2013 08 14 IABIOU
T4bt 4 OULKA
Investment Advisory Board agendas and
staff reports are now available on the
City's web page: www.la-quinta.org
INVESTMENT ADVISORY BOARD
AGENDA
CITY HALL CAUCUS ROOM
78-495 Calle Tampico, La Quinta
REGULAR MEETING on WEDNESDAY, AUGUST 14, 2013 AT 4:00 P.M.
CALL TO ORDER
. .... .....
1 . Pledge of Allegiance
2. Roll Call
APPOINTMENT OF OFFICIERS
1 � Appointment of Investment Advisory Board Chairperson
2. Appointment of Investment Advisory Board Vice -Chairperson
PUBLIC COMMENT
At this time members of the public may address the Board on any matter not listed on the
agenda. Please complete a "Request to Speak" form and limit your comments to three
minutes.
CONFIRMATION OF AGENDA
'APPROVAL OF MINUTES
1 . Approval of the Minutes of June 12, 2013
CONSENT CALENDAR
1. Receive and File Treasurer's Report for May 31, 2013
BUSINESS SESSION
1 . Consideration of Fiscal Year 2013/2014 Meeting Schedule
INVESTMENT ADVISORY BOARD AGENDA 1 August 14, 2013
CORRESPONDENCE AND WRITTEN MATERIALS
1 - Month End Cash Report for June 2013 and the Pooled Money Investment Board
Reports - May 2013 and June 2013
2. Distribution of Investment Policy for Fiscal Year 2013/2014
BOARD MEMBER ITEMS - None
ADJOURNMENT
The next regular meeting of the Investment Advisory Board will be held on September 11,
2013, commencing at 4:00 p.m. in the Caucus Room, 78-495 Calle Tampico, La Quinta,
CA 92253.
DECLARATION OF POSTING
1, Vianka Orrantia, Senior Secretary, of the City of La Quinta, do hereby declare that the
foregoing Agenda for the La Quinta Investment Advisory Board meeting was posted on the
outside entry to the Council Chamber at 78-495 Calle Tampico, and the bulletin boards at
78-630 Highway 111, and the La Quinta Cove Post Office at 51-321 Avenida Bermudas,
on August 12, 2013.
DATED: August 12, 2013
VIANKA ORRANTIA, Senior Secretary
City of La Quinta, California
Public Notices
The La Quinta Caucus Room is handicapped accessible. If special equipment is needed for the hearing impaired, please call the City
Clerk's office at 777-7123, twenty-four (24) hours in advance of the meeting and accommodations will be made.
If special electronic equipment is needed to make presentations to the City Council, arrangements should be made in advance by
contacting the City Clerk's office at 777-7123. A one (1) week notice is required.
If background material is to be presented to the Investment Advisory Board during a Investment Advisory Board meeting, please be
advised that five (5) copies of all documents, exhibits, etc., must be supplied to the Senior Secretary for distribution. It is requested
that this take place prior to the beginning of the meeting.
Any writings or documents provided to a majority of the Investment Advisory Board regarding any item(s) on this agenda will be made
available for public inspection at the City Clerk's counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253,
during normal business hours.
INVESTMENT ADVISORY BOARD AGENDA 2 August 14, 2013
INVESTMENT ADVISORY BOARD
MINUTES
WEDNESDAY, JUNE 12, 2013
CALL TO ORDER
A regular meeting of the La Quinta Investment Advisory Board was called to order
at 4:00 p.m. by Chairman Blum.
PRESENT: Board Members Donais, Blum, Spirtos and Park
ABSENT: Board Member Mortenson
STAFF PRESENT: Finance Director, Robbeyn Bird, City Manager, Frank Spevacek,
City Attorney, Kathy Jenson (via teleconference) and Senior
Secretary, Vianka Orrantia
PUBLIC COMMENT — None
CONFIRMATION OF AGENDA — Confirmed
APPROVAL OF MINUTES
Approval of the Minutes of May 8, 2013
Motion — A motion was made by Board Members Park/Spirtos to approve the
Minutes of May 8, 2013. Motion passed unanimously.
CONSENT CALENDAR ITEMS
1. Transmittal of Treasury Report for April 30, 2013
Ms. Bird presented and reviewed the staff report for the month of March.
Motion — A motion was made by Board Members Spirtos/Donais to review, receive
and file the Treasurer's Report for April 30, 2013. Motion passed unanimously.
BUSINESS SESSION
1 - Consideration of Fiscal Year 2013/2014 Investment Policy and Work Plan Items
INVESTMENT ADVISORY MINUTES 1 June 12, 2013
Ms. Bird advised that the 2013/2014 Investment Policy is presented with the final
changes/additions/deletions incorporated within the policy.
At this time Staff Item No. 1 was discussed. - Mr. Spevacek advised the Board of
the City Council's consideration of procuring a Money Management Investment
Firm.
Motion - It was moved by Board Members Park/Spirtos to approve the amended
2013/2014 Investment Policy and proceed for final approval by the City Council at
the June 18, 2013 meeting. Motion passed unanimously.
2013/2014 Investment Advisory Board Work Plan Items
Motion - A motion was made by Board Members Spirtos/Park to approve the
2013/2014 Investment Advisory Board Work Plan and proceed for final approval by
the City Council at the June 18, 2013. Motion passed unanimously.
CORRESPONDENCE AND WRITTEN MATERIAL
1 - Month End Cash Report, May 2013 and the Pooled Money Investment Board
Reports - April 2013
Noted and Filed
BOARD MEMBER ITEMS - None
STAFF ITEMS
1. Money Management Investment Firm - (This item was discussed under
Business Session Item No. 1)
Mr. Spevacek updated the Board on the
operating expense surplus, in addition to
Redevelopment Agency litigation.
ADJOURNMENT
City's upcoming Fiscal Year 2013/2014
updating the Board on the status of the
There being no further business, it was moved by Board Members Donais/Park to
adjourq,this-m�e,etin
_g--at.4:44 p.m. Motion passed unanimously.
ully
11
Vianka Orranf—ia, Senior Secretary
City of La Quinta, California
INVESTMENT ADVISORY MINUTES 2 June 12, 2013
INVESTMENT ADVISORY BOARD CONSENT CALENDAR
ITEM 1
Meeting Date: August 14, 2013
ITEM TITLE:
Transmittal of Treasury Report
for May 31, 2013
BACKGROUND:
Attached please find the Treasury Report for May 31, 2013.
RECOMMENDATION:
Review, Receive and File the Treasury Report for May 31, 2013.
Robbeyfl'Bird, Finance Director
I
M E M 0 R A N D U M
TO: La Quinta City Council
FROM: Robbeyn Bird, Finance Director[Treasurer
SUBJECT: Treasurers Report for May 31, 2013
DATE: June 30, 2013
Attached is the Treasurers Report for the month ending May 31, 2013. 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:
I certify that this report accurately reflects all pooled investments and is in compliance with the California
Government Code; and is in conformity with the City Investment Policy.
As Treasurer of the City of La Quinta, I hereby certify that sufficient investment liquidity and anticipated
revenues are available to meet the pools expenditure requirements for the next six months. The City of
La Quinta used the Bureau of the Public Debt, U.S. Bank Monthly Statement and the Bank of New York
Monthly Custodian Report to determine the fair market value of investments at month end.
& - 2-9 - 1.3
Date
Robbeyn Bi
Finance Director/Treasurer
Footnote
(1) The amount reported represents the net increase (decrease) of deposits and withdrawals from
the previous month.
(2) The amount reported in the other column represents the amortization of premium/discount for the
month on US Treasury, Commercial Paper and Agency investments.
(3) The cash account may reflect a negative balance. This negative balance will be offset with transfers from other investments
before warrants are presented for payment by the payee at the bank.
Treasurer's Commentary
For the Month of Aa �2O `133
Cash Balances — The portfolio size increased by approximately $2.0 million to end the month
at $149.54 million. The major reason for the increase was due to the receipt of Motor vehicle
in lieu fees in the amount of $2.5 million. Major expenditures were $1.7 million for Public
Safety for the months of February and March 2013; and $298,000 for SilverRock
reimbursements.
Investment Activity — The investment activity resulted in an average maturity increase of 3
days from the prior month to end the month of May at 189 days. The Treasurer follows a buy
and hold investment policy.
During the month of May, the LAIF account decreased by $3.7 million. The sweep account
earned $11 in interest income for the month of May and the bank fees for the month were
$2,072 which resulted in a net decrease of $2,061 in real savings.
Portfolio Performance — The overall portfolio performance decreased from the prior month and
ended at .23% for the month, with the pooled cash investments at .30%. The portfolio yield
should continue to stay at these levels for the near future. At this time last year, the portfolio
was yielding .43% which reflects the current interest rate environment.
Lool�jn_q_Ahead
In the short term, the Treasurer will be investing in negotiable certificates of deposit,
Government Sponsored Enterprises (GSE) paper and rolling over bond proceeds and reserves
into U.S. Treasury bills or notes.
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City of La Quinta
Comparative Rates of Interest
May 31, 2013
Citv of La Quinta
Year
Month -
Annualized
Pooled Cash
E2minqs
Fiscal Agent
Overall
Average
Maturitv (days)
Treasu!y Bills[Note
Commercial Paper
Three Month
Non -Financial
LAIF Ra
2.79;�
Three Month
ISix Month
One Year
Two Year
FY (]&Ua
July 2008
2.99%
1.93%
2.77%
62
1.70%
1.88%
2.29%
2.75%
2.18%
August 2006
3.16%
1.92%
2.88%
51
1.69%
1.89%
2.14%
2.38%
2.08%
278%
Sept2008
2.81%
1.92%
2.64%
37
1.42%
179%
1.96%
2.00%
2.13%
2.T7%
Oct 2008
2.66%
2.61%
2.61%
29
0.90%
1.40%
1.72%
1,50%
2.07%
2.71%
Nov 2008
2-38%
2.36%
2.36%
64
0.15%
0.49%
1.04%
125%
1.45%
2.57%
Dec 2008
1.60%
0.18%
1.42%
116
0-06%
0.25%
0.59%
0.88%
0.97%
2.35%
Jan 2009
1.36%
0.118%
123%
82
0.15%
0.35%
0.43%
0.88%
0.31%
2.05%
Feb 2009
1.23%
0.18%
1.11%
75
0.30%
050%
0.61%
0.88%
0.48%
1.87%
Mar2009
1.26%
0.18%
113%
69
0.20%
0.42%
0.70%
0.88%
0.37%
1.82%
Api2009
094%
0.18%
086%
54
031%
0.33%
0.59%
0.88%
0.28%
1.61%
May 2009
0.92%
0.18%
0.84%
80
0.18%
030%
0.53%
0.88%
0.23%
1.53%
June 2009
0.85%
0.29%
0.80%
ill
0.20%
0.35%
0.55%
1.13%
026%
1-38%
FY 09/10
July 2009
0.69%
0.30%
065%
ill
0.19%
0.28%
0.47%
1.00%
0-28%
1.04%
AugLw 2009
0.64%
0.30%
0.61%
92
0.16%
0.26%
0.46%
1.00%
024%
0.93%
Sept2009
0.56%
0-31%
0.53%
112
0.12%
0.19%
0.41%
1.00%
019%
0.75%
Oct 2009
0.52%
0.31%
0.50%
90
0,08%
0.19%
0.38%
100%
019%
0.65%
Nov 2009
056%
0.31%
0.53%
152
0-04%
0.14%
0.32%
075%
0.15%
0.61%
Dec 2009
0.56%
0.15%
0.51%
239
0-11%
0.20%
0.16%
100%
0.16%
0.57%
Jan 2010
0.46%
0.15%
0.43%
179
0.06%
0-14%
0.34%
0.88%
0.13%
056%
Feb 2010
0.51%
0.16%
0.48%
162
0.13%
0.19%
0.32%
0.88%
0.15%
0.58%
Mar2010
0.50%
016%
0.47%
172
0.15%
0.24%
0.38%
1.00%
0-20%
0.55%
Apr2010
0.52%
016%
0.48%
162
0.15%
0.24%
0.49%
1.00%
023%
0.59%
May 2010
0.52%
0.16%
0.48%
116
0.17%
0.22%
037%
0.75%
0,28%
OZ6%
June 2010
0.30%
0.06%
0.23%
134
0.16%
022%
0.32%
0.63%
0.32%
0.53%
FY 10/11
July 2010
0.50%
0.15%
0-47%
119
0-16%
0.20%
0-30%
0.63%
0.28%
0.53%
August 20 1 C1
0.49%
015%
046%
108
0.15%
0.19%
0.26%
0.38%
0.25%
0.51%
Sept 20 10
0.55%
0.15%
0.51%
107
0.16%
0-19%
0.27%
0.38%
0.24%
0.50%
Oct 2010
055%
0.15%
051%
88
0.13%
0-17%
0.23%
0.38%
0-23%
0.48%
Nov 2010
0.53%
015%
0.49%
84
0.18%
0.21%
0.28%
0.50%
0.23%
0-45%
Dec 2010
0.57%
0-14%
0.52%
265
0-16%
0.19%
0.30%
0-63%
0.23%
0.46%
Jan 2011
051%
0.14%
043%
206
0.16%
0.18%
0.28%
0.63%
0.24%
0.54%
Feb 2011
0.55%
0.17%
0.46%
210
0.16%
0.17%
0-31%
0.63%
0.23%
0.51%
Mar2011
054%
0.17%
0.45%
218
0.05%
0-13%
0.26%
0.75%
0.23%
0.50%
Apr20111
0.59%
017%
0.48%
192
0.05%
0.10%
0.28%
0.63%
020%
0.59%
May2011
0.48%
0-17%
0.41%
156
0.06%
0.12%
0.20%
0.50%
016%
0.41%
June 2011
0.53%
0.00%
0.35%
126
0.03%
0.10%
0.20%
0.38%
015%
0,45%
FY 11112
July2011
0.53%
000%
035%
112
0.07%
012%
0-15%
0.20%
0.14%
0.38%
Augusi:2011
0.60%
0.00%
0.38%
102
0.02%
0.05%
0.10%
013%
0.16%
0.41%
Sepl:2011
058%
0.03%
0.39%
124
0.02%
0.06%
0-09%
0.13%
0.14%
038%
Oct 2011
0.53%
0-03%
0.35%
117
0.01%
0.06%
012%
0.25%
0.15%
0.39%
Nov2011
0.52%
0-03%
0.37%
94
0.03%
0.07%
0.10%
0.25%
0.14%
0.40%
Dec2011
0.48%
0.03%
0-35%
86
0.02%
0.06%
0.11%
0.13%
0.14%
0.39%
Jan 2012
0.45%
0.03%
0.34%
74
0.05%
0.08%
0.11%
0.25%
0.14%
0.39%
Feb 2012
049%
0.05%
0.36%
72
0.12%
0-15%
0.17%
0.25%
017%
0.39%
Mar 2012
0.44%
0.05%
0.34%
74
0.08%
014%
0.19%
0.25%
018%
0.38%
Apr2012
0.44%
0.09%
0.35%
61
0.10%
0.15%
0-19%
0.25%
0.20%
037%
May 2012
0.43%
009%
0.34%
62
0.09%
0.14%
0-19%
0.25%
0.19%
0.36%
June 2012
0.38%
0-08%
0,29%
47
0.10%
0.15%
0.21%
0.25%
0.21%
0.36%
FY 12tl3
July 2012
0.41%
0.08%
0.31%
112
0.11%
0-15%
0.18%
0.22%
0.22%
0.36%
August 2012
0.41%
0.08%
0.29%
31
0-11%
0.14%
020%
0.25%
0.20%
038%
Sepl:2012
043%
0.09%
0.33%
34
0.11%
014%
0-18%
0.25%
0.20%
0.35%
Oct 2012
0.47%
0.10%
036%
22
0.13%
0.16%
018%
0.25%
0.19%
0-34%
Nov 2012
048%
0.10%
0.36%
161
0.10%
0.15%
0-18%
0.25%
0.20%
0.32%
Dec 2012
0-47%
0.10%
0.36%
137
0.08%
0.12%
0.16%
0.13%
0-20%
0.33%
Jan 2013
0.44%
0-10%
0.34%
ill
0.08%
0.11%
0.14%
0.25%
0.16%
030%
Feb 2013
037%
0.10%
0.29%
105
0.13%
0.14%
015%
0.26%
0.17%
0.29%
Mai2013
0.39%
0.09%
0.30%
123
0.08%
0.11%
0.15%
0.25%
0.15%
0.29%
Api2013
0.31%
0.08%
0.25%
186
0.05%
0.08%
0.14%
0.13%
0.12%
0.26%
11
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12
INVESTMENT ADVISORY BOARD MEETING BUSINESS SESSION
ITEM 1
Meeting Date: August 14, 2013
ITEM TITLE
Meeting Schedule for Fiscal Year
2013/2014
BACKGROUND:
Attached find a list of meeting dates for Fiscal Year 2013/2014.
RECOMMENDATION:
Approve the meeting schedule of the Investment Advisory Board for Fiscal Year
2013/2014.
Robbeyn Yird, Finance Director
T4t!t 4 4 Qumro
MEMORANDUM
TO: Investment Advisory Board Members
Qitl
FROM: Robbeyn Bird, Finance Director
DATE: July 3, 2013
RE: Schedule of Investment Advisory Board Meeting Schedule
The City Ordinance specifies that the Investment Advisory Board usually will meet
monthly unless the Board with Council concurrence believes less frequent meetings
are considered necessary. For the last several years the Board has met monthly.
Listed below are meeting dates for the Boards review.
Monthly
August 14, 2013
September 11, 2013
October 9, 2013
November 13, 2013
December 11, 2013
January 8, 2014
February 12, 2014
March 12, 2014
April 9, 2014
May 14, 2014
June 11, 2014
Quarterl
September 11, 2013
December 11, 2013
March 12, 2014
June 11, 2014
Please consider the schedules for Fiscal Year 2013/2014 and give Staff direction.
INVESTMENT ADVISORY BOARD
Meeting Date: August 14, 2013
TITLE:
CORRESPONDENCE AND
WRITTEN MATERIAL ITEM 1
Month End Cash Report for June 2013 and the Pooled Investment Board Report
May 2013 and June 2013
BACKGROUND:
The June 30, 2013 Month End Cash Report is hereby submitted for your review.
This cash report is not a complete Treasury Report and excludes petty cash,
deferred compensation and fiscal agent balances. Selected cash balances are
reported to provide current cash balances to the Board.
In addition, the Pooled Money Investment Board reports for May 2013 and June
2013 are included in the agenda packet.
RECOMMENDATION:
Receive & File
Robbeyn ird, Finance Director
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Bill Lockyer, State Treasurer
Inside the State Treasurer's Office
Local Agency Investment Fund (LAIF)
LAW CONFERENCE INFORMATION
PMIA Performance Report
Date
Daily
Yleld*
Quarter to
Date Yield
Average
Maturity
(in days)
6/13/2013
0.24
0.25
244
6/14/2013
0.24
0.25
242
6/15/2013
0.24
0.25
242
6/16/2013
0.24
0.25
242
6/17/2013
0.24
0.25
238
6/18/2013
0.24
0.25
237
6/19/2013
0.24
0.25
235
6/20/2013
0.25
0.25
259
6/21/2013
0.25
0.25
257
6/22/2013
0.25
0.25
257
6/23/2013
0.25
0.25
257
6/24/2013
0.24
0.25
253
6/25/2013
0.24
0.251
6/26/2013
0.24
0.251
_249
246
LAIF Performance Report
Quarter ending 03/31/2013
Apportionment Rate:
Earnings Ratio:
Fair Value Factor:
Daily:
Quarter To Date:
Average Life:
0.28%
.00000773831888202
1.0010186
0.27%
0.29%
213
PMIA Average Monthly Effective Yields
MAY 2013 0.245%
APRIL 2013 0.264%
MARCH 2013 0.285%
*Daily yield does not reflect capital gains or losses
Pooled Money Investment Account
Portfolio Composition
$67.9 Billion
05/31/13
Tim(
I
CDs/13Ns
15.17%
Ager
15.1
Loans
0.30%
Commercial Paper
7.00%
Mortgages
0.30%
Treasuries
55.45%
3
Recent Bill Auction Results
Page I of I
TreasuryDirect
tlianf. , Mn Kit wtl�nwal , Annoul
K_Qme_-_tsMqtU� Bia LOU , 19Lq-6
Recent Bill AudiDn
Result�
Recent Bill Auction Results
Security
1.. 0
Maturity
Olwoun t
Investment
Price
TOM
D..
Data
Rate %
R ate %
Per $100
CUSIP
4-WEEK
06-27-2013
07-25-2013
0,030
0,030
99,997667
9127957A3
13-WEEK
06-27-2013
09-26-2013
0.060
0.061
99.984033
912796BC2
26-WEEK
06_27-2013
12-26-201 3
0.105
0.107
99.946917
91279613119
52-WEEK
0627-2013
D6-26-2014
0.160
0,162
99.838222
912796BPI
I -WEEK
06.20-2013
07-18-2013
0.045
0.046
99996500
912796AT6
13-WEEK
06-20-2013
09-19-2013
0.045
O.G46
99,988625
91279571<1
26-WFF.K
06-20-20�13
12-19-2013
0.075
0.076
99.962083
912796BQI
4-WEEK
06_1 3-20 3
07-11-2013
0J)'10
0.041
99.9%.089
91.2796A,"
13-WEEK
06_13 _2013
09-12-2013
0.045
0.046
99.98"25
912796BB4
26-WEEK
D6-13-2013
12-12-2013
0,080
0.081
99959556
912796AKS
4-WEEK
06-06-2013
07-05-2013
0.040
0.041
99.996778
912796AN9
13-WEEK
06,D6-2013
09-05-2013
0.045
0.046
99,988625
912796,AZ2
26-WEEK
06-06-2013
120 -2013
0,08
0.081
99959556
912796BNO
13-DAY
06_04.20 13
06:157-2013
0.0500
0,05 1
99,998194
912796ES4
4-WEEK
05-30-2013
06-27-2013
0,030
0,030
99,997667
9127956W6
13-WEEK
05:30:2013
08-29-2013
0,045
0046
99.98%25
912796AY5
26-WEEK
05 30 2013
11-29-2013
0.080
0.081
99.959333
912796BMO
52-WEEK
05,30-2013
05-29-2014
0.135
0,137
99.863500
9127961337
4-WEEK
05-23 _20 13
D6-20-2013
0.035
0.035
99.997278
912796AMI
13-WEEK
05-23-2013
08-22-2013
0.045
0046
99 9ON25
9127957E5
26-WFFK
05-23-20 1 .3
11:21-2013
0.085
0.086
99.957028
912796OL2
4-WEEK
05-16-2013
06 13-2C)13
O.Ojo
0,010
99999222
912796AL3
13-WEEK
05-16_20 13
08_ 15-2013
0.045
0,046
99 . 986625
912796AX7
26-WEEK
05-16-2013
il-14-2013
0.080
0.081
99.959556
912796AE9
4-WEEK
05-09-201 3
06-06-2013
0.000
0.000
100.ODOOGO
912796A)8
13-WEEK
05-09�2013
08-08
0.040
0.041
99.989889
912796AVI
26-WEEK
05-09-2013
:2013
11-07 2013
0.075
0,076
99�962083
912796BK4
4-WEEK
05-02_2013
05 30-2013
0.025
0.025
99998056
9127956R7
13-WEEK
05-02-22 3
08:01 0 1 3
0-050
0.051
99.987361
912796AU3
26-WEEK
05-02-2013
1:2
10-3 20 3
0.080
0.081
99.959556
912796131il
52-WEEK
05-02-2013
05-01-2014
0105
0.107
99.893833
912796SEB
4-WEEK
04 2 2013
05-23-2013
0.045
0,046
99.996500
912796AH2
13-WEEK
04 _255m2013
07- 25-2013
0.050
0.051
99,987361
9127957A3
26-WEEK
04-25_22 3
10-24 2013
0,085
0.086
99957028
912796BG3
4-WEEK
04-18-2013
05_16: 2013
00 50
0.05 1
99'.996111
912796AG4
13-WEEK
04-18-2013
07 18:2 13
0055
0.05
99 90N97
912796AI6
26-WEEK
04-18-2. 0 3
10: , 7 20013
0090
0.097
99'.954500
912795ZS7
4-WEEK
04-11-2013
05-09-2013
0.060
0.061
99.995333
912796Ar6
13-WEEK
04-11-201 3
07-11-2013
OXG5
0,066
99.983569
91279GAS8
26-WEEK
04-11 2013
10� 1 0-2013
0095
0.096
99.951972
912796BF5
EfFective with the 11/2/98 auction, all bills are auctioned using the single -priced method.
I 1�1w_A Guidancg I L�J:Lv�& Legal XgqQgg. I Website (grais N Lg[Wj11qpg I Acoesslbi!Ajc I ()aLa Qk,,,Ilt
U.5, Dentirtmg.,nt of the Tremury. Bureau 0 the Public De-b
4
http://www.treasurydirect.gov/RI/OFBills 6/27/2013
Recent Note, Bond, and TIPS Auction Results
Page I of I
TreasuryDired
tLOL12e , In5t1tkjty2!.rdI , nouil f gs� 5 �aLest&Arkgp_2ata , R�ent Nnte, Bond, and TIPS AwLion Resiults
Recent Note, Bond, and TIPS Auction Results
5.owrilty Term TvPe
2-YEAR
5-YEAR
7_YEAR
'29_ YEAR
3_YEAR
,).YEAR
29_YEAR
2-YEAR
5_YEAR
7_YEAR
9 YEAR
3_YEAR
J('_YEAR
30_YEAR
2-YEAR
5-YEAR
5_Y -AR
C
7-YEAR
3_YEAR
9_YEAR
29_YEAR
2-YEAR
5:YEAR
7 YEAR
9-YEAR
3-YEAR
9.YEAR
29 _YEAR
2_YE.AR
5 YEAR
7_V EAR
.30 YEAR
.3 YEAR
10 :YEAR
30 YEAR
2-YEAR
5-YEAR
7_YE. AR
Jo_YEAR
3 YEAR
B-MONTH
11-MONTH
11-MONTH
6 MONTH
10 MONTH
10:MONTH
10-MONTH
11-MONTH
11-MONTH
NOIE
NOTE
N OTE
TIPS
NOTE
NOTE
BONI)
NOTE
N07E
NOTE
TIPS
NOTE
NOTE
BOND
NOTE
rips
NOTE
NOTE
NOTE
NOTE
BONI)
NOTE
N07E
NOTE
TIP's
NOTE
NOTE
BON D
NOT E
NOTE
NOTE
TIPS
NOTE
NOTE
BOND
NOTE
NO'HE
NOTE
TIPS
NOTE
1-
Maturity
Intere9t
Yield
Price
Date
Date
Rat. -/b
%
Per $100
07-01-2013
06-30-20JS
0375
0.430
99,890734
07-03-2013
06-30-2018
1.375
1.484
99.476843
07-01-2013
06-30-2020
1.875
1.932
99.628563
06-20-2013
02-15-2043
0.625
1,420
81.754227
06 17-2 13
D6-15:2 16
0.50
05081
9 75 876
06:17-2013
0
05- 1 5 210323
1.7500
2�2 9
995.9393 134
06-17-2013
05-15-204.3
2,875
3.355
90.978135
05-31-2013
0 .5-31-2015
0 - 250
0.283
99-934233
05-3 1 -2013
0 5 -31-20 18
1.000
1.045
99.781333
05-31-2013
05-31-2020
1 .375
1 .496
99.198680
05-31-2013
01-15-2023
0 125
-0.225
104.272695
05-15-20 13
05-15-2016
0.250
0 354
99.689924
05- 1 5-20 1 3
05-15-2023
1,750
1 . 810
99-453420
05-15-2013
05-j5-2043
2.875
2,980
97.927211
04-30-2. 013
04-30-20JS
0.125
0,233
9,9364628
04-30-20 1 3
04-15-2018
0. 1 25
-1 311
107.820710
04:30-2013
04-30-201B
0.625
0.710
99.583182
04 30 -2013
04-30' 2020
1 125
1.155
99.798822
04-15-223
04 15:20 16
0.250
0.342
99.72W4
04-15 -2013
02-15 2023
2.000
L795
101.839163
04-15-20 13
02-25-2043
3 125
2.99B
102487803
04-01-2013
03-31-2015
0.250
0.255
99.990045
04-01-2013
0 3 _31_2018
0.750
0.760
99.951048
04-01-2013
03-31-2020
1.12 5
1.248
99.176276
03.28 2013
01 15-2023
0.125
-0.602
107.058044
03-15-2013
03-15-2016
0.375
0.411
99.892773
03-15-2013
02-15-2023
2.000
2.029
99739223
03-15-2013
02 _ 15-2043
3A25
3.24
9T653846
02-28-2013
02_28_2015
0.250
0.25!/
99,986045
02-28-2013
02-28-2018
0.750
0.777
99.867840
02-28-2013
02-29-2020
1.250
1.260
99.933199
02-28-20 13
02 15-2043
0.625
0639
99.494180
02-15 20 13
02�15 2016
0,375
0.411
99.892773
02-15-20 1 3
02 15_2023
2.000
2.046
99585912
02-15-2013
02-15-2G43
3.125
3.190
98 9416BO
01-31-2013
01-31-20JS
0.250
0.288
99.92.4273
01
01-311:2018
0.1375
0,889
99.931681
1:2D13
,:3J
0 3 2013
0 1 -3 2020
1.375
1.416
99.727681
01.31_20 13
01. 1 5� 2023
0.125
-0630
107.505925
01-15-2013
01-15 201 6
0.375
0.385
99970201
- Denotes TIPS bond; all other TIPS without asterisks are notes
CUSIP
9.12829VHO
91282OVK3
912826V]6
912810RA8
912028VG2
912828VB3
912610RB6
912828VD9
912828VE7
912628VI`4
912828UH1
912829VCI
912829VB3
91261OR86
91282BUY4
9128281JX6
912828UZI
912628VAS
912828UWB
912828UN8
912810QZ4
9J 2B28UT5
912828UU2
912628UVO
912828UHI
9 1 2828US7
912828UNO
912810QZ4
912828UP3
91282SUR9
912826UQI
912610RA8
912828UMO
912828UNO
912810QZ4
912828UK4
912828U)7
91282BUL2
912828UHI
912828UG3
Freedom of 1pformatIon Ac I L%jV A.�zWAMS I t.jotice5l gUkILg T ef rps A_(:gndW�L0.j I Acce5s bill Ly I Dd4 ) i
_U.Al[ty
U.S, Demirtmom Of tho., Tre�jsurv, EiLlreiki of the Public Debt
5
http://www.treasurydirect.gov/RI/OFNtebnd 6/27/2013
Printer Version - Board of Governors of the Federal Reserve System Page 1 of 4
Selected Interest Rates (Daily) - H. 15
Current ReleaLe Release Dates Daily Update Historical Data About Announcements
Daily Update
Release Date: June 27, 2013
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.
June 27, 2013
Selected Interest Rates
Yields in percent per annum
Instruments
Federal funds (effective) 2 3
Commercial Paper 3 4 5
2013
Jun
24
2013
Jun
25
0.09
2013
Jun
26
0.09
0.10
Nonfinancial
I 1-month
0.07
0.07
0.08
2-month
n. a.
0.10
n. a.
3-month
n. a.
0.12
0.10
Financial
1-month
0.08
0.07
0.07
2-month
0.11
0.11
0.10
3-month
0.16
0.14
0.11
CDs (secondary market) 37
1-month
0.16
0.16
0.16
3-month
0.19
0.20
0.20
6-month
0.26
0.27
0.27
Eurodollar deposits (London) 3 a
1-month
0.22
0.22
0.22
3-month
0.28
0.42
0.28
0.42
0.28
0.42
6-month
Bank prime loan 23 9
3.25
3.25
3.25
6
http://www.federalreserve.gov/releases/H15/update/ 6/27/2013
Printer Version - Board of Governors of the Federal Reserve System Page 2 of 4
Discount window primary credit � 10
U.S. government securities
Treasury bills (secondary market) 34
4-week
3-month
6-month
1-year
0.75
0.75
0.75
0.01
0.06
0.03
0.02
0.06
0.06
0.11
0.14
0.11
0.11
0.17
0.16
Treasury constant maturities
Nominal !-'
1-month
0.01
0.03
0.02
3-month
0.06
0.06
0.06
6-month
0.11
0.11
0.11
1-year
0.16
0.17
0.16
2-year
0.42
0.43
0.39
3-year
0.73
0.74
0.69
5-year
1.48
1.49
1.45
7-year
2.02
2.03
1.98
10-year
2.57
2.60
2.55
20-year
30-year
Inflation indexed 12
. ..........
5-year
7-year
10-year
20-year
30-year
Inflation -indexed long-term average - 13
3.27
3.31
3.27
3.56
-0.14
3.60
3.58
-0.16
0.21
-0 .22
0.22
0.64
0.16
0.64
0.60
1.22
1.21
1.15
1.45
1.44
1.38
1.16
1.15
1,09
Interest rate swaps 14
. .... . . ......... .......
1-year
2-year
3-year
4-year
5-year
7-year
10-year
0.42
0.38
0.37
0.62
0.56
0.54
0.96
0.88
0.85
1.36
1.28
1.23
1.74
1.66
1.61
2.33
2.25
2.19
2.86
2.74
http://www.federalreserve.gov/releases/Hl 5/update/ 6/27/2013
Printer Version - Board of Governors of the Federal Reserve System
Page 3 of 4
30-year 3.54
. ...... ......
CorDorate bonds
mooay-s seasonea
Aaa 15 4.46
l3aa 5.43
State & local bonds 16
Conventional mortgages 17
n.a. Not available.
Footnotes
1. The daily effective federal funds rate is a weighted average of rates on brokered trades.
3.50 1 3.49
4.46 4.43
5.48 5.44
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.fedcralreserve.P,ov/releases/ct)/).
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. An average of dealer bid rates for certificates of deposit (CDs) that are actively traded in the secondary market and are issued by
top -tier banks. Bids are generally for CDs issued in denominations of $1,000,000 or greater.
8. Source: Bloomberg and CTRI3 ICAP Fixed Income & Money Market Products.
9. Rate posted by a majority of top 25 (by assets in domestic offices) insured U.S.-chartered commercial banks. Prime is one of several
base rates used by banks to price short-term business loans.
10. 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 ww��. 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.1ederalreserve.gov/releases/h I 5/data.htni.
http://www.federalreserve.gov/releases/H I 5/update/ 6/27/2013 8
Printer Version - Board of Governors of the Federal Reserve System Page 4 of 4
11. 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 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 r es
1� tit Source: U.S.
Treasury.
12. Yields on Treasury inflation protected securities (TIPS) adjusted to constant maturities. Source: U.S. Treasury. Additional
information on both nominal and inflation -indexed yields may be found at www.treasury.y-ov/resouree-center/data-c[iart-
center/interesl-rates/.
13. Based on the unweighted average bid yields for all TIPS with remaining terms to maturity of more than 10 years.
14. International Swaps and Derivatives Association (ISDAO) 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 ICAP plc and published on Thomson
Reuters Page ISDAFIX01. ISDAFIX is a registered service mark of ISDA0. Source: Thomson Reuters.
15. Moody's Aaa rates through December 6, 200 1, are averages of Aaa utility and Aaa industrial bond rates. As of December 7, 200 1,
these rates are averages of Aaa industrial bonds only.
16. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Thursday quotations.
17. Contract interest rates on commitments for 30-year fixed-rate first mortgages. Source: Primary Mortgage Market Surveys 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).
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 for Treasury inflation protected securities in the over-the-counter market. The infl ation- indexed constant maturity
yields are read from this yield curve at fixed maturities, currently 5, 7, 10, 20, and 30 years.
9
http://www.federalreserve.gov/releases/H I 5/update/ 6/27/2013
Printer Version - Board of Governors of the Federal Reserve System
Page I of 3
Commercial Paper
Summary Rates Volume Statistics Outstanding Year-end Maturity Distribution About Announcements Technical
Q&As
Commercial Paper Rates and Outstanding Summary Derived from data supplied by The Depository Trust & Clearing
qo�rpqrp!ion,
.Data as of J une 26, 2013
Posted Jtine 27, 2013
The commercial paper release will usually be posted daily at 9:45 a.m. However, the Federal Reserve Board makes no
guarantee regarding the timing of the daily posting. This policy is subject to change at any time without notice.
--- --------
Rates
AA nonfinancial
A2/P2
nonfinancial
Period
1-
7-
1-
is-
30-
60-
90-
7-
15-
30-
60-
90-
day
day
day
day
day
day
day
0.23
0.23
0.24
0.25
day
day
day
0.28
day
day
June
20
0.03
0.08
0.08
0.06
0.09
0.11
0.24
0.25
n.a.
n.a,
June
21
0.05
0.09
0.07
0.06
0.09
n. a.
0.12
0.26
0.26
0.28
0.32
n.a,
June
24
0.05
0.05
0.05
0.07
n. a.
0.25
0.27
0.28
n.a,
n.a,
une
J 25
0.06
0.06
0.06
0. 07
0.10
0.12
0.25
0.27
0.28
0.29
0.30
June
26
0.04
0.05
0.06
0.08
....... ....
n. a.
0.10
0.24
0.27
0.27
0.29
n.a.
0.32
Note: n.a. indicates that trade data was insufficient to support calculation of the particular rate.
PI
Ju
2(
Ju
21
Ju
24
JU
25
Ju
26
AA financial
AA asset
-backed
!riod
1-
1-
7-
15-
30-
60-
90-
7-
is-
30-
60-
90-
day
day
day
day
day
day
day
day
day
day
day
day
0.05
n. a.
0.06
0.08
0.10
0.10
0.19
0.17
0.17
0.21
0.22
ne
0.13
ne
0.13
0.09
n. a.
n. a.
0.07
0.12
0.16
0.14
0.19
0.16
0.19
0.21
n e
0.08
0.13
0.08
n.a.
0.06
0.11
0.16
0.16
0.18
0.16
0.20
0.21
ne
0.04
0.05
0.12
0.06
0.07
0.11
0.14
0.21
0.19
0.17
0.19
0.20
rie
0.06
0.05
0.13
7n.a.
0.07
0.10
0.11
0.10
0.14
0.17
0.21
0.21
10
http://www.federalreserve.gov/releases/cp/ 6/27/2013
Printer Version - Board of Governors of the Federal Reserve System Page 2 of 3
Note: n.a. indicates that trade data was insufficient to support calculation of the particular rate.
Outstanding Levels
Seasonally adjusted
Billions of dollars
Period Total
- Nonfinancial
Total Dom n
Financial
Asset-
backed
Other
mestic
Foreign
Monthly -end levels
2013-Jan.
1,080.9
215.1
165.9
49.2
555.0
312.6
242.4
309.8
1.0
Feb.
1,044.6
220.9
173.8
47.1
-523.3
310.5
212.8
299.6
.9
Mar. 998.5 201.6 163.8 37.8 503.2 289.2 214.0 292.3 1.3
Apr. 993.7 180.8 134.4 46.4 529.5 299.8 229.7 280.5 2.9
May 1,020.8 201.4 148.5 52.9 538.1 299.9 238.2 277.4 3.9
Weekly (Wednesday) levels
May 29 1,047.8 214.5 158.8 55.7 556.5 311.4 245.1 272.9 3.9
June 5
1,030.6
217.3
163.0
54.2
534.6
296.1
238.5
274.8
3.9
June 12
1,034.5
220.1
167.5
52.6
534.9
296.2
238.7
275.6
3.9
June 19
1,037.8
222.4
172.0
50.3
529.7
288.0
241.6
281.9
3.9
June 26
1,039.8
231.4
181.5
49.9
520.4
279.9
240.5
284.1
3.9
Not seasonally adjusted
Billions of dollars
Period
. . .... ........
Total
Nonfinancial
::��ota �ID�omest�icF�oreig n�
Financial
Asset-
backed
Other
mestic
Monthly -end levels
2013-Jan.
1,059.9
207.5
163.5
44.0
545.7
302.2
243.5
305.6
1.0
Feb.
1,051.7
214.8
172.3
42.5
537.3
303.3
234.0
298.7
.9
Mar.
1,001.2
174.2
139.8
34.4
529.6
290.5
239.1
296.0
1.4
Apr.
1,046.8
187.0
137.8
49.1
5 .3
306.3
1 262.0
2886
2 9
�39
May
1,065.7
212.3
152.6
59.7
568.5
299.2
1 269.21
281.2
Weekly (Wednesday) levels
May 29
1,088.4
209.7
149.9
59.8
593.8
314.8
279.0
281.1
3.9
June 5
1,064.3
213.3
154.9
58.4
569.7
301.6
268.1
277.4
3.9
June 12
1,063.9
215.4
157.3
58.1
568.2
302.7
265.5
276.5
3.9
June 19
1,071.9
222.6
166.7
55.9
571.1
304.5
266.6
274.4
3.9
June 26
1,048.1
211.4
157.1
54.3
563.9
298.1
265.7
268.8
3.9
http://www.federalreserve.gov/releases/cp/ 6/27/2013 11
Printer Version - Board of Governors of the Federal Reserve System Page 3 of 3
Return to top
http://www.federalreserve.gov/releases/ep/ 6/27/2013 12
POOLED MONEY INVESTMENT ACCOUNT
Summary of Investment Data
A Comparison of May 2013 with May 2012
(DOLLARS IN THOUSANDS)
May 2013 May 2012 Change
Average Daily Portfolio
69,"5,667
64,079,655
+5,366,012
Accrued Earnings
14,451
19,727
-5,276
Effective Yield (%)
0.245
0.363
-0.118
Average Life -Month End (in Days)
249
224
+25
Total Security Transactions
Amount
23,859,192
18,072,395
+5,786,797
Number
477
364
+113
Total Time Deposit Transactions
Amount
1,933,480
1,666,480
+267,000
Number
96
104
-8
Average Workday Investment Activity
1,172,394
897,222
+275,172
Prescribed Demand Account Balances
For Services ($)
1,730,244
1,927,915
-197,671
1
13
BILL LOCKYER
TREASURER
STATE OF CALIFORNIA
Investment Division Selected Investment Data
Analysis of the Pooled Money Investment Account Portfolio
(DOLLARS IN THOUSANDS)
May 31, 2013
DIFFERENCE IN
PERCENT
PERCENT OF
LF-
PORTFOLIO FROM
TYPE OF SECURITY
AMOUNT W
PORTFOLIO
PRIOR MONTH
Government
Bills
20,069,020
29.57
-0.94
Bonds
0
0.00
0
Notes
17,565,658
25.88
+0.57
Strips
0
0.00
0
Total Government
37,634,678
55.45
-0.37
Federal Agency Debentures
2,297,319
3.39
+0.43
Certificates of Deposit
10,300,061
15.17
+0.80
Bank Notes
0
0.00
0
Bankers' Acceptances
0
0.00
0
Repurchases
0
0.00
0
Federal Agency Discount Notes
7,542,580
11.11
+0.54
Time Deposits
4,421,640
6.51
+0.31
GNMAs
0
0.00
0
Commercial Paper
4,748,726
7.00
-1.83
FHLMC/Remics
205,011
0.30
0
Corporate Bonds
0
0.00
0
AB 55 Loans
280,609
0.41
+0.02
GF Loans
0
0.00
0
NOW Accounts
0
0.00
0
Other
450,069
0.66
+0.10
Reversed Repurchases
0
0.00
0
Total (All Types)
67,880,693
100.00
INVESTMENT ACTIVITY
May 2013
April
2013
NUMBER
AMOUNT ($1
NUMBER
AMOUNT
Pooled Money
477
23,859,192
570
28,649,345
Other
11
707,846
18
1,273,876
Time Deposits
96
1,933,480
102
2,732,800
Total
584
26,500,517
690
32,556,021
PMIA Monthly Average Effective Yield
0.245
0.264
Year to Date Yield Last Day of Month (%)
0.314
0.32�
2
14
Pooled Money Investment Account
Portfolio Composition
$67.9 Billion
Tin
CDs/BNs
15.17%
Ag(
15
05/31/13
Loans
0.41%
Commercial Paper
7.00%
Mortgages
0.30%
3
Treasuries
55.45%
i P1
Bill Lockyer, State Treasurer
Inside the State Treasurer's Office
Local Agency Investment Fund (LAIF)
LAW CONFERENCE INFORMATION
PMIA Performance Report
Date
Daily
Yield*
Quarter to
Date Yield
Average
Maturity
(in days)
7/2/2013
0.26
0.26
297
7/3/20113
0.26
0.26
295
7/4/2013
0.26
0.26
295
7/512013
0.26
0.26
293
7/6/2013
0.26
0.26
293
7/7/2013
0.26
0.26
293
7/8/2013
0.26
0.26
292
7/9/2013
0.26
0.26
294
7/10/2013
0.26
0.26
295
7/11/2013
0.26
0.26
293
7/12/2013
0.27
0.26
297
7/13/2013
0.27
0.26
297
7/14/2013
1 0.271
0.261
297
7/15/2013
1 0.271
0.261
2951
*Daily yield does not reflect capital gains or losses
Time
7
CDs/BNs
15.76%
Agenc
7.551
1 11
LAIF Performance Report
Quarter ending 06/30/2013
Apportionment Rate:
Earnings Ratio:
Fair Value Factor:
Daily:
Quarter To Date:
Average Life:
0.24%
00000667321954799
1.000273207
0.25%
0.25%
278
PMIA Average Monthly Effective Yields
JUNE 2013 0.244%
MAY 2013 0.245%
APRIL 2013 0.264%
Pooled Money Investment Account
Portfolio Composition
$58.8 Billion
06/30/13
Loans
0.49%
Commercial Paper
7.23%
0.33%
Treasuries
61.03%
16
Recent Bill Auction Results Page 1 of I
TreasuryDirect
Home , ln1tltutlQnaj , Announcements.
Data
9L Res&ILU � Latest ALICtlon Data
Recent 8111 Audion Results
Recent Bill Auction Results
Security
I- .
Maturity
Dls�ount
Inv ment
Price
To. .
D=
Data
Rat. %
Rat. N.
Per $100
CUSIP
4-WEEK
07-25-2023
08-22-2013
0.020
0.020
99,998444
9127957E5
I 3-WEEK
07-25-2013
10-24-2013
0.035
0.035
99.991153
912796DG3
26- WEEK
07-25-2013
01-23-2014
0,070
0.072
99.964611
912796DVO
52-WEEK
07-25-2013
07-24-2014
0.115
0,117
99.883722
912796BTS
4-WEEK
07_i -2013
08-15-2013
0.020
0.020
99.999444
912796AX7
13-WEEK
07_1: -2013
10-17-2013
0.040
0041
99.98N69
912795ZO7
26-WEEK
0_1_18_2013
01-16-2014
0.070
0.071
99,964611
912796BU2
4-WEEK
07-JI-2013
08-08-2013
0.025
0.025
99.998056
912796AV1
13-WEEK
07-11-2013
10-10-2013
0.045
0.046
99.988625
912796BFS
26-WEEK
07-11-2013
01-09-2014
0.075
0.076
99.962083
912796AQZ
4-WEEK
07-05-2013
08-01-2013
0.015
0,015
99.996875
912796AU3
13-WEEK
07_')5�2013
10-03-2013
0.050
0.051
99.987500
912796BDO
26-WEEK
07 .05-201 3
Di-02-2014
0.085
0.086
99,957264
912796857
4-WEEK
06-27-20�0
07-25-2013
0.030
0.030
99.997667
9127957A3
13-WEEK
06 .27_20 3
09-26-201 3
0.060
0.061
99994633
912796OC2
26-WEEK
06-27_2013
12-26-2013
0.105
0.107
99.946917
91279613119
52-WEEK
06-27-2013
06-26-2014
0.160
0.162
99.838222
912796BP3
4-WEEK
06-20 .2013
07-18-2013
0.045
0.046
99.996500
912796AT6
13-WEEK
06-20 . 2013
09. J'J-201 3
0.045
0.046
99.9N625
9127957KI
26-WEEK
06-20_2013
12-ig-2013
0.075
0.076
99.962083
912796BQI
4-WEEK
(16-13 _201 3
07- 1 1-2.013
0.040
Ok4l
99,996889
91279W8
13-WEEK
06-13-2013
09-12-2013
0.045
0.046
99.9811625
91279615114
26-WEEK
06-13-2013
12- 12-2013
0.080
0.061
99.959556
912796AK5
4-WEEK
06-06-2013
07-05-201 3
0.040
0.041
99.996776
912796AN9
13-WEEK
06-06-2013
09' 05-2013
0045
0.046
99.988625
912796AZ2
26-WEEK
06-M-21113
12-05-2013
O.Oao
0.081
99.959556
912796BN8
13-DAY
06-04-20 13
06-17-2013
0.050
0.051
99-998194
91279GES4
4-WEEK
05-30-20 13
06-27-2013
0.030
0,030
99997667
9127956WG
13-WEEK
05-30-2013
08- 29-2013
0.045
O.G46
99 9BM25
912796AYS
26-WEEK
05-30-201 3
11-29-2013
0.080
01081
99,959333
912796BMD
52-WEEK
05-30-2013
01-N-1014
11.131
0.137
99.863500
912796BJ7
4-WEEK
111-23.2ol 3
06-20-201 3
0.035
0.035
99.997278
912796AMI
13-WEEK
05-23-2013
08' 22�2013
0.045
0.046
99.989625
9127957125
26-WEEK
05-23-201 3
11-21-2013
0.085
0086
99.957028
912796131-2
4-WEEK
05-16-2013
06-13-2013
0.010
0010
99999222
912796AL3
13-WEEK
05-36-2013
08-1 5-2013
0.045
0.046
99,988625
912796AX7
26-W".K
05-16-20 .13
11-14-2013
0.080
0.081
99.959556
912796AE9
4-WEEK
05-09-2013
06-06-2013
0.000
0.000
100.000000
912796A)B
13-WEEK
05-09-2013
08-08-2013
0,040
0.041
99989889
91279GAVI
26-WEEK
05-09-2013
11�07-201 3
0.075
0.076
99.962083
912796BK4
Effective with the 11/2/98 auction, all bills are auctioned using the slngle-priced method.
FroQdpni o I Law & Guldancel aLacy SJqgAL(j2UC,-�l I AccessIbil Ue I
U.S. Depijament t)v the'rrea:urv, Bureau ol' the Public Debt
http://www.treasurydirect.gov/RI/OFBills 7/24/2013 17
Recent Note, Bond, and TIPS Auction Results Page I of I
TreasuryDirect
tLiM � Institutional , n Dull (p.0L9a)ftKgL Lk Relul > La �,i thq�DaLa � Recent Note, Bond, and TIPS Auctloii Results
Recent Note, Bond, and TIPS Auction Results
S."Viky,
T.'M
TY0.
1..u.
Maturity
I.t.,..t
Yield
Prim
Custp
out.
Date
Rate %
%
P er $100
2-YEAR
NOTE
07-31-2013
07-31-20J 5
0.250
0,336
99,828720
912829VN7
5-YEAR
NOTE
07-31-2013
07-31-2016
1.375
1.410
99.831599
912828VQO
10-YEAR
TIPS
07-31-2013
07-15-2023
0.375
0.384
100.004056
912826VM9
3-YEAR
NOTE
07_ 15-2013
07.15�2016
0.625
0.719
99.721515
912828VL1
9-YEAR
10-MONTH
NOTE
07- 15-2013
OS-15-2023
1750
2.670
92.085831
912828VB3
29-YEAR
10-MONTH
BOND
07- 1 5-2013
05-15-2D43
2675
3.660
912BIORBG
2 Y -AR
- F
NOTE
0 7 01-2 13
D6 -30-2015
0 )7 5
04 30
:5.:14558
9. 90734
912828VHO
5-YEAR
NOIE
07:01-20013
06-30-2018
1.375
1484
99. 4 76843
91282OVK3
7_YEAR
NOTE
07-01-2013
06-30-2020
1.875
1,932
99.620563
91262OV16
-29 YEAR
8-MONTH
,
TIPj
06-28-2013
02-15-204 3
0.625
1.420
61.754227
912810RA8
3-YEAR
NOTE
06-17-201 3
06� 15-2016
0.500
0.581
99.759878
912828VG2
9-YEAR
11-MONTH
NOTE
06-17-2013
05-15-2023
1.750
2.209
95.933134
912628VB3
29-YEAR
11-MONTH
BOND
06-17-2013
05-15-2043
2,875
3.355
90.978135
91281ORB6
2-YFAR
NorE
05-31-2013
05-31-2015
0.250
0.283
99.934233
912628VD9
5_YEAR
NOTE
05-31-2013
05-31-2018
1,000
J.045
99.781333
912828VE7
7_YEAR
NOTE
05-31-2013
05-31-2020
1.375
1.496
99.198680
912828VF4
9_YEAR
8-61ONTH
TIPS
05-31-2013
01-15-2023
0.125
-0.225
1D4.272695
912828UH1
3 YEAR
NOTE
05-15-2013
05 15,2016
0.250
0.354
99.689924
912828VCI
10-YEAR
NOTE
05-15-2013
05 15-2023
1.750
1.810
99.453420
912828VB3
30-YEAR
BOND
05- 15-20 1 3
05- 1 5-20-43
2.875
2.980
97927211
91281ORD6
2_YEAR
NOTE
04-30-2013
D4-30-2015
OJ 25
0,233
99.784628
912828UY4
5_YEAR
TIPS
04-30-2013
04-15-2018
0.125
-1,311
107.820710
912828UX6
5 YEAR
NOTE
04-30-2013
04-30-2016
0.625
0.710
99.583182
912828UZI
7_YEAR
NOTE
04-30-2013
04-30-2020
1.125
1.155
99.798822
912829VA5
3 _YEAR
NOTE
04-15-2013
D4.15-20:16
0.250
0.342
99.725644
912828UWB
9_YEAR
to- MONTH
NOTE
04-15-2013
02-15-2023
2.000
1.795
101.839163
912828UN8
29-YEAR
10-MONTH
BOND
04-15-2013
02-15-2043
3.125
2.998
102.487803
912810QZ4
2 YEAR
NOTE
04-01-2013
03-31-2015
0.250
0,255
99.990045
912828UT5
S: YEAR
NOTE
04-01-2 013
03-31-2018
0.750
0.760
99,951048
912828UU2
7_YEAR
NOTE
04-01-2013
03-31-2020
1.125
1.248
99.178276
9128281JVO
9-YEAR
10-MONTFI
TIPS
03-28-20 13
0 1-15-2023
0. 1 25
-0.602
107.058044
912828UH1
3-YEAR
NOTE
03:15�20 13
03-15-2016
0.375
0.411
99,892773
912828US7
9-YEAR
11-MONTH
NOTE
03 1 5 2o 13
02:115-2023
2.000
2.029
99.739223
912828UN8
29-YEAR
11-MONTH
BOND
03_ 15-2013
02 5-2D43
3.125
3.248
97.653846
912810QZ4
2,_YEAR
NOTE
02-28-2013
02-28-2015
0.250
0.257
99.9860,45
912628UP3
5_YEAR
NOTE
02-28-2013
02-28-2018
0.750
0.777
99,867840
912828UR9
7_Y -AR
F
NOTE
02 2 :201,3
02-29-2020
1.250
1.260
99.933199
91282BUQI
130-YEAR
TIP,
02:286 20 3
02-15-2043
0.625
0.639
99.494180
912810RAS
3_YEAR
NOTE
02-15-2013
02-15-2016
0.375
0.411
99892773
912828UMO
10_YEAR
N OTE
02-15-2013
02-15-2023
2.000
2.046
99.585912
912828UNS
* Denotes TIPS bond; all other TIPS without asterisks are notes
E' I L9U I Ia!f - NaticeslWebsiL lei fns &Condition I PAL§-Qkla1l[Y
U.S. Dewirtment al' the Tremury. Bureau of the Public Debt
18
http://www.treasurydirect.gov/RI/OFNtebnd 7/24/2013
Printer Version - Board of Governors of the Federal Reserve System Page 1 of 4
Selected Interest Rates (Daily) - H. 15
Current Release Release Dates Daily Update Historical Data About Announcements
Daily Update
Release Date:.July 24,2013
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.
July 24, 2013
Selected Interest Rates
Yields in percent per annum-
Instruments
Federal funds (effective) 1 2 3
Commercial Paper 4
Nonfinancial
2013
Jul
22
2013
Jul
23
0.09
0.09
1-month
0.05
0.04
2-month
0.09
0.06
3-month
0.11
0.11
Financial
1-month
2-month
3-month
CDs (secondary market)
0.05
0.14
0.07
0.09
0.13
n.a.
0.13
1-month
n. a.
3-month
n. a.
n.a
6-month
n.a.
n. a.
Eurodollar deposits (London) 3 4
0.22
0.22
1-month
3-month
6-month
Bank prime loan 239
. ....... . . ..... .
0.28
0.42
0.28
0.42
3.25
3.25
http://www.federalreserve.gov/releases/Hl 5/update/ 7/24/2013 19
Printer Version - Board of Governors of the Federal Reserve System Page 2 of 4
Discount window primary credit - 2 10
U.S. government securities
Treasury bills (secondary market) 34
4-week
0.75
0.75
0101
0.04
0.07
0.02
0.02
0.07
3-month
6-month
1-year
0.09
0.12
Treasury constant maturities
Nominal
1-month
3-month
6-month
1-year
2-year
3-year
5-year
0.01
0.02
0.04
0.02
0.07
0.07
0.10
0.12
0.32
0.33
0.59
0.60
1.32
1.90
1.33
1.92
7-year
10-year
20-year
2.50
2.53
3.25
3.27
30-year
3.55
3.58
Inflation indexed 12
5-year
-0.59
-0.57
7-year
-0.13
-0.11
10-year
0.28
0.33
20-year
0.94
1.00
30-year
1.25
1.30
Inflation -indexed long-term average �3
0.88
0.92
Interest rate swaps 14
........... ...
1-year
2-year
3-year
4-year
5-year
0.34
0.34
0.48
0.49
0.76
0.76
1.12
1.13
1.49
2.10
1.50
2.12
7-year
10-year
2.69
2.71
http://www.federalreserve.gov/releases/Hl 5/update/ 7/24/2013 20
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30-year
Corporate bonds
Moody's seasoned
Aaa :15
l3aa
State & local bonds 16
Conventional mortgages 1�7
n.a. Not available.
Footnotes
1. The daily effective federal funds rate is a weighted average of rates on brokered trades.
2. Weekly figures are averages of 7 calendar days ending on Wednesday of the current week; monthly figures include each calendar
day in the month.
3. Annualized using a 360-day year or bank interest.
4. On a discount basis.
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.federairescrvc.p,ov/releases/Cl)�/).
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. An average of dealer bid rates for certificates of deposit (CDs) that are actively traded in the secondary market and are issued by
top -tier banks. Bids are generally for CDs issued in denominations of $1,000,000 or greater. Responses are not reported when the
number of respondents is too few to be representative.
8. Source: Bloomberg and CTRI3 ICAP Fixed Income & Money Market Products.
9. Rate posted by a majority of top 25 (by assets in domestic offices) insured U.S.-chattered commercial banks. Prime is one of several
base rates used by banks to price short-term business loans.
10. 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 w�vw.fetieriii-eserve.g(iv/boii-dcit)cs/pres.q/bci,e�,,/2002/200210312/(Iel��itill.litni. 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.federaireserve.gov/relei-ses/h 1. 5/data.htm.
http://www.federalreserve.gov/releases/Hl 5/update/ 7/24/2013 21
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11. 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 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 W%� \�. I Source: U.S.
Treasury.
12. Yields on Treasury inflation protected securities (TIPS) adjusted to constant maturities. Source: U.S. Treasury. Additional
information on both nominal and inflation -indexed yields may be found at www.treasury.gov/resource-center/data-chart-
center/interest-rates/.
13. Based on the unweighted average bid yields for all TIPS with remaining terms to maturity of more than 10 years.
14. International Swaps and Derivatives Association (ISDAO) 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 ICAP plc and published on Thomson
Reuters Page ISDAFIX01. ISDAFIX is a registered service mark of ISDA& Source: Thomson Reuters.
15. Moody's Aaa rates through December 6, 200 1, are averages of Aaa utility and Aaa industrial bond rates. As of December 7, 200 1,
these rates are averages of Aaa industrial bonds only.
16. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Thursday quotations.
17. Contract interest rates on commitments for 30-year fixed-rate first mortgages. Source: Primary Mortgage Market Surveye 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).
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 for Treasury inflation protected securities in the over-the-counter market. The infl ati on- indexed constant maturity
yields are read from this yield curve at fixed maturities, currently 5, 7, 10, 20, and 30 years.
22
http://www.federalreserve.gov/releases/Hl 5/update/ 7/24/2013
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Commercial Paper
Summary Rates Volurne Statistics Outstanding Year-end Maturity Distribution About Announcements Technical
Q&As
Commercial Paper Rates and Outstanding Summary Derived from data supplied by The Depository Trust & Clearing
Data as of July 23, 2013
Posted July 24, 2013
The commercial paper release will usually be posted daily at 9:45 a.m. However, the Federal Reserve Board makes no
guarantee regarding the timing of the daily posting. This policy is subject to change at any time without notice.
Rates
Period
AA nonfinancial
1-
day
0.22
0.22
0.22
0.22
0.22
A2/P2 nonfinancial
1-
day
7-
day
is-
day
30-
day
60-
day
90-
day
7-
day
is-
day
30-
day
60-
day
90-
day
7-
July 17
0.04
0.08
0.06
0.07
0.09
0.12
0.26
0.25
0.33
0.32
0.31
July 18
0.04
0.08
0.06
0.05
0.06
0.11
0.24
0.25
0.28
0.34
n. a.
July 19
0.05
0.05
0.05
0.04
0.07
0.10
0.24
0.26
0.31
0.35
n. a.
July 22
0.04
0.05
0.05
1 0.05
0.09
0.11
0.25
0.28
0.29
n. a.
n. a.
July 23
0.04
0.051
0.04
1 0,06]
0.11
1 0 1 24
0.25
0.27
n. a.
n.a,
Note: n.a. indicates that trade data was insufficient to support calculation of the particular rate.
Period
AA financial
1-
day
7-
day
is-
day
30-
day
60-
day
90-
day
July 17
0.06
0.07
0.06
0.06,
0.10
0.13
July IS
0.06
0.08
1 0.06
0.06
0.06
0.11
July 19
1 0.06
n. a.
0.07
0.07
0.08
0.12
July 22
0.05
n.a,
0.05
0.05
0.07
0.13
July 23
0.06
n. a.
0.05
0.14
0.09
0.13]
AA asset -backed
1-
day
7-
day
is-
day
30-
day
60-
day
90
day
0.12
0.10
0.18
0.17
0.19
0.22
0.11
0.13
0.14
0.17
0.17
0.18
0.12
0.14
0.15
0.15
1 0.18
0.20
0.11
0.17
0.18
0.16
0.19
0.20
0.11
1 0.251
0.17
0.15
0.18,
0. �2 3]
Note: n.a. indicates that trade data was insufficient to support calculation of the particular rate.
Outstanding Levels
Seasonally adjusted
23
http://www.federalreserve.gov/releases/ep/ 7/24/2013
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Billions of dollars
Period
Total
Nonfinancial
Financial
Asset-
backed
Other
Total
I Domestic
Foreign
Total
Domestic
Foreign
Monthly -end levels
2013-Feb.
1,044.6
220.9
173.8
47.1
523.3
310.5
212.8
299.6
.9
Mar.
998.5
201.6
163.8
37.8
503.2
289.2
214.0
292.3
1.3
Apr.
993.7
180.8
134.4
46.4
529.5
299.8
229.7
280.5
2.9
May
1,020.8
1 201.4
1 148.5
1 52.9
1 538.1
299.9
238.2
1 277.4
1 3.9
June
- 997.9__�
206.31
159.11
47.21
512.0
277.3
234.7
275.7
=3.8
Weekly (Wednesday) levels
June 19
1,037.8
222.4
172.0
50.3
529.7
288.0
241.6
281.9
3.9
June 26
1,039.8
231.4
181.5
49.9
520.4
279.9
240.5
284.1
3.9
July 3
1,035.7
229.9
181.5
48.4
519.5
283.6
235.8
281.5
4.9
July 10
990.5
214.9
166.7
48.2
491.8
255.7
235.9
279.0
4.9
July 17
999.2
213.9
157.2
56.7
1 504.9
1 266.4
238.3
275.5
4.9
Not seasonally adjusted
Billions of dollars
Period
Total
Nonfinancial
Financial
Asset-
backed
Other
T07tal
Doi
eign
Total
FDomestic
Foreign
Monthly -end levels
2013-Feb. 1,051.7 214.8 172.3 42.5 537.3 303.3 234.0 298.7 .9
Mar.
1,001.2
174.2
139.8
34.4
529.6
290.5
239.1
296.0
1.4
Apr.
1,046.8
187.0
137.8
49.1
568.3
306.3
262.0
288.6
2.9
a
May
y
1 1,065.7
1 212.3
152.6
59.7
1 568.5
1 299.2
269.2
281.2
3.9
June
1., 990.61
198.31
147.0
51.21
521.21
278.81
242.21
267.3
3.8
Weekly (Wednesday) levels
LM
June 19
June 26
1,071.9
222.6
166.7
157.1
55.9
54.3
571.1
304.5
266.6
274.4
3.9
1,048.1
211.4
563.9
298.1
265.7
268.8
3.9
3 1
July 3
1,024.7
209.5
157.3
52.2
542.5
289.8
252.6
267.8
4.8
July 10
1,033.9
215.9
159.9
56.0
546.3
289.01
257.2
266.9
4.8
July 17
1,038.8
219.1
161.41
57.6-1
550.91
292.1
� 258.6
264.0
4.8
Return to to
24
http://www.federalreserve.gov/releases/cp/ 7/24/2013
POOLED MONEY INVESTMENT ACCOUNT
Summary of Investment Data
A Comparison of June 2013 with June 2012
(DOLLARS IN THOUSANDS)
IJune 2013 IF June 2012 1 ange
Average Daily Portfolio
65,386,769
62,697,616
+2,789,154
Accrued Earnings
13,105
18,367
-5,262
Effective Yield (%)
0.244
0.358
-0.114
Average Life -Month End (in Days)
278
270
+8
Total Security Transactions
Amount
28,120,766
31,253,724
-3,132,958
Number
564
630
-66
Total Time Deposit Transactions
Amount
1,892,000
2,092,000
-200,000
Number
70
103
-33
Average Workday Investment Activity
1,500,638
1,587,892
-87,264
Prescribed Demand Account Balances
For Services ($)
2,167,252
2,189,973
-22,721
1
25
BILL LOCKYER
TREASURER
STATE OF CALIFORNIA
Investment Division Selected Investment Data
Analysis of the Pooled Money Investment Account Portfolio
(DOLLARS IN THOUSANDS)
TYPE OF SECURITY
Government
Bills
Bonds
Notes
Strips
Total Government
Federal Agency Debentures
Certificates of Deposit
Bank Notes
Bankers' Acceptances
Repurchases
Federal Agency Discount Notes
Time Deposits
GNMAs
Commercial Paper
FHLMC/Remics
Corporate Bonds
AB 56 Loans
GF Loans
NOW Accounts
Other
Reversed Repurchases
Total (All Types)
June 30, 2013
PERCENT
2F
AMOUNT PORTFOLIO
18,019,781
0
17,866,552
1,789,879
9,270,129
0
0
0
2,248,563
4,474,640
0
4,253,843
192,641
0
287,302
0
0
399,982
INVESTMENT ACTIVITY
June 2013
NUMBER AMOUNT
Pooled Money 564 28,120,766
Other 19 343,182
Time Deposits 70 1,892,000
Total 653 30,355,948
PMIA Monthly Average Effective Yield 0.244
Year to Date Yield Last Day of Month (%) 0.307
2
DIFFERENCE IN
PERCENT OF
PORTFOLIO FROM
PRIOR MONTH
30.65
+1.08
0.00
0
30.38
+4.50
0.00
0
61.03
+5.58
3.05
-0.34
15.76
+0.59
0.00
0
0.00
0
0.00
0
3.82
-7.29
7.61
+1.10
0.00
0
7.23
+0.23
0.33
+0.03
0.00
0
0.49
+0.08
0.00
0
0.00
0
0.68
+0.02
0.00
0
100.00
May 2013
NUMBER
AMOUNT ffi
477
23,859,192
11
707,845
96
1,933,480
584
26,500,517
0.245
0.314
26
Pooled Money Investment Account
Portfolio Composition
$58.8 Billion
06/30/13
Commercial Paper
7.23%
Timi
CDs/l3Ns
15.76%
Agen
7.5,1
Loans
0.49%
Treasuries
61.03%
27
INVESTMENT ADVISORY BOARD MEETING CORRESPONDENCE AND
WRITTEN MATERIAL
ITEM 2
Meeting Date: August 14, 2013
ITFM TITI F
Distribution of Investment Policy
for Fiscal Year 2013/2014
BACKGROUND:
On June 18, 2013 the City Council approved the Investment Policy for Fiscal Year
2013/2014, which is attached.
RECOMMENDATION:
Receive and File.
Robbeyn tird, Finance Director
(0
(V (2a ig t(V
GEM of the DESERT
CITY OF LA QUINTA
Investment Policy
Fiscal Year 2013/2014
Table of Contents
Section
i9pi.9
Page
Executive Summary
2
1
General Purpose
4
11
Investment Policy
4
III
Scope
4
IV
Objectives
4
11� Safety of Principal
11. Provide Liquidity
00� Yield A Risk -Based Market Rate Of Return
V
Maximum Maturities
6
VI
Prudence
6
Vil
Authority
7
Vill
Ethics and Conflicts of Interest
7
IX
Authorized Financial Dealers and Institutions
7
00� Broker/Dealers
01. Financial Institutions
X
Permissible Deposits and Investments
8
X1
Investment Pools
13
x1i
Payment and Custody
13
Xill
Interest Earning Distribution Policy
13
XIV
Internal Controls and Independent Auditors
14
XV
Reporting Standards
15
XVI
Financial Assets and Investment Activity Not Subject to this Policy
15
XVII
Investment of Bond Proceeds
16
XIII
Investment Advisory Board - City of La Quinta
16
XIX
Investment Policy Adoption
17
Ap endices Topic
Page
A Summary of Permissible Deposits and Investments 18
B City of La Quinta Municipal Code Ordinance 2.70 - Investment Advisory Board 20
C City of La Quinta Municipal Code Ordinance 3.08 - Investment of Moneys and Funds2l
D Segregation of Major Investment Responsibilities 23
E Listing of Approved Financial Institutions 24
F Broker/Dealer Questionnaire and Certification 25
G Request for Proposal for Professional Portfolio Management Firm 29
H Permissible Investment Chart — Professional Portfolio Management Firm 35
1 Investment Management Process and Risk 36
J Glossary 37
1
CITY OF LA QUINTA
Investment Policy
Fiscal Year 2013/2014
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, Successor Agency to the City of La Quinta
Redevelopment Agency, and the City of La Quinta Financing and Housing Authorities
(the"City").
It is the City's policy to deposit and invest public funds in a manner that shall provide:
0� Safety of principal;
lo- Liquidity to meet all of the City's obligations and requirements that may be reasonably
anticipated; and
0,� 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:
ll� Safeguard assets;
1p- Orderly and efficiently conduct its business, including adherence to all City management
policies;
0- Prevent or detect errors and fraud;
0,� Accurately complete all accounting records; and
0,� Timely prepare all 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, 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
K
and/or dollar limitations and, where applicable, through the bid process requirements. Permissible
deposits and investments include, in general:
10- FDIC -Insured Checking, Savings, and Sweep Accounts;
0,� Collateralized Bank Deposits;
0,- Certificates of Deposit;
0,� Negotiable Certificates of Deposit;
0- U.S. Government Agency Securities and Federal Government Securities;
0,- Prime Commercial Paper;
0- Local Agency Investment Fund (LAIF);
10- Money Market Mutual Funds;
0- Corporate Notes; and
0- 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 notes and bonds maturing between three and five years. Additionally, funds may be
invested for up to ten (10) years as further discussed in Section V.
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 Bill, six-month Bill, and the one
and two-year U.S. Treasury Note, comparable -period rates for commercial paper, and the yield
for the State Treasurer's Local Agency Investment Fund (LAIF).
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.
T�444Q"
P.O. Box 1504
LA QUINTA, CALIFORNIA 92247-1504
78-495 CALLE TAMPICO (7 6 0) 7 7 7 - 7 0 0 0
LA QUINTA, CALIFORNIA 92253 FAX (760) 777-7101
City of La Quinta
Statement of Investment Policy
July 1, 2013 through June 30, 2014
Adopted by the City Council on
I GENERAL PURPOSE
The general purpose of this docurnent is to provide the rules and standards that must be followed
in administering the City of La Quinta's deposits and investments.
11 INVESTMENT POLICY
It is the policy of the City of La Quinta to deposit and invest public funds in a manner that shall
provide:
0- Safety of principal;
0- Liquidity to rneet all of the City's obligations and requirements that may be reasonably
anticipated; and
0- 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 tile 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, Successor Agency to the City of La Quinta Redevelopment
Agency and the City of La Quinta Financing and Housing Authorities (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:
0- General
0, Special Revenue
0- Capital Projects
I- Debt Service
0- Enterprise
Internal Service
Trust and Agency
0, 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,
ff]
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:
0,� Limiting investments to investment grade securities as permitted in Section X;
O� 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:
0- Structuring the investment portfolio so that securities matu�e to meet cash
requirements for ongoing operations, thereby avoiding the need to sell securities
on the open market prior to maturity; and
0,- Investing operating funds primarily in shorter -term securities.
C. Liquicrity 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 1.
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:
00. A security with declining credit quality can be sold early to minimize loss of
principal;
No. Unanticipated liquidity needs of the portfolio require that one or more securities be
sold.
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 reports will display the rates of
return on the three-month Bill, six-month Bill, and one and two-year U.S. Treasury Note,
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 ten
years. For FY2013/2014, the amount of such funds is projected to be $40 million. Funds up to
that amount may be invested in U.S.Treasury notes and bonds, Local Agency Obligations, and
California Local Agency Obligations maturing between 3 and 10 years. For all other funds,
investments are limited to five years maximum maturity.
VII 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."
R
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 his/her designee
shall acknowledge in writing all purchases and sales of investments prior to their execution by the
City Treasurer.
Vill ETHICS AND CONFLICTS OF INTEREST
The City Manager, 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, 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.
1 Broker/Dealers who desire to become bidders for direct investment transactions must
supply the City with the following:
0. Current audited financial statements;
00. Proof of Financial Industry Regulatory Authority (FINRA) Certification;
00. Trading resolution;
01. Resume of Financial broker; and
0. 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.
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:
101 Financial Industry Regulatory Authority (FINRA) Public Disclosure Report File (1-
800-289-9999).
10. 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)
Checking & Savings Accounts FDIC Insured & Sweep Accounts
Interest bearing active bank deposits — non FDIC insured collateralized by
110% of eligible securities
Maximum Maximum Restrictions
Allocation Maturity
Current Sweep Account:
85% Portfolio On Demand U.S. Treasuries
and/or GSE's
6o% P Current / $40 million
On Demand perbank
Permissible Investments and Limitations
(See Appendix A for Additional Information)
Certificates of Deposit - FDIC Insured
Negotiable Certificates of Deposit — FDIC Insured
U.S. Treasury Bills, Notes and Bonds, and Government National
Mortgage Association (GNMA) Securities
Local Agency Bonds/California Local Agency Obligations
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)
- Federal Home Loan Bank Notes & Bonds (FHLB)
- Federal Farm Credit Bank (FFCB)
- Federal Home Loan Mortgage Corporation (FHLMC)
Prime Commercial Paper including Temporary Liquidity Guarantee
Program (TLGP)
Local Agency Investment Fund (LAIF)
Money market mutual funds regulated by the SEC that consist only of US
Treasury Securities or GSE's and maintain a par value of $1 per share
Corporate Notes
Corporate Notes - Temporary Liquidity Guarantee Program (TLGP)
Professionally Managed Account
Maximum Maximum Restrictions
Allocation Maturity I
— $250,000,
60% Portfolio
5 Years
including interest
per institution
$250,000
30% Portfolio
5 Years
including interest
per institution
$30,000,000
100% Portfolio
5 Years
maturing 3-10
Yrs.
$30,000,000
maturing 3-10
100% Portfolio
10 Years
Yrs.
Long term
"A, A2, A" or
better
$20,000,000
5 Years
$25,000,000
5 Years
$30,000,000
5 Years
$20,000,000
5 years
90 Days
$5,000,000 per
15% Portfolio
issuer maximum.
30% Portfolio Current / $50 million
On Demand per account.
200Y. Portfolio
Current /
On Demand
Maintain $1 per
share par value
$5,000,000 max
10%
3 Years
per issuer AA
rated or better
$10,000,000 max
20%
3 Years
per issuer, AA
rated or better.
Requires
10%
3 Years
City Council -
Approved RFP
Long -Term Scale
S&P A 1 AAA, AA +, AA, AA-, A+, A
Moody's P1 Aaa, Aal, Aa2, Aa3, Al, A2
Fitch AAA, AA +, AA, AA-, A+, A
1 Checkinq, 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.
In addition, the Treasurer may invest in an interest bearing active deposit account as
approved in Government Code Section 53632. The deposit account must be collateralized
with securities that are in accordance with Government Code Sections 53632.5(c). In
addition the market value of the collateralized securities must be maintained in accordance
9
with 53652 (a), and be held by a custodian in accordance with the requirements of
Government Code Section 53656. The proposition of the City's share of the deposit
account shall be determined in accordance with Government Code Section 53658.
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 110% 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__Qep si s 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.
3. Negotiable Certificates - of ' _Pe�sit �-issued by a nationally or state -chartered bank, a
savings association or a federal association (as defined by Section 5 102 of the Financial
Code), a state or federal credit union, or by a federally- or state- licensed branch of a
foreign bank. No more than 30% of the City's portfolio may be invested in negotiable
CDs.
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 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).
10
The City's Investment Policy allows investment only in securities of FNMA, FHLMC, FHLB
and FFCB. For Fiscal Year 2013/2014, 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.
Prime Commercial Pape - 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 (Al or
P1) 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 which allows 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 LAIF procedures, local government agencies are each
authorized to invest a maximum of $50 million per account in this investment program
administered by the California State Treasurer.
The City Treasurer may not invest more than $50 million per account in LAIF.
The City's investment in LAIF 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 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 (1) 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
11
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:
00. Maturities shall not exceed three years from date of purchase;
10. Eligible notes shall be regularly quoted and traded in the marketplace;
No. Eligible notes shall be rated "AA" or better;
10. 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
00. 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:
(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; and
(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.
10. Local Agency Bonds and California Local Agency Obliqations — The City may invest in
California local agency obligations pursuant to 56301 (a) and 53301 (e). 53601 (a) pertains
to investing in bonds issued by a local agency, department, board, agency or authority of
12
the local agency. 53601 (e) pertains to investing in bonds and other defined indebtedness
of a local agency or department, board, agency or authority of the local agency within the
State of California.
The City's Investment Policy limits investments in Local Agency Bonds and California
Local Agency obligations to 30% of the portfolio with up to a ten year maximum maturity.
In addition, the Agency obligations must be invested in the long term rating of A, A2, A or
better by S&P, Moody's or Fitch.
In the case of an initial public offering, including refinancings, the Treasurer may purchase
directly from the Bond Underwriter. In the case of secondary issues, the Treasurer will
rely on the approved Broker/Dealers.
X1 INVESTMENT POOLS
There are three (3) types of investment pools:
0- State -run pools (e.g., LAIF);
10- Pools that are operated by a political subdivision where allowed by law and the political
subdivision is the trustee (e.g., County Pools); and
0, Pools that are operated for profit by third parties.
The City's Investment Policy permits investment only in pools authorized in Section X.
X111 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.
Pooled Investments - It is the general policy of the City to pool all available operating cash
of the City of La Quinta, Successor Agency to the City of La Quinta Redevelopment
Agency and La Quinta Financing and Housing Authorities 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.
13
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:
0,- Safeguard assets;
0- The orderly and efficient conduct of its business, including adherence to management
policies;
00- Prevention or detection of errors and fraud;
0, The accuracy and completeness of accounting records; and
0, 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
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.
14
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:
10. A certification by the City Treasurer;
01 A listing of purchases and sales/maturities of investments;
00. Cash and Investments categorized by authorized investments, except for LAIF
which will be provided quarterly and show yield and maturity;
0. Comparison of month end actual holdings to Investment Policy limitations;
00. Current year and prior year monthly history of cash and investments for trend
analysis;
No. Balance Sheet;
No. Distribution of cash and investment balances by fund;
01 A year to date historical cash flow analysis and projection for the next six months;
and
0. A two-year list of historical interest rates.
XVI FINANCIAL ASSETS AND INVESTMENT ACTIVITY NOT SUBJECT TO THIS POLICY
The City's Investment Policy does not apply to the following:
01. Cash and Investments raised from Conduit Debt Financing;
10. Funds held in trust in the City's name in pension or other post -retirement benefit
programs;
No. Cash and Investments held in lieu of retention by banks or other financial
institutions for construction projects;
00. Short or long term loans made to other entities by the City or Agency; and
15
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:
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.
REP
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.
17
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19
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.
Pkel
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 cancelled
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)
3.08.050 Reports.
21
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)
W
Appendix D
SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES
Function Responsible Parties
Develop and Recommend Modifications Investment Advisory Board
to City's Formal Investment Policy and City Treasurer
Review City's Investment Policy City Manager
and Recommend City Council Action and City Attorney
Adopt Formal Investment Policy City Council
Implement Formal Investment Policy City Treasurer
Review Financial Institutions & Select Investments City Treasurer
Acknowledge Investment Selections City Manager or his/her
designee
Execute Investment transactions City Treasurer or City Manager
Confirm Wires (if applicable) Accounting Manager or
Financial Services Assistant
Record Investment Transactions in City's Accounting Manager or
Accounting Records Financial Services Assistant
Investment Verification (match broker confirmation City Treasurer and Financial
to City investment records) Services Assistant
Reconcile Investment Records
to Accounting Records and Bank Statements Financial Services Assistant
Reconcile Investment Records
to Treasurers Report of Investments Accounting Manager
Security of Investments at City Accounting Manager or Senior
Secretary
Security of Investments outside City Third Party Custodian
Review Internal Control Procedures External Auditor
23
Appendix E
LISTING OF APPROVED FINANCIAL INSTITUTIONS
1. Banking Services Wells Fargo Bank, Government Services,
Los Angeles, CA (Banking Services)
Rabobank N.A., Government Banking
Group, Roseville, CA (Collateralized Bank
Deposits)
2. Custodian Services Bank of New York/Mellon
3. Deferred Compensation International City/County Management
Association Retirement Corporation
4. Broker/Dealer Services Banc of America Securities/Merrill Lynch
Morgan Stanley
CitiGroup
First Empire Securities
5. Government Pool State of California Local Agency
Investment Fund
City of La Quinta Account
6. Bond Trustees
1996 Lease Revenue Bonds — 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
2004 Local Agency Rev — US Bank
2011 RDA Project Area 2 — US Bank
2011 Fin Auth Housing 1 &2 — US Bank
Assessment Districts — US Bank
No Changes to this listing may be made without City Council approval
24
Appendix F
BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION
1 . Name of Firm:
2. Address:
3. Telephone: . . . ........
4. Broker's Representative to the City (attach resume):
Name:
Title: --
Telephone:
5. Manager/Partner-in-charge (attach resume):
Name:
Title:
Telephone:_
6. List all personnel who will be trading with or quoting securities to City employees (attach
resume)
Name:
Title:
Telephone:
7. 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 % Repos
% BA's % Reverse Repos
Commercial Paper % CMO's
CD's -% Derivatives
• Mutual Funds Stocks/Equities
• Agencies (specify): % Other (specify):
9. References -- Please identify your most directly comparable public sector clients in our
geographical area.
Entity Entity
25
Contact 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?
26
Latest Audit Report Date
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
If yes, explain primary and excess coverage and carriers.
What portfolio information, if any, do you require from your clients?_
17
No.
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:
0- Latest audited financial statements;
10- Samples of reports, transaction confirmations and any other research/publications the
City will receive;
10 Samples of research reports and/or publications that your firm regularly provides to
clients; and
10- Complete schedule of fees and charges for various transactions.
27
'CERTIFICATION'
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 Representative
Date Title
Sales Manager and/or Managing Partner*
Date Title
W
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:
Robbeyn Bird
Finance Director/Treasurer
La Quinta, CA
78-495 Calle Tampico
La Quinta, CA 92253
(760)777-7150
1. 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.
11. 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.
Ill. FORMAT FOR PROPOSALS
Please format your response to this RFP in the following manner:
A. Organization
29
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
C.
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.
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:
Number
of Clients
Governmental
Governmental Pension
Non Governmental
Pension
Other Restrictive
Operating Funds Number of Funds
Clients
$ N/A N/A
$ N/A N/A
30
Corporate N/A N/A
High Net Worth Client N/A N/A
Endowmental/Foun- N/A N/A
dation
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 Agency 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 11 (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.
31
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 analys-is 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.
32
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
GAS13 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.
Insurance Requirements
Exhibit A defines the insurance requirements that will need to be met prior to the
[Board/Councill'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
78-495 Calle Tampico
La Quinta, CA 92253
Attention: Robbeyn Bird, Finance Director/Treasurer
33
2. Proposal must be received no later than [Time] PST on [Month, Day, and Year].
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
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35
Appendix I
Investment Management Process and Risk
Except as provided for in Section 27000.3, Government Code Section 53600.3 declares as a trustee
each person, treasurer, or governing body authorized to make investment decisions on behalf of local
agencies. As trustees are 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 investment risk associated with any
investment activity and 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 53601). 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 or special
structures, or those issued by little known companies, are examples of "story bonds" and 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 represents the possibility that the borrower may be unable to repay the obligation as
scheduled. 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 11. Fund Management
Local Agency Investment Guidelines 2010 Issued by California Debt and Investment Advisory Commission
M.
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
37
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 govern'ment 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 FNMAs (Federal National Mortgag
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.
2. 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 $5,000. The notes
are issued with maturities of less than one
year and interest is paid at maturity.
3. FLBs (Federal Land Bank Bonds) -_ Long-term
mortgage credit provided to farmers by Federal
Land Banks. These bonds are issued at
irregular times for various maturities ranging
from a few months to ten years. The
minimum denomination is$ 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.
W
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
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
Me]
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, and 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
He]
U.S. Treasury securities issued as direct
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.
41
BOARD MEMBER ITEMS