quality of information —The availability and
quality of cash management data is a particularly important hurdle to enhance
cash flow forecasting. The following can be used to improve the availability and
quality of data:
o Treasury workstations
o Account structure — using a single master account to collect all cash
inflows and disperse vs. multi accounts.
o Treasury Intranet site — can improve the quality of input and allow for
easier sharing of information stored in spreadsheet files. This may also
assist in finding a "home" for unclaimed and un-posted receipts and
disbursements, which improves the quality of bank account
reconciliations.
o Use specific knowledge from business units — business units generate
their cash flow forecasts when creating their annual plans because
treasury would not be able to forecast certain expenditures or receipts for
business units because they are not aware of all activities at that level.
o Manage the expectations of management— Treasury should take extra
precautions in presenting forecasts to management and identify
assumptions very clearly.
2. Provide treasury with greater payment visibility by migrating vendors to e-
payments.
3. Calculate the opportunity cost of inaccuracy — it makes a clear difference how
the comparison between forecast and actual is fed back to the sources. This
helps to provide a practical understanding of the importance of accurate
forecasting.
4. Statistical analysis —'comparing forecasts to the actual cash flow that was
processed by banks can reveal correlations and consistent behavior. This
comparison can reveal opportunities for improving the predictability of a
forecast.
& Use Treasury more as a planning resource or internal consultant and less as a
payment processor.
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6. Continually monitor and adjust performance to the cash forecast.
7. Use technology that integrates bank data into forecasting solution.
In conclusion, the reliability of cash flow forecasting has become more important
in recent years due to internal and external pressures. An improved cash flow
forecast can produce many benefits including: more cash available for internal
lending and external investment opportunities, less adjustment transactions, and
earlier warning signals. However, because cash flow forecasting involves many
individuals across an organization, improvement projects require a strong
commitment and a skilled, dedicated, and multi -disciplinary project team.
Kathy King -Griswold, is the assistant treasurer for the University of Rochester in Rochester, New York.
Top
Useful Resources on Cash Flow Forecasting
. GFOA Recommended Practice: Use of Cash Flow Forecasting in Operations
• Use of Cash_ Flow Forecasting -in Operations, Nov_a.Scotia Municipal Finance
Corporation
Daily forecast (San Mateo County, California)
• Monthly forecast (San Mateo County, California)
• Cash forecast (City _of University Park, Texas)
TOP
Cash Management -Related Sessions at the GFOA Annual
Conference
The upcoming GFOA conference in Anaheim, California on June 10-13, 2007 will
include the following sessions related to cash management and banking
relations. More information on the GFOA conference is available on GFOA's Web
site.
Paper or Plastic? Using Purchasing Cards to Reduce Costs and Maintain
Control. Purchasing cards have the potential to simplify purchasing, reduce
paperwork, expedite delivery of services, and cut costs while maintaining
effective internal controls in the treasury function. But, as with all tools, it is
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important to know how purchasing cards should be used and how to prevent
potential abuse. Learn how leading governments use purchasing cards to
improve their procurement processes in this informative session. The session will
feature a panel of representatives from the card industry, banking, and
government.
Fraud Prevention Techniques for Treasurers. Payment fraud does not go
away, it just goes digital. Learn effective techniques to protect your government
against payment fraud in an increasingly complex banking environment. In this
session, fraud prevention experts share the latest practices and technologies for
avoiding fraud in check payments as well as in the accounts payable and
accounts receivable functions.
Preparing for the Worst of Times: Treasury Management in Emergencies.
Earthquakes... hurricanes... terrorist attacks. The list of threats seems go grow,
and they all affect a local government's treasury management activities. While
you can't control when a disaster occurs, you can control your government's level
of preparedness. By knowing your vulnerability and what actions to take in
advance, you can reduce the impact on your treasury activities. This session will
introduce disaster response tools for the treasury function. Speakers will illustrate
how these have been applied successfully in recent disasters including Hurricane
Katrina.
Technologies for the Treasury Function. New technologies that help
governments move from paper to electronic payment hold great efficiency
potential for government agencies. Speakers will introduce promising
technologies that can help treasurers improve productivity while maintaining
financial controls. Topics will include: electronic check processing, electronic bill
presentment and payment, and the "mobility trend" —the use of mobile devices
such as cell phones and PDAs to manage treasury functions.
Getting the Most From Your Banking Relationships. New banking
technologies have enabled many governments to reduce operating costs in the
finance department by including new services in their banking agreements.
Banks can provide customized reporting, easy access, and improved multi -factor
security. Speakers at this session will discuss the new services available, key
components of a banking relationship review, and
Maximizing the Benefits of Remote Check Deposit. "Remote Capture" is a hot
topic in the banking industry. What is it and how can your government benefit
from this technology? What key factors can make or break remote capture? This
session will feature local government treasury managers who will discuss their
experience with remote capture, the challenges they encountered, and the
lessons they learned.
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WAIS Document Retrieval
53644. If an agreement is not made:
(a) Active deposits and interest t
upon the deman easurer or other an
subj o any penalties which may be prescr
regulation.
(b) Inactive deposits
days before withdrawal.
53645. Interest
follows:
(a) For
shall be c
For
are subject t
ct t ithdra
icia1,
federal law or
of at least thirty
computed and paid by the depository, as
act' deposits upon which interest
uted on the average daily balance
d shall be paid
i eposits, interest shall be
shall be paid quarterly.
is payable, interest
for the calendar
computed on a 360-day
53646. (a) (1) In the case of county government, the treasurer may
annually render to the board of supervisors and any oversight
committee a statement of investment policy, which the board shall
review and approve at a public meeting. Any change in the policy
shall also be reviewed and approved by the board at a public meeting.
(2) In the case of any other local agency, the treasurer or chief
fiscal officer of the local agency may annually render to the
legislative body of that local agency and any oversight committee of
that local agency a statement of investment policy, which the
legislative body of the local agency shall consider at a public
meeting. Any change in the policy shall also be considered by the
legislative body of the local agency at a public meeting.
(b) (1) The treasurer or chief fiscal officer may render a
quarterly report to the chief executive officer, the internal
auditor, and the legislative body of the local agency. The quarterly
report shall be so submitted within 30 days following the end of the
quarter covered by the report. Except as provided in subdivisions
(e) and (f), this report shall include the type of investment,
issuer, date of maturity par and dollar amount invested on all
securities, investments and moneys held by the local agency, and
shall additionally include a description of any of the local agency's
funds, investments, or programs, that are under the management of
contracted parties, including lending programs. With respect to all
securities held by the local agency, and under management of any
outside party that is not also a local agency or the State of
California Local Agency Investment Fund, the report shall also
include a current market value as of the date of the report, and
shall include the source of this same valuation.
(2) The quarterly report shall state compliance of the portfolio
to the statement of investment policy, or manner in which the
portfolio is not in compliance.
(3) The quarterly report shall include a statement denoting the
ability of the local agency to meet its pool's expenditure
requirements for the next six months, or provide an explanation as to
why sufficient money shall, or may, not be available.
(4) In the quarterly report, a subsidiary ledger of investments
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may be used in accordance with accepted accounting practices.
(c) Pursuant to subdivision (b), the treasurer or chief fiscal
officer shall report whatever additional information or data may be
required by the legislative body of the local agency.
(d) The legislative body of a local agency may elect to require
the report specified in subdivision (b) to be made on a monthly basis
instead of quarterly.
(e) For local agency investments that have been placed in the
Local Agency Investment Fund, created by Section 16429.1, in National
Credit Union Share Insurance Fund -insured accounts in a credit
union, in accounts insured or guaranteed pursuant to Section 14858 of
the Financial Code, or in Federal Deposit Insurance
Corporation -insured accounts in a bank or savings and loan
association, in a county investment pool, or any combination of
these, the treasurer or chief fiscal officer may supply to the
governing body, chief executive officer, and the auditor of the local
agency the most recent statement or statements received by the local
agency from these institutions in lieu of the information required
by paragraph (1) of subdivision (b) regarding investments in these
institutions.
(f) The treasurer or chief fiscal officer shall not be required to
render a quarterly report, as required by subdivision (b), to a
legislative body or any oversight committee of a school district or
county office of education for securities, investments, or moneys
held by the school district or county office of education in
individual accounts that are less than twenty-five thousand dollars
($25,000).
(g) Except as provided in subdivisions (h) and (i), each city,
county, or city and county shall submit copies of its second and
fourth quarter reports to the California Debt and Investment Advisory
Commission within 60 days after the close of the second and fourth
quarters of each calendar year. Any city, county, or city and county
not required to submit a report pursuant to subdivision (h) or (i)
shall file with the commission a written statement within 60 days of
the end of the second and fourth quarters of the calendar year
stating the distribution and amount of its investment portfolio and
that it is therefore not subject to this reporting requirement. This
subdivision shall become inoperative on January 1, 2007.
(h) A city shall not be required to submit a quarterly report to
the commission if, during the entire reporting period, the city has
maintained 100 percent of its investment portfolio in (1) the
treasury of the county in which it is located for investment by the
county treasurer pursuant to Section 53684, (2) the Local Agency
Investment Fund created by Section 16429.1, (3) National Credit Union
Share Insurance Fund -insured accounts in a credit union, in accounts
insured or guaranteed pursuant to Section 14858 of the Financial
Code, or in Federal Deposit Insurance Corporation -insured accounts in
a bank or savings and loan association, or (4) in any combination of
these.
(i) A county or city and county shall not be required to submit a
quarterly report to the commission if, during the entire reporting
period, the county has maintained 100 percent of its investment
portfolio in (1) the Local Agency Investment Fund created by Section
16429.1, (2) National Credit Union Share Insurance Fund -insured
accounts in a credit union, in accounts insured or guaranteed
pursuant to Section 14858 of the Financial Code, or in Federal
Deposit Insurance Corporation -insured accounts in a bank or savings
and loan association, or (3) in any combination of these.
(j) The city, county, or city and county investor of any public
funds, no later than 60 days after the close of the second quarter of
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each calendar year and 60 days after the subsequent amendments
thereto, shall provide the statement of investment policy required
pursuant to this section, to the California Debt and Investment
Advisory Commission.
(k) In recognition of the state and local interests served by the
actions made optional in subdivisions (a) and (b), the Legislature
encourages the local agency officials to continue taking the actions
formerly mandated by this section. However, nothing in this
subdivision may be construed to impose any liability on a local
agency that does not continue to take the formerly mandated action.
53647. (a) Interest on all money deposited belongs to, and shall be
in o the general fund of, the loca ag
rep sented by the of making the deposit, unless otherwise
directe law.
(b) Notw standing the provisions of subdivision (a), and except
as otherwise dir ed by law, if the governing body of the local
agency represented b he officer making the deposit so directs, such
interest shall be paid t he fund which contains the principal on
which the interest accrued.
53647.5. Notwithstanding any other provision law, interest
earned on any bail money deposited in a bank acco pursuant to
Section 1463.1 of the Penal Code and Section 53679 of 's code
shall, if the board of supervisors so directs, be allocate r the
sup s in that countv
o.Sb4a. article, the treasurer may -
moneys in, and enter into contracts with, a state or nationa bank,
savings association or federal association, federal or sta credit
union, or federally insured industrial loan company, pur ant to a
federal law or a rule of a federal department or agen adopted
pursuant to the law if the law or rule conflicts w' this article in
regulating the payment of interest on depo�ememters
public moneys by
any of the following:
(a) Banks which are Federal Reserve S or whose
deposits are insured by the Federal D osit Insurance Corporation.
(b) Savings associations or fe al associations which are federal
home loan bank members or whos eposits are insured by the Federal
Savings and Loan Insurance rporation.
(c) State or federal edit unions whose accounts are insured by
the National Credit U 'on Share Insurance Fund or guaranteed by the
California Credit ion Share Guaranty Corporation or insured or
guaranteed purs nt to Section 14858 of the Financial Code, unless a
member of th egislative body of a local agency, or any person with
investmen ecisionmaking authority of the administrative office,
manager' office, budget office, auditor -controller's office, or
trea rer's office of the local agency also serves on the board of
or any committee appointed by the board of directors, or
credi he state or
aral credit union.
(d) A federally insured industrial
loan company.
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ATTACHMENT 2
MEMORANDUM
TO La Quinta City Council
FROM John M. Falconer, Finance Directorrireasurer
SUBJECT: Treasurer's Report for June 30, 2008
DATE: July 31, 2008
Attached is the Treasurer's Report for the month ending June 30. 2008. 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
Beginning
Purchased
Notes
Sold/Matured
Other
Endino
Chan e
Cash (3)
$ (612,892)
(1)
$ (921,482)
$ (1,534,374)
$ (921,482)
LAIF
50.778.392
3,750,000
(6,000,000)
0
48.528,392
(2,250,000)
US Treasuries (2)
57,855.865
29,000,000
(44,000.000)
(170,210)
42,685,655
(15.170,210)
US Gov't Sponsored Enterprises (2)
59,818,389
16,500,000
(16,500.000)
(105,758)
59,712,631
(105,758)
Commercial Paper (2)
29,949.962
23,000,000
(25,000,000)
(49,778)
27,900,184
(2,049,778)
Corporate Notes
7,966,638
4,720
7.971.358
4,720
Mutual Funds
2,704,547
9,399,892
1
12,104.439
9,399,892
Total
$ 208,460,901 1
$ 81,649,892
1 $ 92,421.482
$ 321.026
$ 197,368,285
$ 11.092,616
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, 1 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
zv_�Mn gAdCIF
hn M. Falconer if Date
Finance Directorrrreasurer
Footnote
(11 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 premiumldiscount 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
27
1
Treasurer's Commentary
For the Month of June
Cash Balances - The portfolio size decreased by $11.00 million to $197.4 million. The major
reason for the decrease was the payment of pass through tax increment payments in June
million.
Investment Activity - The average maturity of the portfolio increased by 17 days to 80 days
at the end of June. The six month US Treasury benchmark increased by 22 basis points and
ended the month at 2.14%. The Treasurer follows a buy and hold investment policy and has
not sold investments before maturity to take advantage of market conditions. June was a
very busy month in terms of the number of trades most notably the reinvestment of bond
proceeds in three and six months Treasury bills. Treasury Bills decreased and the Mutual
Funds increased to pay for Housing Program costs. The sweep account earned $1,504 in
interest income for the month of June and the bank fees for the month were $ 1,939 which
resulted in a net decrease of $ 435 in real costs.
Portfolio Performance - The overall portfolio performance decreased by twenty nine (29)
basis points from the prior month and ended at 2.88% for the month, with the pooled cash
investments yielding 3.09%. The overall portfolio yield (including bond proceeds) was
seventy four (74) basis points over the benchmark, which has decreased by fifty one (51)
basis point from the one hundred twenty five (125) basis point difference in May. With the
average maturity of 80 days, the portfolio yield should remain at these levels for the next
three months with a small downward trend based upon reinvestments at lower rates. The
Treasurer has more of a barbell maturity schedule with the longer term investments helping to
keep yields higher as interest rates will gradually be falling. At this time last year, the
portfolio was yielding 5.10% and the benchmark was at 4.81 % so we have made significant
progress in meeting our benchmark. In the short term, the Treasurer has been investing more
in LAIF because its rate declines slower in a declining rate environment and in Commercial
Paper.
Future Thoughts
The Treasurer will continue to invest in short term maturities to take advantage of the yield
curve - Commercial Paper with 30 to 90 day maturities and Bond proceeds will be laddered in
three- and six-month Treasury bills as they mature. Maturing GSE's will be rolled over to the
highest yield on curve taking into consideration cash flow needs or in medium term notes.
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LQ IAB 2008-09 Work Plan Item -
Review Content and Presentation of Monthly Treasurer's Report
The IAB is charged with the duty of reviewing the Monthly Treasurer's Report
"MTR" to note that:
1. Deposits in financial institutions and investments are authorized and do not
exceed limitations established by the IP, and
2. Cash deposits and investments provide adequate cash flow to satisfy
anticipated obligations.
The MTR addresses item 1 in "Authorized investments and Diversification" and
item 2 in "Cash Flow Analysis".
The IAB in concert with the Treasurer will study these and other schedules in the
MTR to determine if the information is sufficient or excessive with emphasis on the
two critical reporting areas. An objective is to simplify and streamline the reports
where possible and make them more understandable by non -accountants.
41
Page 1 of l
John Falconer
From:
Donbarm@aol.com
Sent:
Saturday, July 19, 2008 10:32 AM
To:
John Falconer; ted@theodoreross.com
Subject:
IAB Work Plan- MTR
Attachments: IAB Work Plan - MTR 2008-9.doc
John and Ted:
I prepared a brief description of what I suggest be covered in the review of the MTR. It is included as an
attachment to this email.
It may be helpful to furnish that information to the CC at or before our joint meeting to review and approve the
IAB's 2008-09 work plan.
My preliminary thoughts on the review of the MTR include the following:
1. Assign an identifying number or letter to each schedule and include a table of contents.
2. Consider rearranging the "Authorized Investments and Diversification" schedule in the format of the
schedule in section X of the IP for 2008-09.
3. Recognizing that I am a cash flow addict, I believe that the determination of the projected cash Flow to
meet reasonably anticipated obligations
is the most important monthly task of the Treasurer and review area of the IAB I suggest that the IAB
and the Treasurer study the current process,
attempt to improve it, disclose the principal assumptions used and revise the current "Cash Flow
Analysis".
4. The major tasks in the preparation of the MTR should be subjected to a cost -benefit evaluation to assure
that the Treasurer's resources are being allocated
in a manner commensurate with the importance of the task.
Get fantasy football with free live scoring. Sign up for FanHouse Fantasy Football today.
42
8/7/2008
INVESTMENT ADVISORY BOARD Correspondence & Written
Material Item A
Meeting Date: October 8, 2008
TITLE:
Month End Cash Report — September 2008
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.
John M. Falconer, Finance Director
VONOVmI O^CNJ
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11111111-11
Release I About I Announcements I Outstandings I Volume statistics I Year-end I Maturity Distribution
Data Download Program (DDP)
Announcement: Revisions to Commercial Paper Outstanding
Data as of September 30, 2008
Commercial Paper Rates and Outstanding
Derived from data supplied by The Depository Trust & Clearing Corporation
Posted October 1, 2008
Discount rates
[Term]
nonfmancial
nonfinancial
financial
asset -backed
1-day
3.21
6.33
2.70
6.53
7-day
n.a.
5.93
2.58
4.55
15-day
n.a.
6.02
2.75
4.75
30-day
2.16
5.66
3.53
6.05
60-day
2.19
n.a.
3.33
3.45
90-day
n.a.
n.a.
3.61
4.41
Trade data insufficient to support calculation of the 7-day AA nonfinancial, 15-day AA nonfinancial, 90day AA nonfinancial, 60-day A21P2 nonfinancial,
and 90day A21P2 nonfinancial rates for September 30, 2008.
Yield curve
http://www.federalreserve.gov/Releases/CP/ 10/1/2008 3
rtcts: t ommerciat raper tcates ana vacscanaings
r agu � v! �
Money market basis
— — — AA nanfinarmAl
-......... A2112 nonfinancial
AA financial
AA
k-"
N
Percent
1 7 15 30 60 90
Days to Maturity
Discount rate spread
i nlilj'�Ua�' M'J I-� 14"SJ MM IIUIIIItIAlllrfa! ti131tltil4:l itch
—� %pmad, 5-[fay movintg' avg
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2001 2002 2003 20D4 2005 2006 2007 2008
Discount rate history
6.9
6.5
6.1
5.7
5.3
4.9
4.5
4.1
3.7
3.3
2.9
2.5
2.1
400
360
320
280
240
200
160
120
80
40
0
http://www.federaireserve.gov/Releases/CP/
10/l/2008 4
FRB: Commercial Yaper Kates ana uutstanamgs
rago J vi -r
commercial paper (daily) Percent
7
Outstandings
Weekly (Wednesday), seasonally adjusted
Billions of dollars
1190
1090
990
890
790
690
590
2005 2006 2007 2008
Billions of dollars
---- Nonfinancial (right walci ;="t
--- — Financial (left
El::itx,;�ai:;:�
j
t I'�
{ F
Y l l
iti ✓ 'k
'e.\.
4901,j
2001
6
5
4
3
2
1
0
290
250
n 710
f
"1 170
1:
130
90
2002 2I03 2004 2005 2006 2007 2008
The daily commercial paper release will usually be available before 11:00am EST. However, the Federal
Reserve Board makes no guarantee regarding the timing of the daily commercial paper release. When
the Federal Reserve Board is closed on a business day, rates for the previous business day will be
available through the Federal Reserve Board's Data Download Program DDP). This policy is subject to
change at any time without notice.
Release I About I Announcements I Outsta_ndings I Volume statistics I Year-end I Maturity Distribution
Data Download Program (DDP)
http://www.federalreserve.gov/Releases/CP/ 10/1/2008
5
rr�. �vnnnui�iai r apci x�aLca c iu -5- . —
Home I Statistical releases
Accessibility_ I Contact Us
Last update: October 1, 2008
http://www.federalreserve.gov/Releases/CP/ 10/l/2008 6
rKts: H.t>-5eiectea interest lcates, weo-umy Larry upuate--vuwoer i, /uvo
rage r ui -
Federal Reserve Statistical Release
H.15
Selected Interest Rates (Daily)
Sky to Comem
Release Date: October 1, 2008
Weekly release dates I 1 listorical data I Data Download Program (DDP) I About I Announcements
Daily update Other formats: Screen reader I ASCII
E�€l�fl na r lca
The weekly release is posted on Monday. Daily updates of the weekly release are p
through Friday on this site. If Monday is a holiday, the weekly release will be p
after the holiday and the daily update will not be posted on that Tuesday.
FEDERAL RESERVE STATISTICAL RELEASE
H.15 DAILY UPDATE: WEB RELEASE ONLY
SELECTED INTEREST RATES
For use at 4:15 p.m. Eastern Time
Yields in percent per annum October 1, 2008
Instruments
Sep
Sep
29
30
Federal funds (effective) 1 2 3
1.56
2.03
Commercial Paper 3 4 5
Nonfinancial
1-month
2.12
2.16
2-month
2.18
2.19
3-month
n.a.
n.a.
Financial
1-month
2.27
3.53
2-month
2.79
3.33
3-month
3.30
3.61
CDs (secondary market) 3 6
1-month
4.63
4.63
3-month
4.63
4.75
6-month
5.00
4.80
Eurodollar deposits (London) 3 7
1-month
5.50
7.00
3-month
5.00
6.00
6-month
5.50
5.50
Bank prime loan 2 3 8
5.00
5.00
Discount window primary credit 2 9
2.25
2.25
U.S. government securities
Treasury bills (secondary market) 3 4
4-week
0.06
1.01
3-month
0.96
0.90
6-month
1.46
1.57
1-year
1.56
1.73
Treasury constant maturities
Nominal 10
1-month
0.16
1.02
3-month
0.94
0.92
7
http://www.federaireserve.gov/Releases/H15/update/ 10/1/2008
P1\D. R.l J--JOIDROLL 111WlOJL i\atON VV Ou-Vmyy wiy upuaLP-VLAVVOl 11 LVVo Iar,. V1 'T
6-month
1.49
1.60
1-year
1.60
1.78
2-year
1.70
2.00
3-year
1.96
2.28
5-year
2.70
2.98
7-year
3.12
3.38
10-year
3.61
3.85
20-year
4.21
4.43
30-year
4.13
4.31
Inflation indexed 11
5-year
1.76
2.01
7-year
1.94
2.15
10-year
2.03
2.25
20-year
2.35
2.62
Inflation -indexed long-term average 12
2.37
2.62
Interest rate swaps 13
1-year
3.13
3.33
2-year
3.24
3.36
3-year
3.56
3.64
4-year
3.76
3.84
5-year
3.91
3.98
7-year
4.13
4.19
10-year
4.32
4.37
30-year
4.58
4.60
Corporate bonds
Moody's seasoned
Aaa 14
5.76
6.01
Baa
7.62
7.85
State & local bonds 15
Conventional mortgages 16
n.a. Not available.
Footnotes
1. The daily effective federal funds rate is a weighted average of rates on broke
2. Weekly figures are averages of 7 calendar days ending on Wednesday of the curr
figures include each calendar day in the month.
3. Annualized using a 360-day year or bank interest.
4. On a discount basis.
5. Interest rates interpolated from data on certain commercial paper trades settl
Depository Trust Company. The trades represent sales of commercial paper by deale
issuers to investors (that is, the offer side). The 1-, 2-, and 3-month rates are
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 deposit.
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.
commercial banks. Prime is one of several base rates used by banks to price short
loans.
8
http://www.federalreserve.gov/Releases/H15/update/ 10/1/2008
FRB: H.15--Selected Interest Kates, wen-unry Lauy upuam--ll uu0l 1, -b
9. The rate charged for discounts made and advances extended under the Federal Re
credit discount window program, which became effective January 9, 2003. This rate
adjustment credit, which was discontinued after January 8, 2003. For further info
www.federalreserve.gov/boarddocs/press/bcreg/2002/200210312/default.htm. The rate
for the Federal Reserve Bank of New York. Historical series for the rate on adjus
well as the rate on primary credit are available at www.federalreserve.gov/releas
10. Yields on actively traded non -inflation -indexed issues adjusted to constant m
30-year Treasury constant maturity series was discontinued on February 18, 2002,
on February 9, 2006. From February 18, 2002, to February 9, 2006, the U.S. Treasu
factor for adjusting the daily nominal 20-year constant maturity in order to esti
nominal rate. The historical adjustment factor can be found at
www.treas.gov/offices/domestic-finance/debt-management/interest-rate/itcompositei
Source: U.S. Treasury.
11. Yields on Treasury inflation protected securities (TIPS) adjusted to constant
Source: U.S. Treasury. Additional information on both nominal and inflation -index
found at www.treas.gov/offices/domestic-finance/debt-management/interest-rate/ind
12. Based on the unweighted average bid yields for all TIPS with remaining terms
more than 10 years.
13. International Swaps and Derivatives Association (ISDA(R)) mid -market par swap
for a Fixed Rate Payer in return for receiving three month LIBOR, and are based o
at 11:00 a.m. Eastern time by Garban Intercapital plc and published on Reuters Pa
ISDAFIX is a registered service mark of ISDA. Source: Reuters Limited.
14. Moody's Asa rates through December 6, 2001, are averages of Aaa utility and A
rates. As of December 7, 2001, these rates are averages of Aaa industrial bonds o
15. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Th
16. Contract interest rates on commitments for fixed-rate first mortgages. Source
Market Survey(R) data provided by Freddie Mac.
---------------------------------------------------------------------------------
Note: Weekly and'monthly figures on this release, as well as annual figures avail
Board's historical H.15 web site (see below), are averages of business days unles
Current and historical H.15 data are available on the Federal Reserve Board's web
(www.federalreserve.gov/). For information about individual copies or subscriptio
Publications Services at the Federal Reserve Board (phone 202-452-3244, fax 202-7
electronic access to current and historical data, call STAT-USA at 1-800-782-8872
Description of the Treasury Nominal and Inflation -Indexed Constant Maturi
Yields on Treasury nominal securities at "constant maturity" are interpolated by
from the daily yield curve for non -inflation -indexed Treasury securities. This Cu
the yield on a security to its time to maturity, is based on the closing market b
actively traded Treasury securities in the over-the-counter market. These market
calculated from composites of quotations obtained by the Federal Reserve Bank of
constant maturity yield values are read from the yield curve at fixed maturities,
and 6 months and 1, 2, 3, 5, 7, 10, 20, and 30 years. This method provides a yiel
maturity, for example, even if no outstanding security has exactly 10 years remai
Similarly, yields on inflation -indexed securities at "constant maturity" are inte
http://www.federalreserve.gov/Releases/I-I15/update/
10/1/2008 9
r'KB: H. I )--Jelectecl interest lcates, weo-uruy Lauy UPuatc--ucwuoi i, �vvo ..61,
daily yield curve for Treasury inflation protected securities in the over-the-cou
inflation -indexed constant maturity yields are read from this yield curve at fixe
currently 5, 7, 10, and 20 years.
Weekly release dates I Historical data I Data Download Program (DDP) I About I Announcements
Daily update Other formats: Screen reader I ASCII
Statistical releases
Home I Economic research and dam
Accessibility I Contact Us
Last update: October 1, 2008
http://www.federaireserve.gov/Releases/H15/update/ 10/1/2008 10
Bill Lockyer, State Treasurer
Inside the State Treasurer's Office
Local Agency Investment Fund (LAIF)
PMIA Performance Report
D
9/11/2008
Dad/
Yield
2.78
Quarter to
Date Yield
2.78
Average
Maturity
221
9/12/2008
2.77
2.78
219
9/13/2008
2.77
2.78
219
9/14/2008
2.77
2.78
219
9/15/2008
2.78
2.78
211
9/16/2008
2.77
2.78
210
9/17/2008
2.76
2.78
208
9/18/2008
2.78
2.78
206
9/19/2008
2.76
2.78
204
9/20/ 0008
2.76
2.78
204
9/21/2008
2.76
2.781
204
9/22/2008
2.76
2.78
199
9/23/2008
2.74
2.78
196
9/24/2008
1 2.73
2.78
196
LAIF Performance Report
Quarter ending 6/30/2008
Apportionment Rate: 3.11%
Earnings Ratio: 0.00008483669448820
Fair Value Factor: 0.999950219
PMIA Average Monthly Effective Yields
Aug 2008
2.779%
July 2008
2.787%
June 2008
2.894%
Pooled Money Investment Account
Portfolio Composition
$64.7 Billion
08/31 /08
Reverses Treasuries
-0.76% 5 28% Mortgages
Loans 1.70%
19.67% _
Corporate Bonds
0.64%
Commercial Paper
13.92%
Time Deposits
14.17%
CDs/BNs
18.17%
Agencies
27.21%
11
Kecent tills Auction Kesuns
u6 ..
Home , Institutional , Announcements, Data & Results , Latest Auction Data , Recent Bill Auction Results
Recent Bill Auction Results
Security
Issue
Maturity
Discount
Investment
Price
CUSIP
Term
Date
Date
Rate %
Rate %
Per$100
4-WEEK
10-02-2008
10-30-2008
1.010
1.025
99.921444
912795H46
42-DAY
10-02-200B
11-13-2008
1.100
1.117
99.871667
912795H61
13-WEEK
10-02-2008
01-02-2009
1.100
1.118
99,718889
912795351
26-WEEK
10-02-2008
04-02-2009
1.540
1.574
99,221444
9127951-25
IS -DAY
10-01-2008
10-16-2008
0.990
1.004
99.958750
9127951-12O
101-DAY
09-29-2008
01-08-2009
1.650
1.681
99.537083
912795169
34-DAY
09-26-2008
10-30-2008
0.990
1.005
99.906500
912795H46
7-DAY
09-25-2008
10-02-2008
0.050
0.051
99.999028
912795G88
4-WEEK
09-25-2008
10-23-2008
0.350
0.355
99.972778
912795H38
13-WEEK
09-25-200B
12-26-2008
1.420
1.445
99.637111
912795344
26-WEEK
09-25-2008
03-26-2009
1.790
1.831
99.095056
9127951<91
52-WEEK
09-25-2008
09-24-2009
1.955
2.012
98.023278
912795536
45-DAY
09-22-2008
11 06 2008
1.800
1.829
99.775000
912795H53
59-DAY
09-22-2008
11 20-2008
1.990
2.024
99.673861
912795H79
20-DAY
09-19-2008
10-09-2008
0.100
0.101
99.994444
912795G96
76-DAY
09-19-2008
12-04-2008
0.250
0.254
99.947222
91279SH95
4-WEEK
09-18-2008
10-16-2008
0.300
0.304
99.976667
91279SH2O
35-DAY
09-18-2008
10-23-2008
0.300
0.304
99.970833
912795H38
13-WEEK
09-18-2008
12-18-2008
1.050
1.067
99.734583
912795336
26-WEEK
09-18-2008
03-19-2009
I.550
1.584
99.216389
912795K83
4-WEEK
09-11-2008
10-09-2008
1.575
1.599
99.877500
912795G96
13-WEEK
09-11-2008
12-11-2008
1.690
1.721
99.572806
912795J28
26-WEEK
09-11-2008
03-12-2009
1.900
1.945
99.039444
912795K75
6-DAY
09-09-2008
09-15-2008
2 000
2.028
99.966667
91279SS93
4-WEEK
09-04-2008
10-02-2008
1.540
1.563
99.880222
91279SG88
13-WEEK
09-04-2008
12-04-2008
1.685
1.716
99.574069
912795H95
26-WEEK
09-04-2008
03-05-2009
1.890
1.935
99.044500
912795K67
4-WEEK
08-28-2008
09-25-2008
1.710
1.736
99.867000
912795G70
13-WEEK
08-28-2008
11-28-2008
1.710
1.741
99.563000
912795HB7
26-WEEK
08-28-2008
02-26-2009
1.925
1.971
99.026806
912795K59
52-WEEK
08-28-2008
08-27-2009
2.140
2.206
97.836222
912795528
30-DAY
08-26-2008
09-25-2008
1.750
1.777
99.854167
912795G70
4-WEEK
08-21-2008
09-18-2008
1.790
1.817
99
860778
912795G62
13-WEEK
08-21-2008
11-20-2008
1.850
1.885
99.532361
912795H79
26-WEEK
08-21-2008
02-19-2009
1.980
2.028
98.999000
912795K42
31-DAY
08-15-2008
09-15-2008
1.940
1.970
99.832944
912795593
4-WEEK
08-14-2008
09-11-2008
1.845
1.873
99.856500
912795G54
13-WEEK
08-14-2008
11-13-2008
1.870
1.905
99.527306
912795H61
26-WEEK
08-14-2008
02-12-2009
2.020
2.069
98.978778
9127951<34
155-DAY
08-13-2008
01-15-2009
1.950
1.994
99.160417
912795377
Effective with the 11/2/98 auction, all bills are auctioned using the single -priced method.
Freedom of Informatign Act I Law & Guidance I Privacy &-Legal Notices I Webste Terms & Condition
U.S. Department of the Treasury, Bureau -of the Public Debt
http://www.treasurydirect.gov/RI/OFBills 10/1 /2008 12
THE AUGUST CASH FLOW BUDGET TO ACTUAL
SHEET WILL BE DISTRIBUTED AT THE MEETING.
13
INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
October 8, 2008
Pooled Money Investment Board Report
for July 2008
BACKGROUND:
Correspondence & Written
Material Item B
The Pooled Money Investment Board Report for July 2008 is included in the agenda
packet.
RECOMMENDATION:
Receive & File
John M. Falconer, Finance Director
POOLED MONEY INVESTMENT ACCOUNT
SUMMARY OF INVESTMENT DATA
A COMPARISON OF JULY 2008 WITH JULY 2007
(DOLLARS IN THOUSANDS)
DULY 2008 JULY 2007 CHANGfi
Average Daily Portfolio
$
66,340,351
$
60,681,221
$
+5,659,130
Accrued Earnings
$
157,011
$
270,086
$
-113,074
Effective Yield
2.787
5.255
-2.468
Average Life -Month End (In Days)
222
186
+36
Total Security Transactions
Amount
$
30,037,220
$
34,169,222
$
■1,132,002
Number
622
718
-96
Total Time Deposit Transactions
Amount
$
6,694,700
$
4,626,600
$
+2,068,100
Number
241
172
+69
Average Workday Investment Activity
$
1,669,633
$
1,847,420
$
-177,787
Prescribed Demand Account Balances
For Services
$
606,699
$
263,394
$
+343,305
For Uncollected Funds
$
107,578
$
124,685
$
-17,007
1
BILL LOCKYER
TREASURER
STATE OF CALIFORNIA
INVESTMENT DIVISION SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO
(000 OMITTED)
JULY 31, 2008
DIFFERENCE IN
PERCENT OF
TYPE OF SECURITY
AMOUNT
PERCENT OF
PORTFOLIO
PORTFOLIO FROM
PRIOR MONTH
Government
Bills
$ 1,568,631
2.34
-0.97
Bonds
0
0.00
0
Notes
1,849,661
2.75
+0.10
Strips
0
0.00
0
Total Government
$ 3,418,292
6.09
-0.87
Federal Agency Debentures
$ 10,612,269
15.81
+0.38
Certificates of Deposit
12,225,106
18.22
-1.86
Bank Notes
900,000
1.34
+0.08
Bankers' Acceptances
0
0.00
0
Repurchases
0
0.00
0
Federal Agency Discount Notes
10,362,312
15.44
+2.09
Time Deposits
9,191,000
13.69
+0.26
GNMAs
159
0.00
0
Commercial Paper
6,405,263
9.54
-3.76
FHLMC/Remics
1,105,487
1.65
+0.05
Corporate Bonds
378,290
0.56
+0.20
AB 55 Loans
11,675,437
17.40
+2.16
GF Loans
1,038,000
1.56
+1.65
Reversed Repurchases
-196,250
-0.29
+0.29
Total (All Types)
$ 67,116,355
100.00
INVESTMENT ACTIVITY
JULY 2008
JUNE 2008
NUMBER
AMOUNT
NUMBER
AMOUNT
Pooled Money
622
$ 30,037,220
742
$ 35,493,109
Other
1
592
30
179,463
Time Deposits
241
6,694,700
193
3,831,500
Totals
864
$ 36,732,512
965
$ 39,504,072
PMIA Monthly Average Effective Yield
2.787
2.894
Year to Date Yield Last Day of Month
2.787
4.325
Corporate Bond:
0.56%
Commercial Paper
9.54%
Time Dep
13.69'
Pooled Money Investment Account
Portfolio Composition
$67.1 Billion
7/31 /08
Reverses Treasuries
-0.29% 5.09%
Loans Mortgages
CDs/BNs
19.56%
Agencies
31.25%