2014 04 09 IABW-A
!A U
Investment Advisory Board agendas and
staff reports are now available on the
City's web page: www.la-guinta.org
INVESTMENT ADVISORY BOARD
AGENDA
CITY HALL CAUCUS ROOM
78-495 Calle Tampico, La Quinta
REGULAR MEETING on WEDNESDAY, April 9, 2014 AT 4:00 P.M.
CALL TO ORDER
1 . Pledge of Allegiance
2. Roll Call
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 March 12, 2014
CONSENT CALENDAR
1 Review and File Month End Cash Report, February 2014 and the Pooled
Money Investment Reports — February 2014
BUSINESS SESSION
1 . Review and File Treasurer's Report for January 2014
INVESTMENT ADVISORY BOARD AGENDA 1 April 9, 2014
2. Continued Consideration of Fiscal Year 2014/2015 Investment Policy and
Work Plan
CORRESPONDENCE AND WRITTEN MATERIALS - None
BOARD MEMBER ITEMS — None
ADJOURNMENT
The next regular meeting of the Investment Advisory Board will be held on May 14,
2014, commencing at 4:00 p.m. at the La Quinta Study Session 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 April 3, 2014.
DATED: April 3, 2014
VIANKA ORRANTIA, Senior Secretary
City of La Quinta, California
Public Notices
The La Quinta Study Session 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 as 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 April 9, 2014
INVESTMENT ADVISORY BOARD
MINUTES
March 12, 2014
CALL TO ORDER
A regular meeting of the La Quinta Investment Advisory Board was called to order
at 4:00 p.m. by Chairperson Mortenson.
PRESENT: Board Members Godbey, Donais, Mortenson, Spirtos and Park
ABSENT: None
STAFF PRESENT: Interim Finance Director, Patrick Griffin, Public Works Director,
Tim Jonasson, Senior Partner, Brian Gruber with Lance Soll and
Lunghard (LSL) and Senior Secretary, Vianka Orrantia
PUBLIC COMMENT — None
Mr. Griffin requested that upon approval of the confirmation of the agenda that the
Director's Item be the first item of discussion followed by Business Session — Item
1 .
CONFIRMATION OF AGENDA — Confirmed
APPROVAL OF MINUTES
Approval of the Minutes of January 8, 2013
Motion — A motion was made by Board Members Spirtos/Park to approve the
Minutes of January 8, 2014. Motion passed unanimously.
CONSENT CALENDAR ITEMS
1. Transmittal of Treasury Report for December 31, 2013
Mr. Griffin presented and reviewed the staff report for December 31, 2013.
Motion — A motion was made by Board Members Spritos/Donais to review and file
the Treasurer's Report for December 31, 2013 as submitted, which includes the
corrected handout for page 4. Motion passed unanimously.
INVESTMENT ADVISORY MINUTES March 12, 2014
BUSINESS SESSION
1. Consideration of Fiscal Year 2014/2015 Investment Policy and Work Plan Items
Mr. Griffin presented the draft 2014/2015 Investment Policy and the approved
2013/2014 work plan item staff report from the previous year for the Board's
review and consideration for the upcoming fiscal year. Mr. Griffin suggested that
the Board bring to the next scheduled meeting any recommended
changes/additions/deletions.
Board Member Mortenson recommended the following changes/additions/deletions
to the policy:
Page 9: Listed under Permissible Investments and Limitations, items two and three,
restriction columns, "3 - 10 years - delete - redundancy to the maximum maturity
column.
Page 9: Listed under Permissible Investments and Limitations item five, U.S.
Government Agency Securities - requires restriction.
Page 18: Listed under Permissible Deposits and Investments, item six - requires
restriction
Page 19: Footnote - requires restriction
Motion - It was moved by Board Members Donais/Spritos to continue the review of
the 2014/2015 Investment Policy and Work Plan Items. Motion carried
unanimously.
CORRESPONDENCE AND WRITTEN MATERIAL
1. Consideration of Fiscal Year 2012/2013 Audited Financial Statements
Senior Partner, Brian Gruber of LSL presented the Comprehensive Annual Financial
Report (CAFR) for year ended June 30, 2013. Mr. Gruber informed the Board of
the audit and the audit processes.
Mr. Gruber advised that the most significant impact to this year's CAFR was the
decline in the cash and investments (by approximately $45 million) as a result of
the dissolution of the Redevelopment Agency (RDA). In addition, as a result of the
dissolution of the RDA, several debt loans were being paid by the Successor
Agency. These transactions were reviewed and denied by the Department of
Finance resulting in the loans being returned to the City; therefore resulting in the
reporting of these transactions within the CAFR as "extraordinary transactions."
INVESTMENT ADVISORY MINUTES 2 March 12, 2014
Mr. Gruber advised that the City implemented a couple of governmental standard
policies that were newly affected relating to terminology. The term net assets was
changed to net position, which presents information on all of the City of La
Quinta's assets, deferred outflows of resources, liabilities, and deferred inflows of
resources, with the difference between the two reported as net position. In
addition the terms "deferred in -flows" and "deferred out -flows" were added,
separating certain line items and placing them into their own category. Mr. Gruber
further advised of the change to debt issuance costs, previously when the City
issued debt, the fees associated with it were amortized over the life of the debt.
The new guidelines state that these fees have to be expensed in the period of the
issuance of the debt.
General discussion ensued amongst the Board and staff further clarifying the
reporting of the debt fees, in addition to the discussion of the City's decline of the
net assessed values within the last three years.
The Board and staff thanked Mr. Gruber for his attendance.
Noted and Filed
2. Month End Cash Report for January 2014 and the Pooled Money Investment
Board Reports for December 2013 and January 2014
Mr. Griffin advised the Board that the handout is a revision to page 2, correcting
the LAIF investment amount.
Noted and Filed
BOARD MEMBER ITEMS — None
DIRECTOR'S ITEMS:
1. Presentation on Proposed Landscape Enhancements and Assessments for North
La Quinta.
Public Works Director, Tim Jonasson presented the proposed Landscape
Enhancements and Assessments for north La Quinta and clarified the fiscal
challenges encountered in the City's efforts to maintain the quality landscaping that
currently exists and the proposed solutions to these challenges.
ADJOURNMENT
There being no further business, it was moved by Board Members Park/Spritos to
adjourn this meeting at 5:19 p.m. Motion passed unanimously.
INVESTMENT ADVISORY MINUTES 3 March 12, 2014
Vianka �"raAitr,--S—enioi Seci
City of/ta Quinta, California
INVESTMENT ADVISORY MINUTES 4 March 12, 2014
INVESTMENT ADVISORY BOARD Consent Calendar: 1
Meeting Date: April 9, 2014
TITLE:
Receive and File Month End Cash Report for February 28, 2014 and
Pooled Money Investment Board Report for February 2014
BACKGROUND:
The February 28, 2014 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 report for February 2014 is included
in the agenda packet.
RECOMMENDATION:
Information item only.
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POOLED MONEY INVESTMENT ACCOUNT
Summary of Investment Data
A Comparison of February 2014 with February 2013
(DOLLARS IN THOUSANDS)
IFebruary 2014 11 February 2013 1 Change I
Average Daily Portfolio
54,642,524
57,914,049
-3,271,525
Accrued Earnings ($)
9,897
12,697
-2,800
Effective Yield (%) 0.236 0.286 -0.06
Average Life -Month End (In Days)
208
217
-9
Total Security Transactions
Amount
18,197,868
12,463,946
+5,733,922
Number
364
250
+114
Total Time Deposit Transactions
Amount
1,214,480
1,411,480
-197,000
Number
65
80
-15
Average Workday Investment Activity
1,021,703
730,286
+291,417
Prescribed Demand Account Balances
For Services ($)
2,367,323
1,664,543
+702,780
I
BILL LOCKYER
TREASURER
STATE OF CALIFORNIA
Investment Division Selected Investment Data
Analysis of the Pooled Money Investment Account Portfolio
(DOLLARS IN THOUSANDS)
TYPE OF SECURITY
Government
Bills
Bonds
Notes
Strips
Total Government
Agency Debentures
Certificates of Deposit
Bank Notes
Bankers' Acceptances
Repurchases
Agency Discount Notes
Time Deposits
GNMAs
Commercial Paper
FHLMC/Remics
Corporate Bonds
AB 55 Loans
GF Loans
NOW Accounts
Other
Reversed Repurchases
Total (All Types)
INVESTMENT ACTIVITY
February 28, 2014
DIFFERENCE IN
PERCENT PERCENT OF
OF PORTFOLIO FROM
AMOUNT PORTFOLIO PRIOR MONTH
14,034,219
25.25
-0.33
0
0.00
0
17,663,526
31.79
+0.81
0
0.00
0
31,697,745
57.04
+0.48
1,927,890
3.47
-0.01
7,925,138
14.26
-2.89
300,000
0.54
+0.37
0
0.00
0
0
0.00
0
1,298,933
2.34
+0.06
4,572,640
8.23
+0.25
0
0.00
0
5,173,321
9.31
-0.38
135,586
0.24
-0.01
0
0.00
0
362,529
0.65
+0.02
2,026,400
3.65
+2.10
0
0.00
0
149,896
0.27
+0.01
0
0.00
0
55,570,078
100.00
February 2014 January 2014
NUMBER AMOUNT ($) NUMBER AMOUNT ($)
Pooled Money 364 18,197,868 399 19,922,033
Other 20 808,948 1 3,800
Time Deposits 65 1,214,480 127 3,651,800
Total 449 20,221,296 527 23,577,633
PMIA Monthly Average Effective Yield 0.236 0.244
Year to Date Yield Last Day of Month (%) 0.259 0.262
2
Pooled Money Investment Account
Portfolio Composition
$55.6 Billion
02/28/14
Loans
Commercial Paper 4.30%
n/
Time Deposi
8.23%
CDs/l3Ns
14.80%
Mortgages
0.24%
3
Treasuries
57.04%
Institutional - Announcements, Data & Results
Page 1 of I
TreasuryDirect
Announcements, Data & Results
Treasury sells bills note- bonds, FRNs, and TIPS at regularly scheduled auctions. Refer lo the P-q-qtLqn,
for more information. Follow the links below to get the latest
information on:
(PDF)
==Tre!t the Treasury's Quarterly Refunding press
conference, usually held on the first Wednesday of February, May, August, and November.
Uzc�ir a A=i on
Useful Date for Renearch
Click to find additional Mtisti� from May 5. 2003 through April 1, 2008, which includes
information on bidding by primary dealers, direct bidders, and indirect bidders.
Notei The following table displays data for the 20 most recently auctioned securities that have not yet
matured, for each security type. If you would like to see data for additional securities, please use our
Auction Qum.
Bills Notes Bonds TIPS FRNs
S ... rity T.- rusip CMD. Maturity High Investment
Date D.t. R.t. Rat.
4-Week 9i,7Q6QG No 03127/2014 04/24/2014 1 0.045% j 0.046%
13-Week 1312796FU, No 03/27/2014 06/26/2014 0050% 0.051%
26-Week 9 117 96 D_W6 No 03/27/2014 09/25/2014 0075% 0.076%
4-Week 922796CHO No 03/20/2014 1 04/17/2014 0060% 0.061%
13-Week 2uzzim§ No 03/20/2014 06/19/2014 0050% 0.051%
26-Week 912,796CL31 N. 03/20/2014 09/18/2014 0.080% 0.081%
4-Week 9�1279GOG No 03/13/2014 04/10/2014 0055% 0056%
_L3-!eelc �c)l No 03/13/2014 06/1212014 0050% 0051%
26-Week No 03113/2014 09/11/2014 0080% 0.081%
4-Week ZLZ-qW1At No 03/06/2024 04/03/2014 1 0.045% 0.046%
52-W�ek 912796L'Pl No L 03/06/2014 03105/2015 1 0.120% 0.122%
13-Week No 03106/2014 06/0512014 O�050%
0,051%
26-Week 2-1 ZLWzLI�5 No 0-3106/2014 09/0412014 0.080;= 0.081%
66-Day 91279(5CK3 Yes 03/0312014 05/0812014 0.050% 0, 51%
4-Week 2jZZ2kCU No 02/27/2014 03/27/2014 0.035% 0.035%
13-Week 912,11966.1? No 02,(27/2014 05/29/2014 0045% 0046%
26-Week 9127960117 No 02,/27/2014 08128/2014 0.075% 0076%
23-Week iW.2�-Czq No OZ120/2014 05/22/2014 0.050%_ 0.051%
F6-W:ee.k� 912796EJX6 No 02J20/2014 08/2V2014 0.075% 0.076%
58-Day 912-,GCH Yes 02118/2014 04/17/2014 0.050% 0.051%-
Treaswyoiract
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Enter a CUSIP Number:
Savings Bond Rates
EF J�ond- I Bonds,
0.20% 1.180/0
Fixed
Rates effective through October
31, 2013. New Rates will be
posted November 1, 2013.
Translate I
11
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Institutional - Announcements, Data & Results
Page I of I
TreasuryDirect
Announcements, Data & Results
Treasury sells Wills, notes, bonds FRNs and TIPS at regularly scheduled auctions. Refer to the
ts 2C&ff_rSLqRjM for more information. Follow the links below to get the latest
information on:
====1�2t=eased
Securities
(PDF)
at the Treasury's
Quarterly Refunding press
conference, usually held on the first Wednesday of February,
Umom�na Auctions
Ma V, August, and November.
Useful Data for Research
CAick to find addaVonal antlyti from
May 5. 2003 through April 1,
2008, which includes
infbrmation on bidding by primary dealers, direct bidders, and indirect bidders.
Notei The following table displays data for the 20 most recently auctioned securities that have
not yet
matured, for each security type. If you would like to see data
Auction Ouerv.
for additional securities, please use our
Bills Notes
Bonds
Tlps
FRNs
I....
Seeu,ft Term
CUSIP
Reopening
Date
M.tudty D.te
High Yield
Interest Rate
10-Year
91232SB66
Yes
03/17/2014
02/15/2024
2.729%
2.750%
3-Year
91787802
No
1 03/17/2014
03/15/2017
0802%
0.750%
7'Year
912628
No
02/28/2014
02/28/2021
2.105%
2.000%
5-Year
91282OCZA
F No
OZ/28/2014
OZ128/201 9
1.530%
1500%
2-Year 9126281218
No
02/28/2014
OZ/2912016
0.340%
0.250%
10-Year
No
02/18/2014
02/15/2024
2.795%
2750%
3-Year �74
j No
02/18/2014
02/15/2017
0.715%
0625%
5-.r �_j
No
01/31/2014
01/31/2019
1.572%
1500%
7-year RULIMJ2
No
02/31/2014
01/31/2021
2.190%
2.125%
2-Year 912828041 No
01/3112014
02/31/2016
0.3 80%
0,375%
'10-Year 222§-2AW--E.� Yes
-
01/15/2024
-
11115/2023
_
3,009%
2 .750%
3-Year No
01/15/2014
01/15/2017
0.799%
0.750%
7-Year 91282SA63 No
12/3112013
12J31/2020
2.385%
2.375%
5-Year 91232SA75 No
12/31/2013
12/3112018
1.600%
1 500%
2-Year 912328"7 No
12131/2013
12131/2015
0.345%
0250%
�11 yes
lZtl6/2013
11/15/2023
2.824%
2.750%
�10--Year
Year 91A26A59 No
12J16/2013
12/2512016
0.631%
0.625%
7Y.r' 91262BA4 No
IZ102J2013
11/30t2020
2.106%
2.000%
-Year No
lZfO2/2013
11/3012018
1340%
1.250%
-Year 92232SA20 No
12./0212013
11/30/2015
0.300%
0.250%
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EE Bonds, I Fk1nds"
0.20% 1.180/0
Fixed
Rates effective through October
31, 2013. New Rates will be
i posted November 1, 200.
Trans I
7
http://www.treasurydirect.gov/instit/annceresult/annceresult.htm 3/25/2014
Institutional - Announcements, Data & Results
Page I of I
TreasuryDirect
Announcements, Data & Results
Treasury sells bills, notes, bonds, FRNs, and TIPS at regularly scheduled auctions. Refer to [he auction
for mom information Follow the links below to get the latest
information on:
�==A -'1=='
- " soc-rw'w�- (PDF)
diuleUiol released at the Treasury's
Quarterly Refunding
pmss
conference, usually held on the
Umornino Auctions
first Wednesday of February, May, August,
and November
h
Click to find additional statisti
from May 5, 2003 through April 1,
2008, which includes
information on bidding by primary
dealers, direct bidders, and indirect bidders.
Note: The following table displays data for the 20 most recently auctioned securities
that have
not yet
matured, for each security type. If you
would like to see data for additional
securities, please use
our
Auction O.ery.
Bills Notes
Bonds TIPS
FRNs
Security Term CUSIP Reopening I -
Date Maturity Date
High Yield
i rest Rat.
30-Year 2128109��Q
Yes 03/17/2014 02/15/2044
3.630%
3.625%
30-year �1�aIQREQ
No 02/18/2014 OZ(15/2044
3.690% 1
3.625%
210�!!.r 9,129101101
Yes 01/15/2014 11/15/2043
3.899%
3.750%
30-Year 9�2310RL2
Yes IZ116/2023 11/15/2�3=3.900%
_=00%
3.750%
30-Year qi�,410RL,
No 11/1512013 11115/2043
3-8109b
3750%
30-Year 21zumlil
Yes 10/15/2013 08/15/2043
3.758%
3625%
31)-Y�r 9!2elORC4
Yes 09/16/2013 08/15/2043
3.820%
3.625%
30-Year
No 08/15/2013 08/151ZC43
20/.
1625%
30-Year 912
Yes 07/15/2023 05/1512043
3.660%
2.875%
30-Year jj& �R9f
Yes 06/17/2013 05115/2043
0
3.355%
2.875%
30-Year 912SIG-REI
No 1 05/15/2013 05/15/2043
0
2.980%
75%
30-Year
Yes 04/15/2013 02/15/2043
_L_j.
2.998% f
3.125%
30-Year aizail2gza Yes Owl g(?ni 2115J2043
- -T-- -
3.248%
3.125%
30-Year 9128110014
No 02/15/2013 02/15/2043
-- +
3,180%
- - - -
3a25%
30-Year
M/15120:13 li/1512D42
3,070%
2.750%
30-Y-r 912aloo"
YK 1 12/17/2012 1 21/15/2042
2.917%
2 750%
1-30--Year
11115/2012 11/1512042
2.620%
2 750%
30-Year 111-1109.X.2
Yes 1011512012 08/15/2042
2.904%
2,7:0%
30-Year 2jZajQM
Yes 09/17/2012 08/15/2042
2.896%
2.7
1310-Year
2Lz6-1QQ-X2
No
08/15/2012 o8/15/2042
2.825%
2.750%
MESMI �
Select an Application
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Em
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Enter a CUSIP Number:
Savings Bond Rates
L� Bono,:
0.20% 1.180/0
Fixed
Rates effective through October
31, 2013. New Rates will be
posted November 1, 2013,
TrAnslat I
8
http://www.treasurydirect.gov/instit/annceresult/annceresult.htm 3/25/2014
Printer Version - Board of Governors of the Federal Reserve System Page I of 4
Selected Interest Rates (Weekly) - H. 15
Current Release Release Dates Daily Update Historical Data About Announcements Technical Q&As
Current Release (48 KB PDF)
Release Date: March 24, 2014
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.
March 24,, 2014
H. 15 Selected Interest Rates
Yields in percent per annum
Instruments
2014
Mar
17
2014
Mar
is
2014
Mar
19
2014
Mar
20
2014
Mar
21
Week Ending
2014
Feb
Mar
21
Mar
14
Federal funds (effective) 123
0.08
0.08
0.08
0.08
0.08
0.08
0.08
0.07
Commercial Paper
Nonfinancial
1-month
0.07
0.06
0.06
n.a.
0.06
0.06
0.05
0.06
2-month
0.09
0.08
0.08
n.a.
0.07
0.08
0.08
0.08
3-month
0.10
0.09
0.10
0. 09TO.10
0.10
0.10
0.10
Financial
1-month
0.07
n.a.
0.08
0.06
0.08
0.07
0.07
0.07
2-month
n.a.
0.11
0.10
0.11
0.10
0.11
0.10
0.11
3-month
0.10
0.12
0.13
0.12
0.12
0.12
0.12
0.13
Eurodollar deposits (London) 3 7
1-month
0.19
0.19
0.19
0.19
0.19
0.19
0.19
0.19
3-month
0.26
0.26
0.26
0.26
0.26
0.26
0.26
0.26
6-month
0.41
0.41
0.41
0.41
0.41
0.41
0.41
0.41
Bank prime loan i 2 A
3.25
3.25
1 3.25
3.25
3.25
3.25
3.25
3.25
Discount window primary credit 2 2
0.75
0.75
0.75
0.75
0.75
0.75
0.75
0.75
U.S. government securities
Treasury bills (secondary market) 2 1
4-week
0.05
0.07 1
0.07 1
0.06 j
0.05 1
0.06
0.05
0
9
http://www.federalreserve.gov/releases/H 1 5/Current/ 3/25/2014
Printer Version - Board of Governors of the Federal Reserve System Page 2 of 4
3-month
0.06
0.05
0.06
0.06
0.06
0.06
0.05
0.0-5
6-month
0.08
0.07
0.09
0.09
0.08
0.08
0.08
0.08
1-year
0.12
0.12
0.14
0.13
0.13
0.13
0.12
0.11
Treasury constant maturities
Nominal 10
1-month
0.05
0.07
0.07
0.06
0.05
0.06
0.05
0.05
3-month
0.06
0.05
0.06
0.06
0.06
0.06
0.05
0.05
6-month
0.08
0.07
0.09
0.09
0.08
0.08
0.08
0.08
1-year
0.13
0.13
0.15
0.14
0.14
0.14
0.12
0.12
2-year
0.38
0.36
0.47
0.45
0.45
0.42
0.36
0.33
3-year
0.77
0.75
0.91
0.90
0.91
0.85
0.77
0.69
5-year
1.58
1.56
1.75
1.73
1.73
1.67
1.59
1.52
7-year
2.19
2.16
2.31
2.31
2.30
2.25
2.20
2.15
10-year
2.70
2.68
2.78
2.79
2.75
2.74
2.72
2.71
20-year
3.34
3.33
3.39
3.40
3.34
3.36
3.37
3.38
3 0
0-year
3.63
3.62
3.66
3.67
3.61
3.64
3.66
3.66
I f ior
nflation indexed
5-year
-0.22
-0.21
0.02
-0.02
-0.06
-0.10
-0.22
-0.26
7-year
0.30
0.31
0.51
0.46
0.41
0.40
0.32
0.30
10-year
0.52
0.50
0.62
0.66
0.61
0.58
0.53
0.55
20-year
1.04
1.03
1.10
1.14
1.08
1.08
1.06
1.12
30-year
1.32 1
1.32
1.36
1.40
1.34
1.35
1.35
1.40
Inflation -indexed long-term average 12
1.02
1.01
1.08
1.12
1.06
1.06
1.03
1.04
Interest rate swaps 13
1-year
0.28
0.28
0.28
0.29
0.29
0.28
0.28
0.27
2-year
0.49
0.49
0.49
0.56
0.57
0.52
0.50
0.45
3-year
0.86
0.87
0.87
1.01
1.02
0.92
0.89
0.81
4-year
1.27
1.28
1.28
1.44
1.45
1.34
1.30
1.22
5-year
1.64
1.65
1.66
1.81
1.82
1.72
1.68
1.62
7-year
2.23
2.25
2.25
2.38
2.38
2.30
2.28
2.24
10-year
2.78
2.80
2.80
2.89
2.89
2.83
2.83
2.81
30-year
3.57 1
3.60
3.61
3.63
3.61
3.61
3.63
3.65
Corporate bonds
Moody's seasoned
Aaa 14
4.41
4.41
4.45
4.44
4.39
4.42
4.41
4.45
Baa
5.10
5.10
5.15
5.13
5.07
5.11
5.10
5.10
10
http://www.federalreserve.gov/releases/H I 5/Current/ 3/25/2014
Printer Version - Board of Governors of the Federal Reserve System Page 3 of 4
State & local bonds 15 1
4.51
4.51
4.47
4.44
Conventional mortgages 16
4.32
4.32
4.37
4.30
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.feder-alreserve.eovi'releases/gILi:).
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. Source: Bloomberg and CTRI3 ICAP Fixed Income & Money Market Products.
8. Rate posted by a majority of top 25 (by assets in domestic offices) insured U.S.-chartered commercial banks. Prime is one of several
base rates used by banks to price short-term business loans.
9. The rate charged for discounts made and advances extended under the Federal Reserve's primary credit discount window program,
which became effective January 9, 2003. This rate replaces that for adjustment credit, which was discontinued after January 8, 2003.
For further information, see The rate reported is that for
the Federal Reserve Bank of New York. Historical series for the rate on adjustment credit as well as the rate on primary credit are
available at www.federalreserve.gov/releases/hl 5/data.htm.
10. Yields on actively traded non-infl ati on -indexed issues adj usted to constant maturities. The 3 0-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 Source: U.S.
Treasury.
11. 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.treasw-,.,.2ov/resource-center/data-chart-
center/interest-rates/
11
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Printer Version - Board of Governors of the Federal Reserve System Page 4 of 4
12. Based on the unweighted average bid yields for all TIPS with remaining terms to maturity of more than 10 years.
13. International Swaps and Derivatives Association (ISDA(&) 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 Thomson Reuters and published on
Thomson Reuters Page ISDAFIX0 I. ISDAFIX is a registered service mark of ISDA8. Source: Thomson Reuters.
14. Moody's Aaa rates through December 6, 2001, are averages of Aaa utility and Aaa industrial bond rates. As of December 7, 2001,
these rates are averages of Aaa industrial bonds only.
15. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Thursday quotations.
16. Contract interest rates on commitments for 30-year fixed-rate first mortgages. Source: Primary Mortgage Market Survey8 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 (wwwAderal reserve.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 Tmasury 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 I 0-year maturity, for example, even if no outstanding security has exactly 10 yearsremaining 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 riarket. The inflation -indexed constant maturity yields are read
from this yield curve at fixed maturities, currently 5, 7, 10, 20, and 30 years.
12
http://www.federalreserve.gov/releases/1-11 5/Current/ 3/25/2014
INVESTMENT ADVISORY BOARD Business Session: 1
Meeting Date: April 9, 2014
ITEM TITLE:
Review and File Treasurer's Report for
January 31, 2014
BACKGROUND:
Attached please find the Treasurer's Report for January 31, 2014
RECOMMENDATION:
Review and File the Treasurer's Report for January 31, 2014
Patrick Griffin, Interim Finance Director
A A
MEMORANDUM
TO: La Quinta City Council
FROM: Patrick Griffin, Interim Finance Director/Treasurer
SUBJECT: Treasurers Report for January 31, 2014
DATE: February 28, 2014
Attached is the Treasurers Report for the month ending January 31, 2014. The report is submitted to
the City Council each month after a reconciliation of accounts is accomplished by the Finance Department.
The following table summarizes the changes in investment types for the month:
Investment
Beginning
Purchased
Notes
Sold/Matured
Other
Ending ��Ch�ange
LAfF
18,793,075
$ 14,511,262
$ (1,500,000)
0
$ 31,804,337
13,011,262
Interest bearing active bank deposit
-
0
-
0
Certificates of Deposit
1,680,000
0
1,680,000
0
US Treasuries
30,200,805
(15,000,000)
1,036
15,201,841
(14,998,9&4)
US Gov1 Sponsored Enterprises
-39,949,973
1.327
39,951,300
1,327
Commercial Paper
ICorporate Notes
-
0
0
0
1 0
0
Mutual Funds
12,559,821
1 15,000,035
1
(8,914,786)1
(0)
18,645,070
6,085,249
Subtotal
$ 103,183.674
$ 29,511,297
1
1 $ (25,414,786)1
$ 2,363
$ 107,282,548
$ 4,098,874
Cash S 1.931?555 $ 1.626.108 (1) & (3)] 1 $ 3.557.663 $ 1.626.108
Total $ 105A 15.229 $ 31.137.405 _ 1 $ (25.414,786)[ $ 2.363 $ 110.840.211 $ 5.724.982
I certify that this report accurately reflects all pooled investments and is in compliance with the Calffornia
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
V6r—itM7—.Q,stodiar1 Report to determine the fair market value of investments at month end,
Patrick Griffin
Interim 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.
Date'
(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.
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City of La Quinta
Comparative Rates of Interest
January 31, 2014
f'ih, � I - n..;; t2
Year
Month
-woulen t:amrn
Pooled Cash Fiscal Agent
Overall
Average
Maturity
Tressu
8 llsNota
Three M nth
FY 09110
July 2000
0.69% 0.30%
(days)
Three Month Six Month
One Year
Two Year
Non -Financial
LAIF Ra
August 20M
0.64%
0.30%
0.61%
92
0-19%
028%
0.47%
1 �-00%
0.28%
1.04%
Sept2009
0.56%
0.31%
70.46%0.15%
0.53%
112
0.16%
0.12%
0.26%
0.19%
0.46%
0.41%
1.00%
1.00%
0.24%
0.93%
Oct 2009
0.52%
0.31%
0.50%
90
0.08%
0,19%
0.38%
1.00%
0.19%
0.19%
0.75%
0.65%
Nov 2009
0.56%
0.31%
0.53%
152
0.04%
0.14%
0.32%
0.75%
0.15%
0.61%
Dec2009
0.,56%.
0.15%
0.51%
239
0.11%
0.20%
0.16%
1.00%
0.16%
0.57%
Jan 2010
0.43%
179
0.06%
0.14%
0.34%
0.88%
0.13%
0.56%
Feb 2010
0.51%
0.16%
0.48%
162
0.13%
0.19%
0.32%
0.88%
0.15%
0.58%
Mar2010
0.50%
0.16%
0.47%
172
0.15%
0.24%
0.38%
1.00%
0-20%
0.55%
Apr2010
0.52%
0.16%
0.48%
162
0.15%
0.24%
OA9%
1.00%
0-23%
0.59%
May2010
0.52%
0.16%
0.48%
116
0.17%
0.22%
0.37%
0.75%
0.28%
0.56%
FY 10/11
June 2010
0.44%
0.05%
0.32%
134
0.16%
0.22%
0.32%
0.63%
0.32%
0.53%
July 2010
0.50%
0.15%
0.47%
119
0.16%
0-20%
0.30%
0.63%
0.28%
0.53%
August2olo
0.49%
0.15%
0.46%
108
0.15%
0.19%
0.26%
0.38%
0.25%
0.51%
Sept2010
0.55%
0.15%
0.51%
107
0.16%
0.19%
0.27%
0.38%
0.24%
0.50%
OcI2010
0.55%
0.15%
0.51%
88
0.13%
0.17%
0.23%
0.38%
0.23%
0.48%
Nov 2010
0.53%
0.15%
0.49%
84
0.18%
0-21%
0.28%
0.50%
0.23%
0.45%
Dec 2010
0.57%
0.14%
0.52%
265
0.15%
0.19%
0.30%
0.63%
0-23%
0.46%
Jan 2011
0.51%
0.14%
0.43%
206
0.16%
0.18%
0-28%
0.63%
0.24%
0.54%
Feb 2011
0.55%
0.17%
0.46%
210
0.15%
0.17%
0.31%
0.63%
0.23%
0.51%
Mar2011
0.54%
0.17%
0.45%
218
0.05%
0.13%
0.26%
0.75%
0.23%
0.50%
Apr2011
0.59%
017%
0.48%
192
0.05%
0.10%
0.28%
0.63%
0.20%
0.59%
May 2011
0.48%
0.17%
0.41%
156
0.06%
0.12%
0:20%
0.50%
0.16%
0.41%
FY 11/12
June 2011
July 2011
0.53%
0.53%
0.00%
0.35%
126
0.03%
0.10%
0.20%
0.38%
0.15%
0.45%
Augus(2011
0.60%
0.00%
0.35%
112
0.07%
0.12%
0.15%
0.20%
0.14%
0.38%
0.00%
0.38%
102
0.02%
0.05%
0.10%
0.13%
0.16%
0.41%
Sept 2011
0.58%
0.03%
0.39%
124
0.02%
0.06%
0.09%
0.13%
0.14%
0.38%
Oct 2011
0.53%
0.03%
0.35%
117
0.01%
0.06%
0.12%
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%
Dec 2011
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
0.49%
0 '05%
0.36%
72
0.12%
0.15%
0.17%
0.25%
0.17%
0.39%
Mar 2012
0.44%
0.05%
0.34%
74
0.08%
0.14%
0.19%
0-25%
0.18%
0.38%
Apr2012
0.44%
0.09%
0.35%
61
0.10%
0.15%
0.19%
0.25%
0.20%
0.37%
May 2012
0.43%
0.09%
0.34%
62
0.09%
0.14%
0.19%
0.25%
0.19%
0.36%
FY 12/13
June 2012
July 2012
0.38%
0.41%
0.08%
0.29%
47
0.10%
0.15%
0.21%
0.25%
0.21%
0.36%
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%
0.20%
0.25%
0.20%
0.38%
Sept 2012
0.43%
0.09%
0.33%
34
0.11%
0.14%
0.18%
0.25%
0.20%
0.35%
Oct2012
0.47%
0.10%
0.36%
22
0.13%
0.16%
0.18%
0.25%
0.19%
0.34%
Nov 2012
0.48%
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%
0.30%
Feb 2013
0.37%
0.10%
0.29%
105
0.13%
0.14%
0.15%
0.25%
0.17%
0.29%
Mar 2013
0.39%
0.09%
0.30%
123
0.08%
0.11%
0.15%
0-25%
0.15%
0.29%
Apr2013
0,31%
0.08%
0.25%
186
0.05%
0.08%
0.14%
0.13%
0.12%
0.26%
May 2013
0.30%
0.06%
0.23%
175
0.05%
0.08%
0.14%
0.25%
0.10%
0.25%
June 2013
0.30%
0.07%
0.23%
212
0.05%
0.09%
0.16%
0.38%
0.10%
0.24%
FY 13/14
July 2013
0.28%
0.07%
0.21%
336
0.03%
0.07%
0.12%
0.25%
0.11%
0.27%
Aijgu5t 2013
0.28%
0.06%
0.21%
303
0.03%
0.06%
0.071/6
0.14%
0.09%
0.27%
Sept 2013
0.30%
0.07%
0.23%
321
0.01%
0.04%
0.01%
0.25%
0.08%
0.26%
Oct 2013
OA8%
0.06%
0.31%
427
0.05%
0.08%
0.16%
0.25%
0.11%
0.27%
Nov 2013
0.49%
0.06%
0.31%
444
0.05%
0.08%
0.16%
0.25%
0.09%
0.26%
Dec 2013
r-?niA
0.49%
I -
0.05%
0.31%
- -
396
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0.09%
0.14%
0-25% I
0.09%
0-26%
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INVESTMENT ADVISORY BOARD Business Session: 2
Meeting Date: April 9, 2014
h d d A a d ktff�
Continued consideration of the Fiscal Year 2014/2015 Investment Policy and Work
Plan
BACKGROUND:
At the Investment Advisory Board (IAB) meeting on March 12, 2014, staff
distributed the current Investment Policy to the Board for the purpose of reviewing
the current Policy and making recommendations for modification. On the following
day, staff provided the Board an electronic version of the State Government Code
regarding agency investments.
At the March meeting, Chairman Mortenson provided information regarding the
existing Policy. On March 26, 2014, Board Member Spirtos provided input to
Finance staff regarding areas of the existing Policy that might potentially contain
typographical errors. All of these items provided to date will be incorporated as part
of the draft Investment Policy that will be presented at the May 2014 IAB meeting,
and all changes to the draft revised Investment Policy will be made utilizing redline,
so the IAB can easily follow proposed changes.
As a part of this report, I have provided information regarding a potential new
investment opportunity. CalTrust is a Joint Powers Authority that was created by
public agencies to pool cash assets for investment purposes. CalTrust operates
similar to the State Local Agency Investment Fund (LAIF) in that it pools assets of
several agencies, invests in specific types of securities, and makes the cash
available to agencies when needed. Thus, it provides some level of investment
return while also providing for liquidity needs of public agencies.
CalTrust has four investment account options including money market, short-term,
medium term, and long-term, and each of these accounts earns differing yields. It
should be noted that the short-term account, which provides for unlimited
withdrawals, is currently earning .38% (LAIF is currently at .26%), and the medium -
term account is currently earning .67%. All of the CalTrust accounts comply with
the limits and restrictions in the California Government Code.
Attached to this report are several pages from the CalTrust website, including the
fund's investment philosophy, frequently asked questions, participating agencies,
and portfolio performance. I encourage the Board to review the information and visit
the fund's website at www.caltrust.org to learn more. Having been a participant. in
the past, I can recommend them as an additional investment tool for the City of La
Quinta.
RECOMMENDATION:
1. Continue Board review of the Fiscal Year 2014/2015 Investment Policy and
Work Plan for approval by the City Council in June 2014.
Consider the addition of CalTrust to the City's list of permissible investments.
Patrick Griffin—, Interim Finance Director
Invesbnent Philosophy Page I of 1
Investment Philosophy
The CalTRUST accounts have been created to facilitate the centralization of the investment management function on
behalf of California local agencies. The CalTRUST Board of Trustees selected Metropolitan West Securities, LLC to
serve as Investment Adviser to the Trust. Effective February 2, 2007, Metropolitan West Securities, LLC became
Wachovia Portfolio Services. As of December 31, 2009, Wells Fargo & Company acquired Wachovia Corporation. As
part of that acquisition, Wachovia Portfolio Services and Evergreen Investments were integrated into Wells Capital
Management.
Wells Capital Management (WellsCap), a wholly -owned subsidiary of Wells Fargo Bank, N.A., is an institutional
investment advisory and asset management firm specializing in investment management for separate accounts, mutual
funds, and money market funds.
WellsCap is responsible for the decision to buy and sell the securities for the CalTRUST accounts and arrange for the
execution of securities transactions on behalf of the accounts. WellsCap senior executives bring decades of public
agency funds management experience and demonstrated success in the management of California public sector funds
to the Trust.
As of March 31, 2012, WellsCap had more than $325 billion in assets under management.
Following the investment policy direction established by the Board of Trustees, the primary objective of the investment
manager is to safeguard the principal. The secondary objective shall be to meet the liquidity needs of the participants
and the final objective shall be to maximize the yield in a manner consistent with the first two objectives. The objective of
the investment policy is to obtain the best possible return commensurate with the degree of risk that participants are
willing to assume in obtaining such return.
http://caltrust.blueriverdigital.com/investmentPolicy.aspx?print--Y 4/2/2014
Frequently Asked Questions Page I of 3
Frequently Asked Questions
What is CaITRUST and how is it structured?
CaITRUST is a Joint Powers Authority created by public agencies to provide a convenient method for public agencies to
pool their assets for investment purposes. CalTRUST is governed by a Board of Trustees made up of experienced local
agency treasurers and investment officers. The Board sets overall policies for the program and selects and supervises
the activities of the investment manager and other agents.
What entities are permitted to participate in CaITRUST?
As a practical matter, any public agency that is authorized to join a Joint Powers Authority can participate in CaITRUST.
The specific sections of the California Government Code that govem participation in CaITRUST (Sections 6500 and
6509.7), provide that the following types of agencies may participate:
"the federal government or any federal department or agency, this state, another state or any state department or
agency, a county. county board of education. county superintendent of schools, city, public corporation, public
district, or riagional transportation commission of the State of California or another state, or any joint powers
authority formed pursuant to this article [Article 1 of the Joint Exercise of Powers Act] by any of these
ageilcies, " (Section 6500). and "a nonprofit corporation whose membership is confined to public agencies or public
officialsr" (Section 6509.7).
If you have any questions about participation, please contact CalTRUST at:
by phone: 888-422-8778
by e-mail: caltrust(&_weliscap.com
on the web: www caltrust.org
How does an agency initiate participation in CaITRUST?
Legislation enacted in 2004 (AB 969 - Chapter 470, Statutes of 2004) simplified participation in CaITRUST. AB 969
authorizes local agencies to directly invest in shares issued by JPA pooled investment programs. As a result, agencies
interested in investing through the CalTRUST Program no longer need to adopt a resolution to formally become a
member of the CalTRUST Joint Powers Authority.
Opening an account in the CalTRUST program is quite simple- just carefully read the Information Statement, the Joint
Powers Agreement, the CalTRUST Investment Policy, and co�plete the Account Registration Form and Participation
Agreement.
What account options does CaITRUST offer?
CalTRUST offers four account options — Money Market, Short -Term and Medium -Term Accounts, and a soon -to -be -
opened Long -Term Account. Agencies can select account options that match their investment time horizon and cash
flow needs,- and easily reallocate among accounts as circumstances warrant.
All CalTRUST accounts comply with the limits and restrictions placed on agency investments by the California
Government Code� no leverage is permitted in any of the CalTRUST accounts.
What is the minimum amount that an agency can invest in the CaITRUST program?
The CalTRUST Board of Trustees has established $250,000 as the minimum investment in one or more of the
CalTRUST accounts. The Board also has authorized the CaITRUST Program Administrator to waive this minimum
investment requirement in its discretion.
What is the maximum amount that an agency can invest in the CaITRUST program?
There is no maximum investment amount for any of the CalTRUST accounts
Is there a limit on the number of accounts that an agency can maintain?
There is no limit on the number of accounts that an agency can maintain. This provides additional flexibility to agencies,
allowing them to tailor the number and types of accounts to best suit their local needs and priorities. For example, an
4
http://caltrust.blueriverdigital.com/faq.aspx?print--Y 4/2/2014
Frequently Asked Questions
Page 2 of 3
agency may want or need to segregate its enterprise -type assets from its general operating reserves. CalTRUST
provides the flexibility to meet this local preference.
What are the principal risks of investing in CalTRUST?
Investments in CaITRUST, like investments in other types of bond funds, are subject primarily to interest rate risk and
credit risk.
Interest rate risk is the potential for a decline in bond prices -- and hence the market value of bonds in the portfolio -- due
to rising market interest rates. In general, bond prices vary inversely with interest rates. The change in a bond's price
depends on several factors, including its maturity date. In general, bonds with longer maturities are more sensitive to
changes in interest rates than bonds with shorter maturities. Similarly, bond funds with longer average portfolio
maturities, such as the CalTRUST Medium -Term and Long -Term Accounts, will be more sensitive to interest rate
changes than those with shorter average portfolio maturities, such as the CalTRUST Short -Term account.
Credit risk is the possibility that a deterioration in the underlying creditworthiness of an issuer will adversely affect the
value of its outstanding bonds or that a bond issuer will fail to make timely payments of interest or principal on its
outstanding bonds (default) A decline in a bond issuer's credit rating, or creditworthiness, may cause prices for its
outstanding bonds to decline.
Similar to shares in a bond mutual fund, the value of CalTRUST shares will change with market conditions, as will the
value of an agency's investment account. An agency could lose money on an investment in a CalTRUST account or an
investment in a CalTRUST account could underperform other investments
What is the cost of transferring funds between the Short -Term Account and the Medium -Term
Account or vice -versa?
There is no cost to transfer funds from any CalTRUST account to another CalTRUST account. In addition, there is no
cost for wiring funds into or out of any of the CalTRUST accounts (although a local agency's bank may charge a nominal
fee for sending and receiving wires)
How does an agency monitor its investments in CalTRUST?
All participating agencies have 24-hour, password -protected online access to their individual account information at
wvvw-caltrust.org The CalTRUST website shows the current value of CalTRUST shares, as well as additional relevant
information regarding the underlying pools of securities in the CalTRUST accounts. Month -end statements can be
downloaded directly from the CalTRUST website, or an agency can opt to receive printed monthly statements
What are the costs of participating in CalTRUST?
There are no out-of-pocket costs for an agency to invest funds in CaITRUST. As with other programs, such as the Local
Agency Investment Fund, managed by the State Treasurer's Office, all expenses associated with participation in
CalTRUST are deducted from the yield.
The current total annual operating expense of the CalTRUST Heritage Money Market Account is 13 basis points (0.13%)
of the average daily net assets of the account.
For the Short -Term Account, current total operating expenses are 14 basis points (0.14%) of the average daily net
assets of the Account These expenses drop as the total size of the Account increases-, to 13 basis points for assets
between $500 million and $1 billion and to 12 basis points for assets over $1 billion.
Total annual operating expenses for the Medium -Term and Long -Term Accounts are 24 basis points (0.24%). Again, as
the size of the Accounts increase these expenses drop; to 22 basis points for assets between $500 million and $1 billion,
and to 20 basis points for assets over $1 billion
Expenses for each of the CalTRUST Funds are deducted from the net assets of the Funds on a monthly basis.
How does recently enacted legislation affect the CalTRUST Program?
Legislation signed by Governor Schwarzenegger in September 2004 clarified the authority for local agencies to
participate in Joint Powers Authority investment pools, and makes it easier to participate in CalTRUST
Chapter 470, Statutes of 2004 (Assembly Bill 969 — Correa) revised the provisions of California Government Code
Section 53601 to provide an explicit grant of authority for local agencies to invest in shares of beneficial interest issued
by a Joint Powers Authority, provided the JPA:
5
http://caltrust.blueriverdigital.com/faq.aspx?print--Y 4/2/2014
Frequently Asked Questions
Page 3 of 3
1. Invests only in securities and obligations eligible for local agency investment directly', and
2. Retains an investment adviser that
a. Is registered with the Securities and Exchange Commission or is exempt from registration-,
b. Has not less than five years experience investing in securities and obligations eligible for local agency
investment; and
c. Has at least $500 million in assets under management.
�-j
http://caltrust.blueriverdigital.com/faq.aspx?print=Y 4/2/2014
Participating Agencies Page I of 2
Participating Agencies
Counties:
Alameda County
Butte County*
Contra Costa County*
Del Norte County
Imperial County
Kings County
Madera County
Monterey County*
Mono County
Modoc County*
Riverside County*
San Diego County*
Santa Barbara County*
Solano County*
Sonoma County*
Yuba County*
Wells Fargo Bank, as Trustee for County of Mendocino TRAN
Wells Fargo Bank, as Trustee for County of Tulare TRAN
Cities:
Albany
Beverly Hills
Chino*
Chino Redevelopment Agency*
Chula Vista
El Centro
Elk Grove*
El Paso de Robles
Hercules
Lafayette
Lagune Niguel
Larkspur
Lodi
National City
Norwalk
Oakley
Palm Springs
Pinole*
Pinole Redevelopment Agency*
Poway
• Rancho Cucamonga
• Rancho Cucamonga Redevelopment Agency
• Riverside
• Rialto
• Richmond
• Sacramento*
• Sacramento Housing and Redevelopment Agency
• San Bernardino
• San Dimas
• Wells Fargo Bank, as Trustee for City of Stockton TRAN
Special Districts:
• Antelope Valley -East Kern Water Agency
• Castroville Community Services District
• Central California Irrigation District
• Chino Basin Water Conservation District
• Chino Valley Independent Fire District
• Central Sanitary District (Contra Costa County)
• Consolidated Central Valley Table Grape Pest & Disease Control District
• Crestline Sanitation District
• Dudley Ridge Water District
7
http://caltrust.blueriverdigital.com/Participants.aspx?print--Y 4/2/2014
Participating Agencies
Page 2 of 2
Eastern Municipal Water District
Fallbrook Healthcare District
Helendale Community Services District
Inland Empire Resrouce Conservation District
Inland Empire Utilities Agency
James Irrigation District
Kings River Conservation District
Kinneloa Irrigation District
Los Angeles County Metropolitan Transportation Agency
Midway City Sanitary District*
Monterey Peninsula Regional Park District
Orange County Cemetery District
Regional Government Services Authority
Rio Alto Water District*
San Bernardino Valley Water Conservation District
San Diego Unified Port District
San Luis & Delta -Mendota Water Authority
San Mateo Transit Authority*
Santa Ana Watershed Project Authority
Santa Lucia Community Services District
South Coast Water District
South Feather Water and Power Agency
Tulare Local Healthcare District
Water Facilities Authority*
West County Wastewater District (Contra Costa County)
Westlands Water District*
West Valley Mosquito and Vector Control District*
West Valley Water District
Yorba Linda Water District
Other:
ABAG Finance Authority
ACWA Health Benefits Authority
ACWA JPA Insurance Authority
Alameda Alliance for Health
ALPHA Fund*
Association of California Water Agencies (ACWA)
Bay Area Toll Authority
California Counties Foundation
California State Association of Counties
California Special Districts Association (CSDA)
Chino Basin Watermaster
CPS Human Resource Services
CRHMFA Homebuyers Fund
CSAC Finance Corporation
CSDA Finance Corporation
CSU — Risk Management Authority
League of California Cities
National Association of Counties (NACO)
National Homebuyers Fund, Inc.
Rural County Representatives of California
• San Diego County Airport Authority
• Special District Leadership Foundation
• State Association of County Retirement Systems
Community Colleges
- College of the Sequoias
*JPA Member
E-11
http://caltrust.blueriverdigital.com/Participants.aspx?print--Y 4/2/2014
Portfolio & Perfonnance
Portfolio & Performance
Fund
Current
7 Day
Yield'
Current
Duration2
Prior
Month's
Yield2
CalTrust Short Term Fund
0.38%
0.69
0.39%
CalTrust Medium Term Fund
0.67%
1.57
0.67%
The Heritage Money Market Fund
- Select Class
Click here for details
Total Assets in CalTrust Program $1,720,427,532.00
1 Yield represents the 7 Day Net Distribution yield on investments for the period.
2 As of End of the Prior Month (2/28/2014).
All Yields are quoted net of Fees.
Portfolio & Performance:
Money Market Fund
CalTRUST Short Term Fund (PDF)
CalTRUST Medium Term Fund (PDF)
Portfolio Holdings:
CalTRUST Heritage Money Market Fund
CalTRUST Short Term Fund
CalTRUST Medium Term Fund
Monthly Market Updates'.
CalTRUST Monthly Market Update - February 2014
CalTRUST Monthly Market Update - January 2014
CalTRUST Monthly Market Update - December 2013
CalTRUST Monthly Market Update - November 2013
CalTRUST Monthly Market Update - October 2013
CalTRUST Monthly Market Update - September 2013
CalTRUST Monthly Market Update - August 2013
CalTRUST Monthly Market Update - July 2013
CalTRUST Monthly Market Update - June 2013
CalTRUST Monthly Market Update - May 2013
CalTRUST Monthly Market Update - April 2013
CalTRUST Monthly Market Update - March 2013
401
http://caltrust.blueriverdigital.com/portfolio.aspx?print--Y 4/2/2014
BOARD MEMBER ITEMS
T4tyl 4 4 Q"
MEMORANDUM
TO: Investment Advisory Board
FROM: Patrick Griffin, Interim Finance Director / City Treasurer
DATE: April 16, 2014
SUBJECT: Investment Policy Update -Additional Information Requested by
IAB at the April 9, 2014 Meeting
At the April 9. 2014 Investment Advisory Board meeting, the Board requested
additional information from staff concerning potential new investment instruments
being considered for the updated Investment Policy. Specifically, Chairman
Mortenson requested information on the performance of the CalTrust portfolio for
May - July 2013, Board Member Spirtos requested information regarding
CalTrust's Medium Term Fund, and regarding any principal losses since
inception, and Board Member Godbey suggested consideration of adding the
Riverside County Investment Fund to the list of authorized investments.
Provided below is information to respond to the Board's questions and
suggestions.
The table below provides a comparison of the performance of LAIF, CalTrust
Short Term Fund, CalTrust Medium Term Fund, and Riverside County
Investment Fund from January 2013 through January 2014.
LAIF
CalTrust
CalTrust
Riverside
ShortTerm
MediumTerm
County
January2013
0.32
0.30
0.76
0.37
Febru a ry 2013
0.219
0.30
0.75
0.38
March 2013
0.29
0.44
0.91
0.37
April 2013
0.30
0.67
0.37
May 2013
0.25
0.31
0.67
June 2013
0.29
0.56
0.39
J u ly 2013
.0.25
0.35
0.62
0.37
August 2013
0.33
0.58
0.39
September 2013
25
0.34
0.63
038
October 2013
0.25
0.41
0.70
0.39
November 2013
0.34
0.51
0.39
De ce m lite r 2013
0.26
0.38
0.70
0.33
January 2014
0.26
D.40
0.70
0.37
TO: Investment Advisory Board
FROM: Patrick Griffin, Interim Finance Director / City Treasurer
DATE: April 16, 2014
SUBJECT: Investment Policy Update —Additional Information Requested by
IAB at the April 9, 2014 Meeting
CalTrust
I contacted representatives at CalTrust to gather information regarding
restrictions for deposit and withdrawal from the Medium Term Fund, along with
posing the question regarding principal losses since the inception of the CalTrust
program. With regard to restrictions for deposit and withdrawal, transactions in
and out of the Medium Term Fund can be performed one time per month, on the
last business day. Conversely, the Short Term Fund allows for unlimited deposit
and withdrawal activity throughout the month, with a one -day notice prior to
withdrawal.
With regard to the question of principal losses, the CalTrust representative
indicated that there has not been a principal loss experienced in the Short Term
Fund since inception. As it relates to the Medium Term Fund, the representative
was not aware of any principal losses experienced by a CalTrust participant;
however, he further explained that the Medium Term Fund is designed for longer
term investing; thus, per share pricing may experience greater volatility than the
Short Term Fund, potentially resulting in a principal loss. For example, if an
agency invested funds in January, then immediately withdrew the funds in
February, and during that time the per share price dropped slightly, then the
earnings in that single month might not be sufficient to cover the drop in per
share price. This is why CalTrust advises participants to utilize the Medium Term
Fund for longer period investing.
Finally, the representative indicated that CalTrust fund assets recently surpassed
$2 billion, with 195 participants State-wide.
Riverside County Investment Fund
Attached to this memorandum is a two -page fund disclosure document from the
County website. The disclosure document indicates that the fund's investments
are bound by an investment policy that is more restrictive than the State
Government Code. The fund's assets are currently at $5.3 billion with a current
yield of .39% (February 2014) and AAA ratings from both Moody's and Fitch.
The County requires that participants agree to specific terms and conditions via
passage of a City resolution. Specific conditions include
acknowledgement of a 30-day notice for withdrawal of funds
quarterly distribution of earnings/losses to participants based on average
daily cash balances
deduction of administrative costs from the quarterly distribution (these
include the cost for staff salaries and benefits, computer and office
expenses
6
TO: Investment Advisory Board
FROM: Patrick Griffin, Interim Finance Director/ City Treasurer
DATE: April 16, 2014
SUBJECT: Investment Policy Update —Additional Information Requested by
IAB at the April 9, 2014 Meeting
Given that the administrative costs are deducted prior to earnings distributions on
a quarterly basis, it appears that the cost of administration is not reflected in the
monthly earnings rate shown in the table above (LAIF and CalTrust both provide
earnings rates net of administrative costs). Thus, it may be more beneficial for
the City to consider only the addition of CalTrust at this time, as participation in
the CalTrust Short and Medium Term Funds will provide added flexibility and
additional earnings potential without the same restrictions of the Riverside
County pool.
In order to meet the June 30th Investment Policy update deadline, staff will be
providing the IAB with a redlined version of the current Policy shortly, This
version will outline the changes suggested by the Board to date, and will also
provide suggested language for the addition of CalTrust and County of Riverside,
with the goal to receive final direction at your May 14, 2014 meeting. This
timeline will allow staff to present the Board's recommendations to the City
Council in sufficient time for adoption prior to the June 30th deadline.
Please do not hesitate to contact me at 760-777-7054 if you have any questions
about this information.
3
RIVERSIDE COUNTY POOLED INVESTMENT FUND
The County Treasurer maintains one Pooled Investment Fund (the "PIF") for all local jurisdictions
having funds on deposit in the County Treasury. As of January 31, 2014, the portfolio assets comprising
the PIF had a market value of $5,300,848,415.52.
State law requires that all operating moneys of the County, school districts, and certain special
districts be held by the County Treasurer. On June 30, 2013, the Auditor-Controlier performed an
analysis on the County Treasury which resulted in the identification and classification of "mandatory" vs.
"discretionary" depositors. The County Auditor -Controller reports that collectively, these mandatory
deposits constituted approximately 77.18% of the funds on deposit in the County Treasury, while
approximately 22.82% of the total funds on deposit in the County Treasury represented discretionary
deposits.
While State law permits other governmental jurisdictions to participate in the County's PIF, the
desire of the County Treasurer is to maintain a stable depositor base for those entities participating in
the PIF.
All purchases of securities for the PIF are to be made in accordance with the County Treasurer's
2013 Statement of Investment Policy, which is more restrictive than the investments authorized
pursuant to Sections 53601 and 53635 of the California Government Code. The Policy Statement
requires that all investment transactions be governed by first giving consideration to the safety and
preservation of principal and liquidity sufficient to meet daily cash flow needs prior to achieving a
reasonable rate of return on the investment. Investments are not authorized in reverse -repurchase
agreements except for an unanticipated and immediate cash flow need that would otherwise cause the
Treasurer to sell portfolio securities prior to maturity at a principal loss.
The investments in the Treasurer's Pooled Investment Fund as of January 31, 2014 were as follows:
U.S. Treasury Securities
Federal Agency Securities
Cash Equivalent & Money Market Funds
Commercial Paper
Medium Term Notes
Municipal Notes
Certificates of Deposit
Repurchase Agreements
Local Agency Obligations
Book Yield
Weighted Average Maturity (years)
$370,211,328:15
6.98%
$3,101,421,454.92
58.47%
$645,000,000.00
12.16%
$941,954,053.63
17.76%
0.00%
$50,073,728.70
0.94%
$195,000,000-00
3.68%
0.00%
$455,000-00
0.01%
$5,304,115,565.40
100.00%
0.37%
1.262
(1) Represents County Obligations issued by the Riverside District
Court Financing Corporation.
As of January 31, 2014, the market value of the PIF was 99.94% of book value. The Treasurer
estimates that sufficient liquidity exists within the portfolio to meet daily expenditure needs without
requiring any sale of securities at a principal loss prior to their maturity.
In keeping with Sections 53684 and 53844 of the California Government Code, all interest,
income, gains and losses on the portfolio are distributed quarterly to participants based upon their
average daily balance except for specific investments made on behalf of a particular fund. In these
instances, Sections 53844 requires that the investment income be credited to the specific fund in which
the investment was made.
The Board has established an "Investment Oversight Committee" in compliance with California
Government Code Section 27131. Currently, the Committee is composed of the County Finance
Director, the County Treasurer -Tax Collector, the County Superintendent of Schools, a school district
representative and a public member at large. The purpose of the committee is to review the prudence
of the County's investment policy, portfolio holdings and investment procedures, and to make any
findings and recommendations known to the Board. As of September 29, 2004, the State no longer
required the County to have a local oversight committee, however, the County has elected to maintain
the committee. The committee is utilized by the County to safeguard public funds and to perform other
internal control measures.
The County has obtained a rating on the PIF of "AAA-bf" from Moody's Investors Service and
"AAA/Vl" rating from Fitch Ratings. There is no assurance that such ratings will continue for any given
period of time or that any such rating may not be lowered, suspended or withdrawn entirely by the
respective rating agency if, in the judgment of such rating agency, circumstances so warrant.