2010 03 10 IABINVESTMENT ADVISORY BOARD
Meeting
March 10, 2010
CALL TO ORDER
The regular meeting of the Investment Advisory Board was canceled due to lack of a
quorum.
LA
Y.O. Box 1504
LA QuINIA, CALIFORNIA 92247-1504
78-495 CALLF. TAMPICO 760) 7 7 7 - 7 0 0 0
LA QUI v FA, CAI_LPORNIA 92253 FAX (760) 777-71 01
AGENDA
INVESTMENT ADVISORY BOARD
Caucus Room
78-495 Calle Tampico- La Quinta, CA 92253
March 10, 2010 - 4:00 P.M.
CALL TO ORDER
a. Pledge of Allegiance
b. Roll Call
PUBLIC COMMENT - (This is the time set aside for public comment on any matter
not scheduled on the agenda.)
CONFIRMATION OF AGENDA
CONSENT CALENDAR
A. Approval of Minutes of Meeting on February 10, 2010 for the Investment
Advisory Board.
V BUSINESS SESSION
A. Transmittal of Treasury Report for January 2010
B. Continued Discussion of the Investment Advisory Board 2009/10 Work Plan and
2010/11 Investment Policy
C. CMTA Conference - Sacramento, California, April 20 - 23, 2010
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report and other selected Financial Data -
February 2010
B. Pooled Money Investment Board Reports - December 2009
VII BOARD MEMBER ITEMS
Vill ADJOURNMENT
PUBLIC NOTICES
The La Quinta Caucus Room is handicapped accessible. If special equipment is needed for the hearing impaired, please call the
Finance Department at 777-7150, twenty-four (24) hours in advance of the meeting and accommodations will be made.
Any writings or documents provided to a majority of the Investment Advisory Board regarding any item on this agenda will be
made available for public inspection at the City Clerk counter at City Hall located at 78-495 Calle Tampico, La Quinta, CA 92253,
during normal business hours.
INVESTMENT ADVISORY BOARD
Meeting
February 10, 2010
CALL TO ORDER
Regular meeting of the La Quinta Investment Advisory Board was called to order at the
hour of 4 p.m. by Chairman Ross followed by the Pledge of Allegiance.
PRESENT: Board Members Moulin, Ross, and Park
ABSENT: Board Member Rassi
OTHERS PRESENT: John Falconer, Finance Director and Angela Guereque,
Senior Secretary
II PUBLIC COMMENT - None
III CONFIRMATION OF AGENDA
Mr. Falconer provided corrected copies of Correspondence and Written Material Item B
— Pooled Money Investment Board Reports for November 2009. Confirmed.
IV CONSENT CALENDAR
A. Approval of Minutes of Meeting on January 13, 2010 for the Investment
Advisory Board.
Board Member Ross requested that the following correction be made to page 2,
second sentence of Business Session Item A:
The portfolio activity on Page 3 reflects an increase in days Bested t_ era e
r�itatunt" from 62 days to 152 days......
Board Member Ross requested that the following correction be made to page 2,
third paragraph of Business Session Item A:
The major reason for the decrease was that expenditures were greater ie;:- ....
MOTION - It was moved by Board Members Moulin/Park to approve the Minutes
of January 13, 2010 as amended. Motion carried unanimously.
Investment Advisory Board February 10, 2010
Minutes
V BUSINESS SESSION
A. Transmittal of Treasury Report for December 2009
Mr. Falconer presented and reviewed the staff report. Mr. Falconer further
advised that redevelopment pass -through payments will be remitted in August
each year instead of February, June, and August.
Mr. Falconer thanked Board Member Moulin for the suggestion to move over the
reference to notes on page 2.
Chairman Ross requested that the following correction be made to page 3, sixth
paragraph, third sentence:
The Treasurer plans to invest these funds in either short term Farm Credit GSE's
or Federal Home Loan Bank GSE's. Mr. Falconer commented that at this time
he was not comfortable in investing in Fannie Mae or Freddie Mac at this time.
Board Member Park asked if any feedback had been received regarding interest
rates. Mr. Falconer stated that he has received correspondence from several
broker/dealers and also stated that he feels that there will be no change in the
interest rate market over the next six months.
Board Member Moulin requested eliminating the column "Rank" from page 5 and
changing the heading for Certificates of Deposit from "Market Value" to "Cost
Plus Accrued Interest."
MOTION - It was moved by Board Members Park/Moulin to review, receive and
file the Treasurers Reports for December 2009. Motion carried unanimously.
B. Continued Consideration of Fiscal Year 2009-10 Work Plan Items and
Review the 2010-11 Investment Policy
Mr. Falconer advised that presented to the Board is the draft investment policy
which is reviewed each year commencing in February for any changes and/or
deletions. Mr. Falconer further advised that staff has no recommended changes
at this time.
Mr. Falconer advised that he was to report on other alternatives to LAIF and
FA
Investment Advisory Board
Minutes
February 10, 2010
would have to do so at the next scheduled meeting. Mr. Falconer further
advised that he received a letter regarding the current cash flow of the State
and it was reported that the State would be in a cash decline from February to
mid April, which was the reason for the alternatives to LAIF.
General discussion ensued amongst the Board and staff regarding LAIF and
comparable alternatives.
Chairman Ross suggested that Board Members review the policy and consider
changes at the next Board Meeting. Board Members concurred and Board
Member Moulin made note that the glossary may need to be revised.
MOTION - It was moved by Board Members Moulin/Park to continue
consideration of Fiscal Year 2009-10 Work Plan items and review of the 2010-
2011 Investment Policy. Motion carried unanimously.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report — January 2010
Mr. Falconer presented and reviewed the Month End Cash report advising that
the LAIF balance is in line with the State.
Board Member Moulin asked when the banking relationship with Wells Fargo will
be reviewed. Mr. Falconer stated that the review should be done with next
years Work Plan.
Noted and Filed
B. Pooled Money Investment Board Reports — November 2009
Mr. Falconer presented and reviewed the Pooled Money Investment Board
Report for November 2009.
Mr. Falconer advised the Board that the Treasurers Conference flyers will be
presented at the next meeting.
Noted and Filed
VII BOARD MEMBER ITEMS
K
Investment Advisory Board
Minutes
February 10, 2010
General discussion ensured amongst the Board and staff regarding the Investment
Advisory Board application process for the vacant seat.
VIII ADJOURNMENT
MOTION - It was moved by Board Members Park/Moulin to adjourn the meeting at
4:44 p.m. Motion carried unanimously.
Submitted by,
Vianka Orrantia
Senior Secretary
0
INVESTMENT ADVISORY BOARD
Meeting Date: March 10, 2010
ITEM TITLE:
Transmittal of Treasury Report
for January 31, 2010
BACKGROUND:
Business Session: A
Attached please find the Treasury Report for January 31, 2010
RECOMMENDATION:
Review, Receive and File the Treasury Report for January 31, 2010
John M. Falconer, Finance Director
MEMORANDUM
TO: La Quinta City Council
FROM: John M. Falconer, Finance DimctoNTreasurer
SUBJECT: Treasurers Report for January 31. 2010
DATE: February 26, 2010
Attached is the Treasurer's Report for the month ending January 31, 2010. 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
LAIF
Certificates of Deposit
US Treasuries
US Govl Sponsored Enterprises
Commercial Paper
Corporate Notes
Mutual Funds
$ 48.956,194
1,209,000
98,829.823
-
-
15,250,906
904,183
$ 8,324,281
- 19,000,000
(2)
(2)
(2)
(11
$ (500.000)
19,814
(4,517)
0
(12,091)
0
$ 56,780,475
1,209,000
98,849,637
18,995,483
0
15,238,815
904, 183
7,824,281
0
19,814
18,995,483
0
(12,091)
0
Subtotal I
$ 165150,106 1
$ 27,324281
$ 500,000
$ 3.206 1
$ 191,977,593
1 $ 26827,487
Cash 1 $ 968,814 1 & 3 $ 1,646,040d 1 $ 677,226 1,646,040
Total 1 $ 166 118,920 1 $ 27,324,281 1 1 $ 2,146,040 $ 3,206 1 $ 191.300,367 1 $ 25,181 447
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 Quints, 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 Quints 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.
4
2- Zo o
hn M. Falconer ate
Finance DirectodTreasurer
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.
E
Treasurer's Commentary
For the Month of January 2010
Cash Balances - The portfolio size increased by $25.18 million to end the month at $191.30
million. The major reason for the increase was the receipt of $25.61 million in County
property taxes.
Investment Activity - The investment activity resulted in an average maturity increase of 87
days to 239 days at the end of December. The Treasurer follows a buy and hold investment
policy and two (2) Federal Home Loan Bank Discount Notes were purchased in January.
These investments mature in April 2010. The sweep account earned $24 in interest income
for the month of January and the bank fees for the month were $ 1,967 which resulted in a
net decrease of $1,943 in real savings.
Portfolio Performance - The overall portfolio performance decreased by eight (8) basis points
from the prior month and ended at .43% for the month, with the pooled cash investments
yielding .46%. The portfolio yield should continue to stay at these levels for the near future.
At this time last year, the portfolio was yielding 1.23% which reflects the current interest
rate. environment.
Looking Ahead
While the liquidity crisis impacting financial and business institutions has somewhat waned,
the Treasurer is still concentrating on safety first and foremost. In the short term, the
Treasurer will be maintaining LAIF balances at the maximum allowable percentage because its
rate declines slower in a declining rate environment.
The Treasurer will not be investing in non-TLGP corporate notes, non-TLGP commercial paper
or Fannie Mae or Freddie Mac Government Sponsored Enterprises (GSE) due to the current
economic conditions affecting the financial markets.
In addition, on February 19, 2010, La Jolla Bank was acquired by OneWest Bank through an
agreement with the Federal Deposit Insurance Corporation (FDIC). The City had one
Certificate of Deposit with La Jolla Bank which was under the FDIC limit and was not
affected by the bank change.
As reported last month, the Finance Department will be only remitting Redevelopment Pass
Through payments in August of each year instead of in February, June and August. As a
result of this change, future cash flow reports will show more funds available to invest
between February and July. The Treasurer plans to invest these funds in either short term
Farm Credit (GSE) or Federal Home Loan Bank (GES) Discount or Bullet Notes to earn
additional interest. While these investments will reduce the overall yield of the portfolio, the
actual interest income will increase.
3
Treasurer's Commentary
For the Month of January 2010
Cash Balances - The portfolio size increased by $25.18 million to end the month at $191.30
million. The major reason for the increase was the receipt of $25.61 million in County
property taxes.
Investment Activity - The average maturity of the portfolio increased by 87 days to 239 days
at the end of December. The Treasurer follows a buy and hold investment policy and two (2)
Federal Home Loan Bank Discount Notes were purchased in January. These investments
mature in April 2010. The sweep account earned $24 in interest income for the month of
January and the bank fees for the month were $ 1,967 which resulted in a net decrease of
$1,943 in real savings.
Portfolio Performance - The overall portfolio performance decreased by eight (8) basis points
from the prior month and ended at .43% for the month, .with the pooled cash investments
yielding .46%. The portfolio yield should continue to stay at these levels for the near future.
At this time last year, the portfolio was yielding 1.23% which reflects the current interest
rate environment.
Looking Ahead
While the liquidity crisis impacting financial and business institutions has somewhat waned,
the Treasurer is still concentrating on safety first and foremost. In the short term, the
Treasurer will be maintaining LAIF balances at the maximum allowable percentage because its
rate declines slower in a declining rate environment.
The Treasurer will not be investing in non-TLGP corporate notes, non-TLGP commercial paper
or Fannie Mae or Freddie Mac Government Sponsored Enterprises (GSE) due to the current
economic conditions affecting the financial markets.
In addition, on February 19, 2010, La Jolla Bank was acquired by OneWest Bank through an
agreement with the Federal Deposit Insurance Corporation (FDIC). The City had one
Certificate of Deposit with La Jolla Bank. which was under the FDIC limit and was not
affected by the bank change.
As reported last month, the Finance Department will be only remitting Redevelopment Pass
Through payments in August of each year instead of in February, June and August. As a
result of this change, future cash flow reports will show more funds available to invest
between February and July. The Treasurer plans to invest these funds in either short term
Farm Credit (GSE) or Federal Home Loan Bank (GES) Discount or Bullet Notes to earn
additional interest. While these investments will reduce the overall yield of the portfolio, the
actual interest income will increase.
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10
City ofL Quinta
Coleparelive Rates of Interest
January 31, 2010
City of I a Quinta
Av22ge I I Treasury BIIWN re I I Three Month
August 2W8
4.94%
6.01%
4.97%
48
4.97%
4.0%
Sept 2W6
4.98%
5.01%
4,09%
0
5,00%
802%
W 2006
SAO%
5.02%
5.01%
87
4.96%
5,10%
Nov 2W6
5.04%
5.03%
6,03%
62
4.94%
5,13%
Dec 2000
5.08%
6.04%
5.0%
80
4,90%
5.13%
Jan 2007
5.18%
6.12%
5A6%
64
4.0%
5.16%
Feb 2W7
5.19%
5.13%
5.17%
45
4.95%
6.18%
Mar2007
6.21%
5.03%
6.15%
67
4,88%
5,21%
Apr 2007
5.20%
5.14%
5.16%
42
4.84%
5.22%
May 2607
520%
6.05%
5,16%
32
4.81%
5.26%
June 2007
5.19%
4.88%
5.10%
85
4.81%
5.25%
FY 07r08
July 2007
5.21%
4.90%
5.12%
129
4.80%
5,26%
August 20M
5.17%
4,06%
5.08%
109
4.59511
5,25%
Sept 2007
6.16%
4.88%
S.W%
129
4.W%
6.23%
Oct 2007
6.11%
4.85%
5.02%
116
3.95%
5,14%
Nov 2007
5.03%
4A3%
4.96%
W
3.34%
4,96%
Dec 2007
4.95%
3.43%
4.45%
123
3,39%
4.80%
Jan Mill
4.58%
3.33%
C2 %
98
2.31%
4.62%
Feb 2000
4.12%
324%
3.85%
86
2.07%
4.16%
Mar2008
4.07%
2.83%
3.67%
74
IM16
3.78%
Apr 2008
3.46%
3,27%
3.41%
82
1.10%
340%
May 2W8
3.14%
3.27%
3.17%
63
1.92%
3.07%
June Me
3.09%
1.94%
2.86%
W
2.14%
2,89%
FY 08109
July 2008
2.99%
1.0%
2.77%
62
1.70%
1.88%
2.29%
2,75%
2A8%
2.79%
Augubt2W8
3.16%
1.92%
2.88%
51
1.69%
1.89%
2.14%
2.38%
2.08%
2.78%
Sept2W8
2.81%
1.02%
2.64%
37
1.42%
1.7e%
1.96%
2.0%
2.13%
2.77%
002008
2.66%
2.61%
2.61%
29
0.90%
1.40%
1.72%
1.50%
2,07%
2.71%
Nov 2W8
2.38%
2.36%
2.36%
64
0.16%
0.49%
1.04%
1.25%
1,45%
2.67%
Dec 2DW
1.60%
0.18%
1.42%
116
0.06%
0.26%
0.69%
0.88%
0,97%
2.35%
Jan 2009
1.36%
0,18%
1.23%
82
0.15%
0.35%
0.43%
0.88%
0.31%
2.05%
Feb 2009
1.23%
0,18%
1.11%
76
0.30%
0.50%
DA1%
0.68%
0.48%
181%
Mat-2009
1.26%
0.18%
1.13%
69
0.20%
042%
0.70%
0.88%
0.37%
1.82%
Apr 2009
0.94%
0.18%
0.85%
64
0.31%
0.33%
0.59%
0.88%
0.28%
1.61%
May2009
0.92%
0.18%
0.84%
80
0.18%
0,30%
0.63%
088%
0.23%
1.0%
June 2W9
0.85%
0.29%
0,80%
111
0.20%
0.35%
0.65%
1.13%
0,26%
1.38%
FY OWIG
July 2009
0.69%
0.30%
0.65%
111
0.19%
028%
0.47%
/.W%
0.28%
1.04%
August 2009
0.64%
0.30%
0.61%
92
0.10%
U11%
0.46%
1.W%
0.24%
0.03%
Sept 2W9
0.58%
0.31%
0.53%
112
0.12%
0.19%
0.41%
1.W%
0.191a
0.75%
ct O2W9
0.52%
0.31%
0.W%
go0,08%
0.19%
0.38%
1.00%
0.19%
0.65%
Nov 2W9
0.66%
0.31%
0,53%
152
0.04%
0.14%
0.32%
0.75%
0,16%
0,61%
D9c2W9
0.56%
0,15%
0,61%
239
0.11%
0.20%
0.16%
100%
0.16%
0.67%
11
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INVESTMENT ADVISORY BOARD Business Session: B
Meeting Date: March 10, 2010
ITFM TITLE
Continued Consideration of Fiscal Year 2009/10 Work Plan Items & 2010/11
Investment Policy
BACKGROUND:
As part of the work plan, the Investment Advisory Board is asked to review the
Investment Policy and make any recommendations for the City Council's
consideration in June of each year.
The Treasurer does not plan to introduce an alternative to LAIF at this time.
RECOMMENDATION:
Consideration of this item with a recommendation to the City Council of any
changes to the Fiscal Year 2010/11 Investment Policy.
John M. Falconer, Finance Director
Section
I
II
III
IV
X
XI
XII
XIII
XIV
XV
XVI
XVII
XIII
XIX
Appendices
A
B
C
D
E
F
G
H
J
CITY OF LA QUINTA
Investment Policy
Fiscal Year 2010/2011
Table of Contents
Topic
Executive Summary
General Purpose
Investment Policy
Page
2
6
6
7
7
7
8
12
12
12
13
14
14
15
15
16
Page
17
Board 19
s and Funds20
22
23
Broker/Dealer Questionnaire and Certification 24
Request for Proposal for Professional Portfolio Management Firm 28
Permissible Investment Chart - Professional Portfolio Management Firm 34
Investment Management Process and Risk 35
Glossary 36
1
CITY OF LA QUINTA
Investment Policy
Fiscal Year 2010/2011
Executive Summary
The general purpose of this Investment Policy is to provide the rules and standards that must be
followed in administering the City of La Quinta's deposits and investments.
The City's Investment Policy conforms to all state and local statutes and applies to all deposits
and investments of the City of La Quinta, City of La Quinta Redevelopment Agency, and the
City of La Quinta Financing Authority (the"City").
It is the City's policy to deposit and invest public funds in a manner that shall provide:
► Safety of principal;
► Liquidity to meet all of the City's obligations and requirements that may be reasonably
anticipated;
► A risk -based market rate of return.
It is the City's policy to hold securities and other investments until maturity. This buy -and -hold
policy shall not prevent the sale of a security to minimize loss of principal when an issuer or
backer suffers declining credit worthiness or when the liquidity needs of the portfolio require
that a security be sold.
Authority to manage the City's investment portfolio is derived from the City Ordinance.
Management responsibility for the investment program is delegated to the City Treasurer, who
shall establish and implement written procedures for the operation of the City's investment
program consistent with the Investment Policy. The Treasurer shall establish and implement a
system of internal controls to accomplish the following objectives:
► Safeguard assets;
► The orderly and efficient conduct of its business, including adherence to all City
management policies;
► Prevention or detection of errors and fraud;
► The accuracy and completeness of accounting records;
► Timely preparation of reliable financial information.
The System of Internal Controls developed by the City Treasurer shall be reviewed annually by the
independent auditors in connection with the annual audit of the City's Financial Statements.
The City Manager, Assistant City Managers, City Treasurer and city employees involved in the
City's banking and investment process shall conduct the City's business in an ethical manner and
refrain from any activity or relationship that may be, or have the appearance of, a conflict of
interest.
The City Treasurer maintains a listing of financial institutions which are approved for investment
purposes. All Broker/Dealers and financial institutions that provide investment services will be
subject to City Council approval.
The Treasurer will be permitted to invest only in the permissible deposits and investments
described in Section X and Appendix A up to the specified maximum allowable percentages
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and/or dollar limitations and, where applicable, through the bid process requirements. Permissible
deposits and investments include, in general:
► FDIC -Insured Checking, Savings, and Sweep Accounts;
► Certificates of Deposit;
► U.S. Government Agency Securities and Federal Government Securities;
► Prime Commercial Paper;
► Local Agency Investment Fund (LAIF);
► Money Market Mutual Funds;
► Corporate Notes;
► Professionally Managed Accounts.
The City's deposits and investments are generally limited to three years' maximum maturity.
However, the projected amount of funds not expected to be disbursed within five years may be
invested in U.S. Treasury bills, notes and bonds maturing between three and five years.
The City's Investment Policy does not specify a single benchmark as a goal or target yield for a
rate of return on its investment portfolio. As a basis for comparison only, the Treasurer's
monthly report will display the rates of return on the three-month, six-month, and one-year U.S.
Treasury Bill, comparable -period rates for commercial paper, and the yield for the State
Treasurer's Local Agency Investment Fund (LAIFI.
The Investment Policy shall be adopted by resolution of the La Quinta City Council on an annual
basis. The Investment Policy will be adopted before the end of June of each year.
This Executive Summary is only an overview of the City's Investment Policy. Reading this
summary does not constitute a complete review, which can only be accomplished by reviewing all
of the pages herein.
3
City of La Quinta
Statement of Investment Policy
July 1, 2010 through June 30, 2011
Adopted by the City Council on June 15, 2010
GENERAL PURPOSE
The general purpose of this document is to provide the rules and standards that must be followed
in administering the City of La Quinta's deposits and investments.
II INVESTMENT POLICY
It is the policy of the City of La Quinta to deposit and invest public funds in a manner that shall
provide:
➢ Safety of principal;
➢ Liquidity to meet all of the City's obligations and requirements that may be reasonably
anticipated;
➢ A risk -based market rate of return.
The Investment Policy conforms to all State and local statutes governing the investment of public
funds and sets forth the permissible deposits and investments of the City's funds and the
limitations thereon.
III SCOPE
Except as further detailed in Section XVII, this Investment Policy applies to all deposits and
investments of the City of La Quinta, City of La Quinta Redevelopment Agency and the City of La
Quinta Financing Authority (hereafter referred to in this document as the "City"). These funds are
reported in the City's Comprehensive Annual Financial Report (CAFR) and include all funds within
the following fund types:
► General
► Special Revenue
► Capital Projects
► Debt Service
► Enterprise
► Internal Service
► Trust and Agency
► Any new fund types and fund(s) that may be created.
IV OBJECTIVES
The objectives of the City's investment activity, in order of priority and importance, are:
1. Safety of Principal
Safety of principal is the foremost objective of the City's investment program.
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Investments shall be undertaken in a manner that seeks to ensure the preservation of
principal of the overall portfolio in accordance with the permissible deposits and
investments.
The City shall endeavor to preserve its investment principal by making only permissible
deposits and investments, undertaken in a controlled manner to minimize the possibility of
loss or misappropriation through malfeasance or otherwise. Investments not backed by
the full faith and credit of the United States Government shall be diversified by allocating
assets between different types of permissible investments, maturities, and issuers as a
means to mitigate credit risk and interest rate risk.
A. Credit Risk is the risk of loss from the failure of the security issuer or backer.
Credit risk may be mitigated by:
► Limiting investments to investment grade securities as permitted in Section X;
► Diversifying the issuers of the securities in the investment portfolio so that
potential losses due to issuer failure or individual securities downgrades may be
minimized.
B. Interest Rate Risk is the risk that market values of securities in the portfolio will
decline due to changes in general interest rates. Interest rate risk may be mitigated
by:
► Structuring the investment portfolio so that securities mature to meet cash
requirements for ongoing operations, thereby avoiding the need to sell securities
on the open market prior to maturity; and
► Investing operating funds primarily in shorter -term securities.
C. Liquidity Risk is the risk that a security cannot be liquidated because of its unique
features or structure or because it is thinly traded. Liquidity risk is not a material
issue for the City's portfolio because of the permissible deposits and investments
(see Section X) and because the City maintains a buy -and -hold policy and holds
securities and other investments to maturity. A discussion of the City's investment
process and risk is presented in Appendix I.
2. Provide Liquidity
The investment portfolio shall remain sufficiently liquid to meet all of the City's cash needs
that may be reasonably anticipated. This is accomplished by structuring the portfolio so
that sufficient liquid funds are available to meet anticipated demands. Furthermore, since
all possible cash needs cannot be anticipated the portfolio should be diversified and
consist of securities with active secondary or resale markets.
The City's policy is to hold securities and other investments to maturity. Accordingly,
securities shall not be sold prior to maturity with the following exceptions:
► A security with declining credit quality can be sold early to minimize loss of
principal;
► Unanticipated liquidity needs of the portfolio require that one or more securities be
sold.
GV
3. Yield A Risk -Based Market Rate Of Return
The City's investment portfolio shall be structured with the objective of yielding a risk -
based market rate of return throughout budgetary and economic cycles. Return on
investment is less important than the safety and liquidity objectives described above.
The City's Investment Policy does not specify a single benchmark as a goal or target yield
for a rate of return on its investment portfolio. The portfolio's rates of return will be
influenced by several factors, including actions by the Federal Reserve Board, the
marketplace, and overall economic perceptions and conditions. These factors will not
affect yield during the securities' holding period because the City's buy -and -hold policy
fixes the securities' yield at the time of purchase.
As a basis for comparison only, the Treasurer's monthly report will display the rates of
return on the three-month, six-month, and one-year U.S. Treasury Bill, comparable -period
rates for commercial paper, and the yield for the State Treasurer's Local Agency
Investment Fund (LAIF)• The Treasurer may use these or any other published rates of
return that the Treasurer deems appropriate for comparison to the return on the City's
investment portfolio.
V MAXIMUM MATURITIES
It is the City's policy to hold securities and other investments until maturity, thus avoiding the risk
of market value fluctuations with overall market interest rates. This buy -and -hold policy shall not
prevent the sale of a security to minimize loss of principal when an issuer or backer suffers
declining credit worthiness or when the liquidity needs of the City require that a security be sold.
The buy -and -hold policy requires that the City's investment portfolio be structured so that
sufficient liquid funds are available from maturing investments and other sources to meet all
reasonably -anticipated cash needs. To meet anticipated cash needs, it is essential that the
Treasurer have reliable, diligently prepared cash flow projections.
Annually, the Treasurer shall project the amount of funds not expected to be disbursed within five
years. For FY 2010/201 1, the amount of such funds is projected to be $4 million. Funds up to
that amount may be invested in U.S. Treasury bills, notes and bonds maturing between 3 and 5
years. For all other funds, investments are limited to three years maximum maturity, with no
more than 25% of surplus funds invested in maturities exceeding two years and less than three
years.
VI PRUDENCE
The City shall follow the Uniform Prudent Investor Act as adopted by the State of California in
Probate Code Sections 16045 through 16054.
Section 16053 sets forth the terms of a prudent person which are as follows: "Investments shall
be made with judgment and care - under circumstances then prevailing - which persons of
prudence, discretion, and intelligence exercise in the professional management of their own
affairs, not for speculation, but for investment, considering the probable safety of their capital as
well as the probable income to be derived."
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VII AUTHORITY
Authority to manage the City's investment portfolio is derived from sections 35607 and 35608 of
City Ordinance 3.08.010, Management responsibility for the investment program is delegated to
the City Treasurer for a period of one year pursuant to the City Council's annual adoption of the
Investment Policy.
The City Treasurer shall establish written procedures for the operation of the investment program
consistent with the Investment Policy. Procedures should include reference to safekeeping, wire
transfer agreements, banking service contracts, and collateral/depository agreements. Such
procedures shall include explicit delegation of authority to persons responsible for investment
transactions. No person may engage in an investment transaction except as provided under the
terms of this Investment Policy and the procedures established by the City Treasurer. The City
Treasurer shall be responsible for all transactions undertaken and shall establish a system of
controls to regulate the activities of subordinate officials. The City Manager or an Assistant City
Manager shall acknowledge in writing all purchases and sales of investments prior to their
execution by the City Treasurer.
VIII ETHICS AND CONFLICTS OF INTEREST
The City Manager, Assistant City Managers, City Treasurer and city employees involved in the
City's banking and investment process shall conduct the City's business in an ethical manner and
refrain from any activity or relationship that may be, or have the appearance of, a conflict of
interest. Any questionable activity or relationship shall be reported immediately and in compliance
with the procedures set forth in Section 1 .40 — Conflicts of Interest and Acceptance of Gifts and
other Gratuities of the City of La Quinta Personnel Manual. Reporting must be made in
accordance with the personnel policies of the City and, until resolved, the officer or employee
shall refrain from participating in the City's business related to the matter.
The City Manager, Assistant City Managers, City Treasurer and city employees may conduct
personal business with banks, brokers, and other financial institutions that are authorized to
conduct business with the City provided that the terms of the activity to the accountholder with
the City are the same as those that are available to the public in general.
IX AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The City Treasurer maintains a listing of financial institutions which are approved for direct
investment purposes. In addition a list will also be maintained of approved broker/dealers selected
by credit worthiness, who maintain an office in the State of California.
Broker/Dealers who desire to become bidders for direct investment transactions must
supply the City with the following:
► Current audited financial statements;
► Proof of Financial Industry Regulatory Authority (FINRA) Certification;
► Trading resolution;
► Proof of California registration;
► Resume of Financial broker; and
► Completion of the City of La Quinta Broker/Dealer questionnaire (see Appendix F)
which contains a certification of having read the City's Investment Policy.
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The City Treasurer shall evaluate the documentation submitted by the broker/dealer and
independently verify existing reports on file for any firm and individual conducting
investment related business.
The City Treasurer will also contact the following agencies during the verification process:
► Financial Industry Regulatory Authority (FINRA) Public Disclosure Report File (1-
800-289-9999).
► State of California Department of Corporations (1-916-445-3062).
The City Treasurer maintains a listing of financial institutions which are approved for
investment purposes. All Broker/Dealers and financial institutions that provide investment
services will be subject to City Council approval.
Each securities dealer shall provide monthly and quarterly reports filed pursuant to U.S. Treasury
Department regulations. Each mutual fund shall provide a prospectus and statement of additional
information.
2. Financial Institutions will be required to meet the following criteria in order to receive City
funds for deposit or investment (see Appendix E, "Listing of Approved Financial
Institutions"):
A. Insurance - Public Funds shall be deposited only in financial institutions having
accounts insured by the Federal Deposit Insurance Corporation (FDIC).
B. Collateral - The amount of the City's deposits or investments not insured by the
FDIC —shall be collateralized by securities with market values of 110%, or by
mortgages with market values 150%, of the amount of invested funds plus unpaid
interest earnings.
C. Disclosure - Each financial institution maintaining invested funds in excess of the
FDIC insured amount shall furnish the City a copy of the most recent Call Report.
The City shall not invest in excess of the FDIC insured amount in banking
institutions which do not disclose to the city a current listing of securities pledged
for collateralization in public monies.
X PERMISSIBLE DEPOSITS AND INVESTMENTS
Permissible deposits and investments are summarized below. A more comprehensive list is
included in Appendix A.
Permissible Investments and Limitations
(See Appendix A for Additional Information)
Maximum
Allocation
Maximum
Maturity
Restrictions
Current/
Sweep Account:
Checking & Savings Accounts FDIC Insured & Sweep Accounts
85% Portfolio
On Demand
U.S. Treasuries
and/or GSE's
<= $250,000,
Certificates of Deposit
60% Portfolio
3 Years
including interest
per institution
Permissible Investments and Limitations
Maximum
Maximum
Restrictions
(See Appendix A for Additional Information)
Allocation
Maturity
U.S. Treasury Bills, Notes and Bonds, and Government National
100% Portfolio
3 Years
`=S4,0000,000
Mortgage Association (GNMA) Securities
maturing 3-5 Yrs
U.S. Government Agency Securities and Federal Government Securities
(except collateralized mortgage obligations (CMO's) or structured notes
which contain embedded rate options):
- Federal National Mortgage Association (FNMA)
$20,000,000
3 Years
- Federal Home Loan Bank Notes & Bonds (FHLB)
$25,000,000
3 Years
- Federal Farm Credit Bank (FFCB)
$30,000,000
3 Years
- Federal Home Loan Mortgage Corporation (FHLMC)
$20,000,000
3 years
Prime Commercial Paper including Temporary Liquidity Guarantee
15% Portfolio
90 Days
$5,000,000 per
Program (TLGP)
issuer maximum.
Local Agency Investment Fund (LAIF)
30% Portfolio
Current /
On Demand
$40 million
per account.
Money market mutual funds regulated by the SEC that consist only of US
20% Portfolio
Current /
Maintain $1 per
Treasury Securities or GSE's and maintain a par value of $1 per share
On Demand
share par value
$5,000,000 max
Corporate Notes
10%
3 Years
per issuer AA
rated or better
$10,000,000 max
Corporate Notes -Temporary Liquidity Guarantee Program (TLGP)
20%
3 Years
per issuer, AA
rated or better.
Requires
Professionally Managed Account
10%
3 Years
City Council -
Approved RFP
1. Checking, Savings, and Sweep Accounts — The City will only maintain checking, savings,
and sweep accounts with FDIC insured financial institutions. As authorized by the City
Council, a U.S. Treasury and/or U.S. Agency Securities Money Market Sweep Account
with a $50,000 target balance may be maintained in conjunction with the checking
account.
2. Certificates of Deposit - As authorized in Government Code Section 53649, Certificates of
Deposit are fixed term investments which are required to be collateralized from 1 10% to
150% depending on the specific security pledged as collateral in accordance with
Government Code Section 53652. There are no portfolio limits on the amount or maturity
for this investment vehicle.
Collateralization will be required for Certificates of Deposits in excess of the FDIC insured
amount. The type of collateral is limited to City authorized investments. Collateral will
always be held by an independent third party from the institution that sells the Certificates
of Deposit to the City. Evidence of compliance with State Collateralization policies must
be supplied to the City and retained by the City Treasurer as follows:
A. Certificates of Deposits Insured by the FDIC: The City Treasurer may waive
collateralization of a deposit that is federally insured.
B. Certificates of Deposit in excess of FDIC Limits: The amount not federally insured
shall be 110% collateralized securities or 150% mortgages market value of that
amount of invested funds plus unpaid interest earnings.
The City's Investment Policy limits the percentage of Certificates of Deposit to 60% of the
portfolio.
➢ The City does not allow investments in CDAR's or negotiable (secondary market)
certificates of deposit.
3. U.S. Treasury Bills, Notes, and Bonds and Government National Mortqaqe Associations
(GNMA) securities - The City may invest in U.S. Treasury bills, notes, and bonds, and
GNMA securities directly issued and backed by the full faith and credit of the U.S.
Government. The City's Investment Policy limits investments in U.S. Treasury issues and
GNMA's to 100% of the portfolio.
➢ The City's Investment Policy does not allow investments in local and state
indebtedness.
4. U.S. Government Agency Securities and Federal Government Securities - The City may
invest in securities issued by U.S. Government instrumentalities and agencies (commonly
referred to as government sponsored enterprises or GSE's). These securities are not
backed by the full faith and credit of the U.S. Government. Publicly owned GSE's include
Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation
(FHLMC) and Student Loan Marketing Association (SLMA). Non -publicly owned GSE's
include the Federal Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), Federal
Land Bank (FLB) and Federal Intermediate Credit Bank (FICB).
The City's Investment Policy allows investment only in securities of FNMA, FHLMC, FHLB
and FFCB. For Fiscal Year 2009/2010, the maximum face amount per issuer is $20
million for FNMA and FHLMC, $25 million for FHLB and $30 million for FFCB. In addition,
no more than 30% of the portfolio surplus may be invested in all GSE's combined with a
maximum $10 million face amount per purchase.
5. Prime Commercial Paper - As authorized in Government Code Section 53601(g), a portion
of the City's portfolio may be invested in commercial paper of the highest rating (A-1 or P-
1) as rated by Moody's or Standard and Poor's. There are a number of other qualifications
regarding investments in commercial paper based on the financial strength of the
corporation and the size of the investment. The City's Investment Policy permits
investments in commercial paper with the following limitations:
A. Maximum 15% of the portfolio.
B. Maximum maturity of 90 days.
C. Maximum of $5 million per issuer.
These limitations are more restrictive than the State code allowed amounts of 25% of the
total portfolio with maturities up to 270 days with no per -issuer limitations.
The City is also permitted to invest in commercial paper issued under the FDIC Temporary
Liquidity Guarantee Program subject to the aforementioned commercial paper limitations.
6. State Treasurer's Local Agency Investment Fund (LAIF) - As authorized in Government
Code Section 16429.1 and by LAW procedures, local government agencies are each
authorized to invest a maximum of $40 million per account in this investment program
administered by the California State Treasurer.
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The City's investment in LAW is allowable as long as the average maturity of its
investment portfolio does not exceed two years, unless specific approval is authorized by
the City Council. The City has two accounts with LAIF and limits investment to 30% of
the portfolio.
7. Money Market Mutual Funds - As authorized in Government Code Section 53601(k), local
agencies are authorized to invest in shares of beneficial interest issued by diversified
management companies (mutual funds) in an amount not to exceed 20% of the agency's
portfolio. There are a number of other qualifications and restrictions regarding allowable
investments in corporate notes and shares of beneficial interest issued by mutual funds
which include (11 attaining the highest ranking or the highest letter and numerical rating
provided by not less than two of the three largest nationally recognized rating services, or
(2) having an investment advisor registered with the Securities and Exchange Commission
with not less than five years' experience investing in the securities and obligations and
with assets under management in excess of five hundred million dollars ($500,000,000).
The City's Investment Policy only allows investments in mutual funds that are money
market funds maintaining a par value of $1 per share that invest in direct issues of the
U.S. Treasury and/or US Agency Securities with an average maturity of their portfolio not
exceeding 90 days and the City limits such investments to 20% of the portfolio.
8. Corporate Notes - As authorized in Government Code Section 53601 (j), local agencies
may invest in corporate notes. The notes must be issued by corporations organized and
operating in the United States or by depository institutions licensed by the United States
or any other state and operating in the United States. The City's Investment Policy allows
investment in corporate notes authorized by the Government Code with the following
limitations:
► Maturities shall not exceed three years from date of purchase.
► Eligible notes shall be regularly quoted and traded in the marketplace.
► Eligible notes shall be rated "AVor better.
► Total investment shall not exceed 10% of the portfolio for non- Temporary
Liquidity Guarantee Program (TLGP) Corporate Notes and 20% of the portfolio for
TLGP Corporate Notes, and
► The maximum aggregate investment shall not exceed $5 million face amount for
each issuer.
This is more restrictive than the State code allowed amounts of 30% of the total portfolio
with maturities up to five years with no per -issuer limitations.
The City is also permitted to invest in corporate notes issued under the FDIC
Temporary Liquidity Guarantee Program subject to the aforementioned corporate note
limitations, except that corporate notes issued under the Temporary Liquidity Guarantee
Program or otherwise backed by the United States government shall be limited to 20% of
the portfolio and the maximum aggregate investment for such notes shall not exceed $10
million face amount for each issuer.
9. Professionally Managed Account(s) - The City Treasurer may place up to 10% of the
portfolio with a professional portfolio management firm ("PPMF"). The PPMF will be
approved by the City Council based upon the City Treasurer's recommendation pursuant to
completion of a request for proposal (RFP) as outlined in Appendix G. The PPMF shall
have:
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(a) An established professional reputation for asset or investment management;
(b) Knowledge and working familiarity with State and Federal laws governing and
restricting the investment of public funds;
(c) Substantial experience providing investment management services to local public
agencies whose investment policies and portfolio size are similar to those of the
City;
(d) Professional liability (errors and omissions) insurance and fidelity bonding in such
amounts as are required by the City;
(e) Registration with the Securities and Exchange Commission under the Investment
Advisers Act of 1940.
Before engagement by the City and except as may be specifically waived or revised, the
PPMF shall commit to adhere to the provisions of the City's Investment Policy with the
following exceptions:
(f) The PPMF may be granted the discretion to purchase and sell investment securities
in accordance with Appendix I of this Investment Policy;
(g) The PPMF is not required to adhere to the buy -and -hold policy of the City's
Investment Policy, and;
(h) The PPMF does not need City Manager or City Treasurer approval to make
permissible investments as detailed in column 8 of Appendix H of this Investment
Policy.
XI INVESTMENT POOLS
There are three (3) types of investment pools:
► State -run pools (e.g,, LAIF);
► Pools that are operated by a political subdivision where allowed by law and the political
subdivision is the trustee (e.g., County Pools);
► Pools that are operated for profit by third parties.
The City's Investment Policy permits investment only in pools authorized in Section X.
XII PAYMENT AND CUSTODY
The City shall engage qualified third party custodians to act in a fiduciary capacity to maintain
appropriate evidence of the City's ownership of securities and other eligible investments. Such
custodians shall disburse funds, received from the City for a purchase, to the broker, dealer or
seller only after receiving evidence that the City has legal, record ownership of the securities.
Even though ownership is evidenced in book -entry form rather than by actual certificates, this
procedure is commonly accepted as the delivery versus payment (DVP) method for the transfer of
securities.
XIII INTEREST EARNING DISTRIBUTION POLICY
Interest earnings are generated from pooled investments and specific investments.
1. Pooled Investments - It is the general policy of the City to pool all available operating cash
of the City of La Quinta, La Quinta Redevelopment Agency and La Quinta Financing
12
Authority and allocate interest earnings, in the following order, as follows:
A. Payment to the General Fund of an amount equal to the total annual bank service
charges as incurred by the general fund for all operating funds as included in the
annual operating budget.
B. Payment to the General Fund of a management fee equal to 5% of the annual
pooled cash fund investment earnings.
C. Payment to each fund of an amount based on the average computerized
daily cash balance included in the common portfolio for the earning period.
2. Specific Investments - Specific investments purchased by a fund shall incur all earnings
and expenses to that particular fund.
XIV INTERNAL CONTROLS AND INDEPENDENT AUDITOR
The City Treasurer shall establish a system of internal controls to accomplish the following
objectives:
► Safeguard assets;
► The orderly and efficient conduct of its business, including adherence to management
policies;
► Prevention or detection of errors and fraud;
► The accuracy and completeness of accounting records; and
► Timely preparation of reliable financial information.
While no internal control system, however elaborate, can guarantee absolute assurance that the
City's assets are safeguarded, it is the intent of the City's internal control to provide a reasonable
assurance that management of the investment function meets the City's objectives.
The internal controls shall address the following:
1. Control of collusion. Collusion is a situation where two or more employees are working in
conjunction to defraud their employer.
2. Separation of transaction authority from accounting and record keeping. By separating the
person who authorizes or performs the transaction from the people who record or
otherwise account for the transaction, a separation of duties is achieved.
3. Custodial safekeeping. Securities purchased from any bank or dealer including appropriate
collateral (as defined by State Law) shall be placed with an independent third party for
custodial safekeeping.
4. Avoidance of physical delivery securities. Book entry securities are much easier to
transfer and account for since actual delivery of a document never takes place. Delivered
securities must be properly safeguarded against loss or destruction. The potential for
fraud and loss increases with physically delivered securities.
5. Clear delegation of authority to subordinate staff members. Subordinate staff members
must have a clear understanding of their authority and responsibilities to avoid improper
13
actions. Clear delegation of authority also preserves the internal control structure that is
contingent on the various staff positions and their respective responsibilities as outlined in
the Segregation of Major Investment Responsibilities appendices.
6. Written confirmation or telephone transactions for investments and wire transfers. Due to
the potential for error and improprieties arising from telephone transactions, all telephone
transactions shall be supported by written communications or electronic confirmations and
approved by the appropriate person. Written communications may be via fax if on
letterhead and the safekeeping institution has a list of authorized signatures. Fax
correspondence must be supported by evidence of verbal or written follow-up.
7. Development of a wire transfer agreement with the City's bank and third party custodian.
This agreement should outline the various controls, security provisions, and delineate
responsibilities of each party making and receiving wire transfers.
The System of Internal Controls developed by the City, shall be reviewed annually by the
independent auditor in connection with the annual audit of the City's Financial Statements.
The independent auditor's letter on internal control over financial reporting and compliance as it
pertains to cash and investments, if any, shall be directed to the City Manager who will direct the
City Treasurer to provide a written response to the independent auditor's letter. The auditor's
letter, as it pertains, to cash and investment activities and the City Treasurer's response shall be
provided to the City's Investment Advisory Board for their consideration. Following the
completion of each annual audit, the independent auditor shall meet with the Investment Advisory
Board and discuss the auditing procedures performed and the review of internal controls for cash
and investment activities.
See Appendix D, "Segregation of Major Investment Responsibilities."
XV REPORTING STANDARDS
The City Treasurer shall submit a monthly Treasurers Report to the City Council and the
Investment Advisory Board that includes all cash and investments under the authority of the
Treasurer.
The Treasurer's Report shall summarize cash and investment activity and changes in balances and
include the following:
► A certification by the City Treasurer.
► A listing of purchases and sales/maturities of investments.
► Cash and Investments categorized by authorized investments, except for LAIF
which will be provided quarterly and show yield and maturity.
► Comparison of month end actual holdings to Investment Policy limitations.
► Current year and prior year monthly history of cash and investments for trend
analysis.
► Balance Sheet.
► Distribution of cash and investment balances by fund.
► A comparison of actual and surplus funds.
► A year to date historical cash flow analysis and projection for the next six months.
► A two-year list of historical interest rates.
i[!
XVI FINANCIAL ASSETS AND INVESTMENT ACTIVITY NOT SUBJECT TO THIS POLICY
The City's Investment Policy does not apply to the following:
► Cash and Investments raised from Conduit Debt Financing;
► Funds held in trust in the City's name in pension or other post -retirement benefit
programs;
► Cash and Investments held in lieu of retention by banks or other financial
institutions for construction projects;
► Short or long term loans made to other entities by the City or Agency; and
Short term (Due to/from) or long term (Advances from/to) obligations made
either between the City and its funds or between the City and Agency.
XVII INVESTMENT OF BOND PROCEEDS
The City's Investment Policy shall govern bond proceeds and bond reserve fund investments.
California Code Section 5922 (d) governs the investment of bond proceeds and reserve funds in
accordance with bond indenture provisions which shall be structured in accordance with the
City's Investment Policy.
Arbitrage Requirement - The US Tax Reform Act of 1986 requires the City to perform arbitrage
calculations as required and return excess earnings to the US Treasury from investments of
proceeds of bond issues sold after the effective date of this law. These arbitrage calculations
may be contracted with an outside source to provide the necessary technical assistance to
comply with this regulation. Investable funds subject to the 1986 Tax Reform Act will be kept
segregated from other funds and records will be kept in a fashion to facilitate the calculations.
The City's investment position relative to the new arbitrage restrictions is to continue pursuing
the maximum yield on applicable investments while ensuring the safety of capital and liquidity. It
is the City's position to continue maximization of yield and to rebate excess earnings, if
necessary.
XVIII INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA
The Investment Advisory Board (IAB) is a standing board composed of five members from the
public that are appointed by the City Council. Background information will be requested and
potential candidates must agree to a background check and verification. On an annual basis, in
conjunction with the Political Reform Act disclosure statutes, or at any time if a change in
circumstances warrants, each board member will provide the City Council with a disclosure
statement which identifies any matters that have a bearing on the appropriateness of that
member's service on the board. All board members shall report annually to the City Clerk on
Form 700, Statement of Economic Interests, any activities, interests, or relationships that may be,
or have the appearance of, a conflict of interest.
The IAB must meet at least quarterly, but usually meets monthly, to:
1. Review at least annually the City's Investment Policy and recommend appropriate
changes;
2. Review monthly treasury report and note compliance with the Investment Policy and
adequacy of cash and investments for anticipated obligations;
3. Receive and consider other reports provided by the City Treasurer;
15
4. Meet with the independent auditor after completion of the annual audit of the City's
financial statements, and receive and consider the auditor's comments on auditing
procedures, internal controls and findings for cash and investment activities, and;
5. Serve as a resource for the City Treasurer on matters such as proposed investments,
internal controls, use or change of financial institutions, custodians, brokers and dealers.
The IAB will report to the City Council after each meeting either in person or through
correspondence at a regular City Council meeting. See Appendix B: "Investment Advisory Board
Provisions".
XIX INVESTMENT POLICY ADOPTION
The City's Investment Policy will be reviewed annually by the City's Investment Advisory Board
and the City Treasurer. The Investment Advisory Board will forward the Investment Policy with
any revisions to the City Manager and City Attorney for their review and comment. A joint
meeting will be held with the Investment Advisory Board, City Manager, City Attorney, and City
Treasurer to review the Investment Policy and any comments prior to submission to the City
Council for their consideration.
The Investment Policy shall be adopted by resolution of the City Council annually before the end
of June of each year.
16
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Appendix B
City of La Quinta Municipal Code
Chapter 2.70
INVESTMENT ADVISORY BOARD PROVISIONS
Sections:
2.70.010
General Rules Regarding Appointment.
2.70.020
Board meetings.
2.70.030
Board functions.
2.70.010 General rules regarding appointment
A. Except as set out below, see Chapter 2.06 for General Provisions.
B. The Investment Advisory Board (the "board") is a standing board composed of five (5)
members from the public that are appointed by city council.
C. Applicants for the board should have a background in finance, preferably with knowledge
and/or experience in markets, controls and accounting for securities. Background information will
be requested and potential candidates must agree to a background check and verification.
D. On an annual basis, in conjunction with the Political Reform Act disclosure statutes, or at
any time if a change in circumstances warrants, each board member will provide the City Council
with a disclosure statement which identifies any matters that have a bearing on the
appropriateness of that member's service on the board. Such matters may include, but are not
limited to, changes in employment, changes in residence, or changes in clients.
E. To promote continuity, the expiration of the terms of the members of the board shall be
staggered. The term of service is three years, with one or two terms expiring each year.
2.70.020 Board meetings.
The Board usually will meet monthly, but this schedule may be extended to quarterly
meetings upon the concurrence of the Board and the City Council. The specific meeting dates will
be determined by the Board Members and meetings may be called for on an as needed basis.
2.70.030 Board functions.
A. The principal functions of the Board are: (1) review at least annually the City's Investment
Policy and recommend appropriate changes; (2) review monthly Treasury Report and note
compliance with the Investment Policy and adequacy of cash and investments for anticipated
obligations; (3) receive and consider other reports provided by the City Treasurer; (4) meet with
the independent auditor after completion of the annual audit of the City's financial statements, and
receive and consider the auditor's comments on auditing procedures, internal controls, and findings
for cash and investment activities, and; (5) serve as a resource for the City Treasurer on matters
such as proposed investments, internal controls, use or change of financial institutions, custodians,
brokers and dealers.
B. The Board will report to the City Council after each meeting either in person or through
correspondence at a regular City Council meeting.
19
Appendix C
City of La Quinta Municipal Code
Chapter 3.08
INVESTMENT OF MONEYS AND FUNDS
Sections:
3.08.010 Investment of city moneys and deposit of securities.
3.08.020 Authorized investments.
3.08.030 Sales of securities.
3.08.040 City bonds.
3.08.050 Reports.
3.08.060 Deposits of securities.
3.08.070 Trust fund administration.
3.08.010 Investment of city moneys and deposit of securities.
Pursuant to, and in accordance with, and to the extent allowed by, Sections
53607 and 53608 of the Government Code, the authority to invest and reinvest
moneys of the city, to sell or exchange securities, and to deposit them and provide for
their safekeeping, is delegated to the city treasurer. (Ord. 2 § 1 (part), 1982)
3.08.020 Authorized investments.
Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is
authorized to purchase, at their original sale or after they have been issued, securities
which are permissible investments under any provision of state law relating to the
investing of general city funds, including but not limited to Sections 53601 and 53635 of
the Government Code, as said sections now read or may hereafter be amended, from
moneys in his custody which are not required for the immediate necessities of the city
and as he may deem wise and expedient, and to sell or exchange for other eligible
securities and reinvest the proceeds of the securities so purchased. (Ord. 2 § 1 (part),
1982)
3.08.030 Sales of Securities.
From time to time the city treasurer shall sell the securities in which city moneys have
been invested pursuant to this chapter, so that the proceeds may, as appropriate, be
applied to the purchase for which the original purchase money may have been designated
or placed in the city treasury. (Ord.2 § I (part),
3.08.040 City bonds.
Bonds issued by the city and purchased pursuant to this chapter may be canceled
either in satisfaction of sinking fund obligations or otherwise if proper and appropriate;
provided, however, that the bonds may be held uncancelled and while so held may be
resold. (Ord. 2 § 1 (part), 1982)
20
3.08.050 Reports.
The city treasurer shall make a monthly report to the city council of all investments
made pursuant to the authority delegated in this chapter. (Ord. 2 § 1 (part), 1982)
3.08.060 Deposits of securities.
Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is
authorized to deposit for safekeeping, the securities in which city moneys have been
invested pursuant to this chapter, in any institution or depository authorized by the terms
of any state law, including but not limited to Section 53608 of the Government Code as
it now reads or may hereafter be amended. In accordance with said section, the city
treasurer shall take from the institution or depository a receipt for the securities so
deposited and shall not be responsible for the securities delivered to and receipted for by
the institution or depository until they are withdrawn therefrom by the city treasurer.
(Ord. 2 § 1 (part), 1982
3.08.070 Trust fund administration.
Any departmental trust fund established by the city council pursuant to Section
36523 of the Government Code shall be administered by the city treasurer in accordance
with Section 36523 and 26524 of the Government code and any other applicable
provisions of law. (Ord. 2 § 1 (part), 1982)
21
SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES
Function
Develop and Recommend Modifications
to City's Formal Investment Policy
Review City's Investment Policy
and Recommend City Council Action
Adopt Formal Investment Policy
Implement Formal Investment Policy
Review Financial Institutions & Select Investments
Acknowledge Investment Selections
Execute Investment transactions
Confirm Wires (if applicable)
Record Investment Transactions in City's
Accounting Records
Investment Verification (match broker confirmation
to City investment records)
Reconcile Investment Records
to Accounting Records and Bank Statements
Reconcile Investment Records
to Treasurers Report of Investments
Security of Investments at City
Security of Investments outside City
Review Internal Control Procedures
22
Appendix D
Responsible Parties
Investment Advisory Board
and City Treasurer
City Manager
and City Attorney
City Council
City Treasurer
City Treasurer
City Manager or an
Assistant City Manager
City Treasurer or City Manager
Accounting Manager or
Financial Services Assistant
Accounting Manager or
Financial Services Assistant
City Treasurer and Financial
Services Assistant
Financial Services Assistant
Accounting Manager
Accounting Manager or Senior
Secretary
Third Party Custodian
External Auditor
Appendix E
LISTING OF APPROVED FINANCIAL INSTITUTIONS
1. Banking Services Wells Fargo Bank, Government Services,
Los Angeles, CA
2. Custodian Services Bank of New York/Mellon, Los Angeles,
CA
3. Deferred Compensation International City/County Management
Association Retirement Corporation
4. Broker/Dealer Services Banc of America Securities, San
Francisco, CA
Morgan Stanley, San Rafael, CA
CitiGroup, Costa Mesa, CA
5. Government Pool State of California Local Agency
Investment Fund
City of La Quinta Account
La Quinta Redevelopment Agency
6. Bond Trustees 1991 City Hall Revenue Bonds - US Bank
1991 RDA Project Area 1 - US Bank
1992 RDA Project Area 2 - US Bank
1994 RDA Project Area 1 - US Bank
1998 RDA Project Area 1 &2 — US Bank
2001 RDA Project Area 1 — US Bank
2002 RDA Project Area 1 — US Bank
2003 RDA Project Area 1 — US Bank
Assessment Districts — US Bank
No Changes to this listing may be made without City Council approval
23
Appendix F
BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION
1. Name of Firm:
2. Address:
3. Telephone:) 1
4. Broker's Representative to the City (attach resume):
Name:
7
Title:
Telephone: ( )
Manager/Partner-in-charge (attach resume):
Telephone:
List all personnel who will be trading with or quoting securities to City employees (attach
resume)
Telephone: I—)
Which of the above personnel have read the City's Investment Policy?
8. Which instruments are offered regularly by your local office? (Must equal 100%)
% U.S. Treasuries
% BA's
% Commercial Paper
% CD's
% Mutual Funds
Agencies (specify):
• Repos
• Reverse Repos
% CMO's
% Derivatives
• Stocks/Equities
• Other (specify):
9. References -- Please identify your most directly comparable public sector clients in our
geographical area.
Entity
Contact
24
Entity
Contact
Telephone () Telephone ()
Client Since Client Since
10. Have any of your clients ever sustained a loss on a securities transaction arising from a
misunderstanding or misrepresentation of the risk characteristics of the instrument? If so,
explain.
11. Has your firm or your local office ever been subject to a regulatory or state/ federal
agency investigation for alleged improper, fraudulent, disreputable or unfair activities
related to the sale of securities? Have any of your employees been so investigated? If
so, explain.
12. Has a client ever claimed in writing that you were responsible for an investment loss?
Yes No If yes, please provide action taken
Has a client ever claimed in writing that your firm was responsible for an investment
loss? Yes No If yes, please provide action taken
Do you have any current or pending complaints that are unreported to FINRA?
Yes No If yes, please provide action taken
Does your firm have any current, or pending complaints that are unreported to FINRA?
Yes No If yes, please provide action taken
13. Explain your clearing and safekeeping procedures, custody and delivery process.
Who audits these fiduciary responsibilities?
Latest Audit Report
25
14. How many and what percentage of your transactions failed?
Last month? % $
Last year? % $
15. Describe the method your firm would use to establish capital trading limits for the City of
La Quinta.
16. Is your firm a member in the S.I.P.C. insurance program? Yes No
If yes, explain primary and excess coverage and carriers.
17. What portfolio information, if any, do you require from your clients?
18. What reports and transaction confirmations or any other research publications will the City
receive?
19, Does your firm offer investment training to your clients? Yes No
20. Does your firm have professional liability insurance? Yes No
If yes, please provide the insurance carrier, limits and expiration date.
21. Please list your FINRA/NASD Registration Number
22. Do you have any relatives who work at the City of La Quinta?
Yes No If yes, Name and Department
23. Do you maintain an office in California? Yes No
24. Do you maintain an office in La Quinta or Riverside County? Yes No
25. Please enclose the following:
► Latest audited financial statements.
► Samples of reports, transaction confirmations and any other research/publications the
City will receive.
► Samples of research reports and/or publications that your firm regularly provides to
clients.
► Complete schedule of fees and charges for various transactions.
'CERTIFICATION'
26
I hereby certify that I have personally read the Statement of Investment Policy of the City of La
Quinta, and have implemented reasonable procedures and a system of controls designed to
preclude imprudent investment activities arising out of transactions conducted between our firm
and the City of La Quinta. All sales personnel will be routinely informed of the City's investment
objectives, horizons, outlooks, strategies and risk constraints whenever we are so advised by the
City. We pledge to exercise due diligence in informing the City of La Quinta of all foreseeable
risks associated with financial transactions conducted with our firm.
By signing this document the City of La Quinta is authorized to conduct any and all background
checks.
Under penalties of perjury, the responses to this questionnaire are true and accurate to the best of
my knowledge.
Broker
Title
Sales Manager and/or Managing Partner*
Title
Date
18%
Appendix G
Request for Proposals
Professional Portfolio Management Firm
City of La Quinta, CA
The City of La Quinta, CA is soliciting Requests for Proposals (RFP) from interested firms for the
provision of a discretionary investment management services for City of La Quinta, CA. The
portfolio to be managed of the invested assets is will be approximately 10% of the City's
investment portfolio and will be invested between 0 — 3 years.
The investment of City of La Quinta, CA's funds is guided by the applicable State statutes and
the City of La Quinta, CA's investment policy. A copy of the investment policy is attached for
your information.
Questions regarding this RFP should be directed to:
Name:
Title:
City of:
Address:
City, State, Zip Code:
Phone Number:
John M. Falconer
Finance Director/Treasurer
La Quinta, CA
P.O. Box 1604
La Quinta, CA 92247-1504
(760)777-7150
I. CRITERIA FOR EVALUATION AND SELECTION
■ Experience of the firm in providing services to public sector entities of similar size
and with similar investment objectives;
■ Professional experience and qualifications of the individuals assigned to the
account;
■ Portfolio management resources, investment philosophy and approach;
■ Responsiveness to the RFP, communicating an understanding of the overall
program and services required;
■ Reporting capabilities;
■ Fees.
IL SELECTION TIMETABLE
A. [Month, Day and Year] Proposals due by [Time] PST.
B. [Month, Day and Year] Proposals evaluated: to be determined
C. [Month, Day and Year] [City of La Quinta, CA] [Board/Council] approves selection
and awards contract.
III. FORMAT FOR PROPOSALS
Please format your response to this RFP in the following manner:
A. Organization
M
1. Describe your organization, date founded, ownership and other business
affiliations. Provide number and location of affiliated offices. Specify the number
of years your organization has provided investment management service.
2. Describe your firm's revenue sources (e.g., investment management, institutional
research, etc.) and comment on your firm's financial condition.
3. Within the past three years, have there been any significant developments in your
organization (e.g., changes in ownership, new business ventures)? Do you expect
any changes in the near future?
4. Describe any U.S. Securities and Exchange Commission (SEC) censures or litigation
involving your organization, any officer, or employee at any time in the last ten
years.
5. Describe the firm's fiduciary liability and/or errors and omissions insurance
coverage. Include dollar amount of coverage.
B. Personnel
1. Identify the number of professionals employed by your firm by classification
2. Provide an organization chart showing function, positions, and titles of all the
professionals in your organization.
3. Provide biographical information on investment professionals that will be involved
in the decision -making process for our portfolio, including number of years at your
firm. Identify the person who will be the primary portfolio manager assigned to the
account.
A
Governmental
4. Describe your firm's compensation policies for investment professionals and
address any incentive compensation programs.
Assets Under Management
1 . Summarize your institutional investment management asset totals by category for
your latest reporting period in the following table:
Governmental Pension
Non Governmental
Pension
Number Operating Funds
of Clients
S
S
29
Number of Other Restrictive
Clients Funds
S
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Endowmental/Foun- $ Not
A� Ircebl Nm pf^1
dation pp v_ _'' 0
2. Provide the number of separate accounts whose portfolios consist of operating
funds.
3. List in the following table the percentage by market value of aggregate assets
under all governmental accounts under management for your latest reporting
period:
Type of Asset
U.S. Treasury securities
Federal rAgency obligations
Corporate securities rated AAA -AA
Corporate securities rated A
Corporate securities rated BBB or
lower
Other
(specify
Percent by Market
Value
4. Describe the procedures that your firm has in place to address the potential or
actual credit downgrade of an issuer and to disclose and advise a client of the
situation.
5. Provide data on account/asset growth over the past five years. Indicate the
number of government accounts gained and the number of government accounts
lost.
6. List your five governmental largest clients. Identify those that are exclusively
operating fund relationships and/or those that are other relationships (e.g., bond
fund, retirement fund).
7. Provide a copy of the firm's Form ADV, Parts I and II (including all schedules).
8. Provide proof of State of California Registration, if your firm is not eligible for SEC
registration.
9. Provide a sample contract for services.
30
D. Philosophy/Approach
1. Describe your firm's investment philosophy for public clients, including your firm's
philosophy regarding average duration, maturity, investment types, credit quality,
and yield.
2. Describe in detail your investment process, as you would apply it to City of La
Quinta, CA's portfolio.
3. What are the primary strategies for adding value to portfolios?
4. Describe the process you would recommend for establishing the investment
objectives and constraints for this account.
5. Describe in detail your process of credit risk management, including how you
analyze credit quality, monitor credits on an ongoing basis, and report credit to
governmental accounts.
6. Describe your firm's trading methodology.
7. Describe your firm's decision -making process in terms of structure, committees,
membership, meeting frequency, responsibilities, integration of research ideas, and
portfolio management.
8. Describe your research capabilities as they would pertain to governmental
accounts. What types of analysis do you use?
9. Describe the firm's approach to managing relationships with the broker -dealer
community.
E. Portfolio Management
1 . Are portfolios managed by teams or by one individual?
2. What is the average number of accounts handled per manager?
3. Which professional staff member will be the primary client contact for City of La
Quinta, CA?
4. How frequently are you willing to meet with us?
5. Describe procedures used to ensure that portfolios comply with client investment
objectives, policies, and bond resolutions.
F. Fees Charged
1 . Please include a copy of your firm's fee schedule applicable to this RFP.
2. Identify any expenses that would not be covered through this fee structure and
would be required in order to implement the firm's program.
31
3. Is there a minimum annual fee?
G. Performance Reporting
1. Please report on all accounts under $100 million.
2. Please provide performance history for governmental accounts for the last five
years.
3. Please provide risk measurements for governmental accounts for the last five
years.
4. Indicate whether your returns are calculated and compiled in accordance with
the Association for Investment Management and Research (AIMR/CFA Institute)
standards.
5. Do your reports conform to the State of California reporting standards? Are you
willing to customize your reports to meet our specifications?
6. How will you notify us of investment transactions?
7. Are confirmations of investment transactions sent directly by the broker/dealer to
the client?
8. Do your reports include rating information on investments which is required by
GASB 40?
H. References
Provide a list of at least five (5) client references in California. References should be
public agencies with portfolio size and investment objectives similar to City of La Quinta,
CA. Include length of time managing the assets, contact name, and phone number.
I. Insurance Requirements
Exhibit A defines the insurance requirements that will need to be met prior to the
[Board/Council]'s approval of any agreement for services.
J. Submittal of proposals
1. Seven (7) copies of the proposal shall be submitted in a sealed envelope bearing
the caption RFP for (City of La Quinta, CA) and addressed to:
City of La Quinta, CA
P.O. Box 1504
La Quinta, CA 92247-1504
Attention: John M. Falconer
Finance Director/Treasurer
2. Proposal must be received no later than [Time] PST on [Month, Day, and Year].
32
3. Proposals should be verified before submission. The City of La Quinta, CA shall
not be responsible for errors or omissions on the part of the respondent in
preparation of a proposal. The City of La Quinta, CA reserves the right to reject
any and all proposals, to wave any irregularities, or informalities in the
proposals, and to negotiate modifications to any proposal.
Enclosures: Investment Policy
Treasurers Report
33
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Appendix 1
Investment Management Process and Risk
Except as provided for in Section 27000.3, Government Code Section 53600.3 declares each
person, treasurer, or governing body authorized to make investment decisions on behalf of
local agencies to be a trustee and therefore a fiduciary subject to the prudent investor
standard. These persons shall act with care, skill, prudence, and diligence under the
circumstances then prevailing when investing, reinvesting, purchasing, acquiring, exchanging,
selling, and managing funds. Section 53600.5 further stipulates that the primary objective of
any person investing public funds is to safeguard principal; secondly, to meet liquidity needs
of the depositor; and lastly, to achieve a return or yield on invested funds (Government Code
Section 27000.5 specifies the same objectives for county treasurers and board of
supervisors).
Risk is inherent throughout the investment process. There is risk assigned to any investment
activity as well as opportunity risk related to inactivity. Market risk is derived from exposure
to overall changes in the general level of interest rates while credit risk is the risk of loss due
to the failure of the insurer of a security. The market value of a security varies inversely with
the level of interest rates. If an investor is required to sell an investment with a five percent
yield in a comparable seven percent rate environment, that security will be sold at a loss. The
magnitude of that loss will depend on the amount of time until maturity.
Purchasing certain allowable securities with a maturity of greater than five years requires
approval of the governing board (see Government Code Section 536011. Part of that approval
process involves assessing and disclosing the risk and possible volatility of longer -term
investments
Another element of market risk is liquidity risk. Instruments with unique call features, special
structures or those issued by little known companies are often thinly traded. Their uniqueness
often makes finding prospective buyers in a secondary market more difficult and,
consequently, the securities' marketability and price are discounted. However, under certain
market conditions, gains are also possible with these types of securities.
Default risk occurs when the borrower is unable to repay the obligation. Generally, securities
issued by the federal government and its agencies are considered the most secure, while
securities issued by private corporations or negotiable certificates of deposit issued by
commercial banks have a greater degree of risk. Securities with additional credit
enhancements, such as bankers acceptances, collateralized repurchase agreements and
collateralized bank deposits are somewhere between the two on the risk spectrum.
The vast majority of portfolios are managed within a buy and hold policy. Investments are
purchased with the intent and capacity to hold that security until maturity. At times, market
forces or operations may dictate swapping one security for another or selling a security before
maturity. Continuous analysis and fine tuning of the investment portfolio are considered
prudent investment management. [...]
The Government Code contains specific provisions regarding the types of investments and
practices permitted after considering the broad requirement of preserving principal and
maintaining liquidity before seeking yield. These provisions are intended to promote the use of
reliable, diverse, and safe investment instruments to better ensure a prudently managed portfolio
worthy of public trust.
Chapter II. Fund Management
Local Agency Investment Guidelines 2007 Issued by California Debt and Investment Advisory Commission
35
Appendix J
GLOSSARY
(Adopted from the Municipal Treasurers Association)
The purpose of this glossary is to provide the reader of the City of La Quinta investment
policies with a better understanding of financial terms used in municipal investing.
AGENCIES: Federal agency securities and/or
Government -sponsored enterprises.
ASKED: The price at which securities are offered
BANKERS' ACCEPTANCE (BA): A draft or bill or
exchange accepted by a bank or trust company.
The accepting institution guarantees payment of
the bill, as well as the issuer.
BID: The price offered by a buyer of securities.
(When you are selling securities, you ask for a
bid.) See Offer.
BROKER: A broker brings buyers and sellers
together for a commission.
CERTIFICATE OF DEPOSIT (CD): A time deposit
with a specific maturity evidenced by a
certificate. Large -denomination CD's are typically
negotiable.
COLLATERAL: Securities, evidence of deposit or
other property which a borrower pledges to
secure repayment of a loan. Also refers to
securities pledged by a bank to secure deposits of
public monies.
COMMERCIAL PAPER: Short-term unsecured
promissory notes issued by a corporation to raise
working capital. These negotiable instruments
are purchased at a discount to par value or at par
value with interest bearing. Commercial paper is
issued by corporations such as General Motors
Acceptance Corporation, IBM, Bank America, etc.
COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR): The official annual report for the City of
La Quinta. It includes five combined statements
for each individual fund and account group
prepared in conformity with GAAP. It also
includes supporting schedules necessary to
demonstrate compliance with finance -related
legal and contractual provisions, extensive
introductory material, and a detailed Statistical
Section.
CONDUIT FINANCING: A form of Financing in
which a government or a government agency
lends its name to a bond issue, although it is
acting only as a conduit between a specific project
and bond holders. The bond holders can look only
to the revenues from the project being financed
for repayment and not to the government or
agency whose name appears on the bond.
COUPON: (a) The annual rate of interest that a
bond's issuer promises to pay the bondholder on
the bond's face value. (b) A certificate attached
to a bond evidencing interest due on a payment
date.
DEALER: A dealer, as opposed to a broker, acts as
a principal in all transactions, buying and selling
for his own account.
DEBENTURE: A bond secured only by the general
credit of the issuer.
DELIVERY VERSUS PAYMENT: There are two
methods of delivery of securities: delivery versus
payment and delivery versus receipt. Delivery
versus payment is delivery of securities with an
exchange of money for the securities. Delivery
versus receipt is delivery of securities with an
exchange of a signed receipt for the securities.
DERIVATIVES: (1) Financial instruments whose
return profile is linked to, or derived from, the
movement of one or more underlying index or
security, and may include a leveraging factor, or
(2) financial contracts based upon notional
amounts whose value is derived from an
underlying index or security (interest rates, foreign
exchange rates, equities or commodities).
DISCOUNT: The difference between the cost price
of a security and its maturity when quoted at
lower than face value. A security selling below
original offering price shortly after sale also is
considered to be at a discount.
DISCOUNT SECURITIES: Non -interest bearing
money market instruments that are issued a
discount and redeemed at maturity for full face
value, e.g., U.S. Treasury Bills.
DIVERSIFICATION: Dividing investment funds
among a variety of securities offering
independent returns.
FEDERAL CREDIT AGENCIES: Agencies of the
Federal government set up to supply credit to
various classes of institutions and individuals,
e.g., S&L's, small business firms, students,
farmers, farm cooperatives, and exporters.
1
E
FNMAs (Federal National Mortgage
Association) - Like GNMA was chartered
under the Federal National Mortgage
Association Act in 1938. FNMA is a federal
corporation working under the auspices of the
Department of Housing and Urban
Development (HUD). It is the largest single
provider of residential mortgage funds in the
United States. Fannie Mae, as the corporation
is called, is a private stockholder -owned
corporation. The corporation's purchases
include a variety of adjustable mortgages and
second loans, in addition to fixed-rate
mortgages. FNMA's securities are also highly
liquid and are widely accepted. FNMA
assumes and guarantees that all security
holders will receive timely payment of
principal and interest.
FHLBs (Federal Home Loan Bank Notes and
Bonds) - Issued by the Federal Home Loan
Bank System to help finance the housing
industry. The notes and bonds provide
liquidity and home mortgage credit to savings
and loan associations, mutual savings banks,
cooperative banks, insurance companies, and
mortgage -lending institutions. They are
issued irregularly for various maturities. The
minimum denomination is $5,000. The notes
are issued with maturities of less than one
year and interest is paid at maturity.
3. FLBs (Federal Land Bank Bonds) - Long-term
37
mortgage credit provided to farmers by Federal
Land Banks. These bonds are issued at
irregular times for various maturities ranging
from a few months to ten years. The
minimum denomination is $1,000. They carry
semi-annual coupons. Interest is calculated on
a 360-day, 30 day month basis.
4. FFCBs (Federal Farm Credit Bank) - Debt
instruments used to finance the short and
intermediate term needs of farmers and the
national agricultural industry. They are issued
monthly with three- and six-month maturities.
The FFCB issues larger issues (one to ten
year) on a periodic basis. These issues are
highly liquid.
5. FICBs (Federal Intermediate Credit Bank
Debentures) - Loans to lending institutions
used to finance the short-term and
intermediate needs of farmers, such as
seasonal production. They are usually issued
monthly in minimum denominations of $3,000
with a nine -month maturity. Interest is
payable at maturity and is calculated on a 360-
day, 30-day month basis.
6. FHLMCs (Federal Home Loan Mortgage
Corporation) - a government sponsored entity
established in 1970 to provide a secondary
market for conventional home mortgages.
Mortgages are purchased solely from the
Federal Home Loan Bank System member
lending institutions whose deposits are insured
by agencies of the United States Government.
They are issued for various maturities and in
minimum denominations of $10,000. Principal
and interest is paid monthly. Other federal
agency issues are Small Business
Administration notes (SBA's), Government
National Mortgage Association notes
(GNMA's), Tennessee Valley Authority notes
(TVA's), and Student Loan Association notes
(SALLIE-MAE's).
FEDERAL DEPOSIT INSURANCE CORPORATION
(FDIC): A federal agency that insures bank
deposits, currently up to $250,000 per deposit
through December 31, 2013.
FEDERAL FUNDS RATE: The rate of interest at
which Fed funds are traded. This rate is currently
pegged by the Federal Reserve through open -
market operations.
FEDERAL HOME LOAN BANKS (FHLB):
Government sponsored wholesale banks
(currently 12 regional banks) which lend funds
and provide correspondent banking services to
member commercial banks, thrift institutions,
credit unions and insurance companies. The
mission of the FHLBs is to liquefy the housing
related assets of its members who must purchase
stock in their district Bank.
FEDERAL OPEN MARKET COMMITTEE (FOMC):
Consists of seven members of the Federal
Reserve Board and five of the twelve Federal
Reserve Bank Presidents. The President of the
New York Federal Reserve Bank is a permanent
member, while the other Presidents serve on a
rotating basis. The Committee periodically meets
to set Federal Reserve guidelines regarding
purchases and sales of Government Securities in
the open market as a means of influencing the
volume of bank credit and money.
FEDERAL RESERVE SYSTEM: The central bank of
the United States created by Congress and
consisting of a seven member Board of Governors
in Washington, D.C., 12 regional banks and about
5,700 commercial banks that are members of the
system.
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA or Ginnie Mae): Securities
influencing the volume of bank credit guaranteed
by GNMA and issued by mortgage bankers,
commercial banks, savings and loan associations,
and other institutions. Security holder is
protected by full faith and credit of the U.S.
Government. Ginnie Mae securities are backed
by the FHA, VA or FMHM mortgages. The term
"pass-throughs" is often used to describe Ginnie
Maes.
LAIF (Local Agency Investment Fund) - A special
fund in the State Treasury which local agencies
may use to deposit funds for investment. There
is no minimum investment period and the
minimum transaction is $5,000, in multiples of
$1,000 above that, with a maximum balance of
$50,000,000 for any agency. The City is
restricted to a maximum of ten transactions per
38
month. It offers high liquidity because deposits
can be converted to cash in 24 hours and no
interest is lost. All interest is distributed to those
agencies participating on a proportionate share
basis determined by the amounts deposited and
the length of time they are deposited. Interest is
paid quarterly. The State retains an amount for
reasonable costs of making the investments, not
to exceed one-half of one percent of the earnings.
LIQUIDITY: A liquid asset is one that can be
converted easily and rapidly into cash without a
substantial loss of value. In the money market, a
security is said to be liquid if the spread between
bid and asked prices is narrow and reasonable size
can be done at those quotes.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP):
The aggregate of all funds from political
subdivisions that are placed in the custody of the
State Treasurer for investment and reinvestment
MARKET VALUE: The price at which a security is
trading and could presumably be purchased or
sold.
MASTER REPURCHASE AGREEMENT: A written
contract covering all future transactions between
the parties to repurchase --reverse repurchase
agreements that establishes each party's rights in
the transactions. A master agreement will often
specify, among other things, the right of the
buyer -lender to liquidate the underlying securities
in the event of default by the seller -borrower.
MATURITY: The date upon which the principal or
stated value of an investment becomes due and
payable
MONEY MARKET: The market in which short-term
debt instruments (bills, commercial paper,
bankers' acceptances, etc.) are issued and traded.
OFFER: The price asked by a seller of securities.
(When you are buying securities, you ask for an
offer.) See Asked and Bid.
OPEN MARKET OPERATIONS: Purchases and
sales of government and certain other securities in
the open market by the New York Federal Reserve
Bank as directed by the FOMC in order to
influence the volume of money and credit in the
economy. Purchases inject reserves into the
bank system and stimulate growth of money and
credit; sales have the opposite effect. Open
market operations are the Federal Reserve's most
important and most flexible monetary policy tool.
PORTFOLIO: Collection of all cash and securities
under the direction of the City Treasurer,
including Bond Proceeds.
PRIMARY DEALER: A group of government
securities dealers who submit daily reports of
market activity and positions and monthly
financial statements to the Federal Reserve Bank
of New York and are subject to its informal
oversight. Primary dealers include Securities and
Exchange Commission (SEC) -registered securities
broker -dealers, banks and a few unregulated
firms.
QUALIFIED PUBLIC DEPOSITORIES: A financial
institution which does not claim exemption from
the payment of any sales or compensating use or
ad valorem taxes under the laws of this state,
which has segregated for the benefit of the
commission eligible collateral having a value of
not less than its maximum liability and which has
been approved by the Public Deposit Protection
Commission to hold public deposits.
RATE OF RETURN: The yield obtainable on a
security based on its purchase price or its current
market price. This may be the amortized yield to
maturity on a bond the current income return.
REPURCHASE AGREEMENT (RP OR REPO): A
holder of securities sells these securities to an
investor with an agreement to repurchase them
at a fixed price on a fixed date. The security
"buyer" in effect lends the "seller" money for the
period of the agreement, and the terms of the
agreement are structured to compensate him for
this. Dealers use RP extensively to finance their
positions. Exception: When the Fed is said to be
doing RP, it is lending money that is increasing
bank reserves.
REVERSE REPURCHASE AGREEMENTS (RRP or
RevRepo) - A holder of securities sells these
securities to an investor with an agreement to
repurchase them at a fixed price on a fixed date.
The security"buyer" in effect lends the"seller"
money for the period of the agreement, and the
terms of the agreement are structured to
compensate him for this. Dealers use RRP
extensively to finance their positions. Exception:
When the Fed is said to be doing RRP, it is lending
money that is increasing bank reserves.
SAFEKEEPING: A service to customers rendered
by banks for a fee whereby securities and
valuables of all types and descriptions are held in
the bank's vaults for protection.
SECONDARY MARKET: A market made for the
purchase and sale of outstanding issues following
the initial distribution.
SECURITIES & EXCHANGE COMMISSION: Agency
created by Congress to protect investors in
securities transactions by administering securities
legislation.
SEC RULE 15C3-1: See Uniform Net Capital Rule.
STRUCTURED NOTES: Notes issued by
Government Sponsored Enterprises (FHLB, FNMA,
SLMA, etc.) and Corporations which have
imbedded options (e.g., call features, step-up
coupons, floating rate coupons, derivative -based
returns) into their debt structure. Their market
performance is impacted by the fluctuation of
interest rates, the volatility of the imbedded
options and shifts in the shape of the yield curve.
SURPLUS FUNDS: Section 53601 of the California
Government Code defines surplus funds as any
money not required for immediate necessities of
the local agency. The City has defined immediate
necessities to be payment due within one week.
TREASURY BILLS: A non -interest bearing discount
security issued by the U.S. Treasury to finance the
national debt. Most bills are issued to mature in
three months, six months or one year.
TREASURY BONDS: Long-term coupon -bearing
U.S. Treasury securities issued as direct
obligations of the U.S. Government and having
initial maturities of more than 10 years.
TREASURY NOTES: Medium -term coupon -bearing
U.S. Treasury securities issued as direct
KE
obligations of the U.S. Government and having
initial maturities from two to 10 years.
UNIFORM NET CAPITAL RULE: Securities and
Exchange Commission requirement that member
firms as well as nonmember broker -dealers in
securities maintain a maximum ratio of
indebtedness to liquid capital of 15 to 1; also
called net capital rule and net capital ratio.
Indebtedness covers all money owed to a firm,
including margin loans and commitments to
purchase securities, one reason new public issues
are spread among members of underwriting
syndicates. Liquid capital includes cash and
assets easily converted into cash.
UNIFORM PRUDENT INVESTOR ACT: The State
of California has adopted this Act. The Act
contains the following sections: duty of care,
diversification, review of assets, costs,
compliance determinations, delegation of
investments, terms of prudent investor rule, and
application.
YIELD: The rate of annual income return on an
investment, expressed as a percentage. (a)
INCOME YIELD is obtained by dividing the current
dollar income by the current market price for the
security. (b) NET YIELD or YIELD TO MATURITY
is the current income yield minus any premium
above par or plus any discount from par in
purchase price, with the adjustment spread over
the period from the date of purchase to the date
of maturity of the bond.
.N
INVESTMENT ADVISORY BOARD Business Session: C
Meeting Date: March 10, 2010
UHRA
California Municipal Treasurer's Conference — Sacramento, CA
April 20-23, 2010
BACKGROUND:
Each year the City budgets funds for the Treasurer and two Investment Advisory Board
members to attend the Treasurer's Conference contingent upon City Council's review.
Due to the cancelled March 2, 2010 City Council meeting, the City Council will
consider this overnight travel request at the March 16, 2010 City Council meeting.
Staff would like to receive the name(s) of those Board members who plan to attend
the conference so that advance reservations may be made subject to City Council
approval.
RECOMMENDATION:
Select up to two Board members to attend the Treasurer's Conference.
f
John M. Falconer, Finance Director
Dear CMTA Members:
I look forward to welcoming you to the 2010 CMTA 51 st Annual Conference, April 20 — 23, at the Hyatt
Regency at Capitol Park in Sacramento. This conference offers a comprehensive education program designed for
public agency treasurers and finance professionals. The committee chairs have developed sessions that provide
the latest information on various treasury related issues that challenge government officials today.
I am pleased to announce that:
• The Honorable Bill L.ockyer, California State Treasurer will address our members at Wednesday's luncheon
• Dan Walters, California political, economic, and social journalist will present "The State of California: Past,
Present and Future" at the Public Policy Session on Friday morning;
• Bob "Mr. Inspiration" Wieland, American Hero and world renowned speaker and author whose motto of
encouragement and strength is "Always remember; it is too soon to quit" will motivate attendees during these
challenging economic: times on Wednesday morning.
• Laura Chick, Office of Inspector General, will speak at the Thursday luncheon.
You won't want to miss the program session, which offers a range of timely topics about best practices,
technologies and strategies for investment, debt and cash management. A special thanks to our exhibitors and
sponsors. Please visit the display booths to learn more about their services and expertise.The California Debt
and Investment Advisory Commission (CDIAC) will host the pre -conference seminar featuring information,
education and technical assistance on debt issuance and public fund investments to local public agencies and
other public finance professionals.
Please join me to network with fellow colleagues on Wednesday evening at the Welcome Reception andThursday's
California Gold Rush-themed Installation Banquet. I hope you will "step up to the challenge" and I'll see you in
Sacramento. Until then, best regards and please don't hesitate to call the CMTA headquarters with questions
about the conference.
Sincerely,
Kelley Williams, CCMT
CMTA President
12all fbtiLia d'Lwucipai d1tecoutets 04mociation
Hosted by
tj UnlonBank
INVESTMENT SALES - INSTITUTIONAL TRUST —
GOVERNMENT SERVICES
TUE,S®AY, APRIL 20, 201
HAGGIN OAKS GOLF COMPLEX
645 FULTON AVE, SACRAMENTO, CA 95821
916-808-0963
DIRECTIONS FROM THE HOTEL:
1 Start out going WEST on "L" Street,
toward 12" Street
2. Turn Right onto W Street
3. Turn Right onto "J" Street
4. Turn Left onto 16"i St / CA-160 North
Continue on CA -160.
5. Turn Slight Left onto Ramp.
6. Merge onto Capital City Freeway.
7. Take the exit toward Fulton Avenue.
8. Turn Left on Auburn Blvd.
9. Turn Left on Fulton Avenue
(Gate Access Required )
10. 3645 Fulton Avenue is on the Left.
r— — — — — —
Cost: $ 47.00 Per Player
Includes: Green Fees, Shared Cart and Box Lunch
Rules: Scramble
Registration opens at 9:00 a.m.
Time: Tee -Time begins at 10:00 a.m.
LIMITED TO 40 PLAYERS ONLY
Awairds
• First Place Team
• Longest Drive
• Nearestthe Pin
Trophies for both Men and Women
Name: County/Firm:
Address:
I City: State: _Zip: Phone:
I Email address:_ I
YOUR INDEX OR AVERAGE SCORE: I
I 1
I REMIT THIS FORM AND CHECK PAYABLE TO: I
Union Bank, N.A. For Information:
Attn: Martha Bluemel-Government Services Martha Bluemel @ 925-9473046 or 800-833-4758 I
200 Pringle Ave Ste 250
Walnut Creek, CA 94596 PAYMENT MUST BE RECEIVED BY: I
I April 9, 2010 I
FAX: 925-947-3050 I
2010Annual Conference Preliminary Program
Step up to the Challenge!
r— —-- — — — — —
I MTuesday 1
April, 20
clltt Ok.,A Pre -Conference:
DEBT ANE Goodbye To All That: The
INVESTMENT
n"Jltnl,. Evolving Municipal Debt Market
1 comr rnssunN I
in California
I
California has one of the world's most dynamic, I
innovative and successful municipal debt markets. I
I Yet, market conditions since 2007 have tested the 1
I confidence of many California issuers and investors.
I How should local issuers respond to recent events?
I Will their experiences from the past three years
be typical in the years to come? If so, how should
they issue debt? If not, what should they learn from
recent history?
For this pre -conference, CMTA asked CDIAC to I
develop a seminar in two sessions. In the morning, I
they asked us to address what might develop and use I
I a debt policy formed by recent events.The afternoon I
I session discusses changes in the municipal debt I
I market since 2007.
1
1 9:00 a.m.
The Importance of Adopting a Sound
I Written Debt Policy
Governing boards have fiduciary responsibilities for the way
their staff manage debt. Debt policies, when adopted by the
board, can help direct staff and improve decision -making. How I
I can debt policies help local governments manage debt? To what
extent did adopted debt policies assist cities during the recent
municipal market?
Invited Speaker: Michelle Issa
9:30 a.m.
Practical Advice: What Should Be in a
Written Policy?
I The market challenges experienced since 2007 reinforce the
importance of adopting sound debt policies. Policies should be
flexible enough to accommodate changing market conditions,
but specific enough to provide concrete direction. What
1 makes a good policy? How have cities used — and misused
—written policies.
L- - - - - - - - - -
r— — — — — — — — — — — — —
1 10:30 a.m.
1 Basics of Managing a Debt Portfolio
I What makes for sound debt portfolio management?
12:00 p.m.
Lunch (included)
I
Afternoon Session: Lessons from Market
Events of 2007 through 2009
I
1 1:00 p.m.
I The Current Market: Trends and Changes
Can we make any sense of the past three years? What does
the data tell us about what happened in the market? Is there
a "return" to fundamentals? We know that the need for debt
— both short and long term — is unabated. Has the market
fundamentally changed?
1:30 p.m.
What Caused the Market Problem(s) in the
Municipal Market? When Will We Know that
the Market Has "Recovered?"
The "meltdown" was not so much a single cataclysmic event,
but a series of market changes that caused compounding
and interacting stresses in the municipal debt market.
Nevertheless, the municipal market in California and
elsewhere is strong. What changes have occurred? When will
I the market"return to normal?"
1 3:00 p.m. - 4:30 p.m.
Lessons for Local Governments
Given all the changes in the market —from the disappearance
of short-term instruments and the loss of bond insurers
— what should local governments expect to manage their debt
portfolios?
5:00 p.m. - 6:00
Reception
I
J L - - - - - - J
r— — __ — — — — — — — — — — — — — r
Wednesday
April, 21
I I
9:00 a.m.
Opening Session
Speaker: Kelley Williams, CCMT,
CMTA President, City of Arcadia
I I
1 9:15 a.m. - 10:30 a.m.
I Strive for Success
Speaker: Bob "Mr. Inspiration" Wieland
I I
10:50 a.m. - 1 1:50 a.m.
The New GSE's 2010 and Beyond
Speaker: Ivan Hrazdira, Managing Director,
Credit Suisse Agencies
I I
12:00 p.m. - 1:30 p.m.
Opening Luncheon
I & CCMT Certification Awards
I Speaker:The Honorable Bill Lockyer,
California State Treasurer
2:00 p.m. - 3:00 p.m.
2010 California and Regional Outlook
Speaker: Gary Schlossberg, Senior
Economist Wells Fargo Capital Management
I I
I Concurrent Sessions: I
I I
1 3:20 p.m. - 4:30 p.m.
Investment Pools
Speaker: Nancy Jones, Managing Director,
PFM Asset Management LCC
Remote Deposit Capture & What's News in
theACHTrends
Speaker: John Curtis,Vice President,
Bank of the West
I I
1 Automate Your Receivables
Speaker: Rick Hollar, Senior Vice President,
Wells Fargo
5:30 p.m. - 6:30 p.m.
Welcome Reception
r — — — — —
Thursday
April, 22
I I
1 7:30 a.m. - 8:30 a.m.
I Business Session
Election of Officers
I
8:50 a.m. - 9:40 a.m.
Not Passive or Active: "Proactive" Strategies
for Operating Fund Investment Management 1
Speaker: Rick Phillips, President, CIO,
Main Street Capital Advisors
I I
10:00 a.m. - 10:50 a.m.
Your Revenue Options:A Briefing on Rate,
Fees and Special Assessments
Speaker: Danielle Wood &
I Jeanette Hahn,Associate Directors,
I NBS Local Government Solutions
I
I 1 1:10 a.m. - 12:00 p.m.
PCI Policies & Procedures
Speaker: Don Hester, CPA,
Maze and Associates
I I
12:00 p.m. - 1:40 p.m.
Luncheon, Sponsor Recognition & Golf
Tournament Awards
Speaker: Laura Chick,
Office of Inspector General
I
Concurrent Sessions:
I I
1 2:00 p.m. - 3:00 p.m.
Financial Influenza: Cyber Crime
Speaker: Greg Lister, President, SafeChecks
I
Municipal Securities Rulemaking Board -
EMMA Update
I Speaker: Tina Hanachi
I I
Getting the Most From Your Banking
Relationship
Speaker: Susan Cotton, CTP,
Money Matters Consulting
I I
1 3:15 p.m.- 4:15 p.m.
I Nuts and Bolts Government Associates
Speaker: Bill Gallardo, CCMT
& Victoria Beatley, CCMT
L _ — — _ — — Continues on next page J
r— — — — — — — — — — — — — — — — .l
Thursday
I April, 22 cont'd
I I
1 3:15 p.m. - 4:15 p.m.
I Nuts and Bolts Commercial Associates
Speaker: Don Collins,
Commercial Associate Liaison
4:15 p.m. - 5:00 p.m.
Nuts and Bolts Combined Wrap-up
Speaker: Bill Gallardo, CCMT
&Victoria Beatley, CCMT
I I
1 6:00 p.m. - 7:00 p.m.
President's Reception
7:00 p.m.
Board Installation Banquet
Theme: California Gold Rush
L— — — — — — — — — — — — — J
--- -
Friday
April, 23 - Legislative Policy Session I
I I
1 9:00 a.m. - 10:00 a.m.
I The State of California: Past, Present and 1
Future
Speaker: Dan Walters,
Columnist, Sacramento Bee
I 1
1 I0:00 a.m. - 11:15 a.m. 1
Municipal Bond Market: Outlook &Trends
Speaker: John Kim, Principal,
De La Rosa & Company
i I
I 1 1:1 S a.m. - 12:00 p.m.
State of the State - Budget Outlook
I Speaker: Michael Cohen, 1
Deputy State Legislative Analyst 1
I 1
12:00 p.m.
Passport Drawing
I
12:15 p.m. - 1:30 p.m.
CMTA Board Meeting
For CMTA Officers and Board Members I
L- - - - - - - - - - - - - J
Thank you CMTA
Conference
Exhibitors & Sponsors!
T'°r` S y mPro
.,
TREASURY MANAGEMENT
SOFTWARE
nsn
The PFM Group
Fmbia
ASSET MANAGEMENT-
BankofAmerica.
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Cn CITAC %I,%IS()RS
2019 Citizens Bank
Not your typical bank:'
11 �w'l' , OFFICE OF i1NANCE
BNY MEL ON
2010 Annual Conference Registration
Step up to the Challenge!
April 20-23, 2010
Hyatt Regency at Capitol Park, Sacramento
Register online at www.cmta.org
Registration Deadlines: Discounted: Friday, March 5 Regular: Friday,April 2
Remit form and payment to:
CMTA
1215 K Street, Suite 2290
Sacramento, CA 95814
p:916-231.2144
f:916-231-2141
e-mail: elizabeth@cmta.org
Late: After Friday, April 2
First Name:
Last Name:
Agency/Company:
Title:
Phone:
E-mail:
Badge Name:
Guest's Name:
Will you be attending the Thursday banquet? ❑ Yes ❑ No
First Name:
Last Name:
Agency/Company:
Title:
Phone:
E-mail:
Badge Name:
Guest's Name:
Will you be attending the Thursday banquet? ❑ Yes ❑ No
Scholarships Available! Contact the CMTA office for more information.
Pre -Conference Sen+inar -April 20
❑ $150 - Attending Pre -Conference Seminar ONLY
❑ $125 - Attending Pre -Conference SeminarAND
Conference
Registration Fees Public Agencies
Active or Government Member
Includes all meals, reception &Thursday banquet
❑ $305 - Discount Registration
❑ $330 - Regular Registration
❑ $390 - Late Registration
Second attendee, same organization
❑ $275 - Discount Registration
❑ $300 - Regular Registration
❑ $400 - Late Registration
Past President's Raffle
❑ $20 per pack of 12 tickets qnty:
Registration Fees - Commer ial Associates
Includes all meals, reception &Thursday banquet
❑ $415 -Discount Registration
❑ $465 - Regular Registration
❑ $535 - Late Registration
Are you an exhibitor or non -exhibitor? ❑ Yes ❑ No
*Exhibitor sponsors and non -exhibitor sponsors receive one complimentary
registration, fill out this form and return to CMTA office
Daily Attendee
**Only available if another person from the same agency has paid full
conference registration
❑ $225 per attendee - Wednesday
❑ $225 per attendee - Thursday
Number of daily attendees:
❑ $45 each Wednesday Lunch qnty:
❑ $45 each Thursday Lunch qnty: _
Total due: $ ❑ $85 each Thursday Banquet qnty:
Please make checks payable to CMTA
To pay via credit card, visit the CMTA Web site: w wx mta.org
• $25 fee for cancellations received on or before April 9. • No refunds after April 9, send a colleague if you cannot attend,
Now Offering; Online Registration & Credit Card -Se
ruvis''ad,
Visit www.cmta.org to register
Strike it rich at the
a�I
0
Prenident's
Raffle
Back by popular demand and with the generous contributions from active
members, exhibitors and sponsors, CMTA's Annual Conference will once
again feature the distinguished "Past Presidents' Raffle." Proceeds from the
sale of raffle tickets support the efforts of the CMTA Woodward Education
Scholarship Fund. (Please remember the "Conflict of Interest Rules")"
Members are encouraged to bring a gift to the event. Members who are
unable to participate can support the Scholarship program by sending a gift
for the raffle. If you will be mailing your gift to the conference, please attach
a business card and note "Past Presidents' Raffle." Please ship raffle items for
delivery to the City of Sacramento, during the week of
April 12-16, at the following address:
Russ Fehr, City Treasurer
Historic City Hall, 3rd Floor
915 1 Street
Sacramento, CA 95814
Attn: CMTA Conference
The Honorable CMTA Past Presidents attending the conference will be
selling tickets priced at three tickets for $5 onsite. Attendees can purchase
tickets and pay by credit card on the registration form. The raffle is for a very
worthy cause, so buy, buy, buy! Everyone's help is needed to make this event
a continued success!
Thank you!
Christine Vuletich, CCMT
CMTA Immediate Past President
"Conflict of interest rules prohibit designated local agency employees from accepting
any gifts totaling $420 or more in a calendar year from any one source.
/✓,fit-�.
Than you„?
Special thanks to the
members and Commercial
Associate exhibitors/
sponsors whose
involvement makes it
possible for us to provide
quality educational sessions
and venues for workshops
and programs.
r
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CA ° M
t 3 _
"4 ,, f ,+' % k- L
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Hyatt Regency Sacramento welcomes you to the history and charm of
Northern California. Our AAA Four Diamond hotel is ideally situated
=,., ' directly across from the State Capitol and adjacent to the Sacramento
„• Convention Center. Guests of our downtown Sacramento hotel are in the
heart of one of the state's most vibrant cities.Within blocks of the hotel are
the city's best shopping, restaurants and theaters. Walk to one of the many
landmarks and museums or visit historical Old Sacramento.
` CMTA Room Block Information:
za
• Room Rates: $172 single/double occupancy (tax not included)
$197 triple occupancy (tax not included)
$222 quadruple occupancy (tax not included)
aim
• Check -in: 3:00 p.m. Check-out: Noon
• Parking: $17 per night for self -parking; $25 per night for valet
a»
• Early Departure Fee: One night's stay will be charged for all guests who
j check out prior to the reserved checkout date.
• A credit card is necessary to hold your reservation.You must cancel
your hotel reservation before 3:00 p.m. the day prior to arrival or you
will be charged for one night's stay.
kTW 8 Reservations:
• Call 800.233.1234 and reference CMTA
'�"- • Reserve your room online, please click here to receive the CMTA
discount
1
(In order to receive the CMTA discount you must click on the above hyperlink or copy and
m+f paste this link into your browser:
`'" https://resweb.passkey.coin/Resweb.do?rnode=welcome_ei_new&eventlD=2497253)
INVESTMENT ADVISORY BOARD Correspondence & Written
Material Item A
Meeting Date: March 10, 2010
TITLE:
Month End Cash Report February 2010
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
Bill Lockyll State Treasurer
Inside the State Treasurer's Office
c i,
PMIA Performance Report
O wl, ad
5 16WI
Darly %1
d,.x
Maui, tb�
fDatekY.r, i
it e
MatLTdt r
lnfda'; .
2/11/2010
0.54
0.56
212
2/12/2010
0.54
0.56
211
2/13/2010
0.54
0.56
211
2/14/2010
0.54
0.56
211
2/15/2010
0.54
0.561
211
2/16/2010
0.54
0.56
205
2/17/2010
0.54
0.56
205
2/18/2010
0.54
0.56
205
2/19/2010
0.54
0.56
208
2/20/2010
0.54
0.56
208
2/21/2010
0.54
0.56
208
2/22/2010
0.54
0.56
207
2/23/2010
0.541
0.56
205
2/24/2010
1 0.53
0-571
200
LAIF Performance Report
Quarter ending 12/31/2009
Apportionment Rate:
Earnings Ratio:
Fair Value Factor:
Daily:
Quarter To Date:
Average Life:
0.60%
.00001657120783286
1.000947825
0.56%
0.61 %
222
PMIA Average Monthly Effective Yields
JAN 2010 0.558%
DEC 2009 0.569%
NOV 2009 0.611 %
Pooled Money Investment Account
Portfolio Composition
$67.9 Billion
01 /31 /10
Loans
17 990%
Corporate Bon
0.28%
Commercial Paper
8.03%
Time Deposits
6.11%
CDs
8.0
Agencies
18.31 %
reasuries
40.28%
tgages
27%
3
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02 25 2010
03 25 2010
0.055
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26 WEEK
02 18 2010
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0. 185
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4 WEEK
U1-11-2010
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13 WEEK
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0.1105
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26 WEEK
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02-10-2011
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04-29-2010
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02-18-2010
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04 22 2010
0,060
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01-14 2010
01-15 2010
0.130
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01 13-2011
0.335
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99.661218
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0,025
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91P95S85
13 WEEK
01 of 2010
04 08-2010
O.080
0,081
99919118
912195U33
26 WEEK
at 01 2010
01 08-2010
0.180
0. 183
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912795UW9
4-WECK
12-31-2009
01-28-2010
0,010
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99.999222
912195521
13-WEEK
12-31-2009
04-01-2010
0,110
0. 112
99.912194
412795U33
26 WEEK
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02-01-2010
0,200
0.203
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12 30-2009
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12-24-2009
01-21-2010
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12-24-2009
03-25 2010
0,010
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06-24Q010
0,170
0.173
99 91405E
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12 17 2009
01-14-2010
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912295R66
13-WEEK
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03-18-2010
0,040
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12-16 2010
0.410
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4 DAY
12-0-2009
12 14 2009
0.070
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99.999222
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Effedive with the 11/2/98 auction, all bills are auctioned using the single -priced method.
F rutdoall-- of Informal on Att I aw W Iuldanco I I rvacy 3 Legal notoes I Wets [ 1 .mu 8 Coro I C[Iffal 1IY I Data t 11,Ii' Y
I1.S.D,1 .IIofIn" 1 ry4ftureat 'If tl RLIc0£kl.
http://www.treasurydirect.gov/RI/OFBills 3/1/2010 4
Recent Note, Bond, and 11" Auction ICesuas
TreasuryDirect.
M , I'SGtu&. Allattir,tan orts, Oata.B hC4ulls LaTrst Aual o 0.[0 E1114,L Mo.L BI .., ii 1 IN S .Irl' N411111s
Recent Note, Bond, and TIPS Auction Results
P....
Maturity
Ietertvt
Yield
Price
CUSIP
Security
Term
TYRA
Date
Oale
..HP .
Ver $100
2-YEAR
NOTE
03 01-2010
02-29 2012
0,875
0.895
99.960486
912820MQ0
5-YEAR
NOTE
03-01-2010
02-29 2015
2,375
2.395
99.906254
912R20MR0
7-YEAR
NOTE
0301201E
02-28 QOV
3,000
3.0]9
9451221E
912820M56
'30-YEAR
TIPS
02 26-2010
02-15-2040
2.125
2,229
97 667212
9128IOQE8
3 YEAR
NOTE
02-16 2010
02-15-2013
1.375
1.317
99.994322
912028MN7
10-YEAR
NOTE
02-16 2010
02-15-2020
3.625
3.692
99 9439W
912028MP2
30YEAR
BON
02-18-2010
02-15-2040
4tS25
4.72E
98 483611
91201UQEI
2-YEAR
NOTE
02-01-2010
01-31-2012
0.875
0,880
99.99UI12
91Z628H16
S YEAR
NOTE
Ob 0D 20ID
01-3Y 2015
2.250
2.170
9903754E
912026MH0
7-YLAR
NOTE
02-U 42010
01-33-2U1]
3. 125
3. 127
99.937381,
91202014K3
3-YEAR
NOTE
01-153030
01-15-2013
Lill
1.49E
99.66382E
912828MG2
9-YEAR
10 MONTH
NOTE
01-15-2010
It-15-2019
3. 375
3. Y54
96.900805
912820LY4
E0-YLAR
TIPS
01-15-2010
01-15-2020
1.375
1J30
99.489212
912028MP4
29-YEA0.
10 MONTH
NOD
OI-15-2030
11-15-2039
4.D5
4.640
95.131167
912810Q03
2-YEAR
NONE
12-31-2069
12-31-2011
1.000
1.089
99.824397
911928ML1
5'YEAR
NOTE
12-31 2009
12-31-2014
2.625
2,665
99.$13909
Q12828MEI
]YEAH
NOTE
12-31-2009
12-31-2016
3.250
33 5
99.411424
912828M09
3-YEAR
NOTE
12-15-2009
2-15-2012
1.125
1223
99.Y12191
91282SM83
9 YEAR
11 MONTH
NOTE
12-15-2009
11. 15-2019
3,375
3.448
99.367238
912820LY4
29 YEAR
11 MONTH
BOND
12-15-2009
11-15-2039
4.325
4.520
92.62]644
912910003
2-YEAR
NOTE
11: 30-2009
11-30-2011
0.750
0.802
99,897034
912828MM9
5-YEAR
NOTE
11-30-2009
11-30-2014
2.125
2.P5
993S4325
9128281.71
]YEAR
NOTE
11-302009
11-30-2016
2350
2.835
99463748
912828MA5
3-YEAR
NOTe
11-16-2009
11-15 2012
1.31,
IA04
99915148
912828LX6
10 YEAR
NOTE
11-10-2009
11 15 2019
3.3]5
3,470
99 203098
912828LY4
30 YEAR
BONG
11-10 2009
11 152039
4.315
4A69
98 454984
912010QD3
2 YEAR
NOTE
11 02 2009
10-31 2011
1.000
1,020
99.960585
912820LT5
S YEAR
NOTE
11 02 -2009
tO 31 2014
2.3]5
2.38E
99.93890
9120201.57
)-TEAR
NOTE
11-02-2009
10 31-2016
3.125
3.141
99 899963
912020LU2
4-YEAR
6-MONTH
TIPS
10-30-2009
04-15-2014
1 LSO
0.269
101
91282SKMI
3-YEAR
NOTE
I0-15-2009
10 15 2012
1.315
144S
99J9521U
912820LR9
9-YEAR
9-MONTH
TIPS
10-15-2009
OA 15 2019
LOR
1,510
/04288692
912828LA6
9-YEAR
10 -MONTH
NOTE
10-15-2009
08 15-2019
3.625
3.21E
103.470011
912838U7
29-YEAR
10 MONTH
BOND
10-15-2009
08-15-2039
4.50E
4,009
108 490231
91280005
2-YEAR
NOTE
09-30-2009
09-30-2011
PXEO
1.034
94932870
912828Lw8
5-YEAR
NOTE
09 30-2009
09-30-2014
2,375
2A20
99.555132
912828LQI
7-YEAR
NOTE
09-30-2009
09-30-2016
3,000
3.005
99,968647
912828LP3
3-YEAH
NOTE
09 15 2009
09-15-2012
1,375
1.482
99.672573
912828LMo
9-YEAR
11 MONTH
NOTE
09 15 2099
01-15 2019
3.625
3.53E
UHIA51686
91282017
29-YEAR
11 MONTH
BOND
09 15 2009
08-15-2039
4,500
4.238
104412534
911810QC5
Denotes TIPS bond; all other TIPS without asterisks are notes
Eri,1 111 01 I111 ma[bN Act I L.dw A C.10 a I PnvNrx A I. ci,l N.Irl, I wet L-'1 rn, & Co: N 1 14-u_51111' I 0a14 QueONv
- II. S. LIe,11.1NH1I i lil✓ Tre itiu ry, R'l rPdU It t1le P,Ulr DIM
5
http://www.treasurydirect.gov/RI/OFNtebnd 3/1 /2010
r KD: t1.1D--3C1GetCU 111LC1CSL 1\Atrb, YYOV-lnlly i aiiy up%iam.--r c, ' cv.v
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
February
26,
2010
-
2010
2010
2010
2010
Instruments
Feb
Feb
Feb
Feb
22
23
24
25
Federal funds (effective) 1 2 3
0.12
0.12
0.11
0.12
Commercial Paper 3 4 5 6
Nonfinancial
1-month
0.14
0.14
0.13
0.12
2-month
0.13
0.12
0.13
n.a.
3-month
0.16
n.a.
n.a.
n.a.
Financial
1-month
0.13
0.14
0.14
0.15
2-month
0.14
0.17
0.27
0.17
3-month
0.19
0.20
0.20
0.19
3-month nonfinancial or financial
posted by CPFF 7
Without surcharge
n.a.
n.a.
n.a.
n.a.
With surcharge
n.a.
n.a.
n.a.
n.a.
CDs (secondary market:) 3 8
1-month
0.16
0.16
0.16
0.16
3-month
0.19
0.20
0.19
0.19
6-month
0.30
0.30
0.30
0.30
Eurodollar deposits CLondon) 3 9
1-month
0.28
0.28
0.28
0.28
3-month
0.40
0.40
0.40
0.40
6-month
0.45
0.45
0.45
0.45
Bank prime loan 2 3 1.0
3.25
3.25
3.25
3.25
Discount window primary credit 2 11
0.75
0.75
0.75
0.75
U.S. government securities
Treasury bills (secondary market) 3 4
4-week
0.06
0.08
0.08
0.09
3-month
0.11
0.12
0.12
0.13
6-month
0.19
0.20
0.19
0.19
1-year
0.35
0.34
0.32
0.30
Treasury constant maturities
Nominal 12
1-month
0.06
0.08
0.08
0.09
3-month
0.11
0.12
0.12
0.13
6-month
0.19
0.20
0.19
0.19
1-year
0.37
0.36
0.34
0.32
2-year
0.91
0.87
0.87
0.82
3-year
1.48
1.42
1.42
1.38
5-year
2.47
2.37
2.40
2.33
7-year
3.25
3.13
3.14
3.09
10-year
3.60
3.69
3.70
3.64
20-year
4.60
4.49
4.49
4.44
30-year
4.73
4.63
4.63
4.58
http://www.federalreserve.gov/Releases/H 15/update/
Federal Reserve Statistical Release
HA5
Selected Interest Rates (Daily)
Skip ,, ConI'm
Release Date: February 26, 2010
Weekly release dates I Historical data I Data Download Program (DDP)_I About I Announcements
Daily update Other formats: Screen reader I ASCII
�,�' Dab Download
� Protiram
The weekly release is posted on Monday. Daily updates of the weekly release are posted Tuesday
through Friday on this site. If Monday is a holiday, the weekly release will be posted on Tuesday
after the holiday and the daily update will not be posted on that Tuesday.
3/1/2010 6
r": n.17--3e1ecLeu 1111=UNL llaL05, VV OU-1 Illy La1Ly vpuaw--i • ui uaiy a.v, a.v
Inflation indexed 13
5-year
7-yeas
10-year
20-year
Inflation -indexed long-term average 14
Interest rate swaps 1.5
1-year
2-year
3-year
4-year
5-year
7-year
10-year
30-year
Corporate bonds
Moody's seasoned
Asa 16
Baa
State & local bonds 17
Conventional mortgages 18
n.a. Not available.
Footnotes
0.55
0.47
0.50
0.50
1.09
1.00
1.03
1.03
1.55
1.50
1.51
1.51
2.04
2.00
2.00
2.01
2.14
2.10
2.12
2.11
0.53
0.50
0.49
0.47
1.17
1.12
1.10
1.07
1.82
1.74
1.73
1.68
2.35
2.27
2.25
2.20
2.77
2.71
2.68
2.63
3.38
3.32
3.26
3.22
3.88
3.83
3.77
3.73
4.58
4.54
4.48
4.44
5.45 5.33 5.32
6.45 6.34 6.35
5.26
6.28
4.36
5.05
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.
5. 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. Financial paper that is insured by the FDIC's Temporary Liquidity Guarantee Program is not
excluded from relevant indexes, nor is any financial or nonfinancial commercial paper that may be
directly or indirectly affected by one or more of the Federal Reserve's liquidity facilities. Thus
the rates published after September 19, 2008, likely reflect the direct or indirect effects of the
new temporary programs and, accordingly, likely are not comparable for some purposes to rates
published prior to that period.
7. CPFF refers to the Federal Reserve's Commercial Paper Funding Facility. The rates are identical
under the CPFF for financial and nonfinancial commercial paper. An issuer of commercial paper into
the CPFF may avoid the surcharge by providing a collateral arrangement or indorsement that is
acceptable to the Federal Reserve Bank of New York. The CPFF expired on February 1, 2010, and
therefore these raters are no longer calculated. Source: Federal Reserve Bank of New York.
8. An average of dealer bid rates on nationally traded certificates of deposit.
9. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time.
10. Rate posted by a majority of top 25 (by assets in domestic offices) insured O.S.-chartered
commercial banks. Prime is one of several base rates used by banks to price short-term business
loans.
11. 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
adjustment credit, which was discontinued after January 8, 2003. For further information, see
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 as
well as the rate on primary credit are available at www.federalreserve.gov/releases/hl5/data.htm.
12. Yields on actively traded non -inflation -indexed issues adjusted to constant maturities. The
30-year Treasury constant maturity series was discontinued on February 18, 2002, and reintroduced
http://www.federalreserve.gov/Releases/H15/update/ 3/1/2010 7
1'1CI5: t1.13--3eleeteu 111teresl mutcs, wuu-vuly rally upuacs.--r -.-I-. -
on February 9, 2006. From February 18, 2002, to February 9, 2006, the U.S. Treasury published a
factor for adjusting the daily nominal 20-year constant maturity in order to estimate a 30-year
nominal rate. The historical adjustment factor can be found at
www.treas.gov/offices/domestic-finance/debt-management/interest-rate/ltcompositeindex_historical.shtml.
Source: U.S. Treasury.
13. 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.
14, Based on the unweighted average bid yields for all TIPS with remaining terms to maturity of
more than 10 years.
15. 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)1.
ISDAFIX is a registered service mark of ISDA. Source: Reuters Limited.
16. 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.
17. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Thursday quotations.
18. Contract interest rates on commitments for fixed-rate first mortgages. Source: Primary Mortgage
Market Survey(R) data provided by Freddie Mac.
----------------------------------------------------------------------------------------------------
Note: Weekly and monthly figures on this release, as well as annual figures available on the
Board's historical H.15 web site (see below), are averages of business days unless otherwise noted.
Current and historical H.15 data are available on the Federal Reserve Board's web site
(www.federalreserve.gov/). For information about individual copies or subscriptions, contact
Publications Services at the Federal Reserve Board (phone 202-452-3244, fax 202-728-5886). For paid
electronic access to current and historical data, call STAT-USA at 1-800-782-8872 or 202-482-1986.
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, 20, and 30 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 foxTreasury 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 I Historical data I Data Download Program (DDP) I About I Announcements
Daily update otherformats: Screen reader I ASCII
Statistical releases
Hoine I Economic research and data
Accessibility I Contact Us
Last update: February 26, 2010
8
http://www.federalreserve.gov/Releases/H15/update/ 3/1/2010
r'Rli: Commercial raper Kates ana umstanaings
Federal Reserve Release
� r r
Release I About I Announcements I Outst_andings_ I Volumestatistics_ I Year-end I Maturity_ Distribution I Data
Download Program (DDP)
Data as of February 26, 2010
Commercial Paper Rates and Outstanding
Derived from data supplied by The Depository Trust & Clearing Corporation
Posted March 1, 2010
Discount rates
=AATerm
nonfinancial
financial
asset -backed
1-day
0,12
0.24
0.11
0.22
7-day
0.16 ]
0.27
0.14
0.25
15-day
0.12 ]
0.24
0.13
0.26
30-day
0.15 ]
0.22
0.21
0.20
60-day
0.16 ]
0.27
0.16
0.25
90-day
0.18
n.a.
0.20
0.25
Trade data insufficient to support calculation of the 90-day A2/P2 nonfinancial rate for February 26, 2010.
Yield curve
Money market basis re[ceur
— — — AA nonfiruyncial
........... A21132 nonfinancinl
--- AA financial
-' c --
15 30 60 90
Days to Maturity
0.50
0.25
1 !1
9
http://www.federalreserve.gov/Releases/CP/ 3/1/2010
vtw: uommerctat raper Kates ana vutstanatngs
ray,u L Ui J
Discount rate snreadl
s • r
600
npnc..d. S.Jay moving Avg 700
- 600
500
I 400
+I
- P'1 300
200
�► F+yr,i i ` 100
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Discount rate history
7
6
5
4
3
2
1
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Outstandings
Weekly (Wednesday), seasonally adjusted
10
http://www.federairesen,e.gov/Releases/CP/ 3/1/2010
Acts: uommerctat raper xaies anu vutstammngs
Billions of dollars
raga J vi J
1210
1110
1010
910
810
710
610
510
410
Billions of dollars
---- Nueflmmci;d (right ;u-cda)
Financial dot sc:de)
t I
tip tl ",,n t ✓
2001 2002 2003 2004 2005 2006 2007 2008 2009
280
240
200
160
120
80
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 Outstandings I Volume statistics I Year-end I Maturity Distribution I Data
Download. Program (DDP)
Home I Statistical releases
Accessibility I Contact Us
Last update: March 1, 2010
11
http://www.federalreserve.gov/Releases/CP/ 3/1/2010
City of La Quinta
Cash Flow
Budget to Actual
January 31, 2010
Cash Basis
Budget
Actual
Accrual
Adjusted Total
Variance
Account
1110
1/10
Adjustment
1/10
Over Under
Notes
Property Tax/ Tax Increment
40.157,030
37,372,753
37.372,753
(2,784.277)
Property Tax dec0ne due to ecoromy
Transient Occupancy Tax
534,756
297,440
297,440
(237.316)
Decline in TOT due 0..my
Sales Tax
561.750
474,105
474,105
(87,645)
Gott Course cloaca two weeks for Hope
SilverRock Golf
592,826
245,217
245,217
1
Tournament limited play January
Library
238
(238)
Riverside Cc Transportation Commission
Other revenues
2951413
3290539
3,290539
339,126
Lighting& Landscape Assessment 54701,
Revenues
44,798,012 1
41,680,054
41,680,054
3,117,958
Expenditures
Salaries & Fringe Benefits
903,44E
B13,266
813,266
(90,182)
Other expenditures
3053,305
3179625
3179625
126320
3,956,753
3992891
3992891
36138
Subtotal
369,972
1,137.213
1,137,213
767,241
Redevelopment Agency
Property Tax Adi Fees
Debt Service(Principal/Intenad/Pass Through)
12982084
13031904
13031904.
49,820
13,352,056
14169117
14, 169,117
817061
Subtotal
Capital Projects
860439
860,439
860439
-
Total Expenditures
18,169.248
1 19,022,441
1
19,022,447
853,199
Net Revenues/Expenditures
26,628,764
1 22,657,607
22,657,607
2,264,759)
NOTE 1:
Expenditures are budgeted at 8.34% per month
Difference between actual and budget
(Undempent)
DEPARTMENT
Ovensicent
Notes
GENERAL GOVERNMENT
(37,319)
CITY CLERK
(5,122)
COMMUNITY SERVICES
(7,723)
FINANCE
(10.166)
BUILDING & SAFETY
(20.495)
PUBLIC SAFETY
(138,727)
PLANNING
(77,418)
PUBLIC WORKS:
86486
383,456
SUBTOTAL -GENERAL FUND
Library
Gas Tax
Federal Assistance
JAG Grant
Slesf (Cops) Revenue
Indian Gaming
Lighting & Landscaping
RCTC
Development Agreement
-
CV Violent Crime Task Force
-
AB 939
(11,416)
Quimby
Infrastructure
-
Proposition 1B
-
South Coast Air Quality
3.511
Transportation
-
Parks & Recreation
Civic Center
Library Development
Community Center
-
Street Facility
Park Facility
Fire Protection
Arts In Public Places
(4,562)
Interest Allocation
Equipment Replacement
(19.693)
Information Technology
(21,788)
Park Maintenance Facility
(31.603)
SilverRock Golf
88.299
SilverRock Reserve
LO Public Safety Officer
(167)
Finance Authority
(1,318)
Capital Improvement
Total
382, 993
12
INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
March 10, 2010
Correspondence
& Written Material Item B
Pooled Money Investment Board Report for December 2009
BACKGROUND:
The Pooled Money Investment Board Report for December 2009 is included in the
agenda packet. This report is available on-line at www.treasurer.ca.gov.
RECOMMENDATION:
Receive & File
John M. Falconer, Finance Director
POOLED MONEY INVESTMENT ACCOUNT
SUMMARY OF INVESTMENT DATA
A COMPARISON OF DECEMBER 2009 WITH DECEMBER 2008
(DOLLARS IN THOUSANDS)
DECEMBER 00911 DECEMBER 2008 1 CHANGE
Average Daily Portfolio
$
66,354,589
$
59,947,044
$
+6,407,545
Accrued Earnings
$
32,092
$
119,799
$
-87,707
Effective Yield
0.569
%
2.353 %
-1.784 %
Average Life -Month End (In Days)
222
223
-1
Total Security Transactions
Amount
$
22,944,280
$
16,783,128
$
+6,161,152
Number
474
339
+135
Total Time Deposit Transactions
Amount
$
3,169,600
$
2,993,000
$
+176,600
Number
149
156
-7
Average Workday Investment Activity
$
1,186,994
$
898,915
$
+288,079
Prescribed Demand Account Balances
For Services
$
1,346,190
$
1,199,393
$
+146,797
For Uncollected Funds
$
139,009
$
150,315
$
-11,306
NOW Account Average Balance
$
221,856
$
0
$
+221,856
1
BILL LOCKYER
TREASURER
STATE OF CALIFORNIA
INVESTMENT DIVISION SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO
(000 OMITTED)
December 31, 2009
DIFFERENCE IN
PERCENT OF
TYPE OF SECURITY
PERCENT OF
PORTFOLIO FROM
AMOUNT
PORTFOLIO
PRIOR MONTH
Government
Bills
$ 18,180,533
27.06
+4.81
Bonds
0
0.00
0
Notes
6,963,540
10.37
+0.10
Strips
0
0.00
0
Total Government
$ 25,144,073
37.43
+4.91
Federal Agency Debentures
$ 4,105,920
6.12
-1.49
Certificates of Deposit
6,465,063
9.62
+1.66
Bank Notes
0
0.00
0
Bankers' Acceptances
0
0.00
0
Repurchases
0
0.00
0
Federal Agency Discount Notes
8,312,516
12.37
+0.11
Time Deposits
4,375,800
6.51
-0.91
GNMAs
106
0.00
0
Commercial Paper
5,046,652
7.51
-1.82
FHLMC/Remics
891,288
1.33
-0.01
Corporate Bonds
188,888
0.28
0
AB 55 Loans
367,112
0.55
-0.17
GF Loans
11,979,700
17.83
+0.39
NOW Accounts
0
0.00
-2.68
Other
300,000
0.45
+0.01
Reversed Repurchases
0
0.00
0
Total (All Types)
$ 67,177,118
100.00
INVESTMENT ACTIVITY
DECEMBER 2009
NOVEMBER 2009
NUMBER
AMOUNT
NUMBER
AMOUNT
Pooled Money
474
$ 22,944,280
296
$ 14,291,334
Other
28
467,980
70
5,044,985
Time Deposits
149
3,169,600
106
2,412,000
Totals
651
$ 26,581,860
472
$ 21,748,319
PMIA Monthly Average Effective Yield
0.569
0.611
Year to Date Yield Last Day of Month
0.751
0.791
2
Pooled Money Investment Account
Portfolio Composition
$67.2 Billion
12/31/09
Loans
Corporate Bonds
0.28%
Commercial Paper
7.51 %
Time Deposit
6.51 %
CD:
9.1
Agencies
18.94%
suries
43%
;s