COMPLETED RESOLUTION NO. 10-2�J59
Before the Board of Supervisors in and for the
County of Monterey, State of California
Resolution No: 10 231
a. Receive and Accept the Treasurer's Report of Investments for
the quarter ending June 30, 2010;
b. Receive and adopt Resolution amending the Treasurer's
investment policy for Fiscal Year 2010-11; and
c. Delegate Investment Authority to the Treasurer-Tax Collector
pursuant to California Government Code 53607.
WHEREAS, Government Code Section 53646(b) requires the Treasurer-Tax Collector to submit
a quarterly report of investments to the Board of Supervisors;
WHEREAS, Government Code Section 53646 requires the Board of Supervisors to receive and
adopt the Treasurer's amended investment policy; and
WHEREAS, Government Code Section 53607 requires the Board of Supervisors to delegate
investment authority to the Treasurer.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Supervisors does hereby:
Received and accepted the Treasurer's Report of Investments for the quarter ending June
30, 2010;
Received and adopted the Treasurer's amended investment policy; and
Delegated investment authority to the Treasurer-Tax Collector.
PASSED AND ADOPTED on this 27th day of July, 2010, upon motion of Supervisor Potter,
seconded by Supervisor Armenta, by the following vote, to-wit:
AYES: Supervisors Armenta, Calcagno, Salinas, Parker, Potter
NOES: None
ABSENT: None
I, Gail T. Borkowski, Clerk of the Board of Supervisors of the County of Monterey, State of California, hereby
certify that the foregoing is a true copy of an original order of said Board of Supervisors duly made and entered in
the minutes thereof of Minute Book 75 for the meeting on July 27, 2010.
Dated: July 29, 2010 Gail T. Borkowski, Clerk of the Board of Supervisors
County of Monterey, State of California
By
Deputy
1)
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SIGNED BOARD REPORTX��"�LMONTEREY COUNTY BOARD OF SUPERVISORS
MEETING: July 27, 2010
AGENDA NO:
SUBJECT: A. Receive and Accept the Treasurer's Report of Investments for the quarter ending June
30, 2010; and B. Receive and adopt a Resolution amending the Treasurer's investment policy for FY
2010-11; and C. Delegate Investment Authority to the Treasurer-Tax Collector pursuant to California
Government Code 53607.
DEPARTMENT: Treasurer-Tax Collector
RECOMMENDATION:
It is recommended that the Board of Supervisors:
A. Receive and accept the Treasurer's Report of Investments for the quarter ending June 30, 2010.
B. Receive and adopt the Treasurer's amended investment policy for FY 2010-11
C. Delegate Investment Authority to the Treasurer-Tax Collector pursuant to California
Government Code 53607.
SUMMARY:
Government Code Section 53646 b) requires the Treasurer submit a quarterly report of investments.
The attached Exhibit A provides a narrative portfolio review of economic and market conditions that
support the investment activity during the April June period. Exhibit B describes the investment
portfolio position by investment type as of June 30, 2010. Exhibit C is a listing of common investment
definitions and is included for reference purposes, Exhibit D describes the investment portfolio by
maturity range, and Exhibit E is an overview of the short term funds that the Treasurer uses to store
overnight, liquid assets.
The annual approval of investment policy and approval of investment delegation authority are
prescribed by Government Code Sections 53646 and 53607.
DISCUSSION:
A. ACCEPT TREASURER'S REPORT OF INVESTMENTS FOR QUARTER ENDING JUNE
30, 2010
During the fourth quarter of FY 2009-10, the investment portfolio continued to be subject to downward
pressure on interest rates. Due to poor global economic news, the continued flight to safety resulted in
lower yields along all areas of the U.S. Treasury yield curve.
On June 30, 2010 the Monterey County investment portfolio contained an amortized cost basis of
$966,849,153 spread among 76 separate securities and funds. The par value of those funds was
$963,059,296, and the market value was $967,564,072 or 1.07% of amortized book value. The
portfolio's net earned income yield for the period was 0.57%. The portfolio's net earned income yield
for FY 09-10 was 0.75%. The corresponding yield for U.S. Treasury securities with a 6 Month
maturity was 0.22%. The portfolio produced estimated income of $1,507,934 for the quarter which
will be distributed proportionally to all agencies participating in the investment pool. The investment
portfolio had a weighted average maturity of 226 days.
The investment portfolio was in compliance with all applicable provisions of state law and the adopted
investment policy, and contained sufficient liquidity to meet all projected outflows over the next six
months. Market value pricings were obtained through Bloomberg LLP, Union Bank of California and
included live-bid pricing of corporate securities.
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SIGNED BOARD REPORTX��"�LB. ADOPT TREASURER'S INVESTMENT POLICY FOR FY 2010-11
Annual adoption of the Investment Policy is required by Section 53646 of the Government Code. The
current and proposed Investment Policy is on file with the Clerk to the Board. Exhibit F is the Red
Line version of the amended policy, while Exhibit G is the final amended version, There are several
non substantive changes in regards to the state codes that delegate investment authority to the
Treasurer-Tax Collector as well as the deletion of an investment type NOW account) from Appendix
A, as it is no longer offered by financial institutions. The dollar limit for California State Treasurer's
Local Agency Investment Fund has also been raised from 40 million to 50 million in response to the
fund raising it's limit for individual investors. The most significant change has been made to Section
10 of the investment policy which has been re-written to streamline a redundant process for the
withdrawal of funds from the treasury pool.
C. DELEGATE INVESTMENT AUTHORITY TO THE TREASURER-TAX COLLECTOR FOR
FY 2010 11
Government Code Section 53607 permits the Board to annually delegate investment authority to the
Treasurer-Tax Collector.
OTHER AGENCY INVOLVEMENT:
The changes made to the Investment Policy have been reviewed by the Treasury Oversight Committee
and County Counsel.
A copy of this report will be distributed to all agencies participating in the County investment pool and
the Treasury Oversight Committee. In addition, the report will be displayed on the County Treasurer's
web site. A monthly report of investment transactions is provided to the Board of Supervisors as
required by GC 53607.
FINANCING:
The investment portfolio contains sufficient liquidity to meet all projected expenditures over the next
six months. We estimate that the investment earnings in the General Fund will be consistent with
budgeted revenue, but at historically low levels, as the Federal Reserve is expected to continue
keeping short term interest rates at the current rate of 0.00 0.25%.
Ongoing recovery efforts for defaulted Washington Mutual and Lehman Brothers are more fully
described in Exhibit A.
Approved by:
Pre
b
p
y
Eamonn M. Mahar Lo A Solton
Investment Officer Treasurer-Tax Collector
June 30, 2010 June 30, 2010
cc: County Administrative Office
County Counsel
Auditor-Controller Internal Audit Section
All depositors
Treasury Oversight Committee
Attachments:
Exhibit A Investment Portfolio Review 03.3
Exhibit B Portfolio Management Report 03.31.10
Exhibit C Investment Definitions
Exhibit D Aging Report 03.31.10
Exhibit E JPA and Money Market Fund overview
Exhibit F Red Line version of amended Investment Policy
Exhibit G Final version of amended Investment Policy
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EXHIBIT - A�X��"�OExhibit A
Investment Portfolio Review
Quarter Ending June 30, 2010
OVERVIEW April 1 June 30, 2010
During the April to June quarter the treasury yield curve began to flatten as the European
credit crisis and multiple domestic economic indicators caused most investors to continue
the flight to safety by investing in US Treasuries. Much of the increase in unemployment
can be directly attributed to the loss of temporary jobs that were created by the hiring of
US census workers, but the slowing in other areas of the economy, such as lower
manufacturing, construction spending and home sales continue to keep investors out of
the stock markets. Financial institutions continue to be wary of the increase in strategic
defaulting", where homeowners default on homes they can still afford, simply because
they have become bad investments. These issues continue to be a factor in the 45
additional regional banks that have failed since our last report.
Even with the recent bad global economic news, economists continue to be optimistic in
the short run about the US economy. There is still half of the original $787 billion
economic stimulus package that has yet to be distributed. Since the funds are targeted
towards specific projects, they should help in prohibiting increases in unemployment.
With these factors in mind and in the absence of any significant inflation, the Fed has
continued to maintain their position that they will keep rates at their historic lows for an
extended period of time". The following indicators reflect key aspects of the County's
investment portfolio in light of the above noted conditions:
1 Market Access The U.S. Treasury continues to issue substantial amounts of
debt instruments. This is due to continued efforts to stimulate the economy by
providing funding for financial institutions and ongoing military funding
requirements. Access to U.S. Treasuries is plentiful, but investor's ongoing
desire for safe havens to store funds has continued to force yields down on
Treasury bonds. Investors continue to be wary of any negative economic
news, global and domestic, and prefer the safety of U.S. Treasuries to any
potential gains in other markets.
During the quarter, the majority of County investment purchases continue to
be in U.S. Treasury and Agency markets, with some additional investments in
shorter term, highly rated AA or better) Corporate bonds and highly rated
Al, PI), short term Commercial Paper. In addition, the Treasurer continued
to keep a high level of overnight liquid assets, reflecting the need to maintain
increased levels of available cash to ensure our ability to meet any cash flow
needs.
1
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EXHIBIT - A�X��"�O2. Diversification The Monterey County Treasurer's portfolio consists of
several different types of fixed income investments, all of which are
authorized by the State of California Government Code 53601.
The portfolio asset spread is noted in the pie chart below:
3. Credit Risk Approximately 92.3% of the investment portfolio is comprised
of U.S. Treasuries, Federal Agency securities and other liquid funds. All of
those assets have an investment grade rating. U.S. Treasuries are not
specifically rated, but are considered the safest of all investments. The
corporate debt 7.72%) is rated in the higher levels of investment grade. All
federal agency securities have AAA ratings or they are guaranteed by the U.S.
Treasury.
4. Liquidity Risk Liquidity risk, as measured by the ability of the county's
treasury to meet withdrawal demands on invested assets, was adequately
managed during the April to June quarter. This is due to an average maturity
of 226 days and the large percentage 33.91 %) of assets held in immediately
available funds.
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EXHIBIT - A�X��"�OPORTFOLIO CHARACTERISTICS
March 31, 2010 June 30, 2010
Total Assets $1,038,544,130 $966,849,153.33
Market Value $1,046,366,514 $967,564,072.28
Days to Maturity 174 226
Yield 0.53% 0.57%
Estimated Earnings $ 1,378,395.72 $ 1,507,934.11
FUTURE STRATEGY
The U.S. Treasury has continued a policy of heavy borrowing for stimulus programs,
military funding and other additional needs. We continue to believe this policy will lead
to higher interest rates in the future. In order to mitigate the risk of incurring market
value losses when yields begin to rise, the Treasurer will maintain a ladder of rolling
asset maturities that ensure the safety and continued liquidity of the overall portfolio in
any market environment. With the current uncertainty about the California State budget,
and because of low rates in the short term US Treasury bond markets, the Treasurer has
begun to shorten the portfolio ladder and increase overnight funds in defense against
unknown decreases in state funding.
In the near term the Treasurer believes short term yields will remain extremely low and
will not begin to rise until we see consistent improvement in the unemployment rate. The
Treasurer's rolling investment ladder will access the short term Treasury and Agency
market with expected yields over the next 90 days of less than one-half percent. In our
efforts to continue to provide the safest vehicles for Treasury investments, the Treasurer
will maintain a portfolio weighted with U.S. Treasuries, Federal Agency securities, and
highly liquid funds.
Finally, the Treasurer continues to aggressively pursue recovery of the defaulted Lehman
Brothers and Washington Mutual bonds $24.375 million). Monterey County and other
similarly impacted public agencies continue recovery efforts through a combination of
legislative & litigious actions.
3
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EXHIBIT - B�X��"�SMonterey County
Portfolio Management Report
Exhibit B
June 30, 2010
CUSIP
Moodys/S&P Investment #
Issuer Purchase
Date
Par Value
Market Value
Book Value Stated
Rate YTM
365 Days to
Maturity Maturity
Date
Money Market Accts-GC 53601(k)(2)
SYS11672 N/A 11672 BlackRock 03/23/2010 10,925,557.02 1,092,557.02 1,092,557.02 0.188 0.191 1
SYS11601 Aaa/AAAm 11601 CalTrust 09/03/2009 31,528,804.35 31,528,804.35 31,528,804.35 0.245 0.248 1
SYS11578 Aaa/AAAm 11578 Fidelity Investments 10/31/2009 98,600,000.00 98,600,000.00 98,600,000.00 0.269 0.237 1
SYS11580 Aaa/AAAm 11580 Fidelity Investments 07/01/2009 993,592.72 993,592.72 993,592.72 0.269 0.273 1
Subtotal and Average 142,047,954.09 142,047,954.09 142,047,954.09 0.233 1
State Pool-GC 53601(p)
SYS11361 N/A 11361 LAIF 07/01/2009 50,000,000.00 50,000,000.00 50,000,000.00 0.569 0.577 1
SYS11422 N/A 11422 LAIF 07/01/2009 40,000,000.00 40,000,000.00 40,000,000.00 0.569 0.577 1
Subtotal and Average 90,000,000.00 90,000,000.00 90,000,000.00 0.569 1
CAMP-GC 56301(p)
SYS10379 NR/AAAm 10379
Calif. Asset Mgmt
90,400,000.00
90,400,000.00
90,400,000.00
0.202
0.205
1
SYS1 1457 NR/AAAm 11457 Calif. Asset Mgmt 2,310,323.04 2,310,323.04 2,310,323.04 0.202 0.211 1
SYS11526 NR/AAAm 11526 Calif. Asset Mgmt 3,051,018.67 3,051,018.67 3,051,018.67 0.202 0.211 1
Subtotal and Average 95,761,341.71 95,761,341.71 95,761,341.71 0.202 1
Negotiable CDs GC 53601 i)
78009JZL2 A1+/P1 11670 RBC Capital Markets 02/24/2010 10,000,000.00 9,976,809.60 10,000,000.00 0.400 0.406 238 02/24/2011
Subtotal and Average 10,000,000.00 9,976,809.60 10,000,000.00 0.400 238
Medium Term Notes GC 53601(k)
36962GX82 Aa2/AA+ 11420 General Electric 04/04/2008 5,000,000.00 5,117,500.00 5,021,089.90 5.720 5.310 417 08/22/2011
36962GXS8 Aa2/AA+ 11634 General Electric 10/26/2009 5,000,000.00 5,315,000.00 5,265,899.64 5.875 2.480 594 02/15/2012
36962GT38 Aa2/AA+ 11637 General Electric 11/10/2009 5,000,000.00 5,245,000.00 5,216,031.31 5.000 1.780 502 11/15/2011
36962GZ49 Aa2/AA+ 11660 General Electric 01/07/2010 10,000,000.00 9,741,800.00 9,797,778.78 0.474 1.387 854 11/01/2012
46625HGH7 Aa3/A+ 11461 JP Morgan Chase 05/22/2008 4,000,000.00 3,998,840.00 3,981,604.04 0.546 1.739 319 05/16/2011
929903CF7 Al/AA- 11636 Wachovia Securities 11/10/2009 5,000,000.00 5,243,750.00 5,218,013.24 5.300 1.840 471 10/15/2011
929903CG5 Al/AA- 11661 Wachovia Securities 01/13/2010 10,000,000.00 9,952,400.00 9,964,822.19 0.433 0.717 471 10/15/2011
949748AF4 Aa3/AA- 11638 Wells Fargo & Company 11/10/2009 10,000,000.00 10,290,000.00 10,274,047.62 6.450 1.681 215 02/01/2011
Subtotal and Average 54,000,000.00 54,904,290.00 54,739,286.72 1.866 490
Commercial Paper Disc.- GC 53601(h)
80927VK44 A1+/P1 11684 Scotiabanc Inc 04/09/2010 10,000,000.00 9,988,014.38 9,990,763.89 0.350 0.355 95 10/04/2010
Subtotal and Average 10,000,000.00 9,988,014.38 9,990,763.89 0.351 95
Fed Agcy Coupon Sec GC 53601(f)
31331YYU8 Aaa/AAA 11625 Federal Farm Credit Bank 10/09/2009 10, 000, 000.00 10, 000, 000.00 10, 000, 000.00 2.250 0.223 0 07/01/2010
31331 VSK3 Aaa/AAA 11668 Federal Farm Credit Bank 02/04/2010 10, 000, 000.00 10, 281, 300.00 10, 282,960.96 4.875 0.374 232 02/18/2011
31331JFS7 N/A/AAA 11675 Federal Farm Credit Bank 03/30/2010 10,000,000.00 10,000,000.00 9,996,269.49 0.380 0.023 243 03/01/2011
3133XTM37 Aaa/AAA 11581 Federal Home Loan Bank 07/06/2009 10, 000, 000.00 10, 028,100.00 10, 010, 358.28 1.050 0.770 137 11/15/2010
3133XTTF3 Aaa/AAA 11582 Federal Home Loan Bank 07/06/2009 10, 000, 000.00 10, 025, 000.00 10, 002, 098.62 0.850 0.800 155 12/03/2010
3133XU2W2 Aaa/AAA 11615 Federal Home Loan Bank 10/02/2009 10, 000, 000.00 10, 000, 000.00 10, 000, 397.81 0.570 0.283 5 07/06/2010
3133XRWLO Aaa/AAA 11621 Federal Home Loan Bank 10/06/2009 10,000,000.00 10,037,500.00 10,035,679.48 3.375 0,310 43 08/13/2010
3133XCQZ9 Aaa/AAA 11629 Federal Home Loan Bank 10/1512009 10, 000, 000.00 10, 087, 500.00 10, 085, 316.87 4.375 0.324 78 09/17/2010
3133XGLE2 Aaa/AAA 11631 Federal Home Loan Bank 10/19/2009 10,000,000.00 10,100,000.00 10,091,589.44 5.125 0.335 71 09/10/2010
3133XV7F2 Aaa/AAA 11633 Federal Home Loan Bank 10/20/2009 10, 000, 000.00 10, 006, 300.00 10, 000, 921.27 0.440 0.405 98 10/07/2010
3133XVEJ6 Aaa/AAA 11648 Federal Home Loan Bank 11/25/2009 10,000,000.00 10,012,500.00 10,007,714.80 0.500 0.304 145 11/23/2010
3133XDTA9 Aaa/AAA 11649 Federal Home Loan Bank 11/25/2009 10,000,000.00 10,200,000.00 10,194,989.12 4.750 0.324 162 12/10/2010
3133XUB28 Aaa/AAA 11651 Federal Home Loan Bank 12/01/2009 10,000,000.00 10,028,100.00 10,026,176.53 0.850 0.375 203 01/20/2011
3133XUBV4 Aaa/AAA 11652 Federal Home Loan Bank 12/01/2009 10,000,000.00 10,021,900.00 10,027,825.94 0.880 0.375 203 0112012011
3133XXCU9 Aaa/AAA 11671 Federal Home Loan Bank 03/02/2010 10,000,000.00 10,000,000.00 10,002,815.73 0.375 0.331 237 02/23/2011
3133XY4R3 Aaa/AAA 11687 Federal Home Loan Bank 04/15/2010 10,000,000.00 10,006,300.00 9,999,503.00 0.500 0.506 288 04/15/2011
3133XYKM6 Aaa/AAA 11692 Federal Home Loan Bank 05/19/2010 10,000,000.00 10,006,300.00 10,000,353.07 0.500 0.496 320 05/17/2011
3133XYLB9 Aaa/AAA 11693 Federal Home Loan Bank 05/24/2010 10,000,000.00 10,006,300.00 9,999,462.54 0.500 0.506 322 05/19/2011
3134A4VB7 Aaa/AAA 11614 Federal Home Loan Mtg Corp 09/29/2009 10,000,000.00 10,012,500.00 10,011,590.42 4.125 0.323 11 07/12/2010
3137EAB01 Aaa/AAA 11620 Federal Home Loan Mtg Corp 10/06/2009 10,000,000.00 1QC12,500,00 i0, 0012,35089 3.250 0.280 15 07/16/2010
3137EAAX7 Aaa/AAA 11622 Federal Home Loan Mtg Corp 10/06/2009 10, 000, 000.00 10, 071, 900.00 10,069, 395.54 5.125 0.310 53 08/23/2010
3134A35H5 Aaa/AAA 11627 Federal Home Loan Mtg Corp 10/14/2009 10, 000, 000.00 10,140, 600.00 10,133,893 05 6.875 0.345 76 09/15/2010
3137EABWB Aaa/AAA 11667 Federal Home Loan Mtg Corp 02101/2010 10, 000, 000.00 10,061, 500.00 10,060, 616.07 1.500 0.324 190 01/07/2011
BIB]
40389-U01
EXHIBIT-U02
U02
B-U02
LI21329-U03
FO21330-U03
FO85769-U03
FO89518-U03
MG89556-U03
AS89582-U03
AS89586-U03
AI93618-U03
DO94006-U03
C1-U03
GENERAL-U03
DOCUMENTS-U03
7/29/2010-U04
RIVASR-U04
15336-U05
4-U06
A.-U07
RECEIVE-U07
ACCEPT-U07
TREASURER-U07
S-U07
REPORT-U07
OF-U07
INVESTMENTS-U07
QUARTER-U07
ENDING-U07
JUNE-U07
30,-U07
2010;-U07
117-TREASURER/TAX-U08
COLLECTOR-U08
CROOKE-U09
ELIZABETH-U09
CROOKEEA-U10
7/15/2010-U011
B.-U012
RECEIVE-U012
ADOPT-U012
RESOLUTION-U012
AMENDING-U012
TREASURER-U012
S-U012
INVESTMENT-U012
POLICY-U012
FISCAL-U012
YEAR-U012
2010-11;-U012
C.-U012
DELEGATE-U012
INVESTMENT-U012
AUTHORITY-U012
TO-U012
TREASURER-TAX-U012
COLLECTOR-U012
PURSUANT-U012
TO-U012
CALIFORNIA-U012
GOVERNMENT-U012
CODE-U012
53607.-U012
EXHIBIT - B�X��"�SMonterey County
Portfolio Management Report
Exhibit B
June 30, 2010
Purchase Stated YTM Days to Maturity
CUSIP Moodys/S&P Investment # Issuer Date Par Value Market Value Book Value Rate 365 Maturity Date
3128X96S4 Aaa/AAA 11689 Federal Home Loan Mtg Corp 04/30/2010 10,000,000.00 10,008,200.00 10,000,000.00 1.500 1.496 760 07/30/2012
31398ASC7 Aaa/AAA 11616 Federal National Mtg Assn 10/02/2009 10,000,000.00 10,009,400.00 10,008,223.68 3.000 0.303 11 07/12/2010
3136FHFEO Aaa/AAA 11632 Federal National Mtg Assn 10/19/2009 10,000,000.00 10, 028,100.00 10,024,215.60 1.500 0.335 77 09/16/2010
31398AVQ2 Aaa/AAA 11644 Federal National Mtg Assn 11/20/2009 10, 000, 000.00 10,096,900.00 10,088,255.49 1.750 0.531 265 03/23/2011
31359MHK2 Aaa/AAA 11680 Federal National Mtg Assn 04/07/2010 10,000,000.00 10,359,400.00 %352,564.02 5.500 0.485 257 03/15/2011
31398AWQ1 Aaa/AAA 11686 Federal National Mtg Assn 04/12/2010 10,000,000.00 10,078,100.00 10,069,747.61 1.375 0.526 301 04/28/2011
Subtotal and Average 290,000,000.00 291,726,200.00 291,595,285.32 0.419 171
US Treasury Note-GC 53601(b)
912828JSO N/R 11586 U.S. Treasury 07/24/2009 10,000,000.00 10,043,000.00 10, 022, 596.15 1.250 0.703 152 11/30/2010
9128276J6 N/R 11613 U.S. Treasury 09/29/2009 10,000,000.00 10,068,400.00 10,066,415.78 5.750 0.355 45 08/15/2010
912828JJO N/R 11617 U. S. Treasury 10/02/2009 10,000,000.00 10,036,300.00 10,034,346.85 2.375 0.313 61 08/31/2010
912828JJO N/R 11626 U.S.Treasury 10/09/2009 10,000,000.00 10,036,300.00 10,034,667.09 2.375 0.294 61 08/31/2010
912828JL5 N/R 11630 U.S.Treasury 10/15/2009 10, 000, 000.00 10, 044, 500.00 10,041,640.62 2.000 0.326 97 09/30/2010
912828JV3 N/R 11641 U.S.Treasury 11/18/2009 10, 000, 000.00 10,031,300.00 10,026,281.02 0.875 0.349 183 12/31/2010
912828EQ9 N/R 11642 U.S. Treasury 11/18/2009 10,000,000.00 10,189,500.00 10,184,719.79 4.375 0.326 167 12/15/2010
912828JP6 N/R 11643 U.S. Treasury 11/18/2009 10,000,000.00 10,043,000.00 10,040,652.02 1.500 0.281 122 10/31/2010
912828EJ5 N/R 11645 U.S. Treasury 11/23/2009 10,000,000.00 10,116,400.00 10,116,851.99 4.250 0.219 106 10/15/2010
912828EM8 N/R 11647 U.S. Treasury 11/25/2009 10,000,000.00 10,159,000.00 10,159,448.70 4.500 0.243 137 11/15/2010
912828JY7 N/R 11663 U.S.Treasury 01/20/2010 10, 000, 000.00 10,035,900.00 10,031,277.07 0.875 0.340 214 01/31/2011
912828KH2 N/R 11673 U.S. Treasury 03/26/2010 10,000,000.00 10,042,200.00 10,031,415.76 0.875 0.454 273 03/31/2011
912828KE9 N/R 11674 U.S. Treasury 03/30/2010 10,000,000.00 10,038,700.00 10,032,081.25 0.875 0.390 242 02/28/2011
912828FA3 N/R 11677 U.S. Treasury 04/06/2010 10,000,000.00 10,331,300.00 10,318,436.63 4.750 0.478 273 03/31/2011
912828KL3 N/R 11678 U.S. Treasury 04/06/2010 10,000,000.00 10,044,500.00 10,027,992.45 0.875 0.536 303 04/30/2011
912828FD7 N/R 11679 U.S. Treasury 04/06/2010 10,000,000.00 10,375,000.00 10,359,033.58 4.875 0.534 303 04/30/2011
Subtotal and Average 160,000,000.00 161,635,300.00 161,527,856.75 0.379 171
US Treasury Bill-GC 53061(b)
912795UX7 N/R 11665 U.S. Treasury 01/22/2010 10,000,000.00 9,989,300.00 9,985,300.00 0.270 0.278 196 01/13/2011
912795VDO N/R 11681 U.S. Treasury 04/08/2010 10,000,000.00 9,982,000.00 9,963,833.31 0.465 0.480 280 04/07/2011
912795UJB N/R 11646 US Treasury Bills 11/23/2009 10, 000, 000.00 9,992,800.00 9,990,277.78 0.250 0.257 140 11/18/2010
Subtotal and Average 30,000,000.00 29,964,100.00 29,939,411.09 0.334 205
Federal Agency Step Up-GC 53601(f)
3133XWRD3 Aaa/AAA 11664 Federal Home Loan Bank 01/26/2010 10,000,000.00 10,025,000.00 10,000,000.00 1.000 2.411 1121 07/26/2013
3133XWS59 Aaa/AAA 11666 Federal Home Loan Bank 02/19/2010 6,250,000.00 6,257,812.50 6,250,000.00 1.500 2.545 1145 08/19/2013
3128X9VK3 Aaa/AAA 11662 Federal Home Loan Mtg Corp 01/25/2010 10,000,000.00 10,029,400.00 10,000,000.00 1.000 2.109 939 01/25/2013
3128X9F21 Aaa/AAA 11676 Federal Home Loan Mtg Corp 04/01/2010 10,000,000.00 10,027,000.00 9, 997, 253.76 1.000 2.149 988 03/15/2013
3128X97J3 Aaa/AAA 11688 Federal Home Loan Mtg Corp 04/28/2010 10,000,000.00 10,128,600.00 10,000,000.00 2.125 3.202 1762 04/28/2015
3136FMLQ5 Aaa/AAA 11682 Federal National Mtg Assn 04/20/2010 5,000,000.00 5,026,550.00 5,000,000.00 2.500 2.500 1754 04/20/2015
3136FMLXO Aaa/AAA 11683 Federal National Mtg Assn 04/26/2010 10,000,000.00 10,021,900.00 10,000,000.00 1.125 2.360 1030 04/26/2013
3136FMPZ1 Aaa/AAA 11690 Federal National Mtg Assn 05/12/2010 10,000,000.00 10,009,400.00 10, 000, 000.00 1.250 2.407 1230 11/12/2013
3136FMTZ7 Aaa/AAA 11694 Federal National Mtg Assn 06/08/2010 10,000,000.00 10,034,400.00 10,000,000.00 1.500 3.159 1803 06/08/2015
Subtotal and Average 81,250,000.00 81,560,062.50 81,247,253.76 2.505 1,288
Total and Average 963,059,295.80 967,564,072.28 966,849,153.33 0.631 226
Earned Income Yield
0.57
Weighted Average Market Valuation
100.07
Weighted Average Maturity
226 days
BIB]
40389-U01
EXHIBIT-U02
U02
B-U02
LI21329-U03
FO21330-U03
FO85769-U03
FO89518-U03
MG89556-U03
AS89582-U03
AS89586-U03
AI93618-U03
DO94006-U03
C1-U03
GENERAL-U03
DOCUMENTS-U03
7/29/2010-U04
RIVASR-U04
15336-U05
4-U06
A.-U07
RECEIVE-U07
ACCEPT-U07
TREASURER-U07
S-U07
REPORT-U07
OF-U07
INVESTMENTS-U07
QUARTER-U07
ENDING-U07
JUNE-U07
30,-U07
2010;-U07
117-TREASURER/TAX-U08
COLLECTOR-U08
CROOKE-U09
ELIZABETH-U09
CROOKEEA-U10
7/15/2010-U011
B.-U012
RECEIVE-U012
ADOPT-U012
RESOLUTION-U012
AMENDING-U012
TREASURER-U012
S-U012
INVESTMENT-U012
POLICY-U012
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YEAR-U012
2010-11;-U012
C.-U012
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TO-U012
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CODE-U012
53607.-U012
EXHIBIT - C�X��"�VExhibit C
Investment Definitions
Money Market Accounts- An investment fund that holds the objective to earn interest
for shareholders while maintaining a net asset value NAV) of $1 per share. Mutual
funds, brokerage firms and banks offer these funds. Portfolios are comprised of short-
term less than one year) securities representing high-quality, liquid debt and monetary
instruments.
LAIF- State Pool) State of California's Local Agency Investment Fund. This program
offers local agencies the opportunity to participate in a major portfolio, which invests
hundreds of millions of dollars, using the investment expertise of the State Treasurer's
Office investment staff at no additional cost to the taxpayer. This in-house management
team is comprised of civil servants who have each worked for the State Treasurer's Office
for an average of 20 years. All securities are purchased under the authority of
Government Code Section 16430 and 16480.4
Ca1TRUST Organized as a Joint Powers Authority JPA"), the Investment Trust of
California Ca1TRUST) is a program established by public agencies in California for the
purpose of pooling and investing local agency funds operating reserves as well as bond
proceeds. A Board of Trustees supervises and administers the investment program of the
Trust. The Board is comprised of experienced investment officers and policy-makers of
the public agency members.
CAMP- California Asset Management Program. CAMP is a California JPA established
in 1989 by the treasurers and finance directors of several California local agencies to
provide professional investment services to California public agencies at a reasonable
cost. Monterey County participates in the CAMP money market portfolio.
Medium Term Notes- A marketable debt security issued by a corporation with a fixed
interest rate and term of two to ten years.
Commercial Paper Disc.- A short-term security with maturities ranging from 2 to 270
days issued by banks, corporations and other borrowers. They are usually issued at a
discount from face value.
Federal Agency Coupon Security- A marketable debt security issued by a government-
sponsored enterprise with a fixed interest rate.
Federal Agency Disc.- A marketable debt security issued by a government-sponsored
enterprise that is issued at a discount from face value.
U.S. Treasury Note- A marketable U.S. government debt security with a fixed interest
rate and a maturity between one and ten years.
U.S. Treasury Bill- A short-term debt obligation backed by the U.S. government with a
maturity of one year or less that is issued at a discount from face value.
Federal Agency Step Up- A marketable debt security issued by a government-sponsored
enterprise with an interest rate that increases at pre-set intervals over the term of the
bond.
BIB]
40389-U01
EXHIBIT-U02
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C-U02
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FO89518-U03
MG89556-U03
AS89582-U03
AS89586-U03
AI93618-U03
DO94007-U03
C1-U03
GENERAL-U03
DOCUMENTS-U03
7/29/2010-U04
RIVASR-U04
15336-U05
4-U06
A.-U07
RECEIVE-U07
ACCEPT-U07
TREASURER-U07
S-U07
REPORT-U07
OF-U07
INVESTMENTS-U07
QUARTER-U07
ENDING-U07
JUNE-U07
30,-U07
2010;-U07
117-TREASURER/TAX-U08
COLLECTOR-U08
CROOKE-U09
ELIZABETH-U09
CROOKEEA-U10
7/15/2010-U011
B.-U012
RECEIVE-U012
ADOPT-U012
RESOLUTION-U012
AMENDING-U012
TREASURER-U012
S-U012
INVESTMENT-U012
POLICY-U012
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YEAR-U012
2010-11;-U012
C.-U012
DELEGATE-U012
INVESTMENT-U012
AUTHORITY-U012
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COLLECTOR-U012
PURSUANT-U012
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53607.-U012
EXHIBIT - D�X��"�XMonterey County
Aging Report
Exhibit D
As of July 1, 2010
Monterey County
Maturity
Par Value Percent of
Portfolio Current
Book Value Current
Market Value
Aging Interval: 0 days 07101/2010 07/01/2010 10 Maturities 337.809.295.80 35.08% 337.809.295.80 337.809.295.80
Aging Interval: I 30 days 07/0212010 07/31/2010 4 Maturities 40.000.000.00 4.15% 40,032,562.80 40.034,400.00
Aging Interval: 31 90 days 08/01/2010 09/29/2010 9 Maturities 90,000.000.00 9.35% 90,575.519.70 90,606,600.00
Aging Interval: 91 180 days 09/30/2010 12/28/2010 13 Maturities 130.000.000.00 13.50% 130,763,033.03 130,848.114.38
Aging Interval: 181 365 days 12/29/2010 07/01/2011 24 Maturities 234.000.000.00 24.30% 236.937.853.18 236,081,949.60
Aging Interval: 366 730 days 07/0212011 06/30/2012 5 Maturities 30,000.000.00 3.12% 30.685.856.28 30.873.660.00
Aging Interval: 731 1095 days 07101/2012 06/30/2013 5 Maturities 50.000.000.00 5.19% 49.795.032.54 49.828.300.00
Aging Interval: 1096 days and after 107101/2013 6 Maturities 51,250,000.00 5.32% 51.260.000.00 51,481.762.50
Total for 76 Investments 100.00 966,849,153.33 967,564,072.28
Investments within the Aging Period
$400,000,000
$350,000,000
$300,000,000
$250,000,000
$200 000,000
$150,000,000
$100,000,000
$50,000,000
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BIB]
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EXHIBIT-U02
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AS89582-U03
AS89586-U03
AI93618-U03
DO94008-U03
C1-U03
GENERAL-U03
DOCUMENTS-U03
7/29/2010-U04
RIVASR-U04
15336-U05
4-U06
A.-U07
RECEIVE-U07
ACCEPT-U07
TREASURER-U07
S-U07
REPORT-U07
OF-U07
INVESTMENTS-U07
QUARTER-U07
ENDING-U07
JUNE-U07
30,-U07
2010;-U07
117-TREASURER/TAX-U08
COLLECTOR-U08
CROOKE-U09
ELIZABETH-U09
CROOKEEA-U10
7/15/2010-U011
B.-U012
RECEIVE-U012
ADOPT-U012
RESOLUTION-U012
AMENDING-U012
TREASURER-U012
S-U012
INVESTMENT-U012
POLICY-U012
FISCAL-U012
YEAR-U012
2010-11;-U012
C.-U012
DELEGATE-U012
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AUTHORITY-U012
TO-U012
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GOVERNMENT-U012
CODE-U012
53607.-U012
EXHIBIT - E�X��"�ZJPA & MMF Distribution
Exhibit E
LAIF
Trre Deposits 3.00%
Commercial Paper 3.00%
Asset Backed Conrrercial
Paper 5.00%
Corporate Notes 5%
BlackRock MMF
Domestic CD's 1.00%
CAMP
Ca1TRUST
Other Notes 2.00%
Muni Bonds 9.00 %
Repurchase
Agreements 9.00%
CDs 10.00%
Time Deposits 23.00 %
Fidelity MMF
US Govt & Agency Obligations
Other MMF Investments 3,87%-\ 3900%
Other Corporate Obigabons
0.48%
Finance Companies 0.15%
LAIF CAMP CaITRUST MMF BlackRock MMF Fidelity MMF
Moody's/S&P NR/NR NR/AAAm Aaa/AAAm NR/NR Aaa/AAAm
Net Fund Assets $72,000,000,000 $2,555,730,380 $31,500,000,000 11,000,000,000 33,738,391,161
WAM 203 days 49 days 15 Days 40 days 34 days
Account #'s 11361
11422 10379
11457
11526 11601 11672 11578
11580
% of Portfolio 5.19%
4.15% 9.39%
0.24%
0.32% 4.17% 1.13% 10.24%
0.10%
Quarterly Return 1 0.569% l 0.202�./0 1 0.245% 0.188% 0.269%
BIB]
40389-U01
EXHIBIT-U02
U02
E-U02
LI21329-U03
FO21330-U03
FO85769-U03
FO89518-U03
MG89556-U03
AS89582-U03
AS89586-U03
AI93618-U03
DO94009-U03
C1-U03
GENERAL-U03
DOCUMENTS-U03
7/29/2010-U04
RIVASR-U04
15336-U05
4-U06
A.-U07
RECEIVE-U07
ACCEPT-U07
TREASURER-U07
S-U07
REPORT-U07
OF-U07
INVESTMENTS-U07
QUARTER-U07
ENDING-U07
JUNE-U07
30,-U07
2010;-U07
117-TREASURER/TAX-U08
COLLECTOR-U08
CROOKE-U09
ELIZABETH-U09
CROOKEEA-U10
7/15/2010-U011
B.-U012
RECEIVE-U012
ADOPT-U012
RESOLUTION-U012
AMENDING-U012
TREASURER-U012
S-U012
INVESTMENT-U012
POLICY-U012
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YEAR-U012
2010-11;-U012
C.-U012
DELEGATE-U012
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53607.-U012
EXHIBIT - F�X��"�\
Exhibit F
TREASURER-TAX COLLECTOR
County of Monterey Investment Policy
1.0 Policy.
It is the policy of the Treasurer-Tax Collector of Monterey County to invest public funds
in a manner which provides for the safety of the funds on deposit, the cash flow demands,
or liquidity needs of the treasury pool participants, and the highest possible yield after
first considering the first two objectives of safety and liquidity. In addition, it is the
Treasurer-Tax Collector's policy to invest all funds in strict conformance with all state
statutes governing the investment of public monies.
2.0 Scope.
This investment policy applies to all financial assets of the treasury pool participants.
These funds are accounted for in the annual Financial Reports of the County and each of
the treasury pool's participating agencies.
2.1 Participating Agencies. Participants in the Treasurer's investment pool
shall be limited to the County of Monterey, school districts within Monterey
County and those special districts, which, by statute, maintain depository
authority with the County Treasurer.
2.2 Outside Agency Participation. It is the Treasurer's policy to prohibit any
voluntary agency participation in the treasury pool.
3.0 Prudence.
The county treasurer is a trustee and therefore a fiduciary subject to the prudent investor
standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, and
managing public funds, the county treasurer shall act with care, skill, prudence and
diligence under the circumstances then prevailing, that a prudent person acting in a like
capacity and familiarity with those matters would use in the conduct of funds of a like
character and with like aims, to safeguard the principal and maintain the liquidity
needs of the county and the other depositors. Within the limitations of this section
and considering individual investments as part of an overall investment strategy, a trustee is
authorized to acquire investments as authorized by law. Nothing in this Chapter is
intended to grant investment authority to any person or governing body except as
provided in Sections 53601; and 5360853607, and G3635, of the Government Code.
4.0 Objectives.
The primary objectives, in priority order, of the County of Monterey's investment
activities shall be:
4.1 Safety. Safety of principal. Investments of the County shall be undertaken in
a manner that seeks to ensure preservation of capital in the overall portfolio. To
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attain this objective, diversification is required in order that potential losses do not
exceed the income generated from the remainder of the portfolio.
4.2 Liquidity. The investment portfolio shall remain sufficiently liquid to enable
all depositors to meet all expenditure requirements that might be reasonably
anticipated. A minimum of 30% of the invested assets, including cash held in
commercial bank accounts, shall be kept in overnight liquid assets. In the
event that unforeseen cash-flow fluctuations temporarily cause the ratio of
overnight liquid assets to decline below 30% of the portfolio balance, no new
investments will be made until the minimum ratio is restored.
4.3 Return on Investment. The County's investment portfolio shall be designed
with the objective of attaining a market rate of return throughout budgetary and
economic cycles, taking into account the County's investment risk constraints and
the cash flow characteristics of the portfolio.
5.0 Delegation of Authority.
Subject to amended delegation by the Board of Supervisors pursuant to Government
Code Section 53607, the Treasurer-Tax Collector is authorized to manage the Monterey
County investment program. The Treasurer- Tax Collector shall establish written
procedures for the operation of the investment program consistent with this investment
policy. Procedures should include reference to: safekeeping, master repurchase
agreements, funds transfer agreements, collateral/ depository agreements and banking
service contracts. 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 policy and the
procedures established by the Treasurer-Tax Collector. The Treasurer- Tax Collector
shall be responsible for all transactions undertaken and shall establish a system of
controls to regulate the activities of subordinate officials.
6.0 Conflict of Interest.
Pursuant to Article 2 commencing with Section 87200) of Chapter 7 of Title 9 of the
Government Code and the regulations of the Fair Political Practices Commission enacted
pursuant thereto, the Treasurer-Tax Collector shall disclose his investments, interests in
real properties, and any income received during the immediately preceding 12 months.
Such disclosure shall be in writing, and shall be filed with the officer designated by law
within the time periods specified by law.
6.1 Acceptance of Gifts. The Treasurer-Tax Collector and all deputized
departmental staff are prohibited from accepting any monetary or in-kind gift
from any broker, dealer, or firm doing business or seeking to do business with the
Monterey County Treasurer.
7.0 Authorized Dealers and Institutions.
The Treasurer-Tax Collector will maintain a list of broker/dealers and institutions
authorized to provide investment services. Repurchase agreements and reverse
repurchase agreements shall only be made with primary dealers designated by the Federal
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Reserve Bank. The Treasurer-Tax Collector may impose additional qualifications of
brokers and their firms in order to ensure professionalism and suitability. At a
minimum, all broker/dealers and/or financial institutions authorized to provide
investment services to Monterey County shall meet the following criteria:
1. For commercial banks and saving institutions, must be authorized as insured
with the FDIC, SIPC, or NCUA credit unions), as applicable.
2. Must hold an active corporate registered status with the Secretary of State
California), or an out-of-state counterpart agency.
3. For commercial banks and savings institutions, must be nationally or state
chartered, or be a state licensed branch of a foreign bank.
4. Must be an active member of the National Association of Security Dealers.
7.1 Limitations on Political Contributions. Pursuant to Government Code Section
27133 c), the Treasurer-Tax Collector shall not select for business any broker,
brokerage, dealer, or securities firm that has, within any consecutive 48-month period
following January 1, 1996, made a political contribution in an amount exceeding the
limitations contained in Rule G-37 of the Municipal Securities Rulemaking Board, to
the county treasurer, any member of the Monterey County Board of Supervisors, or
any candidate for those offices.
8.0 Authorized and Suitable Investments.
The Treasurer-Tax Collector of Monterey County may invest in any security within the
limits authorized by Section 553601 of the Government Code of the State of
California, and within the limits of any other Government Code Statute that permits public
agency investment in various securities or participation in investment trading techniques
or strategies. Permissible investments are detailed in Appendix A.
8.1 Limitations. The Treasurer shall not invest in any security not previously
purchased prior to January 1, 1995, which, by its structure, term or other
characteristics, has the possibility of returning a zero or negative yield or could be
subject to a loss of principal at the time such security has attained its maturity
date. Investments shall not be made in inverse floaters, range notes, and interest-
only strips.
8.2 Reverse Repurchase Agreements. Any reverse repurchase agreement
where securities were not purchased previous to January 1, 1995, shall have a
maximum maturity of 92 days, and the proceeds shall not be invested beyond the
expiration of the reverse repurchase agreement. The maximum amount of Reverse
Repurchase Agreements shall be limited to 20% of the portfolio's book value on
the date of the transaction.
8.3 Securities Lending. The Treasurer may engage in securities lending
programs through nationally recognized counter parties, with a 20% restriction
based on the portfolio's book value on the date of the transaction. Instruments
involved in a securities lending program are restricted to those securities
provided in Government Code Section 53635 and the County Investment Policy.
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8.4 Maximum Credit Exposure. The Treasurer shall limit the investments in
any single issuer, regardless of the combination of asset class, to no more than
10% of the portfolio's twelve month projected minimum size. Obligations of the
United States Treasury and its Agencies are exempted from this restriction.
8.5 Maximum Dollar Limits. The Treasurer shall limit investments to specific
maximum dollar limits by issuer as detailed in Appendix A. In the case of
investments outside the core portfolio, maximum dollar limits shall apply to each
separate investment.
9.0 Safekeeping and Custody.
All security transactions, including collateral for repurchase agreements, shall be
conducted on a delivery-versus-payment basis. Securities shall be held by a third-party
custodian designated by the Treasurer-Tax Collector and evidenced by safekeeping
receipts and tri-party master repurchase agreements. Securities acquired through reverse
repurchase agreement transactions may be held as collateral by primary dealers acting as
counter-parties.
9.5 Investments Outside Core Portfolio
The Treasurer will accept funds for investment outside of the core pooled portfolio
custom invested funds) from depository agencies who also deposit their operating
fund in the core portfolio under the following criteria:
a) the funds represent proceeds of bonds, other forms of indebtedness, or
special purpose funds not required for normal operating expenses, and
b) the funds represent new or additional assets of the agency that were not
previously invested in the Monterey County Investment Pool, or under other
conditions approved by the Treasurer, and
c) the funds may be transferred to the core portfolio upon mutual agreement
between the depository agency and the Monterey County Treasurer. Any
such transfer will reflect the market value of any securities sold prior to their
maturity, where the underlying funds cannot be transferred back to a custom
investment outside the core portfolio unless approved by the Treasurer, and
d) funds may be transferred to the Monterey County Treasurer's operating
checking) account for further disbursement provided the funds originate
from: maturing securities; overnight liquid funds; sold securities subject to
section 9.5(c) above, and associated earned income on those funds, and
e) within 7 business days prior to the maturity of any security the depository
agency shall inform the Monterey County Treasurer of the desired
disposition of such maturing assets to include, rollover to a new asset,
transfer to the core portfolio, or transfer to the Monterey County Treasurer's
operating account subject to the conditions 9.5 a) through f) inclusive, and
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f) any earned income on custom invested funds" will be segregated from
the core portfolio and deposited to an overnight liquid fund designated
specifically for such income. Any liquidation or transfer of the underlying
asset will invoke a corresponding transfer of the associated earned income.
10.0 Criteria for Withdrawal of Funds from the Treasury Investment Pool
Section 27136 and Section 27133 h) Government Code.
The County Treasurer- is defined by statute Goyeernnment CodeSe 27000.3) as a
4andar The Treasurer shall have exclusive
30 days in advanee of the first antieipa4ed date of withdrawal. All appheation for-
1. A 1 1 A resolution of the olution of the governing body of the requesting agency declaring a surplus
1
of funds targeted for separate investment. The resolution must state the specify
RuRese
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process, the specific source of all f the investmen funds, and a
invested funds with the ey's general ledge
ail
Such t,4." liej' Must fVl rll in all e ects to all t' of the t Code
11 1 1
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other do entJ s defining the A SB 3 investment categories b, ste
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extend pr-ejected 12 month time hofizen; over- a
An agency with funds on deposit in the county treasury where such funds may statutorily
be invested outside of the county treasury may apply for a withdrawal of those funds.
Pursuant to Government Code Sections 27133 h) and 27136, the County Treasurer shall
evaluate each proposal for withdrawal of funds. The Treasurer's evaluation shall assess
the effect of a proposed withdrawal on the stability and predictability of the investments
in the county treasury pool. In addition, and prior to any withdrawal, the Treasurer shall
find that the proposed withdrawal will not adversely affect the interests of the other
depositors in the treasury pool.
All applications for withdrawal must be submitted by a Resolution of the depository
agency at least 30 days in advance of the anticipated date of withdrawal. Resolutions for
withdrawal shall include:
a. a statement of the purpose for withdrawal
b. the date(s) and amount(s) of funds to be withdrawn
c. a certification that funds withdrawn from the county pool shall be managed by
the applicant agency and that withdrawn funds shall not be returned for future
investment by the County Treasurer for a term of one year, and
d. an acknowledgement that the value of any funds withdrawn from the county
treasury shall reflect their most recent quarterly asset valuation as reported by the
Treasurer.
The Treasurer shall provide an applicant agency a written response within 15 days from
receipt of the application. The Treasurer's determination shall be final.
11.0 Maximum Maturities.
Any non-marketable investments, such as time deposits, should not exceed a two-year
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maturity. In addition, no specific investment shall have a term remaining to maturity in
excess of five years except under the following circumstances, and subject to specific
approval of the Board of Supervisors:
Bond proceeds where the maturity term is not integral to short term cash flow
needs.
Other special purpose investments where the maturity term is not integral to
short term cash flow needs.
11.1 Weighted Average Maturity. The weighted average maturity of the
overall portfolio shall not exceed two years.
11.2 Money Market Fund. The maximum maturity of investments in a money market
fund shall not exceed 397 days, and the weighted average maturity of the fund shall not
exceed 90 days. A Money Market Fund shall not comprise more than 10% of the
portfolio's book value on the date investments are made; maximum investment in all
Money Market Funds, as described in Government Code Section 53635(k) shall not
exceed 20% of the portfolio's book value on the date that investments are made.
12.0 Audits.
The Monterey County investment portfolio shall be subject to a process of independent
review by the Auditor-Controller's internal auditor. The County's external auditors shall
review the investment portfolio in connection with the annual county audit and
requirements of the Governmental Accounting Standards Board.
12.1 Compliance Audit Pursuant to Government Code Section 27134, the
County Treasury Oversight Committee shall cause an annual audit to be conducted
to determine the County Treasurer's compliance with Article 6, Chapter 5 of
Division 2 of Title 3 of the Government Code.
13.0 Performance Standards.
The investment portfolio will be designed to obtain a market average rate of return during
budgetary and economic cycles, taking into account the County's investment risk
constraints and cash flow needs.
14.0 Investment Policy Adoption.
The Treasurer-Tax Collector of Monterey County shall submit the Investment Policy to
the Board of Supervisors for adoption at least annually.
14.1 Policy Amendments. As the California Government Code pertaining to
investments is amended, this policy shall likewise become amended and adopted
by the Board of Supervisors. Other amendments may be recommended
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periodically by the Treasurer-Tax Collector.
15.0 Reporting.
Pursuant to Government Code Section 53686 b) the Treasurer-Tax Collector shall
provide quarterly investment reports to the Board of Supervisors, Treasury Oversight
Committee, and all pool participants. The report shall include a listing of all securities
held in the portfolio. Such listing shall include investment description, maturity date,
par, amortized book value and market values, and a risk measurement standard such as
duration, along with a certification concerning the portfolio's available liquidity to meet
expenditure requirements for the next succeeding reporting period, and disclosure of the
method used to apportion investment interest. Each second and fourth calendar quarter
investment report and the current investment policy shall be provided to the State
Treasurer's California Debt and Investment Advisory Committee as required by Sections
8855 and 53646 of the Government Code.
16.0 Allocation of Investment Cost.
The costs of investing, banking, and cash management as budgeted annually and applied
quarterly shall be assessed to depositing agencies at the time of quarterly interest
apportionment by the County Auditor-Controller, and in accordance with Government
Code statutes. Depositing agencies will receive net revenue after pro rata application of
costs that correspond to a basis point reduction to earned interest rates.
When actual annual costs of investing are determined, any differences from budgeted
amounts shall be included in an adjusting interest allocation by the Auditor-Controller.
17.0 Treasury Oversight Committee A Treasury Oversight Committee nominated by
the County Treasurer and confirmed by the Board of Supervisors shall provide oversight
through periodic review of the Investment Policy and compliance with such policy. The
Treasury Oversight Committee, pursuant to Government Code Section 27130 et seq;
shall consist of 6 members including: the Treasurer-Tax Collector, the County
Administrative Officer or his/her designee: the County Superintendent of Schools, or
his/her designee, a representative of the governing bodies of county school districts, a
representative of the legislative bodies of county special districts that are authorized
depositors in the county treasury, and a member of the public. The committee shall meet
at least quarterly, or as needed, and shall review investment policy and report on
compliance with such policy.
17.1 Treasury Oversight Committee. Pursuant to Section 27130 et seq; of the
Government Code, the Monterey County Treasury Oversight Committee is
established. The committee shall be subject to the provisions of the Political
Reform Act of 1974, as amended Government Code Sections 8100 et seq).
17.2 Pursuant to Government Code Section 27132.4, Committee meetings shall
be open to the public and subject to the Ralph M. Brown Act Chapter 9
commencing with Section 54950) of part 1 of Division 2 of Title 5).
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ACCEPT-U07
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30,-U07
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117-TREASURER/TAX-U08
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AMENDING-U012
TREASURER-U012
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EXHIBIT - F�X��"�\
17.3 Membership Prohibitions
Pursuant to Government Code Section 27132.2, No member of the committee
shall directly or indirectly raise money for a candidate for local treasurer or a
member of the governing board of any local agency that has deposited funds in
the county treasury while a member of the committee.
Pursuant to Government Code Section 27132.3, a member of the Treasury
Oversight Committee may not secure employment with, or be employed by, bond
underwriters, bond covered security brokers or dealers or financial services firms,
with whom the Treasurer is doing business during the period that the person is a
member of the Committee or for one year after leaving the Committee.
ADOPTED 1/26/10
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EXHIBIT - F�X��"�\
Instrument
APPENDIX A
Authorized Investments County General Pool
Maximum Maturity County Restriction Max %/ Dollar Limit
California State Treasurer's Local Agency
Investment Fund N/A N/A $4850,000,000
per account or as approved by the State Treasurer for bond/note proceeds.)
California Asset Management Program
N/A N/A
20%
CaITRUST N/A N/A 20%
0 0
f
d
un
s) Bonds, including revenue bonds, issued by 5 years N/A 10% limit issuer *)
The County, its
Agencies, or authorities
U.S. Treasury notes, bonds, bills, or
5 years
N/A
N/A
Certificates of indebtedness bearing a
full faith and credit pledge
Registered warrants, notes, and bonds,
5 years
N/A
10% limit issuer *)
including revenue bonds, of the State of
California and all other 49 States
Bonds, notes, warrants, and other
5 years
N/A
10% limit issuer *)
evidences of indebtedness issued by any
local agency within California, including
revenue bonds
Obligations of federal agencies and United
years
/A
/A
States government-sponsored enterprises
Bankers acceptances
180 days
N/A
40% *)
Prime commercial paper of domestic issuers 270 days N/A 40% *)
with assets in excess of $500 million
Negotiable certificates of deposit issued
5 years
N/A
30% *)
by domestic banks, associations, and state-
chartered branches of foreign banks.
Reverse repurchase agreements
92 days
N/A
N/A
and Securities Lending matched maturities 20%
Repurchase agreements 1 year 20% N/A
Medium term notes issued by domestic 5 years No inverse floating 30% *)
corporations and depository institutions rate instruments
rated A" or better, hiher at time of purchase
Money market mutual funds N/A N/A 20% Total all funds
f
10%
d
Collateralized deposits and investment contracts 5 years N/A any one
un
10% limit issuer *)
Securitized pass through instruments rated 5 years N/A 20% *)
at least A" or hi her at time of purchase
Overall portfolio weighted average maturity 2 years(*)
*Total exposure of all asset classes to any single issuer shall not exceed 10% of the 12-mo projected minimum size of the
portfolio.
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EXHIBIT - G�X��"�gExhibit G
TREASURER-TAX COLLECTOR
County of Monterey Investment Policy
1.0 Policy.
It is the policy of the Treasurer-Tax Collector of Monterey County to invest public funds
in a manner which provides for the safety of the funds on deposit, the cash flow demands,
or liquidity needs of the treasury pool participants, and the highest possible iy eld after
first considering the first two objectives of safety and liquidity. In addition, it is the
Treasurer-Tax Collector's policy to invest all funds in strict conformance with all state
statutes governing the investment of public monies.
2.0 Scope.
This investment policy applies to all financial assets of the treasury pool participants.
These funds are accounted for in the annual Financial Reports of the County and each of
the treasury pool's participating agencies.
2.1 Participating Agencies. Participants in the Treasurer's investment pool
shall be limited to the County of Monterey, school districts within Monterey
County and those special districts, which, by statute, maintain depository
authority with the County Treasurer.
2.2 Outside Agency Participation. It is the Treasurer's policy to prohibit any
voluntary agency participation in the treasury pool.
3.0 Prudence.
The county treasurer is a trustee and therefore a fiduciary subject to the prudent investor
standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, and
managing public funds, the county treasurer shall act with care, skill, prudence and
diligence under the circumstances then prevailing, that a prudent person acting in a like
capacity and familiarity with those matters would use in the conduct of funds of a like
character and with like aims, to safeguard the principal and maintain the liquidity
needs of the county and the other depositors. Within the limitations of this section
and considering individual investments as part of an overall investment strategy, a trustee is
authorized to acquire investments as authorized by law. Nothing in this Chapter is
intended to grant investment authority to any person or governing body except as
provided in Sections 53601 and 53607 of the Government Code.
4.0 Objectives.
The primary objectives, in priority order, of the County of Monterey's investment
activities shall be:
4.1 Safety. Safety of principal. Investments of the County shall be undertaken in
a manner that seeks to ensure preservation of capital in the overall portfolio. To
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EXHIBIT - G�X��"�gattain this objective, diversification is required in order that potential losses do not
exceed the income generated from the remainder of the portfolio.
4.2 Liquidity. The investment portfolio shall remain sufficiently liquid to enable
all depositors to meet all expenditure requirements that might be reasonably
anticipated. A minimum of 30% of the invested assets, including cash held in
commercial bank accounts, shall be kept in overnight liquid assets. In the
event that unforeseen cash-flow fluctuations temporarily cause the ratio of
overnight liquid assets to decline below 30% of the portfolio balance, no new
investments will be made until the minimum ratio is restored.
4.3 Return on Investment. The County's investment portfolio shall be designed
with the objective of attaining a market rate of return throughout budgetary and
economic cycles, taking into account the County's investment risk constraints and
the cash flow characteristics of the portfolio.
5.0 Delegation of Authority.
Subject to amended delegation by the Board of Supervisors pursuant to Government
Code Section 53607, the Treasurer-Tax Collector is authorized to manage the Monterey
County investment program. The Treasurer- Tax Collector shall establish written
procedures for the operation of the investment program consistent with this investment
policy. Procedures should include reference to: safekeeping, master repurchase
agreements, funds transfer agreements, collateral/ depository agreements and banking
service contracts. 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 policy and the
procedures established by the Treasurer-Tax Collector. The Treasurer- Tax Collector
shall be responsible for all transactions undertaken and shall establish a system of
controls to regulate the activities of subordinate officials.
6.0 Conflict of Interest.
Pursuant to Article 2 commencing with Section 87200) of Chapter 7 of Title 9 of the
Government Code and the regulations of the Fair Political Practices Commission enacted
pursuant thereto, the Treasurer-Tax Collector shall disclose his investments, interests in
real properties, and any income received during the immediately preceding 12 months.
Such disclosure shall be in writing, and shall be filed with the officer designated by law
within the time periods specified by law.
6.1 Acceptance of Gifts. The Treasurer-Tax Collector and all deputized
departmental staff are prohibited from accepting any monetary or in-kind gift
from any broker, dealer, or firm doing business or seeking to do business with the
Monterey County Treasurer.
7.0 Authorized Dealers and Institutions.
The Treasurer-Tax Collector will maintain a list of broker/dealers and institutions
authorized to provide investment services. Repurchase agreements and reverse
repurchase agreements shall only be made with primary dealers designated by the Federal
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EXHIBIT - G�X��"�gReserve Bank. The Treasurer-Tax Collector may impose additional qualifications of
brokers and their firms in order to ensure professionalism and suitability. At a
minimum, all broker/dealers and/or financial institutions authorized to provide
investment services to Monterey County shall meet the following criteria:
1. For commercial banks and saving institutions, must be authorized as insured
with the FDIC, SIPC, or NCUA credit unions), as applicable.
2. Must hold an active corporate registered status with the Secretary of State
California), or an out-of-state counterpart agency.
3. For commercial banks and savings institutions, must be nationally or state
chartered, or be a state licensed branch of a foreign bank.
4. Must be an active member of the National Association of Security Dealers.
7.1 Limitations on Political Contributions. Pursuant to Government Code Section
27133 c), the Treasurer-Tax Collector shall not select for business any broker,
brokerage, dealer, or securities firm that has, within any consecutive 48-month period
following January 1, 1996, made a political contribution in an amount exceeding the
limitations contained in Rule G-37 of the Municipal Securities Rulemaking Board, to
the county treasurer, any member of the Monterey County Board of Supervisors, or
any candidate for those offices.
8.0 Authorized and Suitable Investments.
The Treasurer-Tax Collector of Monterey County may invest in any security within the
limits authorized by Section 53601 of the Government Code of the State of California,
and within the limits of any other Government Code Statute that permits public agency
investment in various securities or participation in investment trading techniques or
strategies. Permissible investments are detailed in Appendix A.
8.1 Limitations. The Treasurer shall not invest in any security not previously
purchased prior to January 1, 1995, which, by its structure, term or other
characteristics, has the possibility of returning a zero or negative yield or could be
subject to a loss of principal at the time such security has attained its maturity
date. Investments shall not be made in inverse floaters, range notes, and interest-
only strips.
8.2 Reverse Repurchase Agreements. Any reverse repurchase agreement
where securities were not purchased previous to January 1, 1995, shall have a
maximum maturity of 92 days, and the proceeds shall not be invested beyond the
expiration of the reverse repurchase agreement. The maximum amount of Reverse
Repurchase Agreements shall be limited to 20% of the portfolio's book value on
the date of the transaction.
8.3 Securities Lending. The Treasurer may engage in securities lending
programs through nationally recognized counter parties, with a 20% restriction
based on the portfolio's book value on the date of the transaction. Instruments
involved in a securities lending program are restricted to those securities
provided in Government Code Section 53635 and the County Investment Policy.
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EXHIBIT - G�X��"�g8.4 Maximum Credit Exposure. The Treasurer shall limit the investments in
any single issuer, regardless of the combination of asset class, to no more than
10% of the portfolio's twelve month projected minimum size. Obligations of the
United States Treasury and its Agencies are exempted from this restriction.
8.5 Maximum Dollar Limits. The Treasurer shall limit investments to specific
maximum dollar limits by issuer as detailed in Appendix A. In the case of
investments outside the core portfolio, maximum dollar limits shall apply to each
separate investment.
9.0 Safekeeping and Custody.
All security transactions, including collateral for repurchase agreements, shall be
conducted on a delivery-versus-payment basis. Securities shall be held by a third-party
custodian designated by the Treasurer-Tax Collector and evidenced by safekeeping
receipts and tri-party master repurchase agreements. Securities acquired through reverse
repurchase agreement transactions may be held as collateral by primary dealers acting as
counter-parties.
9.5 Investments Outside Core Portfolio
The Treasurer will accept funds for investment outside of the core pooled portfolio
custom invested funds) from depository agencies who also deposit their operating
fund in the core portfolio under the following criteria:
a) the funds represent proceeds of bonds, other forms of indebtedness, or
special purpose funds not required for normal operating expenses, and
b) the funds represent new or additional assets of the agency that were not
previously invested in the Monterey County Investment Pool, or under other
conditions approved by the Treasurer, and
c) the funds may be transferred to the core portfolio upon mutual agreement
between the depository agency and the Monterey County Treasurer. Any
such transfer will reflect the market value of any securities sold prior to their
maturity, where the underlying funds cannot be transferred back to a custom
investment outside the core portfolio unless approved by the Treasurer, and
d) funds may be transferred to the Monterey County Treasurer's operating
checking) account for further disbursement provided the funds originate
from: maturing securities; overnight liquid funds; sold securities subject to
section 9.5(c) above, and associated earned income on those funds, and
e) within 7 business days prior to the maturity of any security the depository
agency shall inform the Monterey County Treasurer of the desired
disposition of such maturing assets to include, rollover to a new asset,
transfer to the core portfolio, or transfer to the Monterey County Treasurer's
operating account subject to the conditions 9.5 a) through f) inclusive, and
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EXHIBIT - G�X��"�gf) any earned income on custom invested funds" will be segregated from
the core portfolio and deposited to an overnight liquid fund designated
specifically for such income. Any liquidation or transfer of the underlying
asset will invoke a corresponding transfer of the associated earned income.
10.0 Criteria for Withdrawal of Funds from the Treasury Investment Pool
Section 27136 and Section 27133 h) Government Code.
An agency with funds on deposit in the county treasury where such funds may statutorily
be invested outside of the county treasury may apply for a withdrawal of those funds.
Pursuant to Government Code Sections 27133 h) and 27136, the County Treasurer shall
evaluate each proposal for withdrawal of funds. The Treasurer's evaluation shall assess
the effect of a proposed withdrawal on the stability and predictability of the investments
in the county treasury pool. In addition, and prior to any withdrawal, the Treasurer shall
find that the proposed withdrawal will not adversely affect the interests of the other
depositors in the treasury pool.
All applications for withdrawal must be submitted by a Resolution of the depository
agency at least 30 days in advance of the anticipated date of withdrawal. Resolutions for
withdrawal shall include:
a. a statement of the purpose for withdrawal
b. the date(s) and amount(s) of funds to be withdrawn
c. a certification that funds withdrawn from the county pool shall be managed by
the applicant agency and that withdrawn funds shall not be returned for future
investment by the County Treasurer for a term of one year, and
d. an acknowledgement that the value of any funds withdrawn from the county
treasury shall reflect their most recent quarterly asset valuation as reported by the
Treasurer.
The Treasurer shall provide an applicant agency a written response within 15 days from
receipt of the application. The Treasurer's determination shall be final.
11.0 Maximum Maturities.
Any non-marketable investments, such as time deposits, should not exceed a two-year
maturity. In addition, no specific investment shall have a term remaining to maturity in
excess of five years except under the following circumstances, and subject to specific
approval of the Board of Supervisors:
Bond proceeds where the maturity term is not integral to short term cash flow
needs.
Other special purpose investments where the maturity term is not integral to
short term cash flow needs.
11.1 Weighted Average Maturity. The weighted average maturity of the
overall portfolio shall not exceed two years.
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EXHIBIT - G�X��"�g11.2 Money Market Fund. The maximum maturity of investments in a money market
fund shall not exceed 397 days, and the weighted average maturity of the fund shall not
exceed 90 days. A Money Market Fund shall not comprise more than 10% of the
portfolio's book value on the date investments are made; maximum investment in all
Money Market Funds, as described in Government Code Section 53635(k) shall not
exceed 20% of the portfolio's book value on the date that investments are made.
12.0 Audits.
The Monterey County investment portfolio shall be subject to a process of independent
review by the Auditor-Controller's internal auditor. The County's external auditors shall
review the investment portfolio in connection with the annual county audit and
requirements of the Governmental Accounting Standards Board.
12.1 Compliance Audit Pursuant to Government Code Section 27134, the
County Treasury Oversight Committee shall cause an annual audit to be conducted
to determine the County Treasurer's compliance with Article 6, Chapter 5 of
Division 2 of Title 3 of the Government Code.
13.0 Performance Standards.
The investment portfolio will be designed to obtain a market average rate of return during
budgetary and economic cycles, taking into account the County's investment risk
constraints and cash flow needs.
14.0 Investment Policy Adoption.
The Treasurer-Tax Collector of Monterey County shall submit the Investment Policy to
the Board of Supervisors for adoption at least annually.
14.1 Policy Amendments. As the California Government Code pertaining to
investments is amended, this policy shall likewise become amended and adopted
by the Board of Supervisors. Other amendments may be recommended
periodically by the Treasurer-Tax Collector.
15.0 Reporting.
Pursuant to Government Code Section 53686 b) the Treasurer-Tax Collector shall
provide quarterly investment reports to the Board of Supervisors, Treasury Oversight
Committee, and all pool participants. The report shall include a listing of all securities
held in the portfolio. Such listing shall include investment description, maturity date,
par, amortized book value and market values, and a risk measurement standard such as
duration, along with a certification concerning the portfolio's available liquidity to meet
expenditure requirements for the next succeeding reporting period, and disclosure of the
method used to apportion investment interest. Each second and fourth calendar quarter
investment report and the current investment policy shall be provided to the State
Treasurer's California Debt and Investment Advisory Committee as required by Sections
8855 and 53646 of the Government Code.
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EXHIBIT - G�X��"�g16.0 Allocation of Investment Cost.
The costs of investing, banking, and cash management as budgeted annually and applied
quarterly shall be assessed to depositing agencies at the time of quarterly interest
apportionment by the County Auditor-Controller, and in accordance with Government
Code statutes. Depositing agencies will receive net revenue after pro rata application of
costs that correspond to a basis point reduction to earned interest rates.
When actual annual costs of investing are determined, any differences from budgeted
amounts shall be included in an adjusting interest allocation by the Auditor-Controller.
17.0 Treasury Oversight Committee A Treasury Oversight Committee nominated by
the County Treasurer and confirmed by the Board of Supervisors shall provide oversight
through periodic review of the Investment Policy and compliance with such policy. The
Treasury Oversight Committee, pursuant to Government Code Section 27130 et seq;
shall consist of 6 members including: the Treasurer-Tax Collector, the County
Administrative Officer or his/her designee: the County Superintendent of Schools, or
his/her designee, a representative of the governing bodies of county school districts, a
representative of the legislative bodies of county special districts that are authorized
depositors in the county treasury, and a member of the public. The committee shall meet
at least quarterly, or as needed, and shall review investment policy and report on
compliance with such policy.
17.1 Treasury Oversight Committee. Pursuant to Section 27130 et seq; of the
Government Code, the Monterey County Treasury Oversight Committee is
established. The committee shall be subject to the provisions of the Political
Reform Act of 1974, as amended Government Code Sections 8100 et seq).
17.2 Pursuant to Government Code Section 27132.4, Committee meetings shall
be open to the public and subject to the Ralph M. Brown Act Chapter 9
commencing with Section 54950) of part 1 of Division 2 of Title 5).
17.3 Membership Prohibitions
Pursuant to Government Code Section 27132.2, No member of the committee
shall directly or indirectly raise money for a candidate for local treasurer or a
member of the governing board of any local agency that has deposited funds in
the county treasury while a member of the committee.
Pursuant to Government Code Section 27132.3, a member of the Treasury
Oversight Committee may not secure employment with, or be employed by, bond
underwriters, bond covered security brokers or dealers or financial services firms,
with whom the Treasurer is doing business during the period that the person is a
member of the Committee or for one year after leaving the Committee.
ADOPTED 1/26/10
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EXHIBIT - G�X��"�gAPPENDIX A
Authorized Investments County General Pool
Instrument Maximum Maturity County Restriction Max %/ Dollar Limit
California State Treasurer's Local Agency
Investment Fund
N/A
N/A
$50,000,000 per
account or as approved by the State Treasurer for bond/note proceeds.)
California Asset Management Program N/A N/A 20%
Ca1TRUST N/A N/A 20%
Bonds, including revenue bonds, issued by 5 years N/A 10% limit issuer *)
The County, its
Agencies, or authorities
U.S. Treasury notes, bonds, bills, or
5 years
N/A
N/A
Certificates of indebtedness bearing a
full faith and credit pledge
Registered warrants, notes, and bonds,
5 years
N/A
10% limit issuer *)
including revenue bonds, of the State of
California and all other 49 States
Bonds, notes, warrants, and other
5 years
N/A
10% limit issuer *)
evidences of indebtedness issued by any
local agency within California, including
revenue bonds
Obligations of federal agencies and United
years
/A
/A
States government-sponsored enterprises
Bankers acceptances
180 days
N/A
40% *)
Prime commercial paper of domestic issuers 270 days N/A 40% *)
with assets in excess of $500 million
Negotiable certificates of deposit issued
5 years
N/A
30% *)
by domestic banks, associations, and state-
chartered branches of foreign banks.
Reverse repurchase agreements
92 days
N/A
N/A
and Securities Lending matched maturities 20%
Repurchase agreements 1 year 20% N/A
Medium term notes issued by domestic 5 years No inverse floating 30% *)
corporations and depository institutions
rated A" or higher at time of purchase
Money market mutual funds
N/A rate instruments
N/A
20% Total all funds
10%
f
d
Collateralized deposits and investment contracts 5 years N/A any one
un
10% limit issuer *)
Securitized pass through instruments rated 5 years N/A 20% *)
at least A" or higher at time of purchase
Overall portfolio weighted average maturity
*Total exposure of all asset classes to any single issuer shall not exceed
portfolio.
2 years(*)
10% of the 12-mo projected minimum size of the
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