File #: 10-902    Name:
Type: Minutes Status: Passed
File created: 7/27/2010 In control: Board of Supervisors
On agenda: 7/27/2010 Final action: 7/27/2010
Title: a. Receive and Accept the Treasurer's Report of Investments for the quarter ending June 30, 2010; a. Receive and Accept the Treasurer's Report of Investments for the quarter ending June 30, 2010;
Attachments: 1. Completed Resolution No. 10-231, 2. Signed Board Report, 3. Exhibit - A, 4. Exhibit - B, 5. Exhibit - C, 6. Exhibit - D, 7. Exhibit - E, 8. Exhibit - F, 9. Exhibit - G

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

2

 

 

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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

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LI21329-U03

FO21330-U03

FO85769-U03

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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

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117-TREASURER/TAX-U08

COLLECTOR-U08

CROOKE-U09

ELIZABETH-U09

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B.-U012

RECEIVE-U012

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RESOLUTION-U012

AMENDING-U012

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S-U012

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YEAR-U012

2010-11;-U012

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AUTHORITY-U012

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COLLECTOR-U012

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TO-U012

CALIFORNIA-U012

GOVERNMENT-U012

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.

 

 

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7/29/2010-U04

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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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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]

 

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EXHIBIT-U02

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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

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 - 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

1-

 

 

BIB]

 

40389-U01

EXHIBIT-U02

U02

F-U02

LI21329-U03

FO21330-U03

FO85769-U03

FO89518-U03

MG89556-U03

AS89582-U03

AS89586-U03

AI93618-U03

DO94010-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 - F�X��"�\

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

2-

 

 

BIB]

 

40389-U01

EXHIBIT-U02

U02

F-U02

LI21329-U03

FO21330-U03

FO85769-U03

FO89518-U03

MG89556-U03

AS89582-U03

AS89586-U03

AI93618-U03

DO94010-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 - F�X��"�\

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.

3

 

 

BIB]

 

40389-U01

EXHIBIT-U02

U02

F-U02

LI21329-U03

FO21330-U03

FO85769-U03

FO89518-U03

MG89556-U03

AS89582-U03

AS89586-U03

AI93618-U03

DO94010-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 - F�X��"�\

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

4-

 

 

BIB]

 

40389-U01

EXHIBIT-U02

U02

F-U02

LI21329-U03

FO21330-U03

FO85769-U03

FO89518-U03

MG89556-U03

AS89582-U03

AS89586-U03

AI93618-U03

DO94010-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

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EXHIBIT - F�X��"�\

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

anaB\

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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

Duoiic rune

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other do entJ s defining the  A SB 3 investment categories   b, ste

5-

 

 

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40389-U01

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7/29/2010-U04

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4-U06

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117-TREASURER/TAX-U08

COLLECTOR-U08

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ELIZABETH-U09

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7/15/2010-U011

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ADOPT-U012

RESOLUTION-U012

AMENDING-U012

TREASURER-U012

S-U012

INVESTMENT-U012

POLICY-U012

FISCAL-U012

YEAR-U012

2010-11;-U012

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EXHIBIT - F�X��"�\

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

6-

 

 

BIB]

 

40389-U01

EXHIBIT-U02

U02

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MG89556-U03

AS89582-U03

AS89586-U03

AI93618-U03

DO94010-U03

C1-U03

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DOCUMENTS-U03

7/29/2010-U04

RIVASR-U04

15336-U05

4-U06

A.-U07

RECEIVE-U07

ACCEPT-U07

TREASURER-U07

S-U07

REPORT-U07

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INVESTMENTS-U07

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ENDING-U07

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2010;-U07

117-TREASURER/TAX-U08

COLLECTOR-U08

CROOKE-U09

ELIZABETH-U09

CROOKEEA-U10

7/15/2010-U011

B.-U012

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RESOLUTION-U012

AMENDING-U012

TREASURER-U012

S-U012

INVESTMENT-U012

POLICY-U012

FISCAL-U012

YEAR-U012

2010-11;-U012

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DELEGATE-U012

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EXHIBIT - F�X��"�\

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

7-

 

 

BIB]

 

40389-U01

EXHIBIT-U02

U02

F-U02

LI21329-U03

FO21330-U03

FO85769-U03

FO89518-U03

MG89556-U03

AS89582-U03

AS89586-U03

AI93618-U03

DO94010-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 - F�X��"�\

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).

8-

 

 

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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

9

 

 

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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.

3

 

 

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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.

5

 

 

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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.

6-

 

 

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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

7

 

 

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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

9

 

 

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