HomeMy WebLinkAbout06 DECEMBER 1998 12/10/1998 � --- REDEVELOPMENT AGENCY -- PM - 1
ppRTFOLIp Mp5'1'ER $�7ZY R�7+
NOVEMBER 30, 1998 ACCROAL
AVERAGE ---YIELD TO MATURITY---
PEACENT OF AVERAGE DAYS TO 360 365
INVESTMENTS BOOK VALUE PORTFOLIO TERM MATURITY EQUIVALENT EQUIVALENT
STATE & LOCAL GOVT SERIES - COUPON.. . . . . . . . ..5 66,929,662.00 43.30 1,'/28 1�,233 5."/60 5.840
. FIDELITY 1REASURY POOL...... .................$ 53,195,999.39 39.52 1 1 9.']]4 4.890
]ACAL AGENCY INVESTMENT FUND.................$ 11,455,212.92 '/.43 1 1' S.4ll 5.492
UNITED STATES TREASURY - COUPON..............5 8,965,920.64 5.69 963 594 5.623 . 5.']O1
STATE & LOCAL GOVT SERIES - TIME. . . . .. . . . . . . .$ 5,v30,629.00 3.72 990 503 0.000 . 0.000
UNITED STATES 1REASURY - �ISCOUNT.......... ..$ 5,920,113.fi9 3.89 2,339 2,026 5.454 5.529 ,
HIGFIIdARK SWEEP ACCOUNTS. . . ...................$ 1,628,072.72 1.06 1 1 4.358 4.418
FEDERAL AGENCY - COUPON......................$ 996,461.53 0.65 619 422 5.]69 5.899
TOTAL INVESTMENTS and AVERAGES.. . ... . . .... .$ 159,122,092.09 100.00S 931 665 5.145F 5.2109
CASH
' Passbook/Checking - No Yield Totals.. . . . . . ...$ 40,288.0'1 0.000 0.000
(not included in yield calculatione)
Accrued Interest at Purchase. .. .. .......... ..5 16,742.50
TOTAL CASN and PURCHASE INTEREST.............$ 5'/,030.5'1
TOTAL CASH and INVESTMETTTS.... .. . . . . .. . . . . .$ 154,1"/9,102.66 . �
, MONTH ENDING FISCai,
TOTAL EARNINGS NOVEMBER 30 YEAR TO DATE
Clirrent Year $ 665,938.96 5 3,568,834.36
AVERAGE DAILY BAI,ANCE $ 154,029,196.0] $ 160,841,104.58
EFFECTIVE RATE OF RETURN 5.26$ , 5.29t
T[1E ROA'S INVESTMENT PORTFOLIO IS IN Q�MPLIANCE WITH ALL ('ALIFORNIA GOVfiANM6NT
PAUL S. GIBSON CODE AND RDA INVESTMENT POLICY PROVISIONS RELATING TO THE INVESTMENT OF IArni.
FINANCE DIRECTOR 6 CI1'1 1REASURER AGENCY FUNDS. NOTWITHSTANDING ANY FUTURE ACTIONS ITY THE RDA'S GOVERNING BOARD
OR AN UNFORESEEN CATAST[20PHE, THE RDA HAS SUFFICIENT CASH FIAW TO MEET ITS
E%P6NDITURE REQUIREMENTS FOR THE NEXT SIX MONTHS. MAI2](ET VALUES WERE OBTAINED
DATE FROM U.S. BANK AND FROM SNTERACTIVE DATA CURP. ALL BALANCES ARE HANR BALAttCES.
12/10/199B --- REDEVELOPMENT AGENCY --- pM - 2
INVESTMENT PORTFOLIO DETAILS - INVESTMENTS RDA
NOVEFIDER 30, 199B ACCRUAL
INVESTMENT AVERAGE PURCHASE STATED -- YTM --- MATURITY DAy$
NUPIDER ISSUER HALANCE DATE BOOK VALUE FACE VALUE MARI(ET VALOE RATE 360 365 DATE TO MAT
______""__"'_""____'_________'___"_'_______"'_'____'_"__""'_______'__"_"__"_"_""__'_____'_____"'___""_________'"__"____
STATE fi IACAL GOVT SERSES , COUPON
19500 UNITED STATES TREASURY 07/29/9'] 5,686,82'/.00 5,686,827.00 5,686,827.00 3.165 3.122 3.165 09/O1/02 1,21'/
19501 UNITED STATES TAEASURY 09/29/99 60,992,835.00 60,942,835.00 60,942,835.00 6.090 6.00� 6.090 09/18/02 1,234
_ _______"_'____.__ ______________ ____'_________ ____""______"_ ______ ______ ______
. SUBTOTALS and AVERAGES 66,429,662.00 66,929,662.00 66,429,662.00
. 66,429,662.00 5 J6� S.B40 1,233
FID6LITY TAEASURY POOL
11002 I FIDELITY INVESTMENTS 25,]60,93B.B9 25,'/60,938.89 25,]60,938.89 9.840 4.'/]9 4.840 1
ll003 R FIDELITY INVESTMENTS 2,010,002.66 2,010,002.66 2,010,002.66 4.840 4.779 4.840 � 1
11005 I FIDELITY INVESTMENTS . 4,285,552.96 4,285,552.96 4,285,552.96 4.840 4.']']4 4.890 1
71006 R FIDELITY INVESTMENTS 255,62'1.00 255,621.00 255,621.00 9.840 4.779 4.B90 1
11008 R FIDELITY INVBSTMENI'S 1,]15,269.41 1,]15,269.41 1,']15,269.41 9.840 4.'1']4 4.090 1
11009 I FIDELITY INVESTMENTS 1�868,063.28 1,868,063.28 1,868,063.28 4.840 9.774 4.890 1
13010 I FIDELITY INVESTMENTS 4,942,508.53 4,942,508.53 4,94�,508.53 4.840 9.'1'J4 4.890 1
11011 R F�DEI,ITY 1{.rygSTM£NTS 2,762,630.08 2,762,630.08 2,762,630.OB 4.640 4.774 4.840 1
11�12 E FIDELITY INVESTMENTS 0.00 0.00 0.00 4.640 4.'J09 4.840 1
11018 FIDELITY INVESTMENTS 109.32 109.32 109.32 9.840 4.]"!9 4.840 1
11019 FIDELITY INVESTMENTS 0.00 0.�0 0.00 4.840 4.'/')4 4.840 1
11020 FIOELITY INVESTMENTS 0.00 0.00 0.00 4.840 4.009 4.B40 1
11021 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 4.994 4.040 1
11022 FIDELITY INVESIMENTS '1'14.28 ']')4.28 ']']4.28 4.840 9.'/�4 9.840 1
11923 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.'1'14 9.840 1
11025 FIDELITY INVESTMENTS _ 0.00 0.00 0.00 4.890 4 J99 4.840 1
11026 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 4.'/'/9 4.840 1
11028 FIDELITY INVESTMENTS 118.94 118.]4 116.]4 4.890 4.999 4.840 1 .
11029 FIDELITY INVESTMENTS 190.58 190.58 190.58 4.840 4.]'/9 4.840 1
11030 R FIDELITY INVESTMENTS 692,666 J2 692,666 J2 692,666.'/2 9.B40 4.974 4.840 1
11031 FIDELITY INVESTTIENTS 8.92 8.92 8.92 4.840 4.'1'14 4.840 1
11032 FIDeLITY INVESTMENTS 0.00 0.00 0.00 9.840 4.994 4.840 1
11037 FIDELITY INVESTMENTS 0.1'/ 0.17 O.11 9.840 4.974 4.840 1
11038 FIDELITY INVESTMENTS 31.26 31.26 31.26 4.840 4.'1'14 4.840 1
11039 R FIDELITY INVESTMENTS 540,006.26 590,006.26 540,006.26 4.840 4.779 4.840 1
11040 FIDELITY INVESTMENTS 450.83 . 950.83 450.03 4.840 4.004 4.890 - 1 �
� 11041 I FIDELITY INVESTTI£NTS 82�403.65 82,903.65 82,903.65 4.840 4.774 4.840 1
11042 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.'/']4 4.840 1
11094 FIDELITY INVESTMENTS 36,30].06 36,300.06 36,30'].06 4.890 9.']]4 4.840 3
11099 FIDELITY INVESTMENTS 69.00 69.00 69.00 4.890 9.]]4 4.840 1
11050 FIDELITY INVESTMENTS 2,822.00 2,812.00 2,822.00 4.840 4.]'/4 4.840 1
11051 FIDELITY INVESTMENTS p.00 0.00 0.00 4.840 4.�'/9 4.840 1
11052 FIDELITY INVESTMENTS 17,965.00 1],465.00 1'/,465.00 9.840 4.'/'/9 4.840 1
11055 FIDELITY INVESTMENTS 22,2'l2.04 22,2'/2.04 22,272.04 9.840 4.]'!9 4.890 1
13056 FIDELITY INVESTMENTS 6.59 6.59 6.59 4.840 4.'I'19 4.840 1
1305'1 FIDELITY INVESTMENTS 19,343.13 19,393.13 19,343.13 4.840 4.'I')4 4.890 1
12/10/1998 - --- REDEVELOPMENT AG6NCY -- PM - 3
INVESTMENT PORTFOLIO DETAILS - INVESTMENTS RDA
NOVEMBER 30, 1998 ACCRUAL
INVESTMENT AVERAGE PURCHASE STATED --- YTM --- MATURITY �AYS
NUFIDER ISSUER HALANCE DATE BOOK VALUE FACE VALUE MARKET VALUE EtATE 360 365 DATE TO MAT
FIOELITY TREASURY POOL
11058 FIOELITY INVESTMENTS 25,030."/3 25,030.'/3 25,030.'/3 4.840 4.'1'l9 4.840 1
11061 FIDELITY INVESTMENTS 30,9B7.13- 30,489.13 30,48].13 4.840 4.]'J9 4.840 1
11062 FIDELITY INVESTMENTS - 9,494,692.11 4,444,642 11 4,444,'642 11 9.940 4.0'/9 4.840 1
11063 FIDELITY INVESTMENTS 1,8�3,636.00 1,8�3,636.00 1,8]3,636.00 9.840 4.'!99 4.890 , ' }
11069 FIDELITY INVESTMENTS 109.15 104.15 104.15 4.840 4.'!'/4 4.840 1
11066 FIDELITY INVESTMENTS 1,]83,906.6'1 1,983,906.6] 1,]83,906.6] 9.840 4.0'l4 4.890 1
11068 FSDELITY INVESTMENTS 1,045.57 1,045.57 1,095.57 4.840 4.774 4.890 1
11069 FIDELITY INVESTMENTS 0.04 0.04 0.04 4.840 4."174 4.890 1
11�70 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 4.774 4.890 � 1
130]1 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.'1'l4 4.B90 1
11074 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.774 4.940 1
110�5 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.'1]4 4.840 1
110]6 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.774 4.840 1
11�]] FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 4.]]4 4.840 1
110]8 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 9.]]4 4.840 1
110]9 FIDELITY INVESTMENTS 1.Q0 1.00 1.00 4.840 4.'/]4 9.840 1
11080 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 4.]]4 9.840 1
11081 FIDELII'Y INVESTMENTS 0.00 0.00 0.00 4.840 4.]94 9.640 1
11082 FIDELITY INVESTMENTS 19.48 19.48 19.48 4.B40 4.'1'14 9.840 1
11083 FIDELITY INVESTMENTS 56.32 56.32 56.32 4.840 4.�'l4 4.840 1
11089 FIDELII'1 INVESTMENTS 1.00 1.00 1.00 9.840 4.'1�4 9.840 1
110B5 FIDELII'1 INVESTMENTS 0.00 0.00 0.00 9.840 4.T19 4.840 1
11086 FIDELITY INVESTMENTS 1.00 1.00 1.00 9.840 4 J]9 4.890 1
11092 FIDELITY INVESTTIENTS 13.12 13.12 13.12 4.840 4.'179 4.890 1
11093 FIDELITY INVESTMENTS 0.00 0.00 0.00 9.840 4.'!]9 4.890 1
11094 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 4.'I'19 4.890 1
11096 FIDELII'Y'INVESTMENTS 0.00 0.00 0.00 9.840 4.]99 4.840 1
11097 FIDELII'P INVESTMENTS 0.00 0.00 0.00 4.840 4.779 4.840 1
11099 FIDELITY INVESTMENTS 0.00 0.00 0.00 9.840 4.994 4.890 1
11100 FIDELITY INVESTMENTS 0.00 0.00 0.00 9.840 4.779 4.890 1
11101 FIDELITY INVESTMENTS 2.19 2.19 2.19 4.840 4.'I'l9 4.840 1
11102 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.'!]4 4.890 1
11103 � FIDELITY INVESTMENTS ' 0.00 0.00 0.00 4.840 9.]']4 4.840 1
11104 FIDELITY INVESTMENTS 0.00 0�00 0.00 4.840 4.7'74 4.840 - 1
11105 FIDELITY INVESTMENTS 20,391.90 20,391.90 20,391.90 4.890 4.']']4 4.840 1
11106 FIDELITY INVESTMENTS 0�.00 0.00 0.00 9.890 4.'/'/4 4.840 1
1130'1 FIDELITY INVESTMENTS 129.3] 129.3] 129.3] 9.890 4.'/'/4 4.840 1
111�08 FIDELITY INVESTMENTS 1.00 1.00 1.00 9.840 4.'/'/9 4.840 1
11109 FIDELITY INVESTMENTS 0.00 0.00 0.00 9.840 4.�'l4 4.840 1
11110 FIDELII7 INVE5TMENTS 0.00 0.00 0.00 4.840 4.'!'l9 4.840 1
11111 FIDELSTY INVESTMENTS 0.00 0.00 0.00 9.840 4.'/'/4 4.840 1
11112 FSDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.'!"14 4.890 1
11113 FIDELITY INVESTMENTS 221.02 221.02 221.02 4.840 9.']']4 4.890 1
12/10/1996 -- REDEVEIAPMENT AGENCY -- pM - 4
- INVESTMENT PORTFOLIO �ETAILS - INVESTMENTS RDA
NOVEMBER 30, 1998 ACCRUAL
INVESTMENT AVERAGE PURCHASE STATED --- y'�M --- Mq7'URITY AAYS
� NUM9ER . ISSUER BALANCE DATE BOOK VALUE FACE VALUE MARKET VALUE RATE 360 365 DATE '1'O MAT
FIDELII'1 1REASUAY POOL
11114 FIDELITY INVESTMENTS 6]].23 6'1'1.23 6')'].23 4.840 4.�'14 4.890 1
11129 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.']]4 9.840 1
__"_"____________ ______________ _______'______ _____""_______ ____"_ ______ ___-__
SUHTOTALS and AVERAGES 53,211,096.65 53,195,999.39 53,195,999.39 . '
_ . 53,195,999.39 4 J04 4.840 � ' 1
IACAL AGENCY INVESTMENT FUND
21000 STATE OF CALIFORNIA 11,455,212.92 11,455,212.92 11,955,212.92 5.492 5.41'/ 5.492 1
AVERAGES 11,455,212.92
UNITED STATES TREASUR'Y - COUPON
1']013 R UNITED STATES TREASURY 0']/O1/95 105,900.82 104,000.00 10],5'15.00 'l.'I50 6.098 6.182 11/30/99 369
17083 UNITED STATES 1REASURY 03/21/9'/ 1,995,308.01 2,000,000.00 2,002,500.00 5.000 6.124 6.209 02/15/99 76
19080 � UNITED STATES 1REASURY O1/22/98 151,052.24 151,000.00 151,4]1.88 5.500 5.2'/3 5.34'/ 02/28/99 B9
17088 UNITED STATES TREASURY O1/22/98 155,575.42 155,000.00 156,743.75 S.B75 5.274 5.347 OB/31/99 273
1'l089 UNITED STATES TREASUAY O1/22/98 163,31'/.'J1 160,000.00 165,550.00 ].125 5.266 5.339 02/29/00 455
1'l090 UNITED STATES TREASURY OS/22/98 168,385.13 166,000.00 1]1,550.63 6.250 5.282 5.355 OB/31/00 639 �
1]091 UNITED STATES TREASURY � O1/22/98 190,903.55 190,000.00 194,834.38 5.625 5.289 5.363 02/28/O1 820
1]092 UNITED STATES TREASURY O1/22/98 180,]58.90 1'/6,000.00 185,900.00 6.500 5.329 5.403 OB/31/O1 1,004
1'1093 UNITED STATES TAEASURY O1/22/98 185,250.69 181,000.00 191,350.94 6.250 5.35'! 5.431 02/28/02 1,185
1]095 UNITED STATES TREASURY O1/22/9B 434,015.�1 422,]00.00 449,911.31 6.250 5.35� 5.432 OB/31/02 1,369
1'l096 UNITED STATES 1REASURY O1/22/98 416,04'1.23 405,200.00 431,284.'15 6.250 5.35'I 5.432 OB/31/02 1,369
1'!09'I UNITED STATES TREASURY O1/22/98 9,393.60 9,100.00 9,685.81 6.250 5.35"/ 5.432 OB/31/02 1,369
1'l09B UNITED STATES TREASURY 03/10/98 1,3BO,OB2.25 1,368,000.00 1,412,88'/.50 6.125 5.523 5.599 09/30/00 669
1]099 � UNITED STATES TREASUAY 03/10/98 1,5']4,9'/3.99 1,59'I,000.00 1,631,118.13 6.3']5 S.SB2 5.659 09/30/O1 1,034
1]101 UNITED STATES TREASUAY 03/1P/98 1,6]5,505.69 1,6]3,000.00 1,692,344.06 5.']50 5.980 5.556 09/30/99 303
__"'_____'_'"'"_ '___'_"'__""" """____"""' "'_"'___'__' "_'_' ____" _'____
SUBTOTALS and AVERAGES 8,]66,428.30 8,]65,920.69 8,934,009.19
� B,6BB,000.0� 5.623 5.001 594'
STATE S LOCAL GOVT SERIES - TIME �
19009 UNITED STATES 1REASURY 09/24/9'/ 12,659.00 12,65'/.00 12,65'/.00 0.000 0.000 0.000 03/25/99 - 114
19010 UNITED STATES TREASURY 0']/24f9'1 1,SB1,91'I.00 1,581,41'/.00 1,581,41'/.00 0.000 0.000 0.000 04/O1/99 121 -
19011 IINITED STATES TREASURY 07/24/9] 12,656.00 12,656.00 12,656.00 0.000 0.000 0.000 09/16/99 289 '
19012 UNITE➢ STATES TREASURY 0]/24/9'/ 1'J'],191.00 10'l,191.00 1]9,191.00 0.000 0.000 0.000 10/O1/99 3U4
19013 UNITEA STATES TREASURY o'1/24/9'1 12,65'].00 12,65'1.00 12,65v.0o 0.000 0.000 0.000 03/09/00 464
19014 UNITED STATES TREASUAY 0'//24/9] 1,622,191.00 1,622,191.00 1,622,191.00 0.000 0.000 0.000 04/O1/00 48'/
19015 UNITED STATES TREASURY 0'1/29/9"1 361,813.00 361,813.00 361,B13.00 0.000 0.000 0.000 04/12/00 998
19016 UNITED STATES TREASURY 0'1/29/9� 158,2'15.00 158,2']5.00 158,2'l5.00 0.000 0.000 0.000 10/OS/00 6'l4
1901'1 UNITED STATES TAEASURY 09/29/99 12,656.00 12,656.00 12,656.00 0.000 0.000 0.000 03/29/O1 B99
19018 UNITED STATES TREASURY 0�/29/9] 1,669,990.00 1,664,9]].00 1,664,99].00 0.000 0.000 0.000 04/O1/O1 B52
19019 UNITED STATES TREASURY 0'//24/9] 12,656.00 12,656.00 12,656.00 0.000 0.000 0.000 09/20/O1 1,029
19020 UNITED STATES 1REASURY 0]/29/9"I 88,82'1.00 BB,B2'I.O� 88,82�.00 0.000 0.000 0.000 10/O1/O1 1,035
12/30/1998 -- REDEVELOPMENT AGENCY --- PM - 5 -
INVESTMENT PORTFOLIO DETAILS - INVESTMENTS. RDA
NOVEMHEA 30, 1998 ACCRUAL
INVESTMENT AVERAGE PURCHASE STATED --- Y1T1 --- MATURITY DAYS
NOMBER ISSUER HALANCE DATE BOOK VALUE FACE VALUE MARKET VALUE RATE 360 365 DATE TO MAT
_____"'__""____'"_____________"____"'________'_______'____'"___'"_______'__"__'__________'_________________'____"'_"_'_"_'__"_
STATE & IACAL GOVT SERIES - TIME
19021 UNITEO STATES TREASURY 0'//24/9"! 12,656.00 12,656.00 12,656.00 0.000 0.000 0.000 03/19/02 1,199
'__________"_"_" "_"__""_______ ______________ ______________ ____"_ ____"_ ______
SUeTOTALS and AVERAGES 5,730,629.00 5,']30,629.00 5,'/30,629.00 '
� 5,'/30,629.00 0.000 0.000 503
❑NITED STATES TREASURY - DISCOUNT �
18023 UNITED STATES 1REASURY O1/22/98 150,'/99.82 198,000.00 164,030.63 4."!04 5.3'/4 5.499 02/15/03 1,53'/
18025 UNITED STATES TREASURY O1/22/98 130,16'/.96 181,000.00 143,159.69 4.628 5.434 5.509 02/15/04 1,902
18027 VNITEtl STATE$ TREASVRY O1/22/98 4,989,6']1.22 'l,143,000.00 5,540,289.38 9.590 5.464 5.540 OB/15/04 2,084
18028 UNITED STATES 1REASURY O1/22/98 394,2]9.4'] 532,400.00 431,5'/6.'/5 4.662 5.395 5.9')0 OB/15/03 1,'118
18029 UNITED STA1'ES TREASURY O1/22/98 255,200.42 344,600.00 279,341.38 4.662 5.395 5.470 OB/15/03 1,718
__"__"'_____'_' __'_____""__ "______""____ _"____"'_'"__ _'_'_' '_____ __""'
SUB'1Y)TALS and AVEAAGES 5,920,113.89 5,920,113.89 6,559,397.83
8,399,000.00 5.454 5.529 2,026
HIGHMhR% SWEEP ACCOIINTS
26016 HOUSING AUTH CHx SWEEP (VB) 1,936,049.48 1�436�049.a8 1,436,049.48 4.930 4.369 4.430 1
2601'! HOUSING AVTH 1RT SWSEP (UB) 192,023.24 192,023.29 192,023.24 4.330 4.2'l1 4.330 1
"___'___"_"____"_ __________"'__ ______________ "______"______ ______ ______ ______
SUBTOTALS and AVERAGES 1,908,992.88 1,628,092 J2 1,628,0]2.92
1,628,0'/2.]2 4.358 4.418 1
FEDERAL AGENCY - COUPON
15022 FEDERAL NATIONAL MTG ASSOC OS/18/98 996,461.53 1,000,000.00 1,006,250.00 5.430 5.']69 5.849 O1/29/00 422
AVERAGES 996,338.19
__"_'_"_"______"_"_'"_'_"__""____"'"___________'_'_"____________'_"'_____'______"____"____"______
TOTAL INVESTMENTS and AVG. $ 154,122,092.09 159,938,932.00
153,988,293.83 156,526,5']6.03 5.1455 5.21"!& 665
12/10/1998 --- R6DEVEIAPMENT AGENCY -- pM - 6
INVESTMENT PORTFOLIO DETAILS - CASH J�p
NOVEMBER 30, 1998 ACCRUAL
INVESTMENT AVERAGE PUACHASE STATED --- Y1Tf --- MATURITY OAYS
NUMBER ISSUER BALANCE DATE BOOK VALUE FACE VALUE MARKET VALUE RATE 360 365 DATE TO MAT
_"________'______"'______________________'_"______________'_'"'_'__________'"____"'_____'______"____"_""___'__'_"_'_"'__"
PASSBOOK/CHECRING .
25014 SELFHELP CHECRING (BA) 56,61].96 0.000 0.000 0.000
25015 HOUSING AUTH CHECKING (UB) -16,336.92 0.000 0.000 0.000
25016 � HOUSING AUTH TRUST (UB) . � ].03 0.000 0.000 0.000
' SUBTOTALS and AVERAGES 40,922.24 40,288.0� 0 000 0.000 '
Accrued Intezest at Puxthase 16,942.50 _ �
_______________"____'_'_'__"_"'__'_""__________"_'___"_'__"______"______'___
TOTAL CASH $ 5],030.5]
TOTAL CASH and INVESTMENTS $ 154,029,196.0'1 154,1'19,102.66 �
. .REDEVELOPMENT AGENCY __ INVESTMENT ACTIVITY REPORT _ NOVEMBER 1998
EXECUTIVE SUMMARY
As of 11/30/98, total portfolio book value was approximately$154MM (with SLGS). This reflected a net decrease of
approximately$15M from prior month, due largely to debt service payments. There was an unrealized portfolio net gain
(market value-book value)of approximately$795, based upon prevailing market interest rates. This was only a"paper"
gain since there was no profit-taking. Significant changes in investment position, by security type, are discussed below:
"State 8 Local Govt Series -Couoon." Palm Desert Financing Authority buys special interest-bearing U.S.Treasury
notes with maturities of 2- 10 years to invest proceeds of advance refundings held in escrow(to comply with IRS yield and
arbitrage rebate restrictions). Nonmarketable. Priced 5bp below U.S.Treasury borrowing cost for Treasury securities of
comparable maturity. Although unrated, considered "AAA."
THIS ACCOUNT BALANCE DID NOT CHANGE.
"Fideli reasury Pool." RDA invests tax-exempt bond proceeds (construction, cost of issuance, and reserve monies) in
Fidelity Institutional Money Market Fund: Treasury Portfolio-Class 1." U.S. Bank, as trustee, pays bond expenses and
debt service from this fund. This $3.9MMM fund invests in U.S. Treasury bills and notes, and repurchase agreements for
those securities. Weighted average maturity is 60 days or less. S&P credit quality rating of"AAAm"; Moody's of"Aaa."
THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$169M DUE TO DEBT SERVICE PAYMENTS.
"Loca1 Aqgp�yJnvestment Fund (LAIF1," RDA invests City's loan in $13MMM pool managed by State Treasurer's
Office for 2,600 governmental entities. LAIF has diversified portfolio(BAs, CP, Treasuries, agencies, corporates, repos,
reverse repos, CDs)with weighted average maturity of 180 - 540 days. No loss of principal in 20 years of operation. Deposits
can be"cashed"within 24 hours. Limit of$30MM per account. S&P credit rating of"(A+) positive"; Moody's of"Aa3"
THIS ACCOUNT BALANCE DID NOT CHANGE.
"United States Treasury-Coupon." RDA buys interest-bearing U.S. Treasury notes with maturities of 2- 10 years to
invest tax-exempt bond proceeds. Although unrated, considered "AAA."
THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$1 M DUE TO AMORTIZATION OF PREMIUMS.
"State &Local Govt Series -Time." Palm Desert Financing Authority buys special noninterest-bearing U.S.
Treasury certificates of indebtedness with maturities of 15 days- 1 year to invest proceeds of advance refundings held in
escrow(to comply with IRS yield and arbitrage rebate restrictions). Nonmarketable. Although unrated, considered "AAA."
THlS ACCOUNT BALANCE DID NOT CHANGE.
"United States Treasury-Discount." RDA buys noninterest-bearing zero coupon securities ("STRIPS")with maturities of
6 months -30 years to invest tax-exempt bond proceeds (construction monies). Purchased at discount face value paid at
maturity (difference is yield). Although unrated, considered "AAA."
THIS ACCOUNT BALANCE DID NOT CHANC,E.
"HlphMark Sweep Accounts." RDA sweeps excess checking balances into"HighMark 100% U.S. Treasury Money
Market Fund." This $905MM fund invests only in U.S.Treasury bills and notes (no repos or reverse repos). Weighted
average maturity is 90 days or less (per SEC regs). Although unrated, underlying securities considered"AAA."
THIS ACCOUNT BALANCE/NCREASED BY APPROX/MATELY$154M DUE TO MATUR/NG SECURITIES.
"Federal Ageney-Coupon." RDA buys U.S. government agency and instrumentality notes with maturities of 2 - 10 years
to invest advance refundings and tax-exempt construction funds. Agency debt guaranteed by U.S. Treasury; instrumentality
debt is not(guarantee, instead, believed to be U.S. GovernmenPs"moral obiigation"). Although unrated, considered"AAA."
THIS ACCOUNT BALANCE DID NOT CHANGE SIGNIFICANTLY.
12/10/1998 -- CITY OF PALM DESERT -- pM - 1
PORTFOLIO MASTER SU�4AARY �ITy
NOVEPIDER 30, 1998 ACCRUAL
AVERAGE --YIELD TO MATURITY--
PERCENT OF AVERAGE DAYS TO 360 365
INVESTMENTS BOOK VALUE PORTFOLIO TERM MATVRITY eQUIVALENT EQVIVALENT
______"_'"____'__"____"_"___"________"_"'__'_"""'______"__"__'_______"___"'"__"___'_____"____'___'"'_""_________"__________
UNITED STATES TREASURY - COUPON..............$ 30,098,659.66 24.45 1,332 930 5.952 S 032
FEDERAL AGENCY - COUPON......................$ 22,888,943.55 18.60 1,013 61'] 5.910 5.992
� LOCAL AGENCY INVESTMENT FUND.................$' 29,912,053.25 22.68 1 1 5.4ll 5.992
. CITY LOAN TO RDA.... . . . ......................$ -24,408,338.94 19.83 2,192 943 ' S.41'] � 5.492
� FIDELITY TREASllRY POOL.......................$ . 6,983,842.21 5.69 1 1 4.']94 � 9.890
UNITED STATES TREASURY - DISCOUNT............$ 4,84],122.36 3.94 1,906 1,351 5.]38 5.818
HIGFR�ARIC SWEEP ACCVl1NT5............... .......5 5,483,]34.6'/ 4..46 1 1 4.369 9.930
STATE & IACAL GOVT SERIES - TIME......... ....$ 465,000.00 0.38 1,]53 1,398 0.000 0.000
___'_________"____________________________'____"_"__________________________"_
TOTAL INVESTMENTS and AVERAGES......... . . ..$ 123,08'/,692.64 100.00& 1,023 588 S.SOOk 5.5'!6$
m�_�__�_��_a�ea:esa��_�:������..�.»ae��:see���n�a�������»n__��s_��aaam��� .
CASH
Passbook/Checking - No Yield Totale..........$ 3,311,119.2'/ 0.000 0.000
(not included in yield calculatione) -
TOTAL CASH and INVESTMENTS.................$ 126,398,811.91
MONTH ENDING FIS�n*.
TOTAL EARNINGS NOVEMBER 30 Y6AR TO DATE
Current Year $ 5�8,119.59 $ 3,046,200.39
AVERAGE DAILY BALANCE $ 126,180,271.24 $ 127,005,024.12
EFFECTIVE RATE OF RETURN 5.5'/& 5.']2&
� THE CI1'Y'S INVE57TAF.NT PORTFOLIO IS IN COMPLIANCE WITF3 ALL CALIFORNIA CAVERNMENT
PAUL S. GIBSON � CODE AIiD CITY INVESTMENT POLICY PROVISIONS RELATING TO THE INVESTMENT OF LOra*.
FINANCE DIRECTOR & CITY TREASURER AGENCY FUNDS. NOTWITHSTANDING ANY FUTURE ACfIONS BY THE CITY COUNCIL OR AN
UNFORESEEN CATASTROPHE, THE CITY HAS SUFFICIENT CASH FIAW TO MEET ITS �
EXPENDITORE REQ➢IREMENTS FOR THE NEXT SIX MON1'HS. MARRET VALUES WERE OHTAINED
OATE FAOM O.S. BANK ANp FROM INTERACTIVE DATA CORP. ALL BALANCES AAE HANK BAI.NICES.
12/10/1998 . --- CITY-OF PALM DSSERT --- pp _ 2
INVESTMENT PORTFOLIO ➢ETAILS - INVESTMENTS CITY
NOVEFIDER 30, 1998 ACCRUAL
INVESTMETTT AVERAGE PURCHASE STATED --- YTM --- MAT[1RITY DAYS
NUM1IDER ISSUER HALANCE DATE BOOK VALUE FACE VALUE MARRET VALUE RATE 360 365 DATE TO MAT
__________________"___'""______________________________________"_____________________"""__________'_'___________"_________________
UNITED STA1'ES TREASVRY - COUPON
1fi007 I UNITED STATES TREASIIRY 12/12/95 1,009,SSS.BO 1,000,000.00 1,022,500.00 6.375 5.33B 5.413 O1/15/00 410
16008 I. UNITE➢ STATES 1REASURY , 12/12/95 452,430.10 995,000.00 459,098.44 8.000 5.209 5.352 OB/15/99 25]
16049 UNI1'ED STATES 1REASURY OS/O1/99 2,000,900.21 2,000,000.00 2,018,950.00 6.3]5 6'.191 6.25� 09/30/99 150
16048 UNITED STATES 1REASURY 03/21/9] 1,995,308.01 2,000,000.00 2,002,500.00 5.000 6.129 6.209 02/15/99 '16
. 16050 11NITED STA1'ES 1REASVRY 12/11/9] 92,0'19.99 92,000.00 93,035.00 5.8'15 5.6'/4 5.'153 OB/31/99 2']3
� 16051 UNITED STATES TREASURY 12/11/99 1,350,623.69 1,340,000.00 1,926,262.50 6.250 5."!61 5.841 OB/31/02 1,369 .
16052 UNITED STATES TREASURY 12/11/9] 12,1B9.SB 12,000.00 12,416.25 '/.125 5.6'l2 5.'/50 02/29/00 455
16053 UNITE� STATES TREASURY 12/11/99 9'],001.52 9'I,000.00 100,293.94 6.250 5.]13 5.'192 OB/31/00 639
16054 UNITED STATES TREASURY 12/11/97 12,960.31 13,000.00 13,369.69 5.625 5.693 5."/]2 02/2B/01 820
16055 UNITED STATES TREASUAY 12/11/99 109,6']6.95 1�3,000.00 108,993.95 6.500 5.950 5.830 OB/31/O1 1,004
16056 UNITE� STATES 1REASURY 12/11/97 13,150.05 73,000.00 13,743.99 6.250 5.761 5.841 02/28/02 1,185
16059 UNITED STATES 1REASURY 12/11/99 11,993.99 12,000.00 12,039.50 5.500 5.629 5.�0� 02/28/99 89
16060 UNITED $TATES TR£ASURY 12/11/97 306,']48.50 300�000.00 321,000.00 6.625 5.068 5.848 03/31/02 1,216
16061� UNITED STATES TREASURY 12/11/97 15,209,198.52 15,194,000.00 15,996,433.13 5.9'JS 5.'!62 5.842 09/30/02 1,399
16062 UNITED STATES TREASURY 12/11/9] 923�185.81 911,000.00 960,535.63 6.375 5."ISB 5.838 09/30/O1 1,039
16063 UNITED STATES 1REASURY 12/11/9] 285,233.59 282,000.00 294,954.38 6.3"!5 5.]98 5.828 03/31/O1 053
16064 UNSTED STATES 1REASURY 12/11/9'1 851,496.0'! 84],000.00 874,792.19 6.125 5.724 5.803 09/30/00 669
16065 UNITED STATES TREASURY 12/11/9] 268,565.27 265,000.00 273,993.'/S 6.875 5.696 5.775 03/31/00 4B6
16066 UNITE➢ STATES 1REASURY 12/11/99 806,B25.81 80'/,000.00 B16,330.94 5.050 5.693 5.']92 09/30/99 303
1606'1 UNITED STATES 1REASURY 12/11/9] 250,409.60 250,000.00 251,'196.BB 6.250 5.646 5.'/24 03/31/99 120
16a]0 UNITED STATES TREASURY OS/18/98 9,036,984.'!2 4,000,000.00 4,0]6,250.00 6.875 5.506 5.582 08/31/99 2'/3
_____""_'_______' __________""_ _'______'_'___ ____"'_____'_ "__'_ __'___ __'___
SVBTOTALS and AVERAGES 33,000,191.22 30,098,65'1.66 31,146,'186.91
29,983,000.00 5.'/52 5.832 930
FEDERAL.AGENCY - COUPON
14016 FEDERAL FARM CREDIT HANK OB/04/9] 3,000,000.00 3,000,000.00 3,060,000.00 6.000 6.000 6.OB3 OB/04/00 612
14011 FEDERAL HOME IqAN BANK 03/26/97 1,800,000.00 1,800,000.00 1,@10,687.50 6.310 6.310 6.398 03/26/99 115
14020 FEDERAL HOME IAAN HANK O1/14/98 3,000,000.00 3,000,000.00 3,006,562.50 5.802 S.B02 5.883 O1/14/00 409
14022 FEDERAL HOME IAAN BANI( O1/09/98 2,000,000.00 2,000,000.00 2,016,875.00 6.105 6.145 6.231 O1/09/02 1,135
14024 FEDERAL HOME LOAN BANK 03/03/98 2,996,14].41 3,000,000.00 3,002,012.50 5.935 5.998 6.OB1 02/13/O1 805
19002 I FEDERAL NATIONAL MTG ASSOC 12/12/95 1,015,766.38 1,000,000.00 1,024,375.00 8.450 5.877 5.958 07/12/99 223
19004 I FEDERN. NATIONAL M1G ASSOC 12/12/95 1,040,802.31 1,000,000.00 1,OSO,B12.50 9.050 5.620 5.699 04/10/00 4% �
19023 FEOERAL NATIONAL MTG ASSOC 01/19/98 2,000,000.00 2�000�000.00 2,025,625.00 6.030 5.928 6.010 O1/14/03 1,505
19025 FEDERAL NATIONAL MTG ASSOC OS/18/98 2,041,933.91 2,000,000.00 2,065,625.00 9.590 5.]26 S.BOS 02/14/00 940
19026 FEDERAL NATIONAL MTG ASSOC OS/18/98 1,992,923.05 2,000,000.00 2,012,500.00 5.430 5.]50 S.B30 O1/2'I/00 922
1402'l FEDERAL NATIONAL MTG ASSOC OS/1B/98 2,001,390.49 2,000,000.00 2,016,250.00 5 J90 5.910 5.']89 11/OS/99 339
_________"____"__ _'"___________ ____________"_ ______________ ______ ______ '_'"__
SVBTOTALS and AVERAGES 23,825,552.'!6 22,BBB,943.55 23,099,125.00
22,800,000.00 5.910 5.992 619
12/10/1998 . -- CS1Y OF PALM OESERT -- PM - 3
INVESTMENT PORTFOLIO DETAILS - INVESTMENTS �jTY
NOV£MBER 30, 1998 ACCAUAL
INVESTMENT AVEfiAGE PVRCHASE STATED --- YTM --- MATURITY DAYS
NU[+�ER ISSUER BALANCE DATE HOOK VALUE FACE VALUE MARI(ET VALUE RATE 360 365 OATE TO MAT
LOCAL AGENCY INVESTMENT FUND
12000 STATE OF CALIFORNIA 2"I,912,053.25 27,912,053.25 2'],912,053.25 5.492 5.41"I 5.492 1
AVERAGES 26,145,386.SB
CITY LOAN TO RDA -
� 12006 CITY OF PALM DESERT 07/O1/95 29,908,330.94 24,408,338.94 24,408,338.94 5.992 5.410 5.492 0]/O1/O1 943
AVERAGES 24,908,338.94 �
FIDELITY TREASURY POOL
12004 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 4 J74 4.890 - 1
12005 FIDELITY INVESTMENTS . 0.00 0.00 0.00 4.840 4.�']4 4.840 1
12006 R FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 4.7�4 A.840 1
1200'/ FIDELITY INV&STMENTS 0.00 0.00 0.00 4.840 4.'1'14 4.890 1
12009 I FIOELITY INVESIMENTS 3'/,412.]0 37,412.']0 3'],412.']0 4.840 9."1']q 4.090 1
12010 R FIDELITY INVESTMENTS 194,135.99 194,135.99 194,135.99 4.840 9.794 4.840 1
12012 I FIDELITY INVESTMENTS 269,064.36 269,064.36 269,064.36 4.840 4.]94 4.840 1
12013 R FIDELITY INVESTMENTS 133,442.32 133,442.32 133,442.32 4.890 4.]'/4 4.840 1
12015 FIDELII'1 INVESTMENTS 0.00 0.00 0.00 4.890 4.]94 4.840 1 .
12016 I FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 4.'1'14 4.840 1
12022 R FIDELITY ITMESTMENTS 0.00 0.00 0.00 4.890 4.]�4 4.840 1
12024 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 4.'I'19 4.840 1
12025 R FIDELSI'Y INVESTMENTS 9']6,951.35 496,451.35 476,451.35 4.890 4.'/99 4.840 1
1202] R FIDELSTY INVESTMENTS 64,68'J.68 64,68'/.68 64,68].68 4.840 4.'/'/9 4.840 1
12028 R FIDELITY INVESTMENTS . 163,382.86 163,382.86 163,382.86 4.840 4 J99 4.840 1
12031 FIDELITY INVE�STMENTS 12.05 12.05 12.05 4.840 4.'/'/9 4.840 1
12033 FIDELSTY INVESTMENTS 92.99 42.99 42.99 4.840 4.999 4.840 1 _
12034 FIDELITY INVESTMENTS 107.51 307.51 10].51 4.840 4.774 4.840 1
12035 FIDELITY INVESTMENTS 486.05 486.05 486.05 4.840 4.]]9 4.840 1
12036 FIDELITY INVESTMENTS 130.70 130.70 130.]0 4.840 4.774 4.840 1
1203'1 FIDELITY INVESTMENTS 85.09 85.99 85.99 4.840 4.004 4.840 1
12039 FI➢ELITY INVESTMENTS 24.23 29.23 24.23 4.840 9.'i74 4.840 1
12042 I FIDELITY SNVESTMENTS 0.00 0.00 0.00 4.840 4.0'!4 4.840 1
12043 FIDELITY INVESTMENTS 0�00 0.00 0.00 4.840 4."/'/9 4.840 1
12044 FIDELITY INVESTMENTS 0.00 O.pO 0.00 4.840 4 J94 4.840 ' 1 -
' 12045 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.'1�4 4�.840 1
12046 FIDELITY INVESTMENTS B0.06 80.06 80.06 4�.890 4.'/94 9.840 1
12099 FIDELITY INVESTMENTS 60,5'/2.91 69,502.91 6'1,5'12.91 9.840 4 J94 9.840 � 1
12050 FIDELITY INVESTMENTS 095.53 945.53 045.53 9.840 4.9]9 4.840 1
12051 FIDELSTY INVESTMENTS 195.99 195.49 195.99 9.840 4.'/'/9 4.840 1
12052 FIDELITY INVESTMENTS 1.06 1.96 1.�6 4.840 4.'!04 4.840 1
12053 FIDELITY INVESTMENTS 59,733.19 59,'/33.19 59,'/33.19 4.840 9.'1'!4 4.840 1
12059 FIDELITY INVESTMENTS 0.1'J 0.1"J 0.1'/ 4.840 9.']']4 4.890 1
12055 FIDELITY INVESTMENTS 0.34 0.39 0.34 4.840 4.')')4 4.840 1
12057 PIDELITY INVESTMENTS 4,086,881.00 4,086,881.00 9,OB6,B01.00 4.890 9.974 4.840 1
12/10/1998 ' -- CITY OF PALM DESERT --- PM - 9
INVESTMENT PORTFOLIO �ETAILS - INVESTMENTS CITY
NOVEMBER 30, 1998 ACCRUAL
INVESTMENT AVERAGE PURCHASe STATED --- YTM --- MAT[IRITY DAYS
NUhIDER ISSUER BAI.ANCE DATE BOOK VALUE FACE VALUE MARICET�VALUE RATE 360 365 DATE TO MAT
__"__'_"_______________________"_'""_______'_'_________________________""_________""__""________________________"""___________"___
FIDELII'1' 1REASURY POOL
12058 FIDELITY INVESTMENTS 61,830.28 61,830.28 61,830.28 4.840 9.]']4 4.840 1
12059 FIDELITY INVESTMENTS 1,292.91 1,292.91 1,292.91 4.890 4.]94 4.840 1
12060 FIDELITY INVESTMENTS � 896,198.90 896,198.]0 896,198.]0 4.B90 9.]94 9.840 1
12061 FIDELITY INVESTMENTS 30B,942.84 308,942.84 308,942.84 4.040 4 J�9 4.840 . �1
12062 FIDELITY INVESTMENTS 126,208.68 126,208.68 126,208.68 9.B40 4.'/99 4.840 1
12063 FIDELITY INVESTMENTS 0.00 0.00 0.00 9.B40 4.']'/9 4.840 1
12069 FIDELITY SM/ESTMENTS 0.00 0.00 0.00 9.840 4.779 4.840 1
12065 FIDELIPY INVESTMENTS 0.00 0.00 0.00 4.840 4.7"!9 9.840 1
12066 FI�ELITY INVESTMENTS 0.00 0.00 0.00 9.840 4.779 4.840 1
1206] FIDELITY INVESTMENTS 28.02 28.02 28.02 9.840 4.'/'/9 4.840 1
12068 FIDELITY INVESTMENTS 0.00 0.00 0.00 9.840 4.779 4.840 1
12069 FIDELITY INVES'1'MENTS 191.64 191.64 191.69 4.840 4.004 4.840 1
120]0 F3DELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.']']4 4.890 1
120'/l FSDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.']"/4 4.040 1
120�2 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9."1'14 4.840 1
120'/3 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.']']4 4.890 1
120"/4 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.']']4 4.890 1 .
120]5 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.]]4 4.840 1
120'/6 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 4.'/'!4 4.840 1
120'!] FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 4."/]4 4.840 1
120'/8 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 4.'1'14 4.840 1
12009 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 4.]�4 9.840 1
12080 FIDELITY INVESTMENTS 0.00 0.00 0.00 9.840 4.��4 4.840 1
12081 FIDELITY INVESTMENTS 0.00 0.00 0.00 9.840 4.�'/9 4.840 1
12082 FIDELITY INVESTMENTS � 0.00 0.00 0.00 4.840 4.'1'19 4.890 1
12083 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 4.'1'l9 4.890 1
12084 FIDELITY INVESTMENTS 0.00 0.00 0.00 d.840 9.']']4 4.890 1
12085 FIDELITY INVESTMENTS 0.00 a.00 0.00 4.840 4.'1'14 4.890 1
12086 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.9]4 4.840 1
12087 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9.774 4.840 1
12088 FIOELITY INVESTMENTS 0.00 0.00 0.00 4.890 4.'/]4 4.840 1
120B9 FIDELITY IP7VESTMENTS 0.00 0.00 0.00 4.840 4.774 4.840 1
12090 ' FIDELII7 INVESTMENTS 39,2"/5.45 34,2'/5.45 34,275.45 4.840 4.]94 9.840 1 �
12091 FIDELII'1 INVESTTIENTS 0.00 0.00 0.00 4.840 4.979 9.840 � 1
12092 FIDELII'] INVESTMENTS 115.65 115.65 115.65 9.040 4."I"I9 4.840 1
12093 FIDELITY INVESTMENTS B1.01 81.01 B1.01 4.840 4.'!'/9 4.890 1
12094 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 4.'/74 4.890 1
12095 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 9."!"/4 4.840 1
12096 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 9.']'14 4.840 1
12099 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 4.]94 4.840 1
1]100 R FIDELITY INVESTMENTS 0.00 0.00 0.00 4.890 4.'1�4 9.840 1
12102 FIDELITY INVESTMENTS 0.00 0.00 0.00 4.840 4.]'I4 9.840 1
_________________ ""________"_"_ ___"""_'______ ______"_______ ______ ______ ______
SUBTOTALS and AVERAGES 6,999,296.98 6,983,892.21 6,983,842.21
6,9B3,B92.21 9.774 4.840 1
12/10/199B -- CITY OF PALM DESEAT --- PM - 5
- INVESTMENT PORTFOLIO DETAILS - INVESTMENTS CITY
NOVEMBER 30, 1998 ACCRUAL
� INVESTMENT AVERAGE PURCHASE STATED --- YTM -- MAT[JRITY DAYS
NUPIDER . ISSUER HALtNCE DATE BOOK VALUE FACE VALUE MARHET VALUE RATE 360 365 DATE TO MAT
____"""__"________________'__""______"'__"________________________'"_____""___________"_'_"_______"______________""_"____""____"__
UNITED STATES 1REASVRY - DISCOUNT .
1'/0'/0 UNITED STATES TREASVRY 12/11/9'1 128,6'/6.56 166,000.00 192,396.88 5.0]8 5.')58 5.838 OS/15/02 1,261
1'10'll UNIT£D STATES TREASURY 12/11/9] 4,]18,445.80 6,170,000.00 5,238,'/15.63 5.028 5.'J3'1 5.81'] 08/15/02 1,353
_________________ _"__"__'_____ ___"_'_'_____' ____'_"_'_____ "__'_ ____'_ '_'•__
SUBTOTALS and AVERAGES 4,84�,122.36 4,84],122.36 5,381,112.A � , �
_ , 6,336,OOO.00 5."/39 5.818 . 1;351
RIGHMHRK SWEEP ACCOUN'CS
24015 CITY MASN SW£EP (UB) 4,503,208.01 4,503,200.01 9,503,208.01 4.430 4.369 4.430 1
24019 DESERT WILLOW SWEEP (UB) 145,212.fi1 145,212.61 195,212.61 4.430 9.369 4.430 - 1
24016 OFFICE COMPLEX SWEEP (UB) 835,314.05 835,319.05 835,319.05 4.430 9.369 4.930 1
. ___________"_____ ______________ __"_"________' _____'"'______ ______ ______ """"""
SUBTOTALS and AVERAGES 5,26'/,150.'/2 5,483,]34.6] 5,983,'l34.6'J
5�4B3,v34.6v 9.369 4.930 1
STATE & LOCAL GOVT SERIES - TIME
23000 UNITED STATES TREASURY 12/11/9'1 930,000.00 430,000.00 430,000.00 0.000 0.000 0.000 10/O1/02 1,900
23001 UNITED STATES TREASURY 12/11/9'1 35,000.00 35,000.00 35,000.00 0.000 0.000 0.000 09/02/02 1,3'/1
______"__________ _'__"_"_"___'" ______________ __________"___ ___""_ _'___' ______
SOBTOTALS and AVERAGES 965,000.00 965,000.00 965,000.00
465.000.00 0.000 0.000 1,398
TOTAL INVESTMENTS and AVG. $ 123,OB'],692.64 124,8'/9,993.49
124,953,039.56 129,3'11,969.0'1 S.SOOt 5.5'!6i SBB
12/10/1998 � -- CITY OF PALM OESERT --- PM - 6 ,
INVESTMENT POATFOLIO DETAILS - CASH , CITY
NOVEMBER 30, 199B ACCAUAL
INVESTMENT AVERAGE PVRCHASE STATED --- YTM --- MATf1RITY DAYS
NU[+�ER ISSVER BALANCE DATE BOOK VALUE FACE VALUE MARI(ET VALUE RATE 360 365 DATE TO MAT
PAS5600K/CHECAING
13019 OFFICE COMPLEX CHECRING (UB) 50,615.53 0.000 0.000 0.000 •
13016 CITY MAIN CHECKING (UB) 2,95],995.02 . 0.000 0.000 0.000
13013 ➢ESERT WILIAW CHECxING (UB) 249,682.18 0.000 0.000 0.000 �
� .� 13015 LIBRARY FOLINDATION CRKG (UB) 19,236.39 0.000 0..000 0.000 ,
, 13018 OFFICE COMPLEX TRVST (VB) 23,729.41 0.000 0.000 0.000
13020 RECAEATIONAL FAC CHECRING (SSB) 9,862.'19 0.000 0.000 0.000 � '
_"__________"_ __________"__" """""" """"_"
SUBTOTALS and AVERAGES 1,229,231.60 3,311,119.2a 0.000 0.000
TOTAL CASH and INVESTMENTS 5 12b,180,271.29 126,398,811.91
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CITY OF PALM DESERT ,— INVESTMENT ACTIVITY REPORT � NOVEMBER 1888
EXECUTIVE SUMMARY
As of 11/30/98, total portfolio book value was approximately$123MM. This reflected a net increase of approximately
$438M from prior month, due to interest income. There was an unrealized portfolio net gain (market value-
book value)of approximately$9M, based upon prevailing market interest rates. This was only a"paper"gain since there
was no profit-taking. Significant changes in investment position, by security type, are discussed below:
"United States Treasuq�-Coupon." The Cily buys interest-bearing U.S.Treasury notes with maturities of 2- 10 years to
invest proceeds from sale of assessment bonds. Although unrated, considered"AAA."
TH/S ACCOUNT BALANCE DECREASED BY APPROXIMATELY$3MM DUE TO A MATURING SECUR/TY.
"Federel Aagn�y_Coypon:' The City buys U.S. govemment agency and instrumentality notes with maturities of 2- 10
years to invest proceeds from sale of assessment bonds. Agency debt guaranteed by U.S. Treasury; instrumentality debt
is not(guarantee, instead, believed to be U.S. GovernmenYs"moral obligation"). Although unrated,considered"AAA."
TH/S ACCOUNT BALANCE DECREASED BYAPPROXIMATELY$5MM DUE TO MATURING SECUR/T/ES.
"Locat Agency Investmant Fund (LAIF1." The City temporarily invests proceeds of matured securities in $13MMM
pool managed by State Treasurer's O�ce for 2,600 governmental entities. LAIF has diversified portfolio (BAs, CP, Treasuries,
agencies, corporates, repos, reverse repos, CDs)with weighted average maturity of 180-540 days. No loss of principal in 20
years of operation. Deposits can be"cashed"within 24 hours. Limit of$30MM per account. S&P credit quality rating of
"(A+) positive"; Moody's of"Aa3:'
THIS ACCOUNT BALANCE/NCREASED BY APPROX/MATELY$5MM DUE TO RE/NVESTMENT OF MATUR/NG
SECURITIES.
"Citv Loan to RDA." The City has made long-term cash advances at LAIF interest rate to RDA for property purchases.
Advances will be repaid in future years from tax increment revenue generated by associated redevelopment projects.
THIS ACCOUNT BALANCE/NCREASED BYAPPROXIMATELY$3.4MM DUE TO A NEW CASH ADVANCE.
"Fideli�Treasury Pool." The City invests proceeds from sale of assessment bonds (construction, cost of issuance, and
bond reserve monies)in "Fidelity Institutional Money Market Fund: Treasury Portfolio-Class I." This $3.9MMM fund
invests in U.S. Treasury bills and notes, and repurchase agreements for those securities. Weighted average maturity is 60
days or less. S8P credit quality rating of"AAAm"; Moody's of"Aaa."
THIS ACCOUNT BALANCE DECREASED BYAPPROXIMATELY$129M DUE TO DEBT SERV/CE PAYMENTS.
"United States Traasury-Diseount" The City buys noninterest-bearing zero coupon securities ("STRIPS")with maturities
of 6 months -30 years to invest proceeds from sale of assessment bonds. Purchased at discount;face value paid at
maturity(difference is yield). Although unrated, considered"AAA."
THIS ACCOUNT BALANCE D/D NOT CHANGE. ,
"HighMark Sweep Accounts:' The City sweeps excess checking balances into"HighMark 100% U.S. Treasury Money
Market Fund." This $905MM fund invests only in U.S. Treasury bills, notes, and STRIPS(no repos or reverse repos).
Weighted average maturity is 90 days or less (per SEC regs). Although unrated, underlying securities considered"AAA."
THIS ACCOUNT BALANCE INCREASED BY APPROXIMATELY$224M DUE TO MATURING SECURITIES.
"State 8 Local Govt Serias-Time." The City buys special noninterest-bearing U.S.Treasury certificates of
indebtedness with maturities of 15 days- 1 year to invest proceeds from sale of assessment bonds (to comply with IRS yield
and arbitrage rebate restrictions). Nonmarketable.Although unrated, considered "AAA."
THIS ACCOUNT BALANCE DID NOT CHANGE.
STATE OF CALIFORNIA � MATT FONG, Thseanr� ~
O�ICE OF THE TREASURER
SACRAMENTO .
Local Agency Imestment flu►d
PO Box 942809
Sacramento, CA 94208-0001
(916) 653-3001
October , 1998 Statement �
Ecconat Nnmber: 98-33-621
CITY OF PALM DESERT
Attn: CITY TREASURIIt
73510 FRED W�RII�TG DRNE
PALM DESERT CA 92260
Transactions
Effective 'lYasisaction 'lYan Confirm Authorized
Date Date Type Number Caller Amount
10-15-1998 10-14-1998 QRD SYSTEM 281,835.82
Account Summary
Total Deposit : 291,935.92 Beginning Balance : 22,620,117.33
Total Withdrawal : 0.00 Ending Bala:tce : 22,912,OS3.25
�.
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Page : 1 of 1
POOLED MONEY IIWESTMENT ACCOUNT
SITNIIVIARY OF INVESTMENT DATA
A COMPARISON OF OCTOBER 1998 WITH OCTOBER 1997
(Dollars in Thousands)
OCTOBER3998 UGTOBSR 1997 CHANGE
AvcragcDailyPortfolio $31,218,919 $27,114,127 +$q,104,792"
AcccuedEammgs 5147,354 5131,386 +$15,968
Effecrive Yield 5.55'7 5.705 -.148
Avecage Life—M�th End(in days) 184 215 -31 .
Total Seciaity Txansactions
Amount $19,270,925 $17,735,224 +$1,535,701
Nuwbcr 431 402 +29
ToffiI Time Deposit Trmsactioas
Amount 51,147,790 5648,800" +5498,990
Numba 76 4q +32
Average Workday Investmsat Acrivity 5972,320 5835,637 +SI36,683
Prescnbed Demand Acwunt Balances
For Smices $177,619 5171,352 +;6,267
For Uncolleerod Fimds $130,565 S 116,151 +S 14,414
LOCAL AGENCY IIWESTMENT FUND*
SUNII�IARY OF ACTTVITY
OCTOBER 1998
BEGINNING BALANCE DEPOSTTS WITHDRAWALS MONTH END BALANCE
$13,031,706,897.86 51,863,118,023.51 $1,321,030,892.65 $13,573,794,028.72
•Local Agency Invesm�mt Fund Invested Through Pooled Money Invesmieat Account
State of California
Pooled Money Investment Account
Market Valuation
10/31/98 �
cr3pt�on _:. : - _.Caqyfng Cost:Plus �..... - , ';� �a-�. < ,;�
t 1 �
`' �` - :AccruadlMerest�.urch.��°'� ,.="F,air�l/,alue� ' �ere�t .
United States Treasu :
Bilis $ 2,291,093,280.87 $ 2,373,7T1,560.00 NA
Notes $ 4,949,508,724.48 $ 5,003,053,300:00 $ 72,459,517.55
Federal en :
Bonds S 2,029,113,176.58 $ 2,036,162,399.00 S 27,942,489.95
Floaters $ 170,000,000.00 $ 169.876.800.00 S 2.085.433.40
MBS $ 108,071.92921 $ 109.744.828.99 $ 635.626.21 '
GNMA $ 2,140,28927 $ 2,400,839.67 S 21,182.72
SBA $ 267,498,520.35 $ 268,673,629.50• $ 2,660,937.48
FHLMC PC $ 20,341,558.09 $ 22,377,085.70 S 336.30420
Discount Notes $ 2,025,704,791.87 $ 2,047,592,583.55 NA
Bankers Acce tances $ 39,627,644.21 $ 39,781,166.85 NA
Co rate:
Bonds $ 872,781,006.87 $ 873.350.349.54 $ 12.188.13028
Floaters $ 924,477,402.69 $ 916,765,542.00 $ 6,040,289.07
CDs $ 4,925,121,842.40 $ 4,928,343,976.20 $ 75,466,179.19
Bank Notes $ 1,730,980,489.48 $ 1,732,893,072.48 $ 26,290,043.05
R urChese r&ements NA NA NA
Time De osits $ 1,877,390,000.00 $ 1,877,390,000.00 NA
AB 55& GF Loans $ 2,667,904,996.00 $ 2,667,904,996.00 NA
Commercial Pa r $ 7,201,597,716.67 $ 7,253,638,487.92 NA
Reverse Ra urchase $ 445,804,000.00 $ 445,904,000.00 $ 1,459,704.52
TOTAL $ 31,657,449,379.14 $ 31,877,816,627.40 $ 224,666,428.58
Fair Value Induding Accrued Interest $ 32,102,483,055.98
Repurchase Agreements,Time Deposits,AB 55&Generai Fund loans,and
Reverse Repurchase agreements are cartied at portfolio book value(wrrying cost).
�
���, ,t���r�u��, LAIF STATEMENT
,��ji ' '�l:�i �' HAS A NEW LOOK
, .
..
The Local Agency Investment Fund
....:.: ...... :. . . . ....... .. . ...... . _........... . (LAIF) converted to its new system which is
Year 2000 compliant on October 1, 1998.
On Jan uary 1 , 1998, the State One of the benefits of the new system
Treasurer's Office (STO) assumed th� role of �s its abiliry to produce reports which are more
Administrator of the Local Agency Secu�ty �ncise and easity understood.
Program (LASP) as designated in Assembly Each transaction must be identified
Bili 1432. specffically by type in the new system. This
The LASP was created in 1970 to �s similar to what you ha� seen in the past,
administer and enforce the regulations in • W�h some additions.
accordance with Cal'rfomia Govemment Code To assist you in becoming familiar with
Sections 53630 through 53686. The law these changes, a reference guide was
provides that depositories in Cal'rfornia are included with your October statement listing
required to submit reports of local agency Qach transaction type by the initials that will
deposits and securities to the Administrator of �shovm on your statement, along with their
the LASP. meaning.
Since the STO has assumed
responsibility of the program, many local �
agencies have mistakenly iclentffied the LASP
as the Local Agency Investment Fund (WIF). 1998 LAIF ANNUAL UPDATES
The LASP is NOT affiliated w/th the LA/F. All participants should have
Ahhough the LASP and the LAIF are received their 1998 LAIF Annual Updates
both administered by the State Treasurer, they ��ch were mailed in August. In order to
have distinct roles and responsibilities and are keep account information current, it is
managed by two separate Divisions. imperative that the information on the form
The LASP is managed by the Public �Yer'rfied as correct or changes be made
Finance Division, Securities Clearance Section on the original form and returned to the
of the STO. All correspondence and inquiries �,qIF.
related to the L4SP should be directed to the
attention of Chris Vance, Local Agency Security
Pr ram,915 Ca itol Mall, Room 101, P.Q. Box •p� °',' f� � �
09 P �i�i1i��
942809, Sacramento, CA 94209-0001. For � Ifi >
I;,
more information on the LASP or the LAIF,
please visit the STO web site at http://
www.treasurer.ca.gov:
LAIF participants should continue to
contact Patricia A Beal, LAIF Administrator.
STAiE OF CALIFORNIA ^ . MATT FONG, Tieasure�
OFFICE OF THE TREASURER
SACRAMENTO
Local Agency Investment F�nd
PO Box 942809
Sacramento, CA 94209-0001
(916) 653-3001
October , 1998 Statement "
Hccouat Number : 65-33-035
PALM DESERT RIDEVELOPMENT AGENCY
Attn: PAUL GIBSON, TRF.ASURER
73-510 FRID WAIi.II�TG DRNE
PALM DESERT CA 92260
Transactions
Effective '1Yansaction RYan Confirm Authorized
Date Date Type Number Calles Amount
10-15-1998 10-14-1998 4RD SYSTEM 252,166.70
Account Summa:v
Total Deposit : 252,166.70 Beginsring Balance : 11,203,046.22
Total Withdrawai : 0.00 Ending Balance : 11,455,212.92
:n _
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Page : 1 of 1
POOLED MONEY INVESTMENT ACCOiINT
SUMMARY OF INVESTMENT DATA
A COMPARISON OF OCTOBER 1998 WITIi OCTOBER 1997
(Dollars in Thousands)
OCl'OBER 1998 _ OGTOBER 1997 CHANGE
Average Daily Portfolio $31,218,919 $27,114,127 +$q,104,792
AeemedEacnings $147,354 $131,386 +$15,968
Effective Yield 5.557 5.705 - .148
Average Life—Moath Fnd(in days) 184 215 -31
ToffiI Security Transactions
Amount 519,270,925 $17,735,224 +$1,535,701
Number 431 402 +Z9
Total Time Deposit Transacaons
Amount $1,147,790 $648,800 +$qgg,g9p
Numbcr 76 44 +32
Aveiage WorkdayInvesLmmtAedviry $972,320 5835,637 +$136,683
Presrn'bed Demand Acwunt Balances
For Services $177,619 $171,352 +s6,267
For Uncollected Funds $130,565 $I 16,151 +514,414
LOCAL AGENCY INVESTMENT FUND*
SUMIVIARY OF ACTTVTfY
OCTOBER 1998
BEGINNING BALANCE DEPOSTTS WITHDRAWALS MONTH END BALANCE
$13,031,706,897.86 $1,863,118,023.51 $1,321,030,892.65 $13,573,794,028J2
'Local Agency tnvesanmt Fund Invested T]�rough Pooled Money Investment Accoimt
State of California
Pooled Money Investment Account
Market Vafuation
10/31/98
Description . Carrying Cost Plus
: .. !Accrued IMerest"Purch. Fair Value - -Accrt�ad'lnteresE.=
United States Treasu :
Bills $ 2,291,093,290.97 $ 2,373,771,560.00 NA
Notes $ 4,949,508,724.48 $ 5,003,053,300.00 $ 72,458,517.55
Federal A en :
Bonds $ 2,029,113,176.58 $ 2,036,162,399.00 $ 27.942.489.95
Floaters $ 170,000,000.00 $ 169,876,800.00 $ 2,085,433.40
MBS $ 108,071,929.21 $ 109,744,828.99 $ 635.62621
GNMA $ 2,740,289.27 $ 2,400,839.67 $ 21,182.72
SBA $ 267,498,520.35 $ 268,673,629.50 $ 2,660,937.48
FHLMC PC $ 20,341,558.09 $ 22,377,085.70 $ 336,30420
Discount Notes $ 2,025,704,791.87 $ 2,047,592,593.55 NA
Bankers Acce tances $ 39,627,644.21 $ 39,781,166.85 NA
Co orete:
Bonds $ 872,781,006.87 $ 873,350,349.54 $ 12.188.130.28
Floaters $ 924,477,402.69 $ 916,765,542.00 $ 6,040,289.07
CDs $ 4,925,121,642.40 $ 4,928,343,976.20 $ 75,466,179.19
Bank Notes $ 1,730,980,489.48 $ 1,732,893,072.48 $ 26,290,043.05
Re urehase rsements NA NA NA
Time De osits $ 1,877,390,000.00 $ 1,877,390,000.00 NA
AB 55 8 GF Loans $ 2,667,904,996.00 $ 2,667,904,996.00 NA
Commercial Pa er $ 7,201,597,716.67 $ 7,253,638,487.92 NA
Reverse Re urchase $ (445,904,000.00 $ 445,904,000.00 $ 1,459,704.52
TOTAL $ 31,657,449,379.14 $ 31,877,816,627.40 $ 224,666,428.58
Fair Value Including Accrued Interest S 32,102,483,055.98
Repurchase Agreements,Time Deposits,AB 55 8 General Fund loans,and
Reverse Repurchase agreements are earried at portfolio book value(carrying cost).
' 3:
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�"::3>.cj°�;
���_���_ ��� �� ��; u��.�- LAIF STATEMENT
��� ° * � HAS A NEW LOOK
:s„ .�;"�� -� .
5
�� �` ti<
�r`,�r��}�"1 M . . c c r; � � ,
�� �,���x : The Local Agency Investment Fund
§�'��'��.�.�,�: ��"������i��� (LAIF) converted to its new system which is
Year 2000 compliant on October 1, 1998.
On January 1 , 1998, the State Oneofthebenefitsofthenewsystem
TreasurePs Office (STO) assumed the role of is its abilityto produce reports which are more
Administrator of the Local Agency Security concise and easily understood.
Program (LASP) as designated in Assembly Each transaction must be identified
Bill 1432. specifically by type in the new system. This
The LASP was created in 1970 to is similar to what you have seen in the past,
administer and enforce the regulations in �W�h some addftions.
accordance with Cal'rfornia Govemment Code To assist�rou in becoming familiar with
Sections 53630 through 53686. The law these changes; a reference guide was
provides that depositories in California are included with your October statement listing
required to submit reports of local agency eflch transaction type by the initials that will
deposits and securities to the Administrator of �shown on your statement, along with their
the LASP. meaning.
Since the STO has assumed
responsibility of the program, many local �
agencies have mistakenly ident'rfied the LASP
as the Local Agency Investment Fund{LAIF). 1998 LAIF ANNUAL UPDATES
Trie LASPis NOTaIflliated with the LAIF. AII participants should have
Although the LASP and the LAIF are received their 1998 LAIF Annual Updates
both administered bythe State Treasurer,they ��ch were mailed in August. In order to
have distinct roles and responsibilities and are keep account information current, it is
managed by two separate Divisions. imperativethat the information on the form
The LASP is managed by the Public ��er'rfied as correct or changes be made
Finance Division, Securities Clearance Section on the original form and returned to the
of the STO. All correspondence and inquiries ��F
related to the LASP should be directed to the
attention of Chris Vance, Local Agency Security ��
Program, 915 Capitol Mall, Room 101, P.O. Box .� � � ,_ -� �����,;
942809. Sacramento, CA 94209-0001. For � "��
�� ; �;
more information on the LASP or the LAIF,
please visit the STO web site at http:// .
www.treasurecca.gov.
LAIF participants should continue to
contact Patricia A. Beal, LAIF Administrator. �
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K .i
City of Palm Desert
- Pazkview Office Complex
Income Statemmt
For November 1998
Novemberv98 November-98 # % YTD Y['D # %
Bud et Actual Variance Variance Bud et Actual Varience Verience
Revenues
Rentel $ 58,900 $ 67,028 $ 8,128 113.80% $ 294,500 $ 289,261 $ (5,239) 98.22%
Dividends/Interest $ 1,200 $ 2,868 $ 1,668 238.99% $ 6,000 $ 13,525 $ 7,525 - 225.A2%
� Total Revenues $ 60,100 $ 69,896 $ 9,796 116.30% $ 300,500 $ 302,786 $ � 2,286 100.76% �
Expenses
Professional-AccountingdnAuditing $ 3,700 $ 5,161 $ (1,46]) 139.49% $ 18,500 $ 25,805 $ (7,305) 139.49%
Professional-ManagementFee $ 5,500 $ 5,549 $ (49) 100.88% $ 27,500 $ 32,975 $ (5,475) Y19.91%
Tenentlmprovements $ 5,800 $ 6,610 $ (810) 113.96% $ 29,000 $ 6,670 $ 22,390 22.79%
Repairs&Maintmance Eypding $ 9,]00 $ ¢,755 $ 4,342 52.28% $ 45,500 $ 21,984 $ 23,516 48.32%
Repairs&Maintmance-I�ndecaping $ 1,079 $ - $ 1,079 0.00% $ 5,395 $ - $ 5,395 0.00°h
Utilifies-Water $ 250 $ 99 $ 151 39.42% $ 1,250 $ 419 $ 831 33.52%
UtilitiesGas/ElecMc $ 4,500 $ 3,987 $ 513 88.60% $ 26,000 $ 25,716 $ 284 98.91%
Utilities-Trash $ 450 $ 619 $ (169) 137.61% $ 2,250 $ 2,216 $ 34 98.49%
Telephone $ 150 $ - $ 150 0.00% $ 750 $ 662 $ SS 88.27%
Inaurance $ 521 $ - $ 521 0.00% $ 2,603 $ - $ 2,603 0.00%
Totel Expenses $ 31,050 $ 26,782 $ 4,268 86.25% �$ 158,748 $ 316,387 $ 42,361 73.32%
lvveet1599.Invnt . .
PARKVIEW PROFESSIONAL BUII.DINGS
TFNANT LLST--NOVEMBER 15, 1998
73-710 FRED WARING DRIVE-TWO STORY BUII,DING
FIRST FLOOR
SUITE NO. TENANT QUARE FEET
100 HANOVER Z�p
102 BERGREN � 1�360
103 MULTIPLE SCI.EROSIS qgg
104 ARTHRITIS FOUNDATION g6p
106 VACANI' 928
108 SENATOR KELLEY �g5
112 ASSEMBLYMAN BATI'IN 1,406
114& 116 CHAMBER OF COMIYIERCE 1,478
118 IN-HOME HEALTH 1,ZSp
119 CTI'Y/CVAG CONFERENCE ROOM 1,380
120 GOLF DIlI3ENSIONS 1•750
TOTAL FOOTAGE FIItST FLOOR 14,345
SECOND FIAOR
200 CVAG 4,292
200A VACANT gqi
201 U. S. DISTRICT COURT (,pq
203 CASAS 480
.
205 VACANT �pp
Z08 FERGUSON 8c BERNHEIIYIER 9(p
210& 212 WIISON,PESOTA& PICHARDO 3,040
211 ALZHEIl�IER"S ASSOCIATION 937
217 MCMII.LIN 775
220 VACANT 1,607
222 WMA SECURITIES 2.981
TOTAL FOOTAGE SECOND FIAOR 17,217
TOTAL FOOTAGE BOTH FLOORS 31,562
VACANCY RATE-3�376/31�562=10.70%
, 73-720 FRED WARING DRIVE—p1�iE STORY BiTII.DING
100 STAT'E OF CALIFORNIA—WATER RES. 15,233
102 & 104 STATE OF CALIFORNIA—REHAB. 4396
TOTAL FOOTAGE 19,629
VACANCY RATE-0%
TOTAL FOOTAGE—BOTH BUII.DINGS 51,191
VACANCY RATE—BOTH BTJII.DINGS
3�376/51,191 =6.60%
* .
' �- _
City of Palm Desert
Desert Willow
Budget Vs Actusl
For the moath of November 1998
Budgeted Actual BudgMed Actual
November November $ Percentage Year to Year to $ Percentage
Revenue 1998 1998 Variance Variance Date Date Variance Vaziance
Course&Ground $ 551,704 $ 327,489 $ (224,215) 5936% $ 1,141,317 $ 8'76.200 $ (265,117) 76.77%
Carts $ 24,344 $ 14,574 $ (9,770) 59.87% $ 54,669 $ 36,260 $ (18,409) 6633%
GolfShop $ 51,200 $ 35,173 $ (16,027) 68.70% $ 139,050 $ 117,127 $ (21,923) 84.23`%
Range $ 2,499 $ 1,450 $ (1,049) 58.02% $ 6,826 $ 3,2?A $ (3,602) 47.23%
Food&Beverage $ 53,543 $ 27,601 $ (25,942) 51.55% $ 130,512 $ 101,681 $ (28,831) 77.91°k
Incerest Income $ 1,500 $ 766 $ (734) 51.07% $ 7,500 $ 7,038 $ (462) 93.84�
Total Revenues $ 684,790 $ 407,053 $ (277,73'n 59.44% $ 1,479,874 $ 1,141,530 $ (338,344) 77.14%
Payroll
PerimeterLandscaping $ 9,085 $ 8,334 $ 751 91.73% $ 45,425 $ 36,405 $ 9,020 80.14%
Proshop $ 10,539 $ 6,877 $ 3,662 65.25% $ 34,896 $ 27,482 $ 7,414 78.75%
Cart $ 18,737 $ 13,932 $ 4,805 74.36% $ 61,630 $ 46,241 $ 15,389 75.03%
Course&Ground $ 104,037 $ 105,343 $ (1,306) 101.26To $ 364,526 $ 373,860 $ (9,334) 102.56%
GolfOperations $ 18,229 $ 20,543 $ (2,314) 112.69% $ 72,338 $ 75,144 $ (2,806) 103.88�
General&Administration $ 23,638 $ 17,490 $ 6,145 73.99% $ 116,699 $ _ 88,092 $ 28,607 75.49%
Food&Beverage $ 17,850 $ 16,441 $ 1,409 92.11% $ 65,556 $ 51,861 $ 13,695 79.11%
Total Payroll $ 202,115 $ 188,960 $ 13,155 93.49%> $ 761,070 $ 699,085 $ 61,985 91.86%
Other Eicpenditures �
Perimecer Iandscaping $ 4,900 $ 4,209 $ 691 85.90% $ ?A,500 $ 18,800 $ 5,700 76.73%
Proshap $ 1,850 $ 1,235 $ 615 66.76°k $ 19,040 $ 12,769 $ 6,271 67.06%
Proshop-COGS $ 29,984 $ 19,014 $ 10,970 63.41% $ 80,821 $ 69,543 $ 11,278 86.05%
Cart $ 32,123 $ 7A,814 $ 7,309 77.25% $ 98,755 $ 84,324 $ 14,431 85.39%
Course&Ground-North Course $ 46,016 $ 27,008 $ 19,008 58.69% $ 376,550 $ 318,530 $ 58,020 84.59%
Course&Ground-South Course $ 43,735 $ 35,920 $ 7,815 82.13% $ 129,040 $ 47,086 $ 31,954 75.24%
Course&Ground-Desert Pallet-N $ 3,700 $ - $ 3,700 0.00% $ 21,100 $ - $ 21,100 0.00%
Course&Ground-Desert Pallet-S $ 2,445 $ - $ 2,445 0.00% $ 13,945 $ - $ 13,945 0.00%
Golf Operations $ 800 $ 4,471 $ (3,671) 558.88% $ 20,240 $ 9,506 $ 10,734 46.97%
General&Administration $ 45,825 $ 43,685 $ 2,140 95.33% $ 230,847 $ t99,767 $ 31,080 86.54%
Range $ 300 $ (638) $ 938 -212.67% $ 13,200 $ 9,566 $ 3,634 72.47%
Food&Beverage $ 4,820 $ 5,611 $ (791) 116.41% $ 23,120 $ 29,259 $ (6,139) 126.55�
Food&Beverage COGS $ 18,740 $ 13,359 $ 5,381 71.29% $ 45,679 $ 49,533 $ (3,854) 108.44%
Management Fee $ 25,000 $ 25,000 $ - 100.0046 $ 81,250 $ 75,000 $ 6,250 92.31%
Financing/Lease $ 9,456 $ 6,471 $ 2,985 68.43% $ 38,961 $ 37,082 $ 1,879 95.18%
Total Other E�cpenditures $ 269,694 $ 210,159 $ 59,535 77.92°6 $ 1,217,048 $ 1,010,765 $ 2p6,283 83.05%
David I,eadbetter Academy
Leaming Center Revenues $ 25,000 $ 22,593 $ (2,407) 90.37� $ 90,000 $ 57,335 $ (32,665) 63.71�
Reimbursements to David Leadbetrer $ (21,250) $ (19,204 $ 2,046 9037% $
) (76,500) $ (48,634) $ 27,866 63.57%
Other Expenditures $ (1,450) $ 545 $ 1,995 37.593'0 $ (7,250) $ (6,884) $ 366 94.95%
Learning Center Income(Loss) $ 2,300 $ 3,934 $ 1,634 171.04% $ 6,250 $ 1,817 $ (4,433) $ 222
Net Income(Loss) $ 215,281 $ 11,868 $ (203,413) 5.51% $ (491,994) $ (566,503) $ (74,509) 115.14%
Dw9899;Financiai Statement
Palm.,esert Recreatioa Facilities Corpu.ation
Iacotne 3tatement
Nov98 Nov-9S J1 %
Budget Actual Variance Variance
Food & Beverage Revenues $53,543.00 $27,601.00 $ (25,942.00) 51.55%
Total Revenues $53,543.00 $27,601.00 $ (25,942.00) 51.55%
Salaries $17,850.00 $16,441.00 $ 1,409.00 92.11%
Cost of Goods Sold-F&B $18,740.110 $13,359.00 $ 5,381.00 71.29%
Food & Beverage Expense $ 4,820.00 $ 5,611.00 $ (791.00) 116.41°h
Total Expenses $41,410.00 $35,411.00 $ 5,999.00 85.51%a
Net Income (Loss) $12,133.00 $(7,810.00)
Note: The above revenues and e�enditures are also included in the Desert Willow analysis.
Dw9899;PDRFC Budget
' �.. _
cuy or r�.n�
Desert K711ow
Three Month Cash Reserve Analysis
Three Month
Projected ExpendiWres December January February Projected Expenditures
Pa roll $ 201,674 $ 200,269 $ 200,450 $ 602,393
eraun
Totals , �
Cash Reserve Analysis One Month Three Months
Re ired Reserve $ 459,532.20 $ 1,533,204.60
Cash on Hand $ 520,305.44 $ 520,305.44
Variance- Favorable ( Unfavorable) $ 60,773.24 $ (1,012,899.16)
Reconciliatioa of adjusted cash requiromeat
Reconciled Cash on hand $ 344,210.36
Add:
Preopening Owed by the City $ 36,924.77
Preopening owed by the RDA $ 17,970.05
Ocrober Deficit Owed by Kemper $ 72,619.86 �
Peruneter $ 48,580.40 2
Adjusted Cash on Hand $ 520,305.44
Adjus[ed Reserve Requirement $ 459,532.20 3
Adjusted Cash (No Cash Due by Kemper) $ 60,773.24
' Represents operating deficit owed by Kemper Sports.
� Represents 88% of perimeter expenditures to date.
3 Represents budgeted expenditures for December 1998. Does not
Include interest on city loan. Includes only 12% of the projected
perimeter landscaping expendi[ures.
Dw9899;Cash Com
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Rounds Analysis for six months ending 1997 and 1998
Avg. $/rnd. Resident Rounds Posted Rounds Other Rounds Package Rnds. Total Round Rev.
Jul-97 $27.31 817 1,076 171 223 $62,452.00
Aug-97 $25.81 1,021 1,061 342 99 $65,116.00
Sep-97 $25.70 1,051 893 288 330 $65,843.00
Oct-97 $63.02 634 825 58 948 $155,334.00
Nov-97 $66.08 1,290 1,438 216 1457 $290,804.00
Dec-97 $53.59 863 1,025 418 732 $162,811.00
Tota11997 $46.44 5,676 6,318 1493 3789 $802,360.00
Jul-98 $26.28 54 141 205 1334 $45,561.00
Aug-98 $25.47 65 21 238 1829 $54,842.00
Sep-98 $29.63 293 502 144 2550 $103,391.00
Oct-98 $75.36 1,428 1,878 352 950 $347,268.00
Nov-98 $73.49 1,858 1,687 351 716 $338,928.00
Dec-98 $5422 810 433 711 434 $129,467.00
Tota11998 $53.70 4,508 4,662 2001 7813 $1,019,457.00
July, August & Sepember of 1998 the true count of residents is unavailable due to discounts other than
Resident discounts that residents used.
December 1998 is through the 13th and compared to the entire month of December 1997.
Other rounds include all comps, cart fees, donations, charity events, PGA, special events, & Jr. fee.
Package rounds include wholesalers, passbooks, stand by golf.
II�IDEPII�IDEDfI' P3JDI'I1�RS' REPOFrP dN IIdI'ERI�.L CUNTROL
, ��
Boazd of Trustees
FYiends of the Cl�ltural Center, Inc.
Palm Desext, California
� Pl� � P�o�ng our audit of the financial statements of FYiends of the
Cliltural Center, Inc. for the year en3ed July 31, 1998, •we considered its internal
control structure in or3er to determine aur auditing proceduz.-es for the purpose of
expressing our opinion on the fu�ancial statem�nts and not to provide assurance on the
internal control structure.
HaHever we noted certain matters irrvolving the internal control structure and its
aperations t1�at we consider to be reportable conditions �mder st--,�� established by
the American Institute of Certified Public Accountants. Reportable conditions involve
matters caning to our attention relatirrx3 to significant deficiencies in the design or
operation of the intemal crontrol structure that, in our judgment, could adversely affect
the entity's ability to record, process, s�rize, and report financial data consistent
with the assertions of managem�nt in the f�nannl3l statemPnts.
General Ledaer Accn�mt Reconciliations
Timely genezal ledger accoimt reconciliations are vexy i�ortant for establiahim and
rtaintainina a strong internal accounting control system. We noted that several aPnP.al
ledger accounts contiurue to not be reconciled throughaut the year to supporting
�ntation. The primary accounts that were not reconciled this year were prepaid
expenses, accrued salaries, capital lease abligations, daily box office reconciliations
and acc�acailated depreciation on property and �,;g�nt. These accounts required detail
analysis and corrections during aur audit to detesmine the appropriate balances at July
31, 1998. A strong internal accounting control system with pmper �naral lECigET accoiuit
reconciliations provides managemenC and members of the Boazri of Trustees with fi.nancial
information that is accurate and timely. We recomrend that all general ledger accounts
be reconciled to supporting doctimpntation on a more timely basis.
Accotmts Receivable - Theater Rentals -
The accrnmts recei�rable detail aging for amounts aved from past theater rentals was not
prepared prnperly. The listing did not indicate the pxoper ntmiber of days that the
receivables were past �e. In additioa�, there wnse two receivables that have been
outstarrling for over one year that no cuie follawed up with on a timely basis. SUbsequent
to our audit, one acc�t was collected in full and the other receivable vras detexmined
to be previously collected soc�etime ch�ring the year. We recoamPnd that the finance staff
followi� and research when and where this previous payment c�as made. In the future, all
outstanding accrnmts izceivable shou.ld be analyzed �ronthly and follawed up pxnag�tly far
collection.
Board of 'IYustees
Fiiends of the Cliltural Center, Inc.
Page tv.o
���
Defexred Incca�
The Center bills for hips in the Presidents Circle, tmises - patxoness and
rrnises - m�nbership. Pn�per accounting requires that certain achr�nce wllections on these
membershiFs for future periods be '!deferred" (i.e. not recognized in current. Yeax'
incacie) , until the period when the members "receive a benefit or value in retuYn" . We -
noted that these deferred memberships xecorded at July 1997 had not been analyzed arid '
adjusted to inca� durin4 the Yea�'. The Center should periodically review the ca�onents
of all deferxed inca� account balances to determine the timing for proper �n�tion
as incane in the 3ene�al ledc3es'•
In addition to the abwe reportable conditions, we noted the follaving items which are
not considered to be reportable conditions, but are provided to you for your iriformation
only.
Interest PaYable - Enda,a�nent
�urinq the year, the Center repaid $300,000 of loan advances to the Fhdowment that had
been loaned in prior yeazs. Havever, the ur�aid interest of $31,500 has not yet been
repaid to t1�e F�a�mnt F�nd. Manag�cient should make plans to budget for this i�mediate
repay�rent of the unpaid interest. This amount can be fuxthes rec�ced t'Y S��285 for
amounts cm�ed back to the Center for operating p�nces paid by the Center on behalf of
the f�dvrxnent.
Lbnated Senrices
The Center curs�ntly records donated incane and P�nces for trooper and ushex' wlunteers
usecl thmuqlmut the year. I�t-far-profit accounting literature does not "requisa" these
airounts to be reflected in the accounting recon9s unless the services req�ire specialized
skills and are provided bY specialists in their respective field of v�sr'k. The donated
sexvices provided by these dedicated wlunteers has been verY `raluable to the C.enter
throughout the years, howev�x, we wranted to bring this ruling tio your attention in the
event that the finance department wanted to reduce the related recoxd keeping currently
being c'l�ne.
This report is intended solely for the inforaiation and use of the Boazd of Ttvstees and
n�anagement and sY�ould not be used for any other puspose.
pctobPs 13, 1998
FRIEDIDS OF ZYIE CULIIURAL C�]TER, INC.
PAIM DFSERT. CALIFC�RIVIA
.�.���
�
II�IDEPFSIDFSTf AUDI'IT)RS' REFORT�
CL'"�7BINID FII�NCIAL SfATEN�TPS ANC c�ron��y INFORMATZON
JULY 31. 1998
II�IDEPFT1DENf A[JDI'It�RS' REFORT
�
, �°;, �„_�� ,_
� H�� ��
Boazd of ZYustees
Friends of the CUltural Center, Inc.
Palm Desert, California
We have audited the acca�anying Combined Staterr�ents of Financial A�sition of Friends of
the Claltural Center, Inc. as of July 31, 1998 and 1997, and the related Canbin�
Statements of Activities, EUnctional Expei'�ses and Cash Flays for the year ended July 31,
1998. These combined financial statements are the responsibility of the Center's
management. Our responsibility is to express an apinion on these canbined financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those
standasds require that we plan and perform the audit to obtain reasonable assurance about
whether the fii�ancial statements are free of material misstatemPnt. An audit includes
e�mining, on a test basis, evidence su�porting the acrounts and disclosures in the
financial statements._ An audit also includes assessing Che accounting principles used
and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion the canbined financial statemerits referred to above present fairly, in all
material respects, the fir�icial position of FYiends of the Nltural Center, Inc. as of
July 31, 1998 and 1997, and the chanJes in their net assets and their cash flaws for the .
year ended July 31, 1998 in confosmity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the canbined financial
statements tr.ken �s a whole. The supplementary infoYmation presented on page 15 is
presented for purposes of additional analysis and is not a �,;red Pas't of the
procedures applied in the audit of the combined financial statements. SUch inforn�ation
has been subjected to the auditing prxedures applied in the 1�asic financial statements
and, in our opinion, is fairly stated in a11 material respects in relation to the
combined fi.nancial statements taken as a whole.
October 13, 1998
FRZII�IDS OF 'I4� GUL'IURAL C.ED7PER. INC.
CCi'�B1NID SfATII�VPS OF FII�NCIIii+ �ITION
JULY 31, 1998 ADID 1997
��
� � F
� :h
[.< . .i
A$5�.�'
1998
McCallum .
FYiends of Theatre
the CUltural �t,
Center. Inc. Inc. Canbined
��r � 420,517 $ 769,933 $ 1,190,450
�h y� �y� �ivalents $ 47,653 - 47,653
Accounts receivable 304,362 - 304,362
Pledges recei�rable (net) 198,558 - 198,558
Inventory 43,515 - 43,515
Other current assets 60,161 - 60,161
Note receivable 100,000 - 100,000
Note recei�rable - designated
Due fran related paz'ties 7,285 349,500 356 785
Total current assets 1 182.051 1 119.433 2,301.484
Nt7PE REC�IVABLE - DFSIC3�II�TID
300,000 - 300,000
PROPEC�"PY ADID �TIPNI��VT (NET)
13,357,680 - 13,357,680
��S 100,000 302,250 402,250
INVES'R�gdiS - DFSIC3�II�TID - - - -
DUE FRCA�I RELATID PAKPIES
PL�IDGES RECEIVABLE
365,146 - 365.146
,�,� � $15,304,877 $ 1.� $16,726,560
(The acca�anyin5 notes are an integral Part of these f'nan�ial statements)
�ra
� e`� � `�
� �.��.u.0
'°� :,<<,�
1997
McCatlwn
FYiends of Theatre
the Claltuxal Ehd�nt,
Center. Inc. Inc. C�aibined
$ 31,860 $ 446;281 $ 478,141
42,748 - 42,748
251,046 - 251,046
198,558 - 198,558
59,724 - 59,724
60,161 - 60,161
2,900 322,500 325.400
646,997 768,781 1,415,778
13,609,245 - 13,609,245
118,044 302,250 420,294
510,000 - 510,000
- 300,000 300,000
270,500 - 270.500
$15,154.786 51,371,031 516.525,817
FR�IS OF 'IIIE CUL'ILIRAL CE27PF�2, INC.
�IA]ED STATII�NT5 OF FI[�NCIAL F0.STTION
JULY 31 1998 ADID 1997
_•--'
f�.�' �' � '!
q; Y , .
t� '�
LIABILITIES AAID NEI' ASSEIS
1998
, McC�lltan .
FYiesids of ThPatre
the Cliltural F�dcxa�rn-nt,
Center. Inc. Inc• Ca���
GURRE[1P LIABILITIFS: 122,447 $ - $ 122,447
Accounts payable $
Revolving line of credit 616,271 - 616,271
CUzrent portion of notes payable 100,000 - 100,000
Clirrent portion of obligations 36,848
under capital leases 36,848 . -
Other current liabilities 34,142 - 34,142
I�ferred revenue - tickets 1,607,931 - 1,607,931
Deferred revenue - memberShips & other 96,799 - 96,799
Due to related parties 349.500 7,285 356.785
Total curx'ent liabilities 2,963,938 7,285 2,971,223
LpNG-'I'ERM LIABILITIFS 3,200,000
Notes payable 3,200,000 -
Obligations under capital leases 111,312 - 111,312
Due to related �ties -
'IL7I'AL LIABILITIES 6,275.250 7,285 6,282,535
NE'I' ASSEfS
Unrestricted - Undesignated 7,860,119 220,346 8,080,465
Unrestricted - Designated 400,000 - 400,000
Tertg�orarily restricted 769,508 - 769,508
pes�[�nently restricted - 1,194.052 1,194.052
,ro� �. �� 9 029.627 1,414,398 10 444,025
'I�,L LIABILITIES ADID 1�T ASSE�S S15•� S 1,421,683 $16 726.560
(The acea��rying notes are ar' �t�l part of these. financial statements)
���
€. ��
�4�; ^ -� �.�� 4`-
�^� F�.....-
�,(.
1997
NIcC�lltian
FYiends of Theatre
the Qa].tural En�nent,
Center, Inc. Inc. ���
$ 198.983 $ - $ 198,983
391,000 - 391,000
14,643 - 14,643
63,906 - 63,906
829,824 - 829,824
173,749 - 173,749
322.500 2.900 325.400
1,994,605 2,900 1,997,505
3,000,000 - 3,000,000
53,697 - 53,697
300.000 - 300,000
5,348.302 2.900 5,351.202
8,774,938 208,857 8,983,795
510,000 - 510,000
521,546 - 521,546
- 1,159.274 1,159,274
9.806,484 1.368,131 11.174,615
$ 15,154 786 $ 1,371,031 $ 16,�
� FRIFI�IDS OF 'II3E CULTURAL� CaTIER INC.
�["16a1ED SIP.TEI��TI' OF AGTIVITIFS
� � YEAR EDIDID J[JLY 31. 1998
�-. =":'
WITH �ARATIVE TC7PALS FUR THE YFAR EDIDID JULY 31 1997 �'^r-� t�� -
�' ,:.,i�� ,.. -
1998 1997
McCalltun
FYiends of Theatre
the Cliltural FSzdowment,
Center, Inc. Inc. Canhined Canbined
Q-�NGE'S IN LII�2ESTRICZED NET ASSEPS:
RE\7ENN[IE ADID SUPFORT FROM OPII2ATIONS:
Admissions $ 3,402,201 $ - $ 3,402,201 $3,350,787
Contributions & memberships 1,741,085 - 1,741,085 2,085,756
Concessions & other support 572,098 - 572,098 655,437
Interest and other investment incom� 608 50.652 51.260 49.106
Total revenue & support
from operations 5,715,992 50,652 5,766,644 6,141,086
NET ASSEIS R�:.rFa�:.n FRC�I RFSTRICTIONS:
F�cpiration and allocation
of zestrictions 266,603 (34,778) 231,825 422,179
Total net assets released
from restrictions 266,603 (34,778) 231.825 422,179
Total unrestricted revenues
and support 5,982,595 15,874 5.998,469 6,563.265
F�FSI9ES:
Psoduction costs 5,314,957 - 5,314,957 5,601,906
General and ac�ninistrative 1,284,183 4,385 1,288,566 1,202,131
Fluidraising costs 408,274 - 408,274 295,281
Total p�naes 7.007,414 4,385 7,011,799 7,099.318
INCRFASE (DRc'RFa�') IN L7NRFSTRICTID
�g,'I' p,�'$ Sl1,024,819) $ 11,489 S(1,013.330)S (536.053)
IThe acc'c�rmanying notes are an integral part of these financial statemQnts)
FRiII`IIxS OF THE �, -
aaNIDnvID �L �'� nvc.
�'AT�dI' OF A�IVITIFS
�TH �p,�T� �S�ID �7ULY 31 1998
� �� �ID �Y 31 1997
F""`.r F r"`"`,,
;
;;:�'., _� -__ '
1998
McC�llum 1�—
NYiends of Theatre
the Qiltural Etida�nt
Center. Inc Inc� Combined
�— C�b�n_d
IN�SE �DECREASE) IN
��I�� � �� $(1,024,819) $ 11.489 $(1.013.33n) $ (536 Os�
Q�K�'S IN TES�RARILY )
RES'IRICI�9 NET ASgEis;
Contributions for
�t� �1� 514,565 - 514,565 344,648
Net assets released
from restrictions (266,603) - (266,603) (454.944)
INCREASE IN TII�I�RARILY
R�STRZCI�D NET AS.SE�IS 247.962 - 247,962 (110.296)
Q-� IN PII2�'TANII�7PLY
RFSIRICTID NEf ASSETS:
Contributions - - - 1,000
Net increase in
restrictions - 34.778 34.778 32.765
INCRF.ASE IN PERN�VTi�Y
�I�� � p,�� - ^ 34,778 34,778 33,765
INCREASE (DECRFASE) IN
� p,�,� (776,857) 46.267 (730,590) (612,584)
NEI' ASSETS AT
BEGII�TBQG OF YEAR 9,806.484 1.368:131 11,174,615 11,787.199
NEI' ASSEfS AT
II�ID OF YEAR S 9.029.627 $1,414,398 $10,444,025 511.174,615
(The accaripanyin9 notes are an inta5r"al Pa�'t of these financial stat�enCs)
���
FRIFSIILS OF THE CULZ[7RAi, C�STPII2. INC.
C�II�]Ep S'I'ATII�7f OF FSINCTIONAL� F.�ENSFS
FOR Tf� yF,AR E�IDID J[JI,Y 31, 1998
�,� �p�T� '�PAig FOR T'HE yEAR EDIDID JCTLY 31. 1997 -.'"
r.. �_
�,. ,
�-. ,_ . �.
�_ ;.;. ..
1998 i997
General .
Prnduction and �1u�d
Costs Admin• Raisina Total Total
Salaries, PaYroll taxes
yncl �loyee benefits $1,025,089 $ 467,639 $ 119,361 $1,612,089 $1,663;654
Artist & professional fees 2,797,583 65,062 64,440 2,927,085 3,141,625
SUpplies 45,341 30,393 4,066 79,800 117,213
Utilities & telephone 146,478 40,829 145 187,452 197,259
Postage & shipping 2,321 10,661 4,481 17,463 16,384
Maintenance, repairs�
�n3 equipment rentals 133,391 17,693 3,236 154,320 237,191
Nkirketing, Prortiotions,
and special events 524,931 23,433 205,051 753,415 657,049
Conferences, �nventions
ancl meetirlgs 8,707 26,150 5,745 40,602 29,091
Lbnated materials & senrices 147,564 - - 147,564 381
Depreciation 431,328 58,818 - 490,146 575,783
Education/Outreach 52,142 -
Student pez'fonnances 52,142 - _
Interest 424,491 424,491 342,602
Miscellaneous & other 82 123,399 1,749 125,230 106,830
14.256
Lass on sale of assets -
Total $5,3� S1•288,568 4� S�•011,'799 57.099.318
(The acca�anYirx3 notes are an integral Part of these financial statements)
. FRIEDIDS OF 'If� C�JL'NRAL C�3�7PER INC. -
�_.
N(7PES 'I1� 'IS� CC�'IDINID FIIS4NCIAL STATEMEN'I5 �.
1. DFSCRIP'I'ION OF 'I'HE CE�7I'ER
The FYiends of the C.laltural Center, Inc. is a not-for-profit o�nization
���pOrate3 in California in 1973. Its stated purpose is to conduct cultural.
charitable and educatlonal activities in the Coachella �Sey. Q�rently, the
Center opesates the McCalliun Theatre for the Performing
2. �RY OF SIC3�r2FICANf ACC�UNrII�G R�LICIES
Basis of Accotmtincr
The financial statements of FYiends of the CUltural Center, Inc. have 1�een PrePa�ed
on the accrual 1a�sis of accounting. Net assets and revenues, expe�ses, ��nc, �
losses are classified based on the existence or absence of donor-i�osed '
restrictions. Accordin91Y� net assets of the Center and changes therein are
classified and reported as follays:
ih�s+estricted net assets - Net assets that are not subject to donor-i�osed
stipulations.
T raril restricted net assets - Net assets subject to donor-i�osed
stipulations that may or will be m�t, either bY actions o� � �ter and/or the
passage of time. When a restriction exQires, ter�orar'ily restricted net assets are
reclassified to unrestricted net assets and reported in the statemsnt of activities
as net assets released frcm restrictions.
permanentl restricted net assets - Net assets subject to donor-i�osed
stipulations that they be maintain� P���tly by the Center. GenerallY� the
donors of these assets pesmit the Cpnnter to use all or part of the incane earned
on any related investments for general or specific purposes.
Combinecl Financial Statements
The financial statements of the McCallum Theatre II��nt� Inc. 1�"e ��' �'�
with the financial statemPnts of FYiends of ��t� ��r'���� f�y
transactions and b�lances have not been
statements.
(Yedit Risk � y ect the Center to concentrations of credit
Financial instruments which Centiall subj 1 e recei�rables. 'I7ie
risk consist principally of temporarY ��sh investments and P �4 it financial
cash investments with high credi.t qual Y
Center places its te�orarY sure to any one financial
inatitutions and, by po11�}'� limits the amount of credit expo e receivables are
inatitution. Concentrations of credit risk with respect to Plr ls�n across multiple
limited due to the Center's laxge number of donors and their dispe
g�aP�� �� •�e �enter currently dces not have any significant concentrations
of credit risk.
Cash and c�sh Frniivalents ���5 include m�ney market
For purposes of the statement of cash flcnvs, ersh ec�i
funds and certificates of deposit with original maturities of three months or less.
Irrventory � es to base stock
Base stock invento is stated at the laver of cost or masket. ChanS
inventory are made for only significant purchases and usa9e• .
Investments
Investments are rePorted at fair market value• Investments consist of land, the
Centers� donated interest in a charitable rertiairidex an��ty trust and ccmron stock.
. FRIII�IDS OF 'IHE CVLTURAI, CII�TPER. INC.
I�(7PES 'Il� TS� Q"XVIDIAIED FIISaNCZAL STI�TFS'�I'S , .
2. SUM�QIRY OF SICd�]IFICANP ACOJi7NPING POLICIES (continued)
PYt7T��V dlld Ern i i p[nEI7C
p�perty ancl �,;prtw�t are stated at cost and are beirxJ dePreciated using the
straight-line method over their estimated useful lives. . Donations of prope'rty and
«�,;pment are recordecl as suPP�rt at their estimated fair value. SUch donations are
reported as urnestricted support unless the donpr has restricted the donated asset to
' a specific purpose. Assets donated with explicit restrictions regarding their use and
contributions of cash that crnist be used to a�+,;re proPerty ar�d eq�iPment are rep°rted
as restricted support. Absent donor stipulations rega�lin5 t�ow long those donated
assets must be maintained, the Center reports expirations of donor restrictions when
the donated or acquired assets are placed in service as instructed by the donor. T'he
Center reclassifies teag�orarily restricted net assets to unrestricted net assets at
that time.
The useful lives of property and equiPm�nt are follcws:
Building and i�rovemlits 60 Y�'S .
Theatrical �,;g�nt 7 - 20 years
Office fuzniture and �,;p��nt 3 - 10 years
Revenue Recoqnition
Contributions are recognized when the donor malces a pranise to give which is, in
substance, uncenditional. Contributions that are restricted by the donor are reported
as increases in unrestricted net assets if the restrictions expire in the fiscal year
in Which the cpntributions are reco3nized• A11 other donor restricted contributions
are reported as increases in tertq�Ora�'ily or pernianently restricted net assets
de�nr3ing on the nature of the restrictions. When a restnction expires, te�orarily
restricted net assets are reclassified to unrestricted net assets.
Ticket sales received prior to the fiscal year to which they apply are not recognized
as revenues until the year earned• 'I'hese armunts are included in deferred revenue in
the Statement of Financial Position.
Tax-ex�t Status zation under'the 1986 Internal
The Center is classified as a Section 501(c) (3) Organi
Revenue Code and Section 23701(d) of the California Revenue and Taxation Cocle. As a
result, it has been dete�mined t° be ex�t from federal income and California
franchise taxes.
Estimates
The preparation of financial statements in confo�mitY 'aith 4�erally accepted
accounting px'inciples requires managem�sit to make estimates and asslucg�tions that
affect certain reported ampunts and disclosures. Acco�7;�ly actual results could
differ from those estimates.
��,
FRIEDIDS OF THE CVL'IURAL CIIdP'F�2. INC.
NC7I'ES ZU TI-IE �IIQID FII�NCIAL STATII�NIS
3. PERMAt�7P II`IDC�d�T`7I5
During 1994, the McC�lltun The3tre FY�da+m�lt, Inc. Was funded '�ith a $1,000,000
contri.bution, to provide inca� for the McC�lltiun Theatre's operations and progxatrtning.
Terms of this enci�rent stipulate that this en�nt's principal [tu�st grav at 3 o per
anrnun, ca�ounded annually. Should FYiends of the CUltural Center, Inc. cease to
function as an active oxgaciization responsible for the operation and maintenance of
the McC.'�lltun Theatre for the Perfornuny Arts or othenuise fail to maintain its status _
as a nonprofit organization, $1,-000,000 frcm the McC�lltan Theatre Ehdowment, Inc:
c,�nuld be distributed to the Prim Foundation of Ne�rada.
��nq 7.ggg ancl in subsequent years, a n�snber of donors directed their cuzz�t and
future donations to establish a permanent enda,�e.nt, to provide incane for the
McCallum Theatre's ope�ation and prograRminq• The Hoastl of TYustees resolved that the .
principle of the Pndowment 1�e made a�railable for current operations, and established
a plan to replenish, in the future, those funds whicl'i wpse born-xved• .
4. PL—F'r'r:FR RECEIVAHLE
Pledges receivable consists of the following at July 31, 1998 and 1997:
1998 1997
Pledges receivable $ 684,008 $ 538,046
Iess: Resesve for doubtful pledges (14,500) (16,500)
Net pledges receivable 669,508 521,546
Less: current portion of (304 362) (251,046)
net pledges recei�rable 3$ 65,146 S 270,500
The m3turities of pledges receivable at July 31, 1998 are as folla�as:
Izss than one year $304,362
One to five years 365,146
Mpy� than five years -
669 508
5. INVF[�TIORY
Inventory consists of the following at July 31, 1998 and 1997:
1998 1997
Audio supplies $ 44,907 $ 44,907
Lighting s�plies
80,675 80,675
Stage supplies 49,439 49,439
pther supplies 23.537 23,537
Total 198 558 198 558
6. DESIC3�TID NEI' ASSEI'S
�e Center x,eceived a contri�tion of one million shares of camnn stock fran a
Corporation in July 1997 valued at $510,000. AC July 31, 1997, this amotuit was
classified as irrvestments - desi9nated. On August 1, 1997, the �rporation entered
into a stock rede�tion agreemPsit with the Center. The one million shares of cro�men
stocic that were donated during the Ye�r u'�ere redePmed for $110,000 cash and a $400,000
note recei�rable on August 1, 1997- At July 31, 1998, this acrount was classified as
note receivable - current $100,000 and note receivable - noncurrent $300,000. The
terms of the note r�,;re annual principal of $100,000 along witki interest at 8% to
be paid August 1, for each of the next four years.
„��
FRIII�IDS OF 'II� GUL'IURAL CII�lPER INC.
NJPES ZO 'IHE C�0[�'IBIPIED FII�NCIAL S1P.TII�7I5 r.. '' '
6. DESIc3�.TID I�P ASSEPs (continued) of these assets foz the puzpose of
. The Hoard of 'IYvstees Pve des�ted the p�e�le to the Cit of Palm Desert. The
payirxJ interest and/or rinci on the note yab Y
unrestricted - undesic�ated net assets aC July 31, 1998 and 1997 are as follows:
1998 1997
� 400.000 510 000
7. PROPEt7!'Y PIJANT Ai`ID �LxTIPN�Tr at Jul 31, 1998 and 1997:
Property and equipawsit co��sists of the follaaing Y
1998 1997
guj.lduiq ancl i[[g�irovemeTlts $15,718,774 $15,618,562
Theatrical �,;p��t 2,529,119 2,424,486
Office furniture and equllxrent 399,311 476,510
property held under capital lease 94.165 91,342
18,741,369 18,610,900
Less: accimiulated depreciation 5 720.015 (5 337.981)
13,021,354 13,272,919
Artwork 336,326 336,326
�t� 5�13 357,680 $13,609.245
8. INVFS'IP'�TI'S
Irrvestments consists of the following at July 31, 1998 and 1997:
McC`alltun
FYiends of Theatre
Cultural II'ida�m�Tlt�
Center Inc.• Inc. �b��
1998 g - $ 302,250 $302,250
I�and
InCerest in C7�aritable 100,000 - 100.000
Remainder Annuity 'IYust
100 000 302 250 402 250
1997 $ - $ 302,250 $302,250
Land
Interest in Q�aritable 100,000 - 100,000
ge�inder Ann�ty �St 18.044 - 18.044
CaRron Stock 118 044 3$ p2 250 42$ p,294
� October lggg� th� land vras sold for $350,000. The �t re�ei`red net proceeds
of $326,626 fran this sale.
y p,pVpS7�E �LL�C.TI�IS OF TICKEi' GAT RG
The Center had received $1,607,931 and $829,824 at July 31, 1998 and 199�
i,espectively, an advance ticket sales for the 1998-1999 and 1997-1998 se.asons• �
each p�lction is presented, that Portion of the advanoe sales collections w1'��''
pertains to that production will be recognized as re`renue. In the event any of the
S�heduted productions for the 1998-1999 se.ason is not presented, the achrance ticket
collections for that production will be a`railable for refund to the ticket holder•
�„ �
FRIII�IDS OF � CVLIIURAL CE�7PER. INC.
NC7PF5 � ZS-IE �IAIED FIISSNCIAL SfAT�TIS
10. REVOLUIIJG LII� OF C�2IDIT
Under the tezms of a rewlviny credit agreenr.nt with a bank, the line of credit is
secured by real PropertY and m�tures in ���r 7.998. The Center may borra.v up to
$850,000 at 1°s above prime rate as stated in the Wall Street Jouznal, with an interest
rate floor of 7%, and a ceiliny of 16a. Fluids for these k�orrrxvings maY be used for
' any puspose. At July 31, 1998 and 1997, the Center had $616,271 and $391,000
outstanding on this line of credit.
11. NCJPFS PAYABL�E
Notes payable consists of the following at July 31, 1998 and 1997:
1998 1997
Lr.x�i from private foundation
with 7.5% interest only due rtnnthly,
and principal and interest due
January Zo�2 Sz,soo,000 Sz,soo,000
Lc�an fran Valley Independent Bank
with 9.5°s interest payments due
nanthly, $100,000 principal payme�lts
due annually through July 2001 300,000 -
Lc>an fran City of Palm L�sert with 5%
interest only due annually, and
principal and interest due 500 000 500.000
January 2007 —
3,300,000 3,000,000 _
Lzss: Clizrent portion of (100,000) -
notes payable
$3,200.000 53.000,000
Future principal maturities of notes payable outstanding at July 31, 1998 ar'e as
follows: ��t
Julv 31,
1999 $ 100,000
2000 100,000
2001 100,000
2002 2,500,000
2003 -
Thereafter 500.000
Total $3,300.000
12• L�ASF� t under capital leases expiring in
The Center leases office and theatrical equii�n
various years through April 2003. The assets and liabilities under capital leases are
recorded at the lower of the present �ralue of the minirtumm lease payments or the fair
value of the asset. The assets are �°rtiZed °`rer the�r estimated productive lives.
Artartization of assets under capital leases is included in depreciation p�naes.
property held under capital leases consists of the follcwing at July 31, 1998 and
1997: 1998 1997
Office equipment $ 89,665 $ 36,820
Theatrical equiPme�lt 102.422 54.522
192 087 91 342
Interest rates on capitalized leases vaxy fr«n 10% to 29e ar� are ic�uted based on the
1�wer of the Center's incr�ltal b°r��J �te at the inception of each lease or the
lessor's irt�licit rate of return• �12�
FRIII�IDS OF T� CUL'iURAL CQ�TI'F�t INC. .
I�7i'ES � THE �IA� FII�NCIAL STATII�T�7TS _
;.� :
12. LEASFS (rontinued)
Minimisn future lease paYmeTlts �mder caPital leases as of July 31, 1998 for each of the
next five years and in the aggregate are as follays: �
Julv 31, A�rotuits
1999 53,S1T
2000 51,869 �
2001 45,121
2002 28,854
2003 8.472
Net minirmun lease paya�its 188,133
Less: amount representing 39 973)
interest
present �ra].ue of net 148,160
mininnun lease paYments
Less: current portion of 36 848)
obligations under capital le,ase 11� ,
The Center leases real propertY under an °Pe�ting lease expiring in 2048. All of the
obligations under this lease were prePaid in 1982. Under the texms of this agreement
all funds held in enda�n'-nt aze to be paid to the College of the Desert for the
contirrued bPnefit of the theater upon expixation of the lease.
13. RFSIRICtI�7S � �T �� s or riods:
Te�orarily restricted net assets are available for the follaaing puYPase Pe
1998 1997
Contributions and pled4es for
operations for periods after ��9�508 521 546
July 31,
Temporarily restricted net assets at July 1997 �lltsre�Ti��°et as� at�Y
(see Note 4) in the amo�t of i521e46n ��t of $669,508 plus contributions
1998 consists of outstandinq P �3 cificall desi ted for
received during 1998 a��t�g to $100,000 from two cities spe Y �
fiscal yeaz JulY 31, 1999.
permanently restricted net assets are restricted to:
1998 1997
permanent endawtrent with 3%
- � 'inflation factor SL 194,052 $1,159,274
14. DUE �/FRCM RECATID PARTIES
During the fiscal year ended July 31, 1997, the �lltun Theater �t, ,�se
loaned $300,000 to fYiends of the �l�ltural Center, Inc. for operating puzpose
1�� �,ere repaxd in July 1998.
DUring the fiscal ye.a�' �� J�Y 31, 1996, the McC�llum Tlieater II�t' Inc.
loaned $300,000 to FYiends of � �t�i�1999 w th interes�trat 3%.��s. �
loan is unsecured and is FaY�le Januazy
�,zi �
FRIII�IDS OF Tf-IE (,ULZS7RAL C�3PPII2, INC.
D7C7I'ES ZU TI-IE NNIDIDIED FII�NCIAL STATEME�TI'S
`_. ..
;�`_, ; . �. __
14. LAIE TU/FRCM RELATID PARTIES (continued)
Due to/frnm related parties consists of the follaving at July 31, 1998 and 1997:
Glarrent Fbrtion Julv 31. 1998 Julv 31, 1997
Adv-ances due within one year $300,000 $300,000
Accrued interest on ac3�rances 49,500 22,500
Operating expenses paid by Oenter 7.285 2.900
356 785 325 400
Ir�ncT-Term Portion
Advances due after one year S��- 300 000
(14) �
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THE MCCALIUM THEATRE
� SUMMAFtY INCOME STATEMENT .
OCTOBER 31,79Bb
- YEAR TO DATE
OCTOBER
DESCRIPTON A�N� BUUGET VARNNCE ACTUAL BUOGET VNiWNCE
REVENUES
produetton Revenues y 163,995 S 793,550 5 (29,555) S 215,986 �5 198,650 S 77,336
PeAortnance lnwme 37,671 10,000 27,671 49,410 35,000 74.410
Thealer RenWl InCome 3 5yq 4,200 606 5,150 �6,500 1,350
House Incoma 205,200 207,750 (2,550) 270,546 240,150 � 30,396
� Total Produetlon itevenues
� _ 2,000 (2.000) 4,133 21,000 (16,867) _
Marketing Revenues
Davalopment Revenues 167 9�6 �3Y 5pp 35,476 185,286 244,500 (59,214)
General Development _ _ 80,415 80,415
McCallum Theatre Institute 5,500 5,075 13,125 16,500 3,375
10,575 40,491 278,826 261,000 17.826 �
Muses ��g,qg� 138,000 �
Total Development Revenues .
Other Revenues _ p,500 (2,500) 32,414 33,370 (973)
Buitding Rental S14 . 814 973
Miscellaneous Income 2 qg� 200
2.087 37,183 600 36.583
Financial Income 3�p� y�pp 401 70,570 33,970 36,800
7olal Otber Revanues .
7p7pL REVENUE
386.792 350,450 36,342 624,074 556,120 67,954
EXPENSES . �
ProducdonExpenses 770,379 151,350 79,029 279;420 755500 (4079)
PeAortnance 1.421 3,000 (1,579) 27.371 30,006 (2,635)
TheaVeRentai 1334P 70,351 2�991 939
Front ot House 61,075 �,489 6,586 736,830 135,897 p5,585
TecFmical Department 15,715 30,842 15 727 38.636 ���1 �.-Z
BoxOKce p61,332 250,032 11,300 423,329 386,968 36,367
7otat productlon Exp¢nses
35,514 25,660�.. . 9,855
Marketing ExPenses 7,314 8�253 �939� 59,351 23,465 35,886
Generel Markeling � 23,534 21,055 2,479 1 5� 10,713
Media AdveRising � . 400 (400) 12.213 13.727
1.350 19,898 33,973 47,70�
Publfcily 21,248 141,052 98,325 42.728
Ad Produdion - 52.095 31,058 21.037 ._ . �
7otal Produedon Expenses
DevelopmantExpenses 42,Ott 58.737 (16,726)
17,379 23,717 (6.332) 14.924 44,T99 (29,875)
Genersl Devalopment 4,933 74,933 (70,000) 5,768 19,115 13.34
McCallum Theatre institute � 679 `g 6 779 62 704 �py,651 (59,948)
Muses 23,991 47.102 1z3,171)
Tofal Deveiopment Expenses
AdministredonExPenses - 40,014 43,273 � (3,259) 121,055 125,756 �7 g,q3�
13,100 2.864 41,143 39,300 6,535
Generel AdminisUaGve 15,964 5,368 23,210 76,675 _ ,
Maintenance 17,593 12.225 33.617 34,731 (���)
Services 7,326 6,141 t�t� 12,750
7,816 17,086
Insurence 6,p66 4,250 3.�6 50.804 45,450 5�g�45
MIS 74,996 ��•750 4982 89,605 90550 9�
Utltities 25.868 30,850 .�, 6 838 376.519 364,812 ��� .
Financlal 727.828 120.989
Total Producdon F�cPenses 76�,y 1,003,603 972,556 31 047
485,247 449,182 -
TOTAL EXPENSES � - �
(betore DepredaGon)
NET INCOME 5 8,455 S 98.732 S 20,278 E 379,529 S 416,436 S 36,9U8
(belore DePreciaUon) � . _ 124,500 724,500 �
� 41,500 41,500
Depreciatlon
' Estimate
THE MCCALLUM THEATRE
- BALANCESHEET
OCTOBER�1.199E
OCTOBER 31 1996 JULY 37 1998
MCCALLUM ENDOW COM6INED MCCALLUM ENDOW COMBINED
Cl1RRENT ASSETS�
cnsH S 361,641 S 775,952 5 7,137.594 5 420,516 S 769,934 S . �.812
26,953 26,953 64.812
� ACCOUNTSRECENABLE� ��3�q 669508 � � b89.508
722 314
PLEocESRECENAeLE � »0908 775,952 1886,861 7.154,836 769,934 �1.924,770
TOTALCURRENTASSETS
p7HERA55E75 300,000 300,000 400.000 302,250 702,250
utveSTrnett75 160,162 160,162 � 160,162
COr+71NGEni n�+ieRE5T5 160,162 26,356 26,356
201,009 201,009
PREPND PERFORhtANCE ExPENSES �285 g76,126 683,411 7.285 349.500 356,785
DUE FROM RELATED PARTIES 198 ggg 1gg,558 198.558
798 558 792 367 651 750 1 444.711
uNENTORV 867 014 676.726 1.543,140 -
TOTALCURRENTASSETS
LONCa TERM/w`SETg� 13,335,014 73 357 680 13,357,680
PROPERTY AND EQUIPMENT(NETj 13,335,014 13,357.680 13,357 68C
TOTAL LONG TERM ASSETS
13,335.014 13,335,014
707n�As5e7S 515.312,936 S 1,452,079 S 16,765,015 S 75,304,877 5 1,421,684 S 76,726,561
CURREMLIAB�LRIE3: , 5 63,396 $ �22•44� g �ZZ�44
$ 63.396 616.271 618,27
ACCOUNTS PAYABLE ' 3q.14
REV04HNG LINE OF CREDIT 33,968 34��4Z
33,968 1,607,931 7.607,93
OTHERCURRENTLIAB�LITIES 2,309,409 2,309,409 86,79
DEFERREDREVENUE-BOXOFFICE Zp��52g 98,799
201.529 2 477 590 2 477.59
OEFERRED REVENUE•DEVELOPMENT 2,608.301 - 2.608.307
7pTpL CURREN7 UABILRIES
349,500 7.285 356,7E
IONGTEFtMLUSILITIE3: � 676,126 7.285 683,471 �j00,a
OUE TO REU1hD PARTI:S 500,000 500.000
500,000 y,gpp,000 2�8�'��
MUNICIPni.LOnn � 2,800,000 2,800,000 �48�f
N07E3 PAYAHLE 202,912 202 912 148161 �-
CMI7�LLEI13E5 q,179,039 7,285 4.186.324 3,797.661 7.285 3.804,9�
TOTAL LONG TERM��A6�LITIES
6,787,340 7.285 6,794.625 6 275 257 7 285 6 282,5
TOTAL IIABRTE3 -
NET ASSETS 9,806,484 1,388,131 17.774,6
9.029,626 1,474.399 10.444,025 (286.772) 46,268 -(240,4
eEGINNING FUND eAU�NCe �379 r�p� 30,395 (�9•»� 4901
YEAR TO DATE INCAME(LOSS)BEFORE DEPR (�24 500) 490,146
(124 500) 9 029 626 1 414 399 10 4K C
DEPREGIATION g 525 596 1.444 794 9,970.390
ENDING FUND BALANCE
TOTa�Lu�eluilESnHONE7Asseis S 15,372.936 S 1.452.079 S 16.765.015 S 75,364,877 S 1,421.684 S 16,726,•
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City of Palm Desert Internal Correspondence
oate: 19 November 1998
subject: Proposed Changes for 1999 Statement of Investment Policy
From: Thomas W. Jeffrey, Investment Manager �J
To: Paul S. Gibson, Director of Finance & City Treasurer
I recommend that the following changes be made to the 1999 Statement of
Investment Policy for the City of Palm Desert, the Palm Desert
Redevelopment Agency, and the Palm Desert Housing Authority (hereafter
collectively referred to as the "City"1.
These recommendations result from a comprehensive review of the
investment polices of the Cities of Los Angeles, San Francisco, Sacramento,
San Diego, Riverside, Oceanside, lrvine, Vista, Redlands, and Stockton; the
Counties of Los Ange%s, San Francisco, San Diego, Sac�amento, and Orange;
the water agencies of MWD, Rancho California, and the San Diego County
Water Autho�riy (SDCWAI; and ihe San Diego Port Dist�ict.
All recommended changes are premised on the belief that the City's
investment policy should be a simple working document that provides
guidelines for City investment officers, while meeting legal and political
requirements.
The format of the City's investment policy has been revised so that paragraph
sequence, numbering, and content more closely approximate that of the
model investment policy of the Municipal Treasurer's Association of the
United States and Canada ("MTA"), which is the basis for certification.
In some cases, other California governmental entities have been cited when
they have provisions in their investment policy that are similar to changes
being proposed to the City's investment policy. These citations usually follow
a recommendation, and are enclosed in parentheses.
Preface
• Legal drafting convention used to abridge "City/Agency" into "City." The
City Attorney has confirmed that this is acceptable.
• Palm Desert Housing Authority has been added. _
Pro�osed Changes for 1999 Statement of Investment Policv
19 November 1998
Page2of6
• Policy goal language has been substituted that places greater emphasis on
fiduciary duty in terms of investing public funds. .
• Language on compliance with federal law has been added.
1 .0 Scopg �
• Language excluding Deferred Compensation Plan from investment policy
due to third-party administration, and investment by individual plan
participants, has been added.
2.0 Standard of Care
• "Prudent person" standard replaced with "prudent investor" standard
(state law since 1995►. New language taken directly from California
Government Code Section 53600.3. Result is that accountability standard
for Investment Officers has been raised from that of "average person on
the street" to that of other professional public funds managers
• Broader MTA model policy language substituted in "substantial deviations
from expectations" paragraph to avoid conflict with subsequent portfotio
rebalancing and credit downgrading sections.
3 1 � Credit Risk
• language on pre-qualifying financial institutions, dealers, and direct issuers
in order to manage credit risk, has been added.
3.2.1 Market Risk
• Prohihition against "selling short" relocated to Section 8.0 "Prohibited
Investments and Practices".
3.2 Liquidity
• Language on acquiring securities with active secondary markets and low
duration, has been added.
• 50/30/20 portfolio maturity limits relocated to Section 13.0 "Maximum
Maturity".
3.3 Yield
• One-year Treasury bill benchmark relocated to Section 18.0
"Performance".
Pronosed Changes for 1999 Statement of Investment Policv
19 November 1998
Page 3 of 6
4.0 Delegation of Authority
• Citations of state and municipal statutory authority for City Treasurer to
manage investments, have been added.
. Language on management succession, in terms of authorizing investment ,
transactions, has been added. Previously, this was reportedly an
undocumented practice at City of Palm Desert.
5.0 Confiicts of Interest
• "Ethics" removed from title since meaning unclear and no universal
standards exist. "Conflicts of interest" used, instead, to cover all subjects
under this section.
• Zero-tolerance policy language on gifts and favors to Investment Officers
has been added ("Orange County Ban"1. This is also currently the practice
of the City of Palm Desert Finance Department.
6.0 Authorized Financial Institutions and Dealers
. Regional broker criteria from Schedule III incorporated.
• Annual January deadline for qualifying new brokers has been added.
• Annual March deadline for requalifying existing brokers has been added.
• "Current audited financial statement" changed to plural since it is assumed
that more than one financial statement would be required.
• New requirement added that all new brokers, both primary and secondary,
submit the same application documents.
• New requirement added for submission of broker-dealer (firm) registration
and status forms.
• Three-year moratorium on new broker-dealer reapplication if original one
denied or rejected.
• Bank rating service changed from Financial Directory to Sheshunoff Bank
Quarterly Ratings and Analysis due to the former's failure to differentiate
between California financial institutions in terms of credit risk (all California
banks and S&Ls are given the same "AAA" rating). Sheshunoff, in
contrast, ranks them comparatively on a scale of 1 — 100, and has a
comparably priced publication. (City of Redlands)
• Equity-to-assets ratio raised from 4% to 5% (based on Financial Directory
surveyl.
. New requirement of S5 billion in total assets (all of City's current financial
services providers + CalFed qualify►.
Pr000sed Changes for 1999 Statement of Investment Policv
19 November 1998
Page 4 of 6
7.1 United States Treasury Bills, etc.
• Certificates of Indebtedness specified (for SLGS►.
• Maturity and concentration limits on zero coupon Treasuries added, in
order to enhance portfolio liquidity.
7.2 Federal Aaency and Instrumentality Notes
• "Instrumentality" added to title as a reminder of guarantee differences
between "agency" and "government-sponsored enterprise" debt. Specific
agencies and instrumentalities identified as suitable to do business with, in
order to manage credit risk. (Cities of Riverside, Irvine, San Francisco;
Counties of Orange, San Diego and San Francisco; Port of San Diego;
SDCWA)
• Issuer concentration limits have been added to manage credit risk,
replacing prior highly subjective, ambiguous, and out-of-date "prudent
person rule". (Cities of Los Angeles; Riverside, Irvine and San Francisco;
Counties of Orange, San Diego & San Francisco; Port of San Diego;
SDCWA)
• Specific overall and annual concentration limits have been placed on
callables to ensure that the City's laddered bond portfolio does not
collapse, and that overall portfolio yield does not significantly decline due
to calis being made.
7.4 Bankers's AcceRtances
• Institutional credit risk rating requirement has been added. (City and
County of Los Angeles; San Diego County Water Authority; Rancho
Califomia Water District)
7.5 Commercial Pa�er
• Alternative single issuer concentration limits of 5% of market value or
S500,000 have been deleted (more restrictive than state law). 10% single
concentration limit mandated by state law left intact. (Cities of San
Francisco, Riverside, Redlands, Vista, Oceanside, and Irvine; Counties of
Los Angeles, San Francisco and Sacramento; Port of San Diego; MWD;
and SDCWA)
7.6 Non-Negotiable CDs
• "Non-Negotiable" has been added to title to clarify security type.
• Main requirements of "Schedule I -- Policy Statement on Collateralized
Time Deposits" incorporated.
Proposed Changes for 1999 Statem��r nf Immefman4 Pnliry
19 November 1998
Page 5 of 6
• "590,000" maximum investment substituted for prior 5100,000 limit
(permits recovery of interest as well as principal under FOIC►.
• Collateralization requirements relocated to Section 10.0 "Collateralization"
of this policy (per MTA model policyl.
7J Mutual Funds
• Major requirements of Schedule II "Policy Criteria for Entering into a
Diversified Management Company" incorporated.
• As an alternative to "AAA" ratings, MMMF can qualify through SEC-
registered investment advisor with five years's experience managing 5500
million+ MMMF (per state law�.
. Fitch Investors Services has been added as a third major credit rating firm
(making it now two of three to qualify). (San Diego County Water
Authority; County of San Diego)
• Language clarifying prohibited commissions has been added.
8.0 Prohibited Investments and Practices (New Sectionl
• Language banning most derivatives has been added (current policy silent
on this topic►. State law specifically prohibits certain types of derivatives.
• Exemption for callables and zero coupons has been specified.
9.0 Investment Pools
• Citation of LAIF authorizing statute relocated to Section 7.8 "LAIF".
10.0 Collateralization (New Sectionl
• Main requirements of "Schedule I — Time Deposits" incorporated.
11 .0 Safekeepipg and Custodv_
• Exceptions to DVP policy (LAIF, mutual funds, Federal Reserve) noted.
• Management authorization chain-of-command added for money transfers
involving broker-dealers.
13.0 Maximum Maturitv (New Sectionl
• 50/30/20 limit relocated here.
14.0 Bond Proceeds
• Language referring to 1986 Tax Reform Act added. (City of Irvine)
. Language on bond arbitrage and rebates has been added. (City of Irvine)
• Language on competitive bidding has been added (current policy silent on
this topic►. (Cities of Los Angeles and Riverside; SDCWA)
Pro�osed Changes for 1999 Statement of Investment Policv
19 November 1998
Page6of6
15.0 Portfolio Rebalancina (New Sectionl
. Strategy for handling a violation of portfolio constraint percentages added.
(MWD; SDCWA; Cities of Vista and Oceanside; and Port of San Diego)
16.0 Credit Downgradina /New SectionJ
• Strategy for handling a federal agency or corporate bond downgrade
added. (City of Stockton; MWD; Counties of Orange and San Diego)
17.0 Internal Controls
. "Negligence" substituted for "employee error".
• Paragraph with examples of internal controls has been added.
• Auditor review of investment policy incorporated. Focus on reviewing
internal controls, not on cash and investments according to GAAP.
• Role of Finance Committee incorporated.
18.0 Performance (New Sectionl
• Language defining portfolio management strategy added (current policy
silent on this). Passive management emphasized; active management only
to improve portfolio risk structure, liquidity, or yield.
• One-year T-bill benchmark incorporated,
• Secondary market T-bill rate used as opportunity cost of capital.
19.0 Re op rtin�
• More report details have been added.
20.0 Policy Adoption
• Palm Desert Housing Authority Commission added as an authorizer of City
investment policy.
• Submission deadline moved back to November 30 from January 31 so that
reviewed and approved policy is available in January annually.
N
Exhibit "A" - Aonroved Provider List
• Federal Reserve Bank added since Treasury bills and notes can be
purchased through "Treasury Direct Program" (bypassing brokers and
avoiding commissions).
. Direct issuers of commercial paper added since commercial paper can be
purchased directly from corporate issuer �bypassing brokers and avoiding
commissions►. The corporate issuers listed, in addition 4o being Fortune
500 companies, were taken from the County of Los Angeles "Approved
List".
OFFICE OF THE TREASURER
C/TV OF PALM DESERT
STATEMENT OF INVESTMENT POLICY
FOR CALENDAR YEAR 1999
�-��� .
, ;
. �
.�
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, . .
Paul S. Gibson
Treasurer
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
FINANCE COMMITTEE DRAFT
� I�Ro?oSED�
CITY OF PALM DESERT
STATEMENT OF INVESTMENT POLICY
Calendar Year 1999
TABLE OF CONTENTS
SUBJECT PAGE
1 .0 Scope 1
2.0 Standard of Care 2
3.0 Objectives 2
4.0 Delegation of Authority 3
5.0 Conflicts of Interest 4
6.0 Authorized Financial Institutions and Dealers 4
7.0 Authorized Investments 7
8.0 Prohibited Investments and Practices 9
9.0 Investment Pools 9
10.0 Collateralization 10
1 1 .0 Safekeeping and Custody 10
12.0 Diversification 11
13.0 Maximum Maturity 1 1
14.0 Bond Proceeds 11
15.0 Portfolio Rebalancing 12
16.0 Credit Downgrading 12
17.0 Internal Controls 12
18.0 Performance 13
19.0 Reporting 14
20.0 Adoption 14
APPENDIX
Exhibit "A" -- Approved Provider List 15
Exhibit "B" -- Glossary of Investment Terms 16
CITY OF PALM DESERT
STATEMENT OF INVESTMENT POLICY
Calendar Year 1999
_ POLICY
The purpose of this document is to outline the policy on the investment of
public monies.
It is the policy of the City of Palm Desert, the Palm Desert Redevelopment
Agency, and the Palm Desert Housing Authority (hereafter collectively referred
to as the "City") to predicate their investment policies, procedures, and
practices upon the limitations placed upon them by governing legislative
bodies. These policies shall have three primary goals:
A. To assure compliance with federal, state, and local laws governing the
investment of public monies under the control of the City Treasurer.
B. To protect the principal monies entrusted to the City.
C. To generate the maximum amount of investment income within the
parameters of prudent risk management, as defined in this Statement of
Investment Policy.
For the purposes of this policy, "Investment Officers" shall be defined as the
City Treasurer and the City Investment Manager.
1 .0 Scope
This Statement of Investment Policy shall apply to all funds that are
under the control of the City Treasurer, including, but not limited to, the
general fund; special revenue funds; debt service funds; capital project
funds; enterprise funds; trust and agency funds; and any other funcls
under the City Treasurer's control. These funds are accounted for in
the City Comorehensive Annual Financial Reports.
The City Deferred Compensation Plan shall be excluded from the scope
of this Statement of Investment Policy, since it is managed by a third-
party administrator, and by individual plan participants. Investment
Officers, however, shall be responsible for presenting quarterly reports
to the Finance Committee and to the City Council that describe the
investment of the City Deferred Compensation Plan assets.
CPD Statement of Investment Policv
Calendar Year 1999
Page 2 of 20
2.0 Standard of Care
Investment Officers, as trustees of public monias, shall adhere to the
"prudent investor" standard when managing the City investment
portfolio. They shall invest "...with care, skill, prudence, and diligence
under the circumstances then prevailing, including, but not limited to,
the general economic conditions and the anticipated needs of the
agency, 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 agency."
Investment Officers who follow the provisions of this Statement of
Investment Policy and who ezercise due diligence, shall be relieved of
personal responsibility for a security's credit risk or market price
changes: r vi , that they report substantial deviations from
expectations to the City Manager and to the City Finance Committee
("Finance Committee") in a timely manner, and that appropriate action
is taken to control adverse developments.
3.0 Objectives
The City's investment objectives, in order of priority, shall be:
3.1 . Safetv. Safety of principal shall be the foremost objective.
Investments shall be made with the aim of avoiding capital
losses, whether from issuer default; broker-dealer default; or
market value erosion. Principal shall be preserved by mitigating
the following types of risk:
3. 1. 7. Credit Risk, the risk of loss due to the failure of the
issuer of the security, shall be mitigated by investing
in only the highest quality credits; by diversifying
investments; and by pre-qualifying financial
institutions, broker-dealers, and direct issuers.
3. 1.2. Maiket Risk, the risk of loss due to a decline in bond
prices because of rising market interest rates, shall
be mitigated by structuring the portfolio so that
issues mature concurrently with the City's
anticipated cash requirements, thereby eliminating
CPD Statement of Investment Policy
Calendar Year 1999
Page 3 of 20
the need to sell securities prematurely on the open
market.
It is recognized, however, .that in a diversified portfolio,
occasional measured losses are inevitable, and must be
considered within the context of overall investment return. •
3.2 Liauiditv. An adequate percentage of the portfolio shall be
maintained in liquid, short-term securities that can be converted
to cash, if necessary, to meet disbursement requirements. Since
all cash requirements cannot be anticipated, the portfolio should
consist largely of securities with active secondary markets.
These securities should have a relatively low sensitivity to market
risk. Maximum overall portfolio maturities are referenced in
Section 13.0 of this Statement of Investment Policy.
3.3 1 '�id. Yield shall be considered only after the basic requirements
of safety and liquidity have been met. Whenever possible and in
a manner consistent with the objectives of safety and liquidity, a
yield higher than the market rate of return shall be sought.
4.0 Delegation of Authority
California Government Code Sections 53607 and 53608 authorize the
legislative body of a local agency to invest, deposit, and provide for the
safekeeping of the local agency's funds, or to delegate those
responsibilities to the treasurer of the local agency.
City of Palm Desert Municioal Code Section 3.08.010 delegates the
authority to invest, deposit, and provide for the safekeeping of City
public monies, to the City Treasurer.
City of Palm Desert Municioal Code Section 2.16.010 authorizes the
City Director of Finance to serve ex officio as City Treasurer. He shall
be responsible for all investment transactions that are executed on
behalf of the City.
The City Treasurer shall establish written procedures for the operation
of the City investment program that are consistent with the provisions
of this Statement of Investment Policy. Procedures deemed most
important shall include: safekeeping; wire transfer agreements; banking
service contracts; and collateralization agreements.
CPD Statement of Investment Policv
Calendar Year 1999
Page 4 of 20
Investment Officers shall have the exclusive authority to buy and sell
securities on behalf of the City. They shall engage in mutual
consultation and in collective decisianmaking on economic trends,
investment opportunities, and portfolio structuring.
The Investment Manager may initiate investment transactions on behalf
of the City only if the City Treasurer has previously authorized the
transactions, in writing. In the event that the City Treasurer is
unavailable, then: (1 ) the Finance Operations Manager; (2) the City
Manager; or (3) an Assistant City Manager, in that order of succession,
shall authorize the investment transactions, in writing, prior to
execution.
5.0 Conflicts of Interest
Investment Officers shall refrain from personal business activity that
could conflict with the proper execution of the City investment program
or impair their ability to make impartial investment decisions. They
shall disclose to the Palm Desert City Council ("City Council") any
material financial interest in financial institutions that conduct business
within the City's jurisdiction. They shall also disclose any large
personal investment positions that could be related to the performance
of the City investment portfolio. Investment Officers shall subordinate
their personal investment transactions to those of the City, particularly
with regard to the timing of securities purchases and sales, and shall
avuid transactions that might impair public confidence.
Investment Officers and their immediate relatives shall not accept or
solicit any gifts, gratuities, honorariums, or favors from persons or
entities who provide or who are seeking to provide financial services to
the City.
6.0 Authorized Financial Institutions and Dealers
The City Treasurer shall keep an "Approved Provider List" (see Exhibit
"A") of all commercial banks, savings and loan associations, securities
broker-dealers, and direct issuers of securities eligible for purchase
(hereafter collectively referred to as "Providers") that the Finance
Committee and the City Council has authorized to provide financial
services to the City, based upon their credit worthiness. This list shall �
CPD Statement of Investment Policv
Calendar Year 1999
Page 5 of 20
be provided to all members of the City Council and the Finance
Committee.
The securities broker-dealers must be primary dealers that regularly '
report to the Federal Reserve Bank of New York. The Finance
Committee, at its discretion, however, may authorize regional brQker-
dealers that: (1 ► have been in existence for more than five years; (2)
have a net capital position in excess of S100 million; and (3) are
licensed as broker-dealers by the State of California, to provide financial
services to the City.
The City shall not do business with any Provider that has, within any
consecutive four-year period following 1 January 1996, made a political
contribution in an amount exceeding the limitations in Rule G-37 of the
Municipal Securities Rulemaking Board, to any member of or candidate
for the City Council, or to any member of the Finance Committee.
Any new broker-dealers that wish to qualify for addition to the
"Approved Provider List" may apply annually, in January. They must,
at a minimum, provide the City Treasurer with a copy of the following
documents, unless otherwise noted:
a) Latest annual audited financial statements.
b) National Association of Security Dealers ("NASDAQ") "Certificate
of Membership".
c) NASDAQ "Form BD — Uniform Application for Broker-Dealer
Registration".
d) Current "Form BD Status Report".
e) NASDAQ "Form U-4 -- Uniform Application for Securities.
Industry Registration or Transfer" for each employee with whom
the City would be trading.
f) Current "Form U-4 Status Report" on each employee with whom
the City would be trading.
g) A resume from each employee with whom the City would be
trading.
h) A trading resolution.
i) State of California Department of Corporations "Broker-Dealer's
Certificate".
j) Completed "Broker-Dealer Questionnaire and Certification"
(original only).
CPD Statement of Investment Policy
Calendar Year 1999
Page 6 of 20
New broker-dealers may be requested to provide local government or
other client references from within California.
The Finance Committee and the City Council shall review the submitted
documents, along with th.e Investment Officers's recommendations, and
shall select the broker-dealers that will be added to the City's -
"Approved Provider LisY'.
If a broker-dealer fails to complete and submit the required documents
on time, then its application shall be deemed to have been automatically
rejected. If the City either rejects or fails to aporove a broker-dealer's
ao�lication. then that broker-dealer shall be ine�igible for three
consecutive years to reaRolv for addition to the City's "A� ro oved
Provider List".
The City Treasurer shall conduct an annual review, in March, of the
financial condition and registrations of approved broker-dealers in order
to determine whether they should remain on the "Approved Provider
List". In addition to other requirements, these broker-dealers shall be
given the current City investment policy and a certification form. The
completion and submission of the certification form by a broker-dealer
shall constitute proof that it has received the City investment policy;
read it; and intends to comply with it. The City Treasurer shall keep
current audited annual financial statements on file for each broker-
dealer with which the City does business.
The City shall only deposit public monies in qualified public
depositories. The City may deposit public monies in federally- and
state-chartered commercial banks and savings and loan associations
that have a branch office within Fiiverside County.
Such institutions shall also be favorably rated as determined by the City
Treasurer, based upon statistical ratings from Sheshunoff Information
Services, Inc. or from another nationally recognized rating service. The
institution shall also have at least S5 billion in total assets and a core
capital-to-total assets ratio of at least five percent. Under no
circumstances shall City deposits exceed the institution's total
shareholders's equity.
CPD Statement of Investment Policv
Calendar Year 1999
Page 7 of 20
7.0 Authorized Investments
The City is authorized to invest in the following financial instruments
pursuant to California Government Code Section 53600 et seq. City
investment policy is more than conservative than state law.
7.1 linited States Treasury Bills. Notes. Bonds, and Certificates of
Indebtedness. There shall be no concentration limit on the
purchase of Treasuries, other than for zero coupon securities.
Purchases of zero coupon T�easuries shall not exceed three yea�s
to maturity. Purchases of zero coupon Treasuries shall not
exceed 10 percent of the cost value of the portfolio (excluding
the proceeds of tax-exempt bondsl.
7.2 Federal Agency and Instrumentalitv Notes. Investment shall be
permitted in the following discount, coupon, and variable rate
security issuers: Federal Farm Credit Bank; Federal Home Loan
Bank; Federal Home Loan Mortgage Corporation; Student Loan
Market Association; Federal National Mortgage Association;
Tennessee Valley Authority; Export-Import Bank of the United
States; Federal Land Bank; Small Business Administration; and
Federal Credit Consolidated System. Purchases of callable
securities shall not exceed 20 pe�cent of the cost value of the
portfolio. Purchases of callable securitieS shall not exceed mo�e
than five percent of the cost value of the portfolio in any one
year. No more than 25 percent of the cost value of the portfolio
(excluding the proceeds of tax-ezempt bondsl may be invested in
any one issuer.
7.3 Medium Term Notes 1"MTN"1. Investment shall be limited to
MTNs rated "A" or better by Standard & Poor's Corpo�ation
("Standard & Poor's") or by Moody's Investors Services, Inc.
("Moody's"), that are issued by corporations organized and
operating in the United States. Purchases of 'A" rated MTNs
shall not exceed two years to maturity,• "AA" rated MTNs th�ee
years to matu�ity; and "AAA" rated MTNs five yea�s to maturity.
Purchases of MTNs shall not exceed 30 percent of the cosi va/ue
of the porifolio. No more than five pe�cent of the cost va/ue of
the portfolio sha!l be invesied in ihe MTNs of any one issuer.
Commercial paper holdings shall be conside�ed when calculating
the maximum percentage of any issuer name.
CPD S�atement of Investment Policv
Calendar Year 1999
Page 8 of 20
7.4 Bankers's Accq�tances 1"BA"1. Investment shall be permitted in
domestic BAs issued by commercial banks that are favorably
rated as determined by the City Treasurer, based upon statistical
ratings from Sheshunoff Information Services, Inc. or from
another nationally recognized rating service. Pu�chases of BAs
shall not exceed 270 days to maturity. Purchases of BAs shall
not exceed 40 percent of the cost value of the portfolio. lVo
more than 30 percent of the cost va/ue of the portfolio shal/ be
invested in BAs issued by any one bank.
7.5 Commercial Paper ("CP"1. Investment shall be permitted in
"prime" CP that is rated "A1 " by Standard & Poor's or "P1 " by
Moody's. The issuing corporation must be organized and
operating in the United States; have total assets of 5500 million
or more; and have long-term debentures that have been rated
"A" or higher by Standard & Poor's or by Moody's. Purchases of
CP shal/ not exceed 180 days to maturity. No more than 15
percent of the cosi value of the portfolio shall be invested in CP.
No more than f0 percent of the outstanding CP of any one issuer
shall be purchased.
7.6 Non-Negotiable Certificates of Denosit ("CD"1. Investment shall
be permitted in non-negotiable, collateralized CDs issued by
qualified public depositories that meet the criteria specified in
Section 6.0 of this Statement of Investment Policy. CDs shall be
centralized at one designated office location for each financial
institution. Purchases of CDs shall noi exceed one year to
maturity. No more than 15 perceni of the cosi va/ue of ihe
porifolio shall be invested in CDs. lf collateralization wil/ not be
involved, then no mo�e than 590,000 may be invested in any one
issuer.
7.7 Mutual Funds. Investment shall be permitted in money market
mutual funds ("MMMF") that invest g�y in United States
Treasury bills, notes, bonds, and related repurchase agreements.
In seeking to maintain a stable share price of 51 .00, the MMMF
shall have a dollar-weighted average maturity of 90 days or less,
and shall purchase securities with a� effective maturity of 13
months or less. Commission (e.g., sales load on purchases,
reinvested dividends, redemptions, and exchanges) shall not be
included in the purchase of any fund shares. Additiona!ly, a
qualifying MMMF must have: (11 total porifolio net assets of
�PD Statement of Investment Policy
Calendar Year 1999
Page 9 of 20
S500 million or more; �p.d (2/ the highest rating of two of the
three largest nationa!ly recognized iating seivices, Q an
investment advisor who is registered wiih the Securities and
Exchange Commission and who has five yea�s's or more of
experience investing for MMMFs of 5500 million or more in total
porifolio net assets. •
7.8 Local q.gency Investment Fund 1"LAIF"l. Investment shall be
permitted in this pool which is organized and managed by the
State Treasurer's Office for the benefit of local agencies,
pursuant to California Government Code Section 16429.1 . The
City Council and the Redevelopment Agency Board approved City
participation in LAIF on 12 December 1981 in Resolution Number
81-161 . lnvestment shal/ be limited to the maximum amount
per legal entity that is permitted under state law.
8.0 Prohibited Investments and Practices
The City Treasurer shall not invest public monies in financial
instruments that are not described under Section 7.0 of this Statement
of Investment Policy.
Prohibited investments shall include, but shall not be limited to,
equities, bond mutual funds, and derivative contracts (forwards,
futures, and options). The purchase of derivative securities shall be
prohibited, except for callable and zero coupon .Treasury ("STRIPS"1
securities.
The City Treasurer shall not engage in securities lending ("selling
short"1.
9.0 Investment Pools
The City Treasurer shall investigate all local government investment
pools ("LGIPs") prior to investing public monies, and periodically
thereafter while City public monies are invested in the LGIP. With the
exception of LAIF, all LGIPs shall meet the criteria specified in Section
7.7 of this Statement of Investment Policy.
CPD Statement of Investment Policv
Calendar Year 1999
Page 10 of 20
10.0 Collateralization
The City Treasurer shall ensure that all demand deposits and non-
negotiable CDs which exceed 5100,000 shall be fully collateralized
with securities authorized under state law and under this Statement of
Investment Policy. Collateral may be waived for the first 5100,000
since this will be insured by the Federal Deposit Insurance Corporation.
Any amount on deposit over $100,000 plus accrued interest, however,
shall be collateralized with United States Treasury or federal agency .
securities at a constant margin ratio of 110 percent, or with mortgage-
backed collateral at a constant margin ratio of 150 percent.
Collateralized investments and demand deposits may require
substitution of collateral. The City Treasurer must approve all requests
from financial institutions for substitution of collateral that involve
interchanging classes of security.
An independent third party with whom the City has a current custodial
agreement, shall always hold the collateral. The independent third
party shall provide the City Treasurer with a safekeeping receipt that he
shall retain.
11 .0 Safekeeping and Custody
The City shall conduct all of its security transactions on a delivery-
versus-payment ("DVP") basis. A third-party bank trust department
that acts as an agent for the City under the terms of a custody
agreement executed between the bank and fhe City, shall hold the
securities. The only exception to the foregoing shall be securities
purchases made with: (1 ) local government investment pools; (2)
money market mutual funds; and (3) Federal Reserve Banks ("Treasury
Direct Program"), since the purchased securities are not deliverable.
No outside broker-dealer or investment advisor shall have access to City ,
monies, accounts, or investments. Any transfer of monies to or
through an outside broker-dealer must have the City Treasurer's prior
written approval. If the City Treasurer is unavailable, then the
management authorization chain-of-command specified in Section 4.0,
paragraph six, of this Statement of Investment Policy, shall be followed.
CPD Statement of Investment Policy
Calendar Year 1999
Page 11 of 20
Confirmation receipts shall be required on all trades. Investment
Officers shall review these receipts immediately upon delivery, for
conformity with City transaction documentation.
12.0 Diversification
The City shall diversify its investments by security type and by
institution, except for bond reserve monies; bond escrow monies; and
any other monies approved by the Finance Committee or by the City
Council.
13.0 Maximum Maturity
The City shall not invest in securities with maturities exceeding five
years. The Finance Committee and the City Council, however, may
approve longer maturities for the investment of bond reserve, bond
escrow, and other funds if the maturities of such investments are
expected to coincide with the expected use of the funds.
At all times, at least 50 percent of the City po�tfolio shall mature in
three years or less; 30 percent in two years o� less; and 20 percent in
one year or less.
14.0 Bond Proceeds
The City Treasurer shall segregate tax-exempt bond proceeds from the
City �eneral pool and shall keep them in a separate pool. They shall be
invested pursuant to the instructions in the respective bond indentures
of trust. If the bond indenture authorizes investments that conflict with
this Statement of Investment Policy, then such investments shall be
made only with the Finance Committee's prior approval. All securities
shali be held in third-party safekeeping with the bond trustee, and all
DVP rules shall apply.
Investment Officers shatl use competitive bidding, whenever practical,
for all investment transactions that invoive the proceeds of tax-exempt
bonds. A minimum of three bids shall be obtained from approved
Brokers. Any excepiions to this policy shall be documented and shall
be reported to the Finance Committee at its next monthly meeting.
The City is required under the "U.S. Tax Reform Act of 1986" to
perform annual arbitrage calculations and to rebate excess earnings to
CPD Statement of Investment Policv
Calendar Year 1999
Page 12 of 20
the United States Treasury from the investment of tax-exempt bond
proceeds that were sold after the effective date of this law. The City
Treasurer may contraci with a qualified outside financial consultant to
provide the necessary technical expertise that is required to comply
with this regulation,
15.0 Portfolio Rebalancing
In the event that portfolio percentage constraints are violated due to a
temporary imbalance in the portfolio, then Investment Officers shall
hold the affected securities to maturity in order to avoid capital losses.
If no capital losses would be realized upon sale, however,. then
Investment Officers shall consider rebalancing the portfolio, after
evaluating the expected length of time that the portfolio will be
imbalanced. Portfolio percentage limits are in place in order to ensure
diversification of the City investment portfolio; a small, temporary
imbalance will not significantly impair that strategy.
16.0 Credit Downgrading
This Statement of Investment Policy sets forth minimum credit risk
criteria for each type of security. This credit risk criteria applies to the
initial purchase of a security; it does not automatically force the sale of
a security if its credit risk ratings fall below policy limits.
If a security is downgraded below the minimum credit risk criteria
specified in this Statement of Investment Policy, then Investment
Officers shall evaluate the downgrade, on a case-by-case basis, to
determine whether to hold or sell the security.
The City Treasurer shall inform the Finance Committee at its next
monthly meeting of the credit downgrade, and of the Investment
Officers's decision to hold or sell the downgraded security.
Investment Officers shall review the credit standing of all securities in
the City investment portfolio on a quarterly basis.
17.0 Internal Controls
The City Treasurer shall be responsible for ensuring compliance with the
City investment policy, as well as for establishing internal controls that
CPD St�tement of Investment Policv
Calendar Year 1999
Page 13 of 20
are designed to prevent losses due to fraud, negligence, and third-party
misrepresentation.
Internal controls deemed most important shall include: control of
collusion; separation of duties and administrative controls; separating
transaction authority from accounting and record keeping; custodial
safekeeping; clear delegation of authority; management approval and
review of investment transactions; specific limitations regarding
securities losses and remedial action; written confirmation of telephone
transactions; and docume�tation of investment transactions and
strategies.
The City Treasurer shall establish an annual process of independent
review by an external audit firm. The external auditor shall review the
management of the City investment program, in terms of compliance
with the internal controls previously established in the Citv of Palm
Desert Treasury Policies and Procedures Manual.
A Finance Committee consisting of City officials and community
representatives shall be responsible for reviewing the City investment
reports, transactions, policies and procedures, and strategies, on a
monthly basis. The Mayor; Mayor Pro-Tempore; City Manager; City
Attorney; Redevelopment Agency Executive Director; City Director of
Finanee; City Investment Manager; and various citizens who are
appointed by the City Council, shall sit on this committee.
18.0 Performance
The City investment portfolio, for the most part, shall be passively
managed, with portfolio securities being held to maturity. On selected
occasions, the City portfolio may be actively managed for purposes of
improving portfolio risk structure, liquidity, or yield in response to
market conditions or City requirements. Profit-taking may only be done
if capital gains would: (11 exceed the return that would be realized by
holding the security to maturity; and (2) more than offset any income
reduction due to reinvestment rate risk.
The City shall use a one-year United States Treasury bill that is traded
on the secondary market, as a benchmark to measure whether or not
City portfolio yield is matching or surpassing market yield.
CPD St'atement of Investment Policv
Calendar Year 1999
Page 14 of 20
19.0 Reporting
The City Treasurer shall provide a monthly investment report to the
Finance Committee and to the City Council within 30 days of month-
end, or at the next scheduled City Council meeting following a Finance
Committee meeting.
This report shall include a complete portfolio inventory, with details on
issue; par value; book value; coupon/rate; original settlement date of
purchase; final maturity date; CUSIP number; average weighted yield;
average days to maturity; and market value (including source of market
valuation). The report will include a statement on compliance or
noncompliance with the City investment policy, and a statement on
whether there are or are riot sufficient funds to meet the City's
anticipated cash requirements for the next six months.
20.0 Adoption
The City Treasurer shall submit a Statement of Investment Policy to the
Finance Committee; the City Council; the Redevelopment Agency
Board; and the Housing Authority Commission, annually for their review
and approval. This statement shall be presented to the Finance
Committee by November 30 of each year.
CPD Statement of Investment Policv
Calendar Year 1999
Page 15 of 20
EXHIBIT "A"
APPROVED. PROVIDER LIST
The following institutions have been authorized by the Palm Desert City
Council; the Palm Desert Redevelopment Agency Board; and the Palm Desert
Housing Authority Commission, to provide financial services to the City.
I. United States Government
A. Federal Reserve Bank
II. Primary Dealers
A. Morgan Stanley & Company (formerly Dean Witter Reynolds)
B. Salomon Smith Barney, Inc.
III. Regional Dealers
A. Union Bank of California
B. Wells Fargo Bank
IV. Direct Issuers ICommercial Paoerl
A. General Electric Capital Corporation
B. Ford Motor Credit Company
C. Chevron Oil Finance Company
D. General Motors Acceptance Corporation
E. Texacolncorporated
F. Prudential Funding Corporation
V. Public Depositories
A. Union Bank of California
B. Bank of America
C. U.S. Bank (formerly First Trust California)
D. Washington Mutual Bank (formerly Great Western Bank)
E. Home Savings of America
F. Downey Savings & Loan
G. Glendale Federal Bank
�PD Statement of Investment Policv
Calendar Year 1999
Page 16 of 20
EXHIBIT „B••
GLOSSARY OF INV�STMENT TERMS
AGENCIES. Federal agency and instrumentality securities.
ASKED. The price at which securities are offered.
BANKERS'S ACCEPTANCE (BA1. A draft, bill, or exchange accepted by a
bank or a trust company. Both the issuer and the accepting institution
guarantee payment of the bill.
BID. The price offered by a buyer of securities (when you are selling
securities, you ask for a bid). See "Offer".
BROKER. A broker brings buyers and sellers together so that he can earn a
commission.
CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity, as
evidenced by a certificata. Large-denomination CDs are typically negotiable.
COLLATERAL. Securities, evidence of deposit, or other property which a
borrower pledges to secure repayment of a loan. Also refers to securities
pledged by a bank to secure deposits of public monies.
COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR). The official annual
report for the City of Palm Desert. It includes five combined statements for
each individual fund and account group, that are prepared in conformity with
GAAP. It also includes supporting schedules that are necessary to
demonstrate compliance with finance-related legal and contractual provisions,
extensive introductory material, and a detailed statistical section.
COUPON. (a) The annual rate of interest that a bond's issuer promises to
pay the bondholder on the bond's face value. (b) A certificate attached to a
bond, that evidences interest due on a payment date.
DEALER. A dealer, as opposed to a broker, acts as a principal in aU
transactions, buying and selling for his own account.
DEBENTURE. A bond secured only by the general credit of the issuer.
CPD Statement of Investment Policv
Calendar Year 1999
Page 17 of 20
DELIVERY VERSUS PAYMENT. There are two methods of delivery of
securities: (1 ) delivery versus payment (DVP); and (2) delivery versus receipt
(DVR). DVP is delivery of securities with an exchange of money for the '
securities. DVR is delivery of securities with an exchange of a signed receipt
for the securities.
DERIVATIVES. (1 ) Financial instruments that are linked to, or derived from,
the movement of one or more underlying indexes or securities, and may
include a leveraging factor; or (2) financial contracts based upon a notional
amount whose value is derived from an underlying index or security (e.g.,
interest rates, foreign exchange rates, equities, or commoditiesl.
DISCOUNT. The difference between the acquisition cost of a security and its
value at maturity, when quoted at lower than face value. A security that sells
below original offering price shortly after sale, is also is considered to be at a
discount.
DISCOUNT SECURITIES. Non-interest bearing money market instruments that
are issued a discount and that are redeemed at maturity for full face value
(e.g., U.S. Treasury Bilisl.
DIVERSIFICATION. Dividing investment funds among a variety of securities
that offer independent returns.
FEDERAL CREDIT AGENCIES. Agencies of the Federal Government that were
established to supply credit to various classes of institutions and individuals
(e.g., S&Ls, small business firms, students, farmers, farm cooperatives, and
exporters).
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC). A federal agency
that insures bank deposits, curr.ently up to 5100,000 per deposit.
FEDERAL FUNDS RATE. The rate of interest at which Fed funds are traded.
This rate is currently pegged by the Federal Reserue through open-market
operations.
FEDERAL HOME LOAN BANKS (FHLB►. Government-sponsored wholesale
banks (currently 12 regional banks) which lend funds and provide
correspondent banking services to member commercial banks, thrift
institutions, credit unions, and insurance companies. The mission of the
CPD Statement of Investment Policv
Calendar Year 1999
Page 18 of 20
FHLBs is to liquefy the housing-related assets of its members, who must
purchase stock in their District Bank.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA). FNMA, like
GNMA, was chartered under the Federal National Mortgage Association Act in
1938. FNMA is a federal corporation working under the auspices of the -
Department of Housing and Urban Development (HUD►. It is the largest single
provider of residential mortgage funds in the United, States. Fannie Mae, as
the corporation is called, is a private stockholder-owned corporation. The
corporation's purchases include a variety of adjustable mortgages and second
loans, in addition to fixed-rate mortgages. FNMA's securities are also highly
liquid and are widely accepted. FNMA assumes and guarantees that all
security holders will receive timely payment of principal and interest.
FEDERAL OPEN MARKET COMMITTEE (FOMC1. The FOMC consists of seven
members of the Federal Reserve Board and five of the 12 Federal Reserve
Bank Presidents. The President of the New York Federal Reserve Bank is a
permanent member, while the other Presidents serve on a rotating basis. The
Committee periodically meets to set Federal Reserve guidelines regarding
purchases and sales of government securities in the open market, as a means
of influencing the volume of bank credit and money.
FEDERAL RESERVE SYSTEM. The central bank of the United States created
by Congress and consisting of a seven-member Board of Governors in
Washington, D.C., 12 regional banks, and about 5,700 commercial banks that
are members of the system.
GOVERNMENT NATIONAL MORTGAGE AS50CIATION (GNMA or Ginnie
Mael. Securities that influence the volume of bank credit which is guaranteed
by GNMA and issued by mortgage bankers, commercial banks, savings and
loan associations, and other institutions. A security holder is protected by the
full faith and credit of the U.S. Government. Ginnie Mae securities are backed
by the FHA, VA, or FMHM mortgages. The term "passthroughs" is often
used to describe Ginnie Maes.
LIQUIDITY. A liquid asset is one that can be converted easily and rapidly into
cash without a substantial loss of value. In the money market, a security is
said to be liquid if the spread between bid and asked prices is narrow, and
reasonable size can be done at those quotes.
CPD Statement of Investment Policv
Calendar Year 1999
Page 19 of 20
LOCAL GOVERNMENT INVESTMENT FUND (LAIF). Monies from local
governmental units may be remitted to the California State Treasurer for
depo$it in this special fund for the purpose of investment.
MARKET VALUE. The price at which a security is trading and could
presumably be purchased or sold.
MASTER REPURCHASE AGREEMENT. A written contract covering all future
transactions between the parties to repurchase-reverse repurchase
agreemenis, that establishes each party's rights in the transactions. A master
agreement will often specify, among other things, the right of the buyer
(lender) to liquidate the underlying securities in the event of default by the
seller (borrower).
MATURITY. The date upon which the principal or stated value of an
investment becomes due and payable.
MONEY MARKET. The market in which short-term debt instruments (e.g.,
bills, commercial paper, bankers's acceptances) are issued and traded.
OFFER. The price asked by a seller of securities (when you are buying
securities, you ask for an offerl. See "Asked" and "Bid".
OPEN MARKET OPERATIONS. Purchases and sales of government and
certain other securities in the open market by the New York Federal Reserve
Bank, as directed by the FOMC in order to influence the volume of money and
credit in the economy. Purchases inject reserves into the bank system and
stimulate growth of money and credit; sales have the opposite effect. Open
market operations are the Federal Reserve's most important and most flexible
monetary policy tool.
PORTFOLIO. A collection of securities held by an investor.
PRIMARY DEALER. A group of government securities dealers that submit
daily reports of market activity and positions, and monthly financial
statements to the Federal Reserve Bank of New York, and are subject to its
informal oversight. Primary dealers include Securities and Exchange
Commission (SEC) -- registered securities broker-dealers, banks, and a few
unregulated firms.
PRUDENT INVESTOR RULE. An investment standard. A fiduciary, such as a
trustee, may invest in a security if it is one that would be bought by a prudent
CPD Statement of Investment Policv
Calendar Year 1999
Page 20 of 20
investor acting in like capacity, who is seeking reasonable income and
preservation of capital.
QUALIFIED PUBLIC DEPOSITORIES. A financial institution that: 11 ) does not
claim exemption from the payment of any sales, compensating use, or ad
valorem taxes under the laws of this state; (2) has segregated for the benefit
of the commission eligible collateral having a value of not less than its
maximum liability; and (3) has been approved by the Public Deposit Protection
Commission to hold public deposits.
RATE OF RETURN. The yield obtainable on a security based on its purchase
price or its current market price.
REPURCHASE AGREEMENT (RP OR REP01. A holder of securities selis them
to an investor with an agreement to repurchase the securities at a fixed price
on a fixed date. The security "buyer", in effect, lends the "seller" money for
the period of the agreement, and the terms of the agreement are structured to
compensate him for this. Dealers use RP extensively to finance their
positions. Exception: when the Fed is said to be doing RP, it is lending
money (increasing bank reservesl.
SAFEKEEPING. A service to customers rendered by banks for a fee whereby
securities and valuables of all types and descriptions are held in the bank's
vaults for protection.
SECONDARY MARKET. A market made for the purchase and sale of
outstanding issues following the initial distribution.
SECURITIES & EXCHANGE COMMISSION. An agency created by Congress to
administer securities legislation for the purpose of protecting investors in
securities transactions.
SEC RULE 15c3-1 . See "Uniform Net Capita/Ru/e".
STRUCTURED NOTES. Notes issued by instrumentalities (e.g., FHLB, FNMA,
SLMA) and by corporations, that have imbedded options (e.g., call features,
step-up coupons, floating rate coupons, derivative-based returns) in their debt
structure. The market performance of structured notes is affected by
fluctuating interest rates; the volatility of imbedded options; and shifts in the
yield curve.
CPD Statement of Invesiment Policv
Calendar Year 1999
Page 21 of 20
TREASURY BILLS. A non-interest bearing discount security that is issued by
the U.S. Treasury to finance the national debt. Most T-bilis are issued to
mature in three months, six months, or one year.
TREASURY BONDS. Long-term, coupon-bearing U.S. Treasury securities tha#
are issued as direct obligations of the U.S. Government, and having initial .
maturities of more than 10 years.
TREASURY NOTES. Medium-term, coupon-bearing U.S. Treasury securities
that are issued as direct obligations of the U.S. Government, and having initial
maturities ot two to 10 years.
UNIFORM NET CAPITAL RULE. SEC requirement that member firms, as well
as nonmember broker-dealers in securities, maintain a maximum ratio of
indebtedness-to-liquid capital of 15 to 1 . Also called net capital �ule and net
capita �atio. Indebtedness covers all money that is owed to a firm, including
margin loans and commitments to purchase securities (one reason that new
public issues are spread among members of underwriting syndicates►. Liquid
capital includes cash and assets easily converted into cash.
YIELD. The rate of annual income return on an investment, expressed as a
percentage. (a) INCOME YIELD is obtained by dividing the current dollar
income by the current market price for the security. (b) NET YIELD or YIELD
TO MATURITY is the current income yield minus any premium above par or
plus any discount from par in purchase price, with the adjustment spread over
the period from the date of purchase to the date of maturity of the bond.
' • . — � _.
CITY OF PALM DESERT
and
PALM DESERT REDEVELOPMENT AGENCY
STATEMENT OF INVESTMENT POLICY
CCuRRE�T) �
ADOPTED BY RESOLUTION: February �2, 1998
CITY OF PALM DESERT/PALM DESERT REDEVELOPMENT AGENCY
Statement of Investment Policy
TABLE OF CONTENTS
Pa¢e
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Investment Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A. Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B. Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
C. Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 2
Authority to Invest Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
InvestmendFinance Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
InternalConuol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Ethiu and Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Evaluation of Investment Officer Actions . . . . . . . . . . . . . . . . . . . . . : . . . . . . . . . 3
Authorized Financial Dealers 8[ Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
AuthorizedInvestmenu . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
InvestmentPools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Safekeeping of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Diversification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maximum Maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
BondProceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Reporting Requiremenu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Investment Policy Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Investrnent Policy Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
. . .
Policy Statement on Collateralized Time Deposiu . . . . . . . . . . . . . . . . . . . . Schedule I
Policy Criteria for E�itering Into a Money Market fund . . . . . . . . . . . . . . . . Schedule II
Policy Criteria for Selecting Broker/Dealers . . . . . . . . . . . . . . . . . . . . . . . Schedule 111
Firms Authorized to Conduct Investment Transactions . . . . . . . . . . . . . . . Schedule IV
Chart of Authorized Investmenu . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . Schedule V
Glossary
CITY OF PALM DESERT/PALM DESERT REDEVELOPMENT AGENCY
Statement of Investrnent Policy
lNTRODUCTION
The policy and practices of rhe Ciry of Palm Desert and the Palm Desert Redevelopment Agencv
are based upon state law, ciry ordinances, prudent money management and the 'Prudent person"
, standards. The primary goals of this policy are to invest public funds to:
1. Achieve a reasonable rate of return while minimizing the potential for capiral losses
arising from market changes or issuer default.
2. Meet the daily cash,flow needs of the Ciry and the Redevelopment Agenry.
3. Compiy with 6ll laws of the State of.California regarding the investment of public
fimds.
SCOPE .
The invesunent policy appiies to all funds under the control of the Finance Director/City
Treasurer of the City of Palm Desert and the Palm Desert Redevelopment Agency, including
but not limited to the general revenues of the City/Agency, enterprise fund revenues, proceeds
of bond sales and debt service revenues, trust funds in the custody of the Finance
Direaor/Treasurer and any other funds under his control. These funds are accounted for in
the comprehensive annual financial reports of the City of Palm Desert and the Palm Deser[
Redevelopment Agency.
INV�STMENT OB] CTIV
A.. Safe of Princioal
Safery of principal is the City/Agency's foremost objective of the investment program.
Investmenu shall be undertaken in a manner that seeks to ensure that capital losses
resuiting from ins�iwtion default, broker-dealer default, or the erosion of market value
are avoided. The City/Agency shall seek to preserve principal by midgadng the two
types of risk: credit risk and market risk.
1. Credit risk, defined as the risk of loss due to failure of the issuer of a security,
shall ue mitigated by investing in oniy the highest quality securities (see
authorized investmenu) and by diversifying the investment portfolio so that the
failure of any one issuer would not unduly harm the City/Agency's cash flow.
2. Market risk, defined as the risk of market value fluctuadons due to overall
Rev: 1/98 1
� changes in the general level of interesc rates, shall be mitigated by structuring the
portfolio so that securities mature at the same time that major cash outFlows
occur, this eliminating the need to sell securities prior to mawrity; and by
prohibiting the taking of shott positions, that is, selling securities that the
City/Agency does not own. It is explicitly recognized, however, that in a
diversified portfolio, occasional measured losses may occur, and musc be
considered within the context of overall investment retum.
B. I '�guiditv .
. Liquidity is the second most important objective of the investment program. The
invesanent portfolio shall remain sufficiently liquid to enable the City/Agency to meet
ali operating requiremenu. At all times, at least 50% of the total portfolio shall be
invested for periods of three years or less; at least 30% of the toul portfolio shall be
invesced for two years or less; at least 20% of the total portfolio shall be invested for
one year or less. At no ume will a security in the portfolio mature in more than five
years except bond reserve funds, bond escrow funds and any funds approved by the
Finance Committee and Ciry Council to be appropriate for a longer period.
C. y�
The City/Agency portfolio shall be invested to attain a market average rate of retum
through economic cycles, as long as it does not diminish the objectives of Safety and
Liquidity. The market rate of retum is defined as the average retum on the one-year
U.S. Treasury Bill. Whenever possible and in a manner consistent with the objectives
of safety of principal and liquidity, a yield higher than the market rate of retum shall be
sought.
A�ITHORITY TO INVEST FUNDS
The City Council and Redevelopment Agency Board have appointed the City Finance Director
as City Treasurer responsible for undertaking investment vansactions on behalf of the
City/Agency. Unless specifically designated by the City Council and Agency Board, the only
officials authorized to undertake investment transactions on behalf of the City/Agency are the
Director of Finance/Treasurer and his/her designee. The Finance Director/Treasurer and
Investment Manager will observe, review and reaa to the changing conditions that affect the
investment portfolio. They wiil meet on a regular basis to discuss current market conditions,
future vends and how each of these affecu the investment portfolio and the Ciry/Agency. The
Finance Director/Treasurer and Investment Manager shall establish a system of conuols to
ensure compliance with the City/Agency's investrnent policy.
INVESTMENT/F(ivANCE Cc�MMITTEE
The City utilizes a Finance Committee, composed of the Mayor, Mayor Pro-Tempore, City
Manager, Redevelopment Agency Executive Director, Finance Director, Investment Manager,
City Attorney and Citizen(s) appointed by the Clty Council, to insure stability and constant
Rev: 1/98 2
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information flow as it relates to investrnent and other finance activities. They will meet monthly
to discuss issues relating to the Ciry/Agency's investment portfolio. Items may include the
suiubility Of current investment policies and procedures, current and proposed strategies,
investment transactions since the last meeting as well as other topia affecting the sources and
uses of funds in the portfolio.
INTERNAL CONTROL
The Finance Director, is responsible for ensuring compliance with the City/Agency investment
policies as well as establishing internal conuols designed to prevent losses due to fraud,
empioyee error, misrepreseMing by third parties, or unanticipated changes in financial markeu.
A written policy on the specific internal conuols will be reviewed by the Finance Committee.
ETHICS AND CONFUCTS OF INTEREST
Officer and empioyees involved in the investment process shall refrain from personal business
activity that could conflict with proper execution of the invesunent program, or which could
impair their ability to make impartial investment decisions. Employees and inyestment officers
shall disclose any material financial interesu in financial instiwtions that conduct business within
this jurisdiction, and they shall fuRher disclose any large personal flnancial/investment positions
that could be related to the performance of the City/Agency's portfolio. Employees and
officers shall subordinate their personal investment transactions to those of the City/Agency,
particularly with regard to the timing of purchases and sales, and shall avoid vansactions that
might impair public confidence in the City's ability to govern effectively.
EVALUATION OF INVESTMENT OFFI FR A�"1'inUc
The actions of City/Agency investment officers in the performance of their duties as managers
of public funds shall be evaluated using the foliowing"prudent person" standard applied in the
context of managing the overall portfolio:
Investments shall be made with judgment and care, under .circumstances then
prevailing, which persons of prudence, discretion, and intelligence exercise in the
professional management of their business affairs, not for speculation, but for
investment, considering the probable safety of their capital as well as the probable
income to be derived.
City/Agency investrnent officers acting in accordance with written polities and the "prudent
person" standard and exercising due diligence shall be relieved of personal responsibility for an
individual security's credit risk or market price changes, provided that substantial deviations
from expectations are reported by the Treasurer to City Manager and the Finance Committee
within three days of discovery. Muwally agreeable remedial action will be taken by the
Treasurer and reported to the next Finance Committee meeting.
Rev: l/98 J
AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONt
The City/Agency shall transact business only with banks and savings and loans, and with
investment securities dealers which/who comply with Schedule III (Policy Criteria for Selecting
Broker/Dealers) attached. The Finance Direaor/Treasurer wili maintain a list of financial
institudons authorized to provide investment services. He wili also maintain a list of approved
security brokers/dealers selected by credit worthiness who are authorized to provide invescment
services to the City/Agency. The dealers must be primary dealers regularly reporting to the
Federal Reserve Bank. Exceptions to the primary dealer rule may be made with the approval
of the InvestrnenUFinance Committee, provided they are consistent v�rith California Govemment
Code Section 53601.5.
All primary financial instiwtions and broker/dealers who desire to become qualified bidders for
investment transactions must supply an audited flnancial statement, and U4 Form for the
broker, completed broker/dealer questionnaire and certification of having read the
City/Agency's investment policy. All secondary financial ins[itutions and broker/dealers who
desire to become qualified bidders for invesnnent transactions must supply an audited financial
statement, proof of National Association af Securities Dealers certification, uading resolution,
proof of state registration, completed broker/dealer quesYionnaire, U4 Form for the broker and
certification of having read the Ciry/Agency's investment policy. , The finance
Director/Treasurer shall determine if they are adequately capitalized, make markeu on securities
appropriate to the City/Agency's needs and are recommended by managers of portfolios similar
to the Ciry/Agency. The Finance Direaor/Treasurer shall submit his findings and
recommendations to the InvestrnendFinance Committee. The committee will determine which
broker/dealera will be authorized to trade with the City/Agency.
An annual review of the firrancial condition and registration of qualified bidders will be
conducted. A current audited financial statement is required to be on file for each financial
institution and broker/dealer in which the Ciry/Agency invests.
The City/Agency shall at least annually send a copy of the current investment policy to all
financial instiwtions and broker/dealers approved to do business with the City/Agency.
Confirmatiorr of receipt of this policy shall be considered evidence that the dealer has read and
understands the City/Agency's investment policy and will recommend and execute only
uansactions suitable for and in compliance with the City/Agency's investment policy.
AUTHORIZED INVESTMENTS
The City/Agency is authorized by California Govemment Code Section 53600, et. seq..to
invest in specific types of securities. The City/Agency has further limited the types of securides
in which we may invest. Any security not listed, is not a valid investment for the City/Agency.
The concise list of approved securities is as follows:
A. United States Treasury Bills, Bonds, and Notes, or those for which the full faith
and credit of the United States are pledged for payment of principal and interest.
There is no limitation as to the percentage of the portfolio which can be.invested
Rev: l/98 4
' ' E —
� in this category.
B. Obligations issued by United States Govemment Agencies such as, but not
limited to, the Government National Mortgage Association (GNMA), the
Federal Farm Credit Bank System (FFCB), the Federal Home Loan Bank (FHLB),
the Federal National Mortgage Association (FNMA), the federal Home
Mortgage Corporation (FHLMC), the Swdent Loan Marketing Association
(SLMA), and the Tennessee Valley Authority (NA). Although there is no
percentage limitation of the dollar amount that can be invested in these issuers,
the "prudent person" rule shall apply for any single agency name. ,
C. Biils of exchange or time draf[s drawn on and accepted by a commercial bank,
otherwise known as bankers acceptances which are eligible for purchase by the
Federal Reserve System, may not exceed 270 days to mawrity or 40�/0 of the
market value of the portfolio. No more than 30% of the market value of the
portfolio may be invested in banker's acceptances issued by any one bank.
D. Commercial paper of prime qualiry.and ranked Pt by Moody's Investor Services
' and At by Standard and Poor's and issued by a domestic corporation having
asseu in excess of $500 million and having an "A" br better�ating on iu long
term debt as provided by Moody's or Standard and poor's. Purchases of eligible
commercial paper may not exceed 180 days w maturity. Purchases of
commercial paper may not exceed 15% of the market value of the portfolio.
No more than 5% of the market value of the portfolio, or $500,000, or 10%
of the issuers' ouutanding paper may be invested in commercial paper issued by
any one corporation.
E. Medium Term Notes (MTNs) issued by corporations organized and operating
within the United Sutes. MTNs eligible for purchase shall be rated "A" or
better by Standard and Poor's or by Moody's rating services. MTNs with an
"A" rating shall be limited to 24 months maximum maturity; "AA" rated MTNs
shall be limited w 36 months. The aggregate total of all purchased MTNs may
not exceed 30% of the market value of the investrnent portfolio. No more than
5% of the market value of the portfolio may be invested in notes issued by any
one corporation. Commercial paper holdings shall be considered when
calculating the maximum percentage of any issuer name.
F. The Local Agency Investment Fund (LAIF), established by the Sute Treasurer
for the beneftt of local agencies and identified under Government Code Section
16429.1, is authorized up to the maximum amount permitted by State Law.
G. The City/Agency may invest in "shares of beneficial interest" issued by
diversified management companies which invest only in direct obligations in
United States Treasury bilis, notes and bonds, and repurchase agreemenu with
a weighted average of 60 days or less. They must be rated in the highest-rating
category of at least two nationally-recognized radng services (e.g., Moody's P-1
Rev: 1/98 5
; - � _
or Standard and Poor's AAA), and have a minimum of $500 million in asseu
under management, and comply with Schedule II (Policy Criteria for Entering
Into a Diversified Management Company) attached. The purchase price may noc
include commissions.
H. The City/Agency may place funds in inacdve deposiu with Banks and Savings and
Loans with a branch within Califomla that have a radng of at least "A-1 " from
the Financial Direccory or an equivalent rating from another generally recognized
authority on radngs, and have an Equity to Total Asseu ratio of at least 4%. No
more than 15% of the City/Agency portfolio, exclusive of investmenu in
government agency issues and the State Treasurer's Local Agency Investment
Fund, shall be placed with any one financial instiwtion. All deposiu shall be
secured in accordance with Sedions 53651 and 53652 of the California
Govemment Code and comply with Schedule I (Policy Statement of
Collateralized Time Deposiu) attached. If deposiu are not collateralized, the
maximum placed at any one institution will be $100,000. The maximum
amount of collateralized inactive deposiu placed at any one institution shali not
constjwte more than 15% of the total asseu of the instiwtion or $5,000,000,
whichever is less, and shall not exceed the total shareholders' equity of the issuing
institution.
INVESTMENT POOLS
The City/Agency will investigate all local govemment investrnent pools (LGP) and money
market mutual funds prior to investing and periodically thereafter while the City/Agency is
invested in the pool.
All money market mutual funds and LGP's, except the Local Agency Investrnent Fund (LAIF)
of the State of California, must meet the criteria in Schedule Il of this policy which includes
providing a written statement that it meeu the requiremenu in Sections 53601 and 53635
of the California Government Code and have the highest rating from two national rating
agencies. The fund must maintain a daily principal per share value of $1.00 per share and
distribute interest monthly. The fund's investmenu shall be limited to direct obligations in
United Sutes Treasury bills notes and bonds, and repurchase agreements.
LAIF is authorized under provisions in Section 16429.1 of the Califomia Government Code.
The City/Agency's participation in the pool was approved by the City Council and the
Redevelopment Agency Board on December 12, 1981, by Resolution 81-161. It is a
permitted investrnent of the City/Agency even though it does not comply with all of the items
listed in Schedule II, "Criteria for Entering Into a Money Market Fund."
SAFEKEEPING OF SECUR(TI .0
To protect against potendal losses by the collapse of individual securities dealers, all securities
owned by the Ciry/Agency shall be held in safekeeping by a third party bank trust department
acting as agent for the C'ity/Agency under the terms of a custody agreement executed by the
Rev: l/98 6
' bank and the C'tty/Agency. Ail securities wili be received and delivered using standard delivery-
versus-payment (DVP) praedures. The third party bank Uvstee agreement must comply with
Section 53608 of the Callfomia Govemment Code. No outside broker/dealer or advisor may
have access to City/Agency funds, accounu or investrnenu, and any transfer of funds co or
through an ouuide broker/dealer must be approved by the finance Director/Treasurer.
DIVERSIFICATION
The City/Agency will diversify its investmenu by securiry type and investment. With the .
exception of bond reserve funds, bond escrow funds, and any other funds approved by the .
Finance Committee or the City Council, at all times at least 50% of the total portfolio shall
mature in three years or less; at least 30% of the total portfolio shall mature in two years or
less; at least 20% of the portfolio shall mawre in one year or less.
MAXIMUM MAT RITIES
The City/Agency will attempt to match its investmenu with anticipated cash Flow requiremenu.
Uniess matched to a specific cash flow, as aRproved by the Finance Committee and City
Council, the City/Agency will not directly invest in securities mawring more than Bve years
from the date of purchase. Bond reserve funds, bond escrow funds, and,any other funds
approved by the Finance Committee or the Ciry Council may be invested in securities exceeding
five years if the maturities of such investmenu are made to coincide as nearly as possible with
the expected use of the funds.
BOND PROCEEDS
The City/Agency will direct the investment of proceeds on bonds issued as instruaed in the
bond indenture. Securities authorized by the bond indenwre that are not authorized by the
City/Agency's investment policy will only be used if they are specifically approved by the
Finance Committee. All securities will be lield in third-party safekeeping with the bond trustee,
and all delivery-versus-payment rules will apply.
REPORTING REn�►iRFMF��s
The Finance DirectodTreasurer shall render a report of invesunent activiry to the Ciry Council,
Agency Board and the Finance Committee monthly within 30 days following the end of the
month or the next scheduled Council meeting following the Finance and Investment Committee
meeting. The report wiil include the type of investment, issuer, date of maturity, and par and
doliar amount invested, on all securities, investmenu and monies held by the City/Agency. The
report shall state market value and the source of the valuation, and state that the portfolio is
in compliance with the policy or the manner in which it is not in compliance. The report will
also include a statemrnt denoting the ability to meet the City/Agency's expected expenditure
requiremenu for the next six months or provide an explanation as to why sufficient money is
not available.
Rev: l/98 7
� INVESTMENT POLICY ADOPTION
The Finance Director/Treasurer shall submit an annual Statement of Investment Policy to the
Finance Committee and then the Ciry Council and Redevelopment Agency Board for their
approval. This statement shall be filed with the Finance Committee by January 31 of each year.
INVESTMENT POLICY REVIEW
The City/Agency's independent Certified Public Accountant shall annually review and make
recommendations regarding the City/Agency investment policies to the extent considered ' .
necessary as required by generally accepted audidng standards as they relate to the annual . -
financiai audit which includes cash and investmenu.
Rev: 1/98 g
- � _
� CITY OF PALM DESERT
PALM DESERT REDEVELOPMENT AGENCY
POLICY STATEMEN7 ON COLLATERALIZED TIME DEPOSITS
SCHEDULE I
Before the Treasury can place a time deposh with a locai bank or savin� and loan, the following
criteria must be met
1. The bank must provide us with an exewted copy of the "Contract for Deposit for
Moneys" as specified in Section 53649 of the California Govemment Code.
2. The interest rate on the Time Certificate of Deposit must be competitive with rates
offered by other banks and savings and loans residing in Riverside County and must
exceed the interest rate for treasury bilis for a similar maturity period.
3. For investmenu less than $100,000, fDIC insurance wiil be sufficient without requiring
any collateral to be pledged with the Federal Reserve to secure the public fund deposit.
4. For invettmenu exceeding $100,000, there may be a waiver of collaterai for the first
$100,000 deposRed, and all of the funds piaced on deposit must be collateralized by
105% of U.S. Treasury or Federal Agency securhies, or by 150% of mortgages having
maturities less than five years in accordance with Section 53652 of the Califomia
Govemment Code. The City/Agency must receive confirmation that these securities
have been pledged in repayment of the dme deposh. The securities pledged must be
mainuined at a current market value 10% greater than the dollar amount of the
deposit.
5. The Ciry/Agency must be given a current audited financial statement for the financial
year just ended. The financial reports must both include a "statement of financial
condidon" as well as an "income siatemerrt" depicting current and prior year operations.
. 6. The City/Agency wiil not place a fund deposit for more than $5,000,000, or 10% of
the asseu of the institution, whichever is less.
7. The City/Agency must receive a certificate of deposit which specifically expresses the
terms governing the transaction, (i.e., the period of time, name of depositor, interest
rate, etc.).
8. All time certificates must have a maturity period not exceeding one year fi-om the date
of deposit with quarterly paymen[s of interest based upon the stated interest rate.
9. Time deposiu will only be made whh qualified banks and savings and loans having branch
office locations within Riverside County. However, dme deposiu with a bank or savin�
and loan must be centralized at one designated office location rather than making
separate deposiu with each branch office.
Rev: 1/98 Schedule I
CITY OF PALM DESERT
PALM DESERT REDEVELOPMENT AGENCY
POLICY CRITERIA FOR ENTERING INTO A
DIVERSIFIED MANAGEMENT COMPANY
SCHEDULEiI
1. The firm must meet all requiremenu set forth in the Califomia Government Code
Sections 53601 and 53635.
2. The fund must provide evidence that it has been registered with SEC and has "AAA"
ratings from Standard 8t Poor's and Moody's.
3. The fund's invecnnenu shall be limhed to direct obligations in U.S. Treasury bills, bonds
or no;es and repurchase agreemenu, to the extent allowed by law, and shall maintain
weighted average maturities within their portfolio of less than 60 days.
4. The fund shall provide us a current prospectus before our participation in the fund.
5. The fund cannot engage in hedging strategies, WI purchases, options, future, reverse-
repurchase agreemenu, or security lending.
6. The fund must maintain daily, a principal per share value of $1.00 per share.
7. The fund shall provide us at least annual financial statemenu on the fund's financial
condidon and performance.
8. The fund shall provide us wire instructions for the purchase and redemption of shares
and must be able to distribute interest eamings to us on a monthiy basis.
9. Uniess the fund is more than five years old, the City/Agency is to be given its
performance history since the inception of the fund.
Rev: 1/98 ',Schedule II
. _ � _
� CITY OF PALM DESERT
PALM DESERT REDEVELOPMENT AGENCY
POLICY CRITERIA FOR SELECTING BROKER/DEALERS
SCHEDULE 111
1. All primary financial instiwtions and brokeddealers who desire to become qualified
bidders for investrnent uansactions must supply an audfted financial statement, an� U4
Form for the broker, completed broker%dealer questionnaire and certification of having
. read the City/Agency's investment policy. All secondary financial in.stitutions and
broker/dealers who desire to become qualified bidders for investrnent transactions must
supply an audhed financial statement, proof of National Assaiation of Securities Dealers
certification, uading resolution, proof of state registration, completed broker/dealer
quertionnaire, (paR of this Schedule), U4 Form for the broker and certification of
having read the City/Agency's invesanent pplicy.
2. The net capital position of the firtn shall be in excess of $100 million.
3. The finance DirectodTreasurer's intent is to enter into a long-term relationship.
Therefore, the integ�ity of the firm and the peaonnel assigned to our account is of
primary importance.
4. It is important that the firm provide related services that wiil enhance the account
relationship which could include:
a) An active secondary market for its securities.
b) Internal credit research analysis on commercial paper, banker's acceptances and
other securities it offers for sale.
c) Be capable of providing market analysis, economic projections, newsletters.
d) Provide market education on new invesanent producu, security spread
relationships, graphs, eu.
5. If requested, the firm must be wiliing to provide us a list of local,government clienu or
other references, particularly those client reladonships established within the State of
California.
6. Without exception, all vansallons are to be conducted ona "delivery vs. Payment"
basis. All securities owned by.the Ciry/Agency shall be held in safekeeping by a Third
Party Bank Tnut Department aaing as Agent for the City/Agency under the terms of
a Custody Agreement executed by the bank and the City/Agency.
7. The Firm shall be headquartered or have a branch office in California and must be
registered whn and be operating under the laws of the Sute of California.
8. The Firm must have been in operation for more than 5 years, and must have net cap'rtal
in exceu of $100 miilion.
Rev: 1/98 Schedule IIl
� 9. No business relationship shall be established with firms engaging in the sale of "exotic"
products. Exotic meaning"unusually high yields," no ready secondary market, or "high
price volatility" on the security.
10. No broker/dealer or security firm shali be selected which has, within any consecutive
48-month period, made a political contribution in an amount exceeding the limitations
conuined in Rule G-37 of the Municipal Securities Rulemaking Board, to the local
treasurer or any member of the City Council or the Redevelopment Agency governing
board or to any candidate for these offices.
11. All Broker/Dealers who have been selected to work with the City/Agency will annualiy
review the revised Investment Policy and sign a statement indicating that he/she will
comply with iL They will also provide their audited financial statemenu to us.
Rev: 1/98 Schedule III
- . . .- / .-� . .
,"
' CITY OF PALM DESERT
PALM DESERT REDEVELOPMENT AGENCY
FIRMS AUTHORIZED TO CONDUCT INVESTMENT TRANSACTIONS
SCHEQULE IV
The City/Agency is authorized to conduct investment security transactions with the following
investment firms and broker/dealers, many of which are designated by the Federal Reserve Bank
as primary government dealers. Security transactions with firms, other than those appearing .
on this list, are prohibited.
A. Firms designated by the Federai Reserve Bank as Primary Government Dealers:
Morgan Stanley Dean Witter Reynolds, Discover, Inc.
Solomon Smith Barney, Inc.
B. Other authorized firms: •
Union Bank of California ,
The Bank of New York
Great Western Bank
Home Savings of America
Downey Savings
Glendale Federal Bank
Weils Fargo Bank
Rev: i/98 Schedule IV
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. ,- ,
' GLOSSARY
AGENCIES: Federal agency securities. general credit of the issuer.
ASKED: The price at which securities are DELIVERY VERSUS PAYMENT: There are
offered. (The price at which a firm will sell two methods of delivery of securities:
a security to an investor.) delivery versus payment and delivery versus
receip� Delivery versus payment is delivery
BANKERS' ACCEPTANCE (BA): A draft of securities with an exchange of money for
or bill or exchange accepted by a bank or the securities. Delivery versus receipt is ,
trust company. The accepting institution delivery of securities with an exchange of a
guarantees payment of the bill, as well as signed receipt for the securities.
the issuer.
DISCOUNT: The difference between the
BASIS POINT: One one-hundredth of a cost price of a security and iu maturity
percent (i.e., 0.01%). when quoted at lower than face value. A
security selling below original offering price
BID: The price offered by a buyer of shortly after sale also is considered to be at
securities. (When you are selling securities, a discount.
you ask for a bid.)
DISC011NT SECURITIES: Non-interest
BROKER: A broker brin� buyers and bearing money market instrumenu that are
seliers together for a commission. He does issued at a discount and redeemed at
not uke a position. maturity for full face value (e.g., U.S.
Treasury Bills).
CERTIFICATE OF DEPOSIT (CD): A ume
deposit with a specific maturity evidenced DIVERSIFICATION: Dividing investment
by a certificate. Large-denomination CD's funds among a variety of securities offering
are typically negodable. independent rewms.
COLLATERAL: Securities, evidence of FEDERAL CREDIT AGENCIES: Agencies
deposit or otner property which a borrower of the Federal govemment set up to supply
pledges to secure repayment of a loan. credit to various claues of institutions (e. g.
Also refers to securities pledged by a bank SstL's, Small business firms, swdenu,
to secure deposiu of pubiic monies. farmers, farm cooperatives, and exporters).
COUPON: a) The annual rate of incerest FEDERAL DEPOSIT INSURANCE
that a bond's issuer promises to pay the CORPORATION (FDIC): A Federal
bondholder on the bond's face value. b) A agency that insures bank deposiu, currently
certificate attached to a bond evidencing up to $100,000 per deposit.
interest due on a payment date.
FEDERAL FUNDS RATE: The rate of
DEALER: A dealer, as opposed to a broker, interest at which fed funds are traded. This
acts as a principal in all transadions, buying• rate is currently. pegged by the Federal
and selling for his own account. Reserve through open-market operations.
DEBENTURE: A bond secured only by the FEDERAL HOME LOAN BANKS (FHLB):
Rev: l/98 Glossary
' The institutions that regulate and lend to sys[em.
savings and loan associations. The federal
Home Loan Banks play a role analogous to G O V E R N M E N T N A T I O N A L
that played by the Federal Reserve Banks MORTGAGE ASSOCIATION (GNMA or
vis-a-vis member commercial banks. Ginnie Mae): Securities influencing the
volume of bank credit guaranteed by
FEDERAL NATIONAL MORTGAGE GNMA and issued by morcgage bankers,
ASSOCIATION (FNMA): FNMA, like commercial banks, savings and loan
GNMA was chartered under the Federal associations, and other institutions. Securiry
National Mortgage Association Act in holder is protected by fult faith and credit of
1938. FNMA is .a Federal corporation the U.S. Government. Ginnie Mae
working under the auspices of the securities are batked by the FHA, VA or
Department of Housing and Urban FMHM mortgages. The term "pass-
Development (HUD). It is the largest single throughs" is often used to describe Ginnie
provider of residential mortgage funds in the Maes.
United Sutes. Fannie Mae, as the
corporation is called, is a private LIQUIDITY: A liquid asset is one that can
stockholder-owned corporation. The be converted easily and rapidiy into cash
corporation's purchases include a variety of without a substantial loss of value. In the
adjustable mortgages and second loans, in money market, a securfty.is said to be liquid
addidon to fixed-rate mortgages. FNMA's if the spread between bid and asked prices
securities are also highly liquid and are is narrow and reasonable size can be done at
widely accepted. FNMA assumes and those quotes.
guarantees that all securiry holders will
receive timely payment of principal and LOCAL GOVERNMENT INVESTMENT
interest. POOL (LG1P): The aggregate of all funds
� from political subdivisions that are placed in
FEDERAL OPEN MARKET COMMITTEE the custody of the State Treasurer for
(FOMC): Consists of seven members of the investment and reinvestment.
Federal Reserve Board and five of the
twelve federal Reserve Bank Presidenu. MARKET VALUE: The price at which a _
The Rresident of the New York Federat security is uading and could presumably be
Reserve Bank is a permanent member, while purchased or soid.
the other presidenu serve on a rotating
basis. The Committee periodically meeu to MARKET REPURCHASE AGREEMENT:
set Federal Reserve guidelines regarding A written contract covering all future
purchases and sales of Government uansactions between the parties to
Securities in the open market as a means of repurchase-reverse repurchase agreemenu
influencing the volume of bank credit and that establish each parry's righu in the
money. transactions. A master agreement will often
specify, among other things, the right of the
FEDERAL RESERVE SYSTEM: The central buyer-lender to liquidate the underlying
bank of the United States created by securities in the event of default by the
Congress and consirting of a seven-member seller-borrower.
Board of Govertiors in Washing[on, D.C.; _
12 regional banks and about 5,700 MATURITY: The date upon which the
commercial banks are members of the principal or stated value of an investment
Rev: 1/98 Glossary
— ( _
becomes due and payable. iu current market price. This may be the
amoroized yield to mawrity; on a bond, the
OFFER: The price asked by a seiler of current income return.
securities. (When you are buying securities,
you ask for an offer.) See "Asked" and REPURCHASE AGREEMENT (RP or
"B�d��• REPO): A holder of securides sells these
securities to an inv�tor with an agreement
OPEN MARKET OPERATtONS: to repurchase them at a fixed date. The
Purchases and sales of govemment and security "buyer" in effect lends the "seller"
certain other securities in the open market money for the period of the agreement, and
by the New York Federai Reserve Bank as the terms of the agreement are muctured
direcced by the FOMC in order to influence to compensate him for this. Dealers use RP
the volume of money and credh in the extensively to finance their positions.
economy. Purchases inject reserves into the F�cception: When the Fed is said to be doing
bank system and stimulate growth of money RP, it is lending money, that is, increasing
and credit: Sales have the opposhe effect. bank reserves.
Open market operations are the Federal
Reserve's most important and most flexible . SAFEKEEPING: A service to customers
monetary palicy tool. rendered by banks for a fee whereby
sewrities and valuables of all types and
PORTFOLIO: Collection of securiites held descripdons are held in the bank's vaulu for
by an investor. protection.
PRIMARY DEALER: A group of SECONDARY MARKET: A market made
government securities dealers who submit for the purchase and sale of ouutanding
daily reports of market acdvity and positions issues following the initial distribution.
and monthiy financial statemenu to the
Federal Reserve Bank of New York and are SECURITIES 8t EXCHANGE
subject to iu informal oversight Primary COMMISSION: Agency created by
dealers include Securides and Exchange Congress to protect investors in securities
Commission (SEC)-regittered securtties transactions by administering securities
broker/dealers, banks and a few unregulated legisladon.
firms. ,
SEC RUI.E 15C3-1: See "Uniform Net
PRUDENT PERSON RULE: An investment Capitai Rule".
standard. in some states, the law requires
that a fiduciary, such as a wstee, may TREASURY BILLS: A non-interest bearing
invest money only in a list of securides discount security issued by the U.S.
selected by the custody state—the so-called . Treasury w finance the national debt. Most
"�eSa� �ist"• In other stat�, the nvstee may bills are issaed to mature in three months,
invest in a security if it is one which would six months, or one year.
be bougfit by a prudent person of discretion
and intelligence who is seeking a reasonable TREASURY BOND: Long-term U.S.
income and preservation of capitaL Treasury securities having initial mawrities
of more than 10 years.
RATE OF RETURN: The yield obtainable .
on a security based on iu purchase price or TREASURY NOTES: Intermediate-term
Rev: 1/98
Glossary
. i' . . � —
coupon bearing U.S. Treasury secu�itfes
having inhial maturides of from one year to
ten years.
UNIFORM NET CAPITAL RULE:
Securities and Exchange Commission
requirement that member fimu as well as
nonmember brokeddealers in securities
maintain a ma�umam ratio of indebtedness
to liquid capital of 15 to 1; also cailed net
capiul rule and .net capital rado.
Indebtedness covers all money owed to a
firm, including margin loans and
commitmenu to purchase securities, one
reason new public issues are spread among
members of underwriting syndicates. Liquid
capital includes cash and asseu easily
converted into cash.
YIELD: The rate of annual income rewrn on
an investment, expressed as a percentage.
(a) INCOME YIELD is obtained by dividing
the current dollar income by the current
market price for the searity. (b) NET
YIELD or YIELD TO MATURITY is the
current income yield minus any premium
above par or plus any discount from par in
purchase price, with the adjusUnent spread
over the period from the date of purchase
to the date of maturity of the bond.
Rev: 1l98
Glossary
� FINANCE
�
• �
This Government
�
�
Brought to You By. . . 1
n 1985,a little-noaced event in Sac�a- a paR.Under the plan,co�porations agee
More a�d mare
mento, Califomia, ushered some to assist with the addition of new public .
sweeping changes into a major sector gorer�ments are �ti�°i�'e renovation or expaz�sion of ' .
of American society. That was the e�risting ones,in exchange£or marketing
year the naming rights for a new bas- oppoxtunides including sigtage,vending
ketball azena in California's cspital city signing sponsorship rights and,passibly,narning rights.
were sold to a chemical company for$7.5 Convention center names have 1�een up
�o��=�Y�. deals with cor�erate ��s since Iast yeaz,when Wisconsin
Not that the city received any of those sold the rights to the one in Milwaukee to
�o�.�e d���,���,e��_ America. Seme fiad 8 regional airline for$8.5 million wer 15
ing of ARCO Arena was a purely private yeazs. Furthermore, individual depart-
one—the arena is privately owned. But the race for tae 'n����aTy�°D�ty�ernme�ts
the ARCO deal sparked the now-familiar 6ave signed sponsorship ageements in
waveofsimilarazrangementsinthewodd 6ash troublien T�nt years. The Los Angeles County
of sports,as corporate sponsots have lined !1• Deparhnent of Beaches and Harbors,for
up to buy the naming rights to golf tour- ........................................................ e�cample,has rnnUects with Ford Motor
naments,college bowl games and sports m L 1 1 1 1 1 1 E L l E 1 i 1 1 1 Co. and Speedo to fumish vehicles and
facilities both private and public. . . .... .. .... ........... sw'vnwear for its lifeguards.In exchange.
Thirteen yeazs later,Sacramento is in Mayor Jce Serna cazne up with the idea the companies receive the ri�t ro advertise
the vanguard of what might become the as a way to alleviate a budget shortfall pro- thea relationship with the depachnent,and
second wave of the rnrporate-branding jected to reach$14 million by the end of they getd�e mazlaetlng exposure d�at oomes
trend,and this time the public sector has the century.Although Sema floated a con- when the county's 60 million beach users
a lot on the table.The city has announced cept that might have produced a slate of see Speedoclad liCeguards driving Focds.
that it will sell sponsorship and naming Monster Burger Libraries and Kwiklde Some smaller cities already aze using
rights to a cange of city facilities.Within Lube Parks,the final plan calls for a more the broader citywide appnoech.Hundng-
three yeazs, the city expects to reap an broadly defined `citywide sponsorship ron Beach,Califomia,is seeldng cirywide
annual windfall of$2 million ro$4 million. program,"ofwhich nammgrights are only sponsors to help offset the cost ofa$6 mil-
� � lion pier renovation. Md the seaside
resoR of Ocean City,Maryland,is in the .
second year of a contract with Coca-Cola
dlat ptovidcs the citywith ayearly boost of
$120,000 cash and neazly $100,000 in
advertising on Coke products for Ocean
Ciry's weekend events.Coke gets the right
to hawk its produM to the 8 million annual
visitots W those events,along with exclu-
sive vend'utg rights to all city facilities.
Sacramento, however, is the first large
municipality to implement the citywide
approech,and its deasion may signal that
this new form of public-private paztner-
- ship is about to take root in a large number
of the nation's cities and towns.
An influx of coipo�ate c�ssh mro d�e pub-
lic codeis may ease a city's budgetwoes,but
the pios�et malaes some observers une�sy.
When Oklahoma lawmalcets rejected a bill
"— tl�at would have allowed advertising on
schaol Uuses,d�ey spoke of a sliPPe�Y�
The Gr.pevine-colleyviue.eLoa atet.;ct�.connact wich nr Pepper rLa[could lead to a Capitol building rliat
ie worf.h E.Y.4b million to tLe auburban Dallas echool eyetem. tesemb�ed an adve[tisIDg-fe�ino��minoi-
PAoiaqrop,im�nmaJr6rCmpeurnr-Co//rrt�i/4vAoaldunin November19B8 6 0 V E R N I N 6 43
league ballpark. Despite such croncems, �e the�e a�e few ob'
over the pest Year school districts in J�ns to deals agement for the Colorado Springs school
ulaz'liaveen�ed'meoexclusive �c S°���eO���ge1�CO��Y dfstriM. "Kids don't need to be rinAng
� and vendi�g agee���a �p has with Ford and Speedo, the doorbells at 5 or 6 o'clock at night,hying
Toa e �g�' school rnntracts, not sucprisin8lY, are 6odcumuP�"o�Y�'bandcompetitlons."
�S d�'ce,the development in drawing a good bit ofopposition. Even the critics find less to object to
I the nation's schaols is nothing more d�an an To Alce Molnaz,an education profes.sor when schools are not involved.The city-
extencion ofthe long-ivnnmgoolawats.For at the University of Wisconsin-Milwaukee wide P�s iust aren't houbling in the
I Y�s,oolleges and�miveisities have signed and director of the Center for the AnalYsis same way."In the case ofcities�"says Mol-
m��"�O°�O�''0011�'`��`'��h Coke or of Commemialism in Education,the con- nar, "it's not as clear-cut,because cities
� Pepsi.Elemenhery and secondary edu�4on tracts are turning schools into a"flea mar- don't have a curriculwn."
, is the new batt►egrou�,d,�d�y�h- �t"��..�rone who can plunk down But the sponsonhip deals do raise
strapped school dishicts aze happy to mar- the price of a stall gets to be there."Fur- questions of their own,if only the appear_
ket themselves and their studenh to the thermore, argnes Molnaz, the money ance of unseemliness. In central New'
soft-drink giants. 1'}�e �n��� �ve offered by the cola companies i�a"spit in York,Assembly Majority L,eader Michael
bemme so common that m March,wteis in �e ocwn"ofschool budgets and"the fise�l Bragn�an P1aYed a critical role in acquiring•
one Oklahoma sohool district approved a equivalent ofeating a s��r��g�ut You the two Coca-Cola cont�acts for his dis-'
bond that only partlyfun�s consh����'a �a short hi then
I,li new stulium;diey ex�t a soft c]���- �� Y°u°�a5h•" trict. Soft drink companies have con-f
Pany to pick up the tab for the ces� M�O1e Manilov,a co-£ounder of the tributed generously to Bragnan's cazn-�
From community to community, the m��Fr�ee pub1i��E�d����Y� ��5��d the industry credits}wn w��
deals vary both in size and in scopa.W}We school mnhacts communicate an"im � P S eliminate a beverage�container
Berkeley,California,limits�e�o�t of endorsement"of � � �t�st the industry $52 million a
advertising allowed on school �ounds, • S°�'3''�e'°ated be�` Yeaz. Concems were raised in Fargo,
Derby,Kan'sas,accepted$132,000 for a ingc�o�hac�����•�S�It s not�an the TyD s����so���°a nbil�bo�d
"GeneratioNext Center,"an elementary- �upho� boa�
school resource fiality diat Makes its name Some lawmak�rs��n comPanY:less than a month later,the city
from P si s sl aB�.Marlin Schnei- Permitted lazger downtown signs.While
� °&�''�t�11•the Colorado der, a Democratic state representative no impmpriety w�aJ]����er nse,
SpringsschooldistriMsignedal0-year from Wisconsin Rapids, Wisconsin, is "itraisesthequesbono{µ,}���blicoffi-
deal with Coca-Cola worth up to $11.1 sponsoring legislation that would bar his cials wprk fo�;'s�ys Molnar.
million.Included in the Sscal bonai�a are state's school districts fiom S•
promotional prizes such as a drawing sive contracts with business�es.gCe ti g �y�j��put the influenoe of corpomte
among the district s best students for a March's notorious "Coke Day" at an money. What concems some of them is
new car,a"fantasy prom"for each high Evans,Ceo�gia,}ugh School that resulted that the city wodt see enough of it,afler
school that pays for one couple's entlre in a student being suspende�]fo�K.�ng �y.�g$�r���o�����mpany tp
evening, and an essay contest entided aPepsis}wt,Schneidercontendsthatthe bOkforyp��� ��g���p���,
"Why I Should Be Selected to Throw put rn���p�se a threat to academic free- a 15 peroent commission on all contr�acts. .
Critics cite the Coke Day at a Georgia �e�not Bill Gates,"says Bill Edgaz,
' � Sac�amento's aty manaSer."We've got to
high school that resulted in a student being �'P°�`�S`�,�"d'�"��tm��e .
�s��a��a,.,�Y�
suspendetl for wearing a Pepsi shirt. ��������
rhat althrn,gl,axeo aena may t�a.re beea
named with little 6nfare,many Northem
the Fust Pitch at a Rocldes Game"—with dom."Free �'fO11S1��'"87D°P�that Candlestick
�1e����g�O dO j"��. this ldnd of��1����ce��� Pazk,San Fiancisco's veneiable home o
The Grapevine-Colleyville school dis_ school setting,"pS}�e derlsa ment in the the 49ers and Giants, is now lmown as
trict in suburban Dallas signed a 10.Y�, wght not ro be in the busines of 5��� �om Pazk�riginallY a yvc-month deal,
$3.45 million pact with Dr Pepper that ing indihduaj pr���^ Promot- signed in 1995, t}�at netted the city.
includes logos on two school rookops>vis- But schaols have lon �,�,�d���Dded through jan_
ible to planes flying in and out of nearby of products through their fu d-rais ne �2����ti��,9 million,
Dallas-Fort Worth International S The continuing public outcry in San
A�rport• activities>argue the school districts that Francisco is a sign that more thaz�money
In Catoosa,Oklahoma,Pepsi paid for an a�e sig�ing the de�s.In Colo�o Spring�, ����en a�y�,,s heritage is at steke.'
elech-onic message center, computers, students used to sell "World's Finest Mindfulo{'thatco��rn,�y,�Sac�ammenm�
gYm equipment,and aRer-graduatlon and Chocolate"bars door-to-door to su acra
after-prom parties.Two cenpal Ne�•yo� �eir extracurricular actlylties.Now,the buildin to protect the names of historic
school dishicts accepted near-identical money frnm the Coca-Cola contract BS>Pledging that police cruisers
deals,with Coca-Cola promising each of for choir trips and debate toumame�nts. asguring M�ze�N�sCo e facili�h'��,y��
them 31.53 milljon over 10 yeazs,includ- "One of the ideas behind this is to keep as cemeteries, will always be off-limits.
I ing$900,000 up front for an adiletic rnm- our ldds off the street at night,"saYs John Even in a city as thiisty fpr cach as Sacra-
I plex for each districL Bushey,executive director of sclwol man- mento,some things aren't for sale. p�
_I � M Q 0 V E R N I N C November 1BB8
CSMFO�ni News December 1998
C ha pte r Co rn e r: ��e offered their services to uach the _� The amount of resources commit-
course.Costs will be held to a mini- ted under contract for Year 2000
Sacramento Valley mum.Detailsarestil(beingworked correctiveacrionsthataretobe
Ray Berzins,Assistant Finance out. expended after the balance sheet
DirectodDeputy Treasurer, ��•
Folsom The Chapter would also like to
Chair, Sacramerrto Valley aclmowledge several new promotions On October 22, 1998,the AICPA
Chapter achieved by our chapter members: issued guidance to auditors strnngly
Susan Badgley is the very first Finance advising them to consider qualifying
The Sacramento Valley chapter Manager for the City of Citrus Heights, their audit opinion by including in the
covers a lazge area of Northern P�Lefebrve is the new Finance opinion a scope limitation paragraph
Califomia,that includes Sacra- Director for the City of Dixon. Robin emphasizing the difficuky in substan-
mento,Yolo,Yuba,Sutter,Placer, Bertagna is the new Finance Officer for tiating the assertions required to be
Tehama,Amador,Butte,Colusa,El �e City of Yuba City. included in the Year 2000 disclosure.
Dorado,Glerm,I,assen,Modoc, In following the advice ofthe AICPA,
Nevada,Plumas,Shasta,Sierra and many auditing firms will be issuing
Siskiyou counries.This is a chal- opinions that are qualified with
lengetoholdquarterlychapter N@W FIIla11C11I respecttothisdisclosure£orap
meetings that everyone can attend. Statement govemmental financial statements
with audit opinions dated after
Ourchapterconductsmeetingsat Disclosure October31, 1998(theeffectivedate
the Folsom Community Center.One on which a year 2000 disclosure
new idea we tried was to hold a Req u i red fo r th e bacame required by GASB for a fair
travelingchaptermeeting. Tahoe year 2000 Issue Presentarioninaccordancewith
City was the site selected. Overall, generally accepted accounting
it turned out very well as we Ken AI-Iman, Conrad&Associates, principles). The AICPA guidance
received good participation from L.L.P. and suggested opinion language can
those who normally are unable to be obtained from the AICPA's web
attend.This traveling meeting will In October, 1998,GASB issued site at w�»v.aicpaorg./members/
probably be tried again for one of Technical Bulletin No. 98-1 that sets Y2000/gasb98-I.htm.
our meetings next year.We have forth disclosure in governmental
held four meetings so far this year. fmancial statemenu with respect to the GFOA 6as indicated that a scope
Our topics have ranged from an y�2000 issue. The disclosure limitation in the auditor s opinion for
implementarion meeting on GASB ��ssed by this technical bulletin is ��s issue will have no effect on the
31,Year 2000 problems,Yield applicable to local governmental Sovemment receiving the GFOA
burning controversy,and a very financial statemenu issued with award for CAFR reporting. However,
successful meeting that had three auditor's opinions dated after October me failure to include a Year 2000
times ttte normal attendance on the footnote in financial statements with
31, 1998. Earlier implementation is audit opinions dated after October
topic of Land based fmancings that encouraged. The information to be
was conducted by Califomia Debt disclosed includes: 31, 1998,may result in the denial of
and Investrnent Advisory Commis- the GFOA award.
sion. 1) A genenl description ofthe Year
2000 issue as it relates to the reporting
In December we will hold a meeting local government.
that will feature a speaker on the
topic of Internet tax laws.A low z) The stage of Year 2000 prepazed- Ken AI-Imcm is Chair, CSCPA
cost GFOA Training class will be ness in which the govemment is in as of Goverrrmental
held in Folsom early next year as a ear end. Accounting&Auditing Comminee
result the interest shown by our
Y Member, California Comminee on
chaptermembers. Loca1CPA's Municipal Accourrting
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