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Home My WebLink About10 APRIL 1999 DATE lila/11l ,i- TO: ❑ MAYOR`.. ❑ ENVIRONMENTAL CONSERVATION ❑ COUNCIL 0 EMERGENCY SERVICES -T7 MANAGER ❑ REDEVELOPMENT ❑ REDEVELOPMENT ❑ CODE COMPLIANCE ❑ CITY CLERK ❑ BUILDING & SAFETY ❑ HUMAN RESOURCES ❑ PUBLIC WORKS-ENGINEERING ❑ FINANCE ❑ PLANNING&COMM. DEVELOPMENT ❑ ECONOMIC DEVELOPMENT ❑PUBLIC WORKS-MAINTENANCE El 0 FOR: ~ ❑INFORMATION REVIEW&COMMENT ❑ACTION&DISPOSITION ❑INITIAL&CIRCULATE ❑FILE ❑RETURN , REMARKS('11(/ a I 5 l 1 f Vi li r..' 'I. I I1.��. "z3 I i 1: : f �u r LMA.TS. 1978 / I j 11 REVISED 1982 FROM ' C,�I k'�- REVISED 1989 `�' RECEIVED AGENDA APR 2 1 1999 INVESTMENT Ed FINANCE COMMITTEE PALM DESERT CITY HALL WEDNESDAY, April 28, 1999 -- 1:30 P.M. CITY MANAGER NORTH WING CONFERENCE ROOM CALL TO ORDER II. ROLL CALL III. APPROVAL OF MINUTES Rec: Approve the Minutes of March 24, 1999 as submitted. /Qit Action: IV. ORAL COMMUNICATIONS A. Any person wishing to discuss any item not otherwise on the agenda may address the Investment & Finance Committee at this point by giving his or her name and address for the record. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Chairman. B. This is the time and place for any person who wishes to comment on non- hearing agenda items. It should be noted that at the Investment & Finance Committee's discretion, these comments may be deferred until such time on the agenda, as the item is discussed. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Chairman. V. OLD BUSINESS A. Status of Public and Private Partnerships Background Checks for Section 4 Rec: Report by Carlos Ortega. Action: B. Bond Issuance by Palm Desert Financing Authority Rec: Status Report on new Bonds. Action: AGENDA - INVESTMENT E FINANCE COMMITTEE April 28, 1999 ****************************************************************************** VI. NEW BUSINESS A. City and Redevelopment Agency Investment Schedule for March, 1999 Rec: Review and submit to the next City Council agenda. Review the presentation on the investment graphs. Review the investment activity during the month of January. Review status of capital projects and cash flow projections. Action: B. Review Short Term Investments Maturing in April, 1999 Rec: Review investments in 1) collateralized deposits; 2) treasury bonds and notes; and, 3) Agencies discount notes. Action: C. State of California Local Agency Investment Fund Monthly Reports for February and March, 1999 Rec: Informational item for the Committee to review. No action required. D. Monthly Financial Report for City Council for March, 1999 Rec: Report and submit to City Council. Action: E. Parkview Professional Office Buildings - Financial Reports for March, 1999 Rec: Review and file report. Action: F. Desert Willow Golf Resort Financial Information for March, 1999 Rec: Review and file report. Action: G. Palm Desert Recreation Facilities Corporation Income Analysis for r _ AGENDA - INVESTMENT Fa FINANCE COMMITTEE April 28, 1999 March, 1999 Rec: Review and file report. Action: H. Review of New Broker-Dealer Applications 1. Nations Bank I. Requalification of Existing Broker-Dealers 1. Wells Fargo 2. Union Bank of California 3. Salomon Smith Barney 4. Morgan Stanely Dean Witter VII. REPORTS AND REMARKS A. Reports and Remarks by any Committee Member B. Items to be placed on the Next A.enda VIII. NEXT MEETING DATE Next regularly scheduled meeting is: `Weiaboiego t y, Matz Igg9 ,t 7130 pommn IX. ADJOURNMENT I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda for the Palm Desert Investment and Finance Committee was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this April 20, 1999. Veronica Abarca, Recording Secretary '''''''''''' ( i‘ 1 Minutes : i L r Finance Committee CONVENE On March 24, 1999, the Investment & Finance Committee was called to order at 1:36 p.m. by Mr. Paul Gibson. ROLL CALL Russ Campbell, Buford Crites, Ray Din, Dave Erwin, Paul Gibson, Thomas Jeffrey, Murray Magloff, Dennis Coleman for Carlos Ortega, Bill Veazie and Veronica Abarca, recording secretary. GUEST Gregg Lindquist, Kemper Sports-Desert Willow Jose Luis Espinoza, Finance Operations Manager APPROVAL OF MINUTES Upon motion by Mr. Dave Erwin, and seconded by Mr. Russ Campbell, the Minutes of the February 17, 1999 meeting were APPROVED as submitted. ORAL COMMUNICATIONS Mr. Gibson stated that he would take Items F & G under New Business out of order per Mr. Lindquist's request. F. Desert Willow Golf Resort Financial Information for February, 1999. ki Mr. Lindquist stated that February, again, Was an excellent month with a net profit of '6 A 00,000, 8% over projections. They are $47,000 under budget (year to date). The golf rounds for February were at aover projections. February was not a promising month for group rounds which are worth more money. Mr. Lindquist stated that at present the March figures are 12-14% higher than projected. The rounds are also higher than projected at 7%. Mr. Lindquist stated that 25% of the rounds played were by Palm Desert residents. That number should increase as the summer months allow for more availability of tee times. Receive and file report. 1 Minutes s Finance Committee G. Palm Desert Recreation Facilities Corporation Income Analysis for February, 1999 Mr. Lindquist stated that although a good month, the restaurant fell short of projections by$12,000. The restaurant did however attract$50,000 in revenue which is the highest since its opening. Mr. Lindquist believes that the current location of the restaurant limits their ability to keep up with the success of the two courses, and that when the Club House is completed these numbers will also increase. Mr. Lindquist asked if there were any questions. Mr. Magloff asked when the Club House would be completed. Mr. Lindquist stated completion is scheduled for October, 1999. Receive and file report. OLD BUSINESS A. Status of Public and Private Partnerships Background Checks for Section 4 There were no changes to the previous month report. B. Bond Issuance by Palm Desert Financing Authority There were no changes to the previous month report. C. Management Letters for Housing Authority and Desert Willow Golf Resort for year ended June 30, 1998. Mr. Gibson asked if there were any questions regarding the management letters issued by the auditors for the Housing Authority and Desert Willow Golf Resort which are both managed by contracted agency. NEW BUSINESS A. City and Redevelopment Adencv Investment Schedule Mr. Jeffrey informed the committee that at the CMTA Conference he attended on March 17 and 18, out of 48 cities and small water agencies, the City of Palm Desert holds the 2nd laigest investment portfolio in California at $327 million, next to City of San Jose at $950 Million. • Minutes IFinance Committee Mr. Jeffrey also summarized for the committee a 1999 Economic Forecast that had been given by Steven A. Wood, Chief Economist Bank of America which covered the global and U.S. economies. Mr. Jeffrey reviewed the reports for the City and the Redevelopment Agency. He stated that the City Portfolio currently is at$165 million which is a$5.7 million increase from January (tax increment revenues were received in February). Mr. Jeffrey asked if there were any questions. There were none. • Receive and file reports. B. Review Short Term Investments Maturing in March. 1999 Mr. Jeffrey reported that in March, $2 million in City funds would be reinvested in Federal Agency Bonds and$373,000 of Redevelopment Agency funds would be used for Debt Service. Receive and file report. C. State of California Local Agency Investment Fund Monthly Report Mr. Gibson reported that for the month of January, the City had$20.6 million and the Redevelopment Agency LAIF has a balance of $28.2 million at an interest rate of.5.265%. Receive and file reports. D. Monthly Financial Report for City Council Mr. Gibson reviewed the reports and asked if there were any questions. There were none. Receive and file report. E. Parhview Professional Office Buildings- Financial Reports Mr. Gibson stated that the Office Complex continues to do well. Mr. Gibson will make an appointment with the City Attorney to discuss how to structure and where to use the funding. - 3 • Minutes Finance Committee Mr. Gibson also stated that as of April 1, 1999 the State Department of Agriculture will be a new tenant at the Office Complex. Which will bring the tenant rate to 97% occupied. Mr. Gibson stated that the architect is presently working on the specifications for the re-design of the office space to be leased by the State Rehabilitation. - Bid documents are scheduled for publication in mid-April. The State is hoping to occupy the space by August, 1999, however September, 1999 seems more reasonable. Receive and file report. REPORT AND REMARKS None. NEXT MEETING DATE The next Investment & Finance Committee meeting will be held Wednesday, April 28, 1999 at 1:30 p.m. This meeting will be postponed from it's regular date, due to availability of staff. ADJOURNMENT Upon motion by Murray Magloff and seconded by Dave Erwin the Investment &Finance Committee adjourned at 2:10 p.m. Respectfully submitted, j-e(ZPUCC- 6714Z4TL Veronica L. Abarca, Recording.Secretary • ( » ! § \ ; k / {} O Qi _ — rr ! ! 0 ! 0 ! ! ) o. r § ■ _ 0 o. 24.1 , . � . , _ _ \ / { u 0. ! °to 2 r — ! k ` i ( F ( ` ( & \ \ jk ! 2 ( ( 77 ; ` ) ` § ; — \ ` .- ` } c - E &| ( ) � [ 5 ! 2 ! ! ! a ) k ) \ o °a. - : G „ # 7 ; + * q ! ; : ¥ ; ! ) « la 0 ± ! * § ® | § ! ! ) Ek0 ; r6 ; / _ @ # § ! CA°A23 t co enco � � ! ( 7 ) w & � � , � , 10 c w0 - 7 ` ` en ` E00 \ c j , . j � / \ « ■ 0 . i , e . � o � � ; = lRnm cu co kna , t � � 0 = o ° !- ® m � — 0. ! # a oog2 l= Re # # k # \ RC # � ! ; ! _ 0 ! 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This reflected a net decrease of approximately $2.6MM from prior month, due primarily to debt service. There was an unrealized portfolio net gain (market value- book value)of approximately$849M, 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 Treasury -Coupon". The City buys interest-bearing U.S. Treasury notes with maturities of 2- 10 years to invest assessment bond proceeds. Although unrated, considered "AAA". THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$295M DUE TO A MATURING SECURITY. "Federal Agency-Coupon". The City buys U.S. government agency and instrumentality notes with maturities of 2 - 10 years to invest assessment bond proceeds. Agency debt guaranteed by U.S. Treasury; instrumentality debt is not (guarantee, instead, believed to be U.S. Governments "moral obligation"). Although unrated, considered "AAA." THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$1.8MM DUE TO A MATURING SECURITY. "I neal Agency Investment Fund (LAIFI". The City temporarily invests proceeds of matured securities 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. 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 DECREASED BY APPROXIMATELY$2MM DUE TO A SECURITY PURCHASE. "Federal Agency-Callable". The City purchases federal agency securities that may be called prior to maturity, in order to obtain an additional premium for that risk, thereby increasing overall portfolio profitability. In the event of a call,the City would be compelled to reinvest principal and interest at a lower market interest rate. THIS ACCOUNT BALANCE DID NOT CHANGE SIGNIFICANTLY. "City 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 DID NOT CHANGE. "Fidelity Treasury Pool". The City invests assessment bond proceeds (construction, cost of issuance, and bond reserve 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. S&P credit quality rating of"AAAm"; Moody's of"Aaa". THIS ACCOUNT BALANCE INCREASED BY APPROXIMATELY$2.7MM DUE TO MATURING SECURITIES. "United States Treasury -Discount". The City buys noninterest-bearing zero coupon securities ("STRIPS")with maturities of 6 months-30 years, to invest assessment bond proceeds. Purchased at discount; face value paid at maturity(difference is yield). Although unrated, considered "AAA". THIS ACCOUNT BALANCE DID 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 DECREASED BY APPROXIMATELY$3.2MM DUE TO DEBT SERVICE. "State & Local Govt Series -Time". The City buys special noninterest-bearing U.S. Treasury certificates of indebtedness with maturities of 15 days- 1 year,to invest assessment bond proceeds (to comply with IRS yield and arbitrage rebate restrictions). Nonmarketable. Although unrated, considered "AAA". THIS ACCOUNT BALANCE DID NOT CHANGE. "Medium-Term Notes". The City buys interest-bearing corporate medium-term notes with maturities of five years or less, to invest revenues. The City currently holds"A"-rated General Motors, Ford, and Morgan Stanley Dean Witter, and "AAA" General Electric MTNs. THIS ACCOUNT BALANCE INCREASED BY APPROXIMATELY$2MM DUE TO A PURCHASE. < CI. ; : { § { \\ t } tk cc — ! ƒ « § 7 § 7 ) \ § •! ° * � ` ` ` k { § ( 0. / / " soci 1-rtco ` ao co \ � \ / l � � , � ! ! \ r § a, ` cm ) ) \ { tk � \ &ttC.) § 5@ ) _ \ . a. { ) ] ; / �� \ \ $ \ $ \ \ \ ( Cr. el { \ \ \ m ; » we ; km ■ el I $ ! / § » wa , - - cocca � % 2 $ ` ` {as k / f E cn C § - : - 2s2 � { kfo § £ g $ !! mRlr § ! & ! R q { / ) a god 2 != § R § 4 ! # k ; E \ K k ! ! � ; w \ ® CO2 & 7 \ / ~ © co r ! co To ■ , o a © ® � § % I < a ! ) k § !! @ it- ; @a ; m@ ; e el � k ( } \ \ } # ; q Lei § © � el , � ; , § ; t : 1 § & k / ; wm ' ' # ! § ! ;' # ! o ■ . • ! f ! \ ( ( ( \ !>- !§ § | tk\ ( \ \) \ \ k §\!\ ! j Cs \ } , )in � � § ! ! . \ e r - | » @ fJ E ! 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Omdl 2 a �V�pp(�]00000i0i m am w I- � � O 00)0Lf (rn C;W rill r7 & O Q taco A N m m l 0 /- cc0 0N0 ~ O 0 VJ 4W D a u. � W C) ap Q a 0 Q d t 4 y t Y9 bl Q tSS4Wmtlitl)MVi1919i9i31H� m < 2 L' i C 2 ❑ -a < z Q8 UZ a to F LU _ M L Y `9a .bin.n+ m J< ;/tlI ivL q 3 N 2 p O U P m H JNJ ¢ NC� o 2 w WFZZj Q a > '- ) Q c wJ Zw8ogo y88 2 L = i CC -C -- 5r 0000c?owo 3 = a wQ m Cl Oct U . w 0 0 0 LL ~ g of 99 <<oa3nk>cp o s m wors.., ¢F�=wUMEYzo I W w Z Q r 9 a y F V'I B L Q W oQ 6 a . co N m a o 1-. 0Lin c Eu-u-V U QI U' 2. i to N V V < (%)a13IA REDEVELOPMENT AGENCY,— INVESTMENT ACTIVITY REPORT MARCH 1999 EXECUTIVE SUMMARY As of 3/31/99,total portfolio book value was approximately$161.6MM (with SLGS). This reflected a net decrease of approximately$576M from prior month, due primarily to securities purchases. There was an unrealized portfolio net gain (market value- book value)of approximately$545M, 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& Local Govt Series-Coupon." 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. "Fidelity Treasury Pool." RDA invests tax-exempt bond proceeds (construction, cost of issuance, and reserve monies) in Fidelity Institutional Money Market Fund: Treasury Portfolio -Class I." 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 INCREASED BY APPROXIMATELY$4.8MM DUE TO MATURING SECURITIES. "Local Agency Investment Fund (LAIF)." 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 DECREASED BY APPROXIMATELY$5MM DUE TO DEBT SERVICE PAYMENTS. "llnitnkStates 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$3M 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 "AM." THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$372M DUE TO MATURING SECURITIES. "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 CHANGE. "HighMark 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 INCREASED BY APPROXIMATELY$39M DUE TO INTEREST COUPON PAYMENTS. "Federal Agency-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. Government's"moral obligation"). Although unrated, considered "AAA." THIS ACCOUNT BALANCE DID NOT SIGNIFICANTLY CHANGE. CITY OF PALM DESERT SECURITIES PURCHASES MARCH & APRIL 1999 The following two securities have been acquired for the City portfolio: 1 . $2MM FNMA Callable (Euro); 5.30% YTM; Price of 100.00; Matures 4-24-01 ; Callable only on 4-24-00. Implied AAA rating. Purchased from Salomon Smith Barney. 2. $2MM GECC MTN; 5.48% YTM; Price of 99.225; Matures 2-1-02. S&P AAA rating. Purchased from Norwest Investment Services (formerly Wells Fargo). MATURING SECURITIES APRIL 1999 1 . $1 .6MM SLGS — Time; matured 4-1-99 (RDA). Used to pay debt service. 2. $2MM US Treasury Note; 6.26% YTM; matures 4-30-99 (CITY). MATURING SECURITIES MAY 1999 NONE ** ** The City will receive the April 1999 tax increment revenues in May; they will then be promptly invested in securities obtained through a competitive offering. The bulk of the monies will be invested either in U.S. Treasury coupon-bearing notes or in Federal Agency callables (preferably Euros). A small amount might be invested in high-grade medium-term notes, depending upon liquidity requirements. STATE OF CALIFORNIA PHILIP ANGELIUtb, Treasurer OFFICE OF THE TREASURY SACRAMENTO Local Agency Investment Fund PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 March , 1999 Statement Account Number : 98-33-621 CITY OF PALM DESERT Attn: CITY TREASURER 73510 FRED WARING DRIVE PALM DESERT CA 92260 Transactions Effective Transaction Tran Confirm Authorized Date Date Type Number Caller Amount 03-26-1999 03-26-1999 RW 14068 THOMAS JEFFREY - 2,000,000.00 Account Summary Total Deposit : 0.00 Beginning Balance : 28,264,456.54 Total Withdrawal : - 2,000,000.00 Ending Balance : 26,264,456.54 C'. BU Co Cr? tiJ C,' NJ Page : 1 of 1 s 'y AwdsSF' [Al? :a ¶IEWS ' March, vitt LOCAL.AGENCY INVESTMENT FUND SUMMARY'OF ARTY MARCH 1999 BEGINNING BALANCE DEPOSITS WITH RAWALS MONTtI;END BALANCE' $15 24>t,372 549 65s ` $1;# 3Z 928;£ 00 $1 56tiiii, $1 ;$14,661:,543,219 fl4 POOLED MONEY INVESTMENT ACCOUNT SUMMARY'OF INVESTMENT ►ATA A COMPARISON OF;MARCH 1999 WITH'MARCH 1998 {Dottars In Thousands) t Nlc i t� Ave a Daily Perim Eiive Yield Average IIfs-Mont End din days} 7 Your LAIF Newsletter has now become an important reporting document. In the future, for efficiency of operation, you will no longer receive a separate"Summary of Investment Data"for both the Pooled Money Investment Account (PMIA) and the LAIF. This information, which includes the data most frequently requested, will now be included in the LAIF Newsletter. In addition, beginning April 15, 1999, the monthly PMIA Market Valuation that is mailed with your monthly statements, will instead be reported on the State Treasurer's Office home page at http:// www.treasurer.ca.gov. If you should require additional reporting information or do not have access to the Internet and need the Market Valuation mailed to your agency, please contact the LAIF staff at (916) 653-3001. State Treasurer Philip Angelides Phone (916) 653-3001 Local Agency Investment Fund Fax (916) 654-9931 P.O. Box 942809, Sacramento, CA 94209-000I http://www.treasurer.ca.gov : 1 0 1 .. N • Oa«- a c Q ,ti 10 co r en �.;sa* ..-s N N coE w o w w 0 IA C it. • - co n 0 CO 0 n fa_tu�ri et sr p >. �...Th114. C v ,•w. w w w r o n 0 o n cd W j 'i Oco co A O N 03 O O. N r v N r a ,,„- as a} w w w w w I. O et n el f0 O Q , '" f0 CO 0) CO r b,, t+Ho O N r r A a Z CO yr+ r r N CO Q o a4 �• ' w w w w w w °0 O N O n co W _ �•'i u) c� 1n n 0 0 1y .. 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Li: C> • , W 0 a Z in + K °) :: :: °) w w p u a a o O w 0 0 0 0 c r a m c) c� 04 a Z Z Z Z STATE OF CALIFORNIA PHILIP ANU LIUt J, I redsurur OFFICE OF THE TREASURE SACRAMENTO ' Local Agency Investment Fund PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 March, , 1999 Statement Account Number : 65-33-015 PALM DESERT REDEVELOPMENT AGENCY Attn: PAUL GIBSON, TREASURER 73-510 FRED WARING DRIVE PALM DESERT CA 92260 Transactions Effective Transaction flan Confirm Authorized Date Date Type Number Caller Amount 03-22-1999 03-22-1999 RW 10970 THOMAS JEFFREY - 5,000,000.00 Account Summary Total Deposit : 0.00 Beginning Balance : 20,612,332.84 Total Withdrawal : - 5,000,000.00 Ending Balance : 15,612,332.84 Page : 1 of 1 [Alt March, 1949 LOCAL AGENCY INVESTMENT:'FUND SUMMARY OF ACT VTfl( MARCH 1999 4 BEGINNINGA BArL`ANCE y`DEPOSITS iVVRITHDRAWAL r MONTH�:END BALANCE; 1 57 3$t663O$1 $14,66♦54321 06 POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA , A COMPARISON OF MARCH 1999 WITH MARCH 1995 (Ddtars In Thoussni l�t� Mart 'l€ t s Av €ge 0*Portfol o f�i+� L�L� Average l i€e-Month (ln rays) I99 : 197 + Your LAIF Newsletter has now become an important reporting document. In the future, for efficiency of operation, you will no longer receive a separate"Summary of Investment Data"for both the Pooled Money Investment Account (PMIA) and the LAIF. This information, which includes the data most frequently requested, will now be included in the LAIF Newsletter. In addition, beginning April 15, 1999, the monthly PMIA Market Valuation that is mailed with your monthly statements, will instead be reported on the State Treasurer's Office home page at http:// www.treasurer.ca.gov. If you should require additional reporting information or do not have access to the Internet and need the Market Valuation mailed to your agency, please contact the LAIF staff at (916) 653-3001. State Treasurer Philip Angelides Phone (916) 653-3001 Local Agency investment Fund Fax (916) 654-9931 P.O. Box 942809, Sacramento, CA 94209-0001 http://www.treasurer.ca.gov O N e • 7 o a ao a o Q li F to CO 0 e -, ` t N N e m CO E ,. en ea O in' w �. 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"' 0 ZZZZ STATE OF CALIFOKNIA ,^", - OFFICE OF THE TREASURE(' SACRAMENTO ,.110; , " ,i Local Agency Investment Fund PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 February , 1999 Statement Account Number : 98-33-621 CITY OF PALM DESERT Attn: CITY TREASURER 73510 FRED WARING DRIVE PALM DESERT CA 92260 Account Summary Total Deposit : 0.00 Beginning Balance : 28,264,456.54 Total Withdrawal : 0.00 Ending Balance : 28,264,456.54 r C.% r • Oie SOO rr. _ TJ /V4- Page : 1 of 1 Pr'LED MONEY INVESTMENT AC AUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF FEBRUARY 1999 WITH FEBRUARY 1998 (Dollars in Thousands) FEBRUARY 1999 FEBRUARY 1998 CHANGE Average Daily Portfolio $35,739,579 $31,140,429 +$4,599,150 Accrued Earnings $142,842 $136,647 +$6,195 Effective Yield 5.210 5.720 - .51 Avenge Life—Month End(in days) 198 207 -9 Total Security Transactions Amount $15,332,185 $28,614,910 -$13,282,725 Number 339 633 -294 Total Time Deposit Transactions Amount $1,329,200 $806,200 +$523,000 Number 67 47 +20 Average Workday Investment Activity $925,632 $1,634,506 -$708,874 Prescribed Demand Account Balances For Services $222,813 $230,513 -$7,700 For Uncollected Funds $163,009 $160,258 +$2,751 LOCAL AGENCY INVESTMENT FUND* SUMMARY OF ACTIVITY FEBRUARY 1999 BEGINNING BALANCE DEPOSITS WITHDRAWALS MONTH END BALANCE $15,449,862,096.60 $1,128,537,000.00 $1,338,026,546.95 $15,240,372,549.65 'Local Agency Investment Fund Invested Through Pooled Money Investment Account State of California Pooled Money Investment Account Market Valuation 2/28/99 Description Carrying Cost Plus Accrued Interest Purch. Fair Value Accrued Interest' United States Treasury: Bills $ 3,219,653,087.06 $ 3,280,624,989.03 NA Notes $ 4,376,988,787.55 $ 4,386,206,750.00 $ 56,212,744.75 Federal Agency: Bonds $ 2,867,614,388.80 $ 2,858,395,336.80 $ 34,233,359.13 Floaters $ 170,000,000.00 $ 169,960,100.00 $ 371,496.90 MBS $ 76,924,173.93 $ 77,933,277.95 $ 451,808.71 GNMA $ 1,895,343.07 $ 2,141,387.35 $ 18,763.19 SBA $ 288,648,095.02 $ 289,330,823.62 $ 2,563,477.84 PHLMC PC $ 18,342,486.28 $ 19,459,556.78 $ 294,487.72 Discount Notes $ 4,324,915,701.75 $ 4,391,901,547.55 NA Bankers Acceptances $ 77,145,994.77 $ 78,391,576.83 NA Corporate: Bonds $ 680,854,567.57 $ 679,740,358.72 $ 11,374,249.57 Floaters $ 1,129,502,736.06 $ 1,128,525,358.00 $ 6,164,945.72 CDs $ 4,654,149,634.41 $ 4,647,143,498.58 $ 46,598,644.87 Bank Notes $ 1,218,090,054.21 $ 1,217,875,561.02 $ 18,804,786.12 Repurchase Agreements NA NA NA Time Deposits $ 2,007,640,000.00 $ 2,007,640,000.00 NA AB 55 &GF Loans $ 2,086,134,001.21 $ 2,086,134,001.21 NA Commercial Paper $ 7,978,739,942.86 $ 8,041,959,054.63 NA Reverse Repurchase $ (1,006,437,167.00) $ (1,006,437,167.00) $ (3,141,588.47) TOTAL $ 34,170,801,827.55 $ 34,356,926,011.07 $ 173,947,176.05 Fair Value Including Accrued Interest $ 34,530,873,187.12 Repurchase Agreements, Time Deposits,AB 55&General Fund loans, and Reverse Repurchase agreements are carried at portfolio book value (carrying cost). STATE OF CALIFORNIA _-_..._. OFFICE OF THE TREASURE' SACRAMENTO !� Local Agency Investment Fund PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 February , 1999 Statement Account Number : 65-33-015 PALM DESERT REDEVELOPMENT AGENCY Attn: PAUL GIBSON, TREASURER 73-510 FRED WARING DRIVE PALM DESERT CA 92260 Transactions Effective Transaction Tran Confirm Authorized Date Date Type Number Caller Amount 02-23-1999 02-22-1999 RD 28365 THOMAS JEFFREY 2,000,000.00 02-25-1999 02-25-1999 RW 22469 THOMAS JEFFREY - 2,000,000.00 Account Summary Total Deposit : 2,000,000.00 Beginning Balance : 20,612,332.84- Total Withdrawal : - 2,000,000.00 Ending Balance : 20,612,332.84 -I a o Page : 1 of 1 PCJED MONEY INVESTMENT AC(ThJNT SUMMARY OF INVESTMENT DATA A COMPARISON OF FEBRUARY 1999 WITH FEBRUARY 1998 (Dollars in Thousands) FEBRUARY 1999 FEBRUARY 1998 CHANGE Average Daily Portfolio $35,739,579 $31,140,429 +$4,599,150 Accrued Earnings $142,842 $136,647 +$6,195 Effective Yield 5.210 5.720 -.51 Average Life—Month End(in days) 198 207 -9 Total Security Transactions Amount $15,332,185 $28,614,910 -$13,282,725 Number 339 633 -294 Total Time Deposit Transactions Amount $1,329,200 $806,200 +$523,000 Number 67 47 +20 • Average Workday Investment Activity $925,632 $1,634,506 -$708,874 Prescribed Demand Account Balances For Services $222,813 $230,513 -$7,700 For Uncollected Funds $163,009 $160,258 +$2,751 LOCAL AGENCY INVESTMENT FUND* SUMMARY OF ACTIVITY FEBRUARY 1999 BEGINNING BALANCE DEPOSITS WITHDRAWALS MONTH END BALANCE $15,449,862,096.60 $1,128,537,000.00 $1,338,026,546.95 $15,240,372,549.65 'Local Agency Investment Fund Invested Through Pooled Money Investment Account State of California Pooled Money Investment Account Market Valuation 2/28199 Description Carrying Cost Plus. , Accrued Interest Purchs x'. Fair-Value Accrued Interest`. United States Treasury: Bills $ 3,219,653,087.06 $ 3,280,624,989.03 NA Notes $ 4,376,988,787.55 $ 4,386,206,750.00 $ 56,212,744.75 Federal Agency: Bonds $ 2,867,614,388.80 $ 2,858,395,336.80 $ 34,233,359.13 Floaters $ 170,000,000.00 $ 169,960,100.00 $ 371,496.90 MBS $ 76,924,173.93 $ 77,933,277.95 $ 451,808.71 GNMA $ 1,895,343.07 $ 2,141,387.35 $ 18,763.19 SBA , $ 288,648,095.02 $ 289,330,823.62 $ 2,563,477.84 FHLMC PC $ 18,342,486.28 $ 19,459,556.78 $ 294,487.72 Discount Notes $ 4,324,915,701.75 $ 4,391,901,547.55 NA Bankers Acceptances $ 77,145,994.77 $ 78,391,576.83 NA Corporate: Bonds $ 680,854,567.57 $ 679,740,358.72 $ 11,374,249.57 Floaters $ 1,129,502,736.06 $ 1,128,525,358.00 $ 6,164,945.72 CDs $ 4,654,149,634.41 $ 4,647,143,498.58 $ 46,598,644.87 Bank Notes $ 1,218,090,054.21 $ 1,217,875,561.02 $ 18,804,786.12 Repurchase Agreements NA NA NA Time Deposits $ 2,007,640,000.00 $ 2,007,640,000.00 NA AB 55& GF Loans $ 2,086,134,001.21 $ 2,086,134,001.21 NA Commercial Paper $ 7,978,739,942.86 $ 8,041,959,054.63 NA Reverse Repurchase $ (1,006,437,167.00) $ (1,006,437,167.00) $ (3,141,588.47) TOTAL $ 34,170,801,827.55 $ 34,356,926,011.07 $ 173,947,176.05 Fair Value Including Accrued Interest $ 34,530,873,187.12 Repurchase Agreements,Time Deposits, AB 55 &General Fund loans, and Reverse Repurchase agreements are carried at portfolio book value(carrying cost). v nyr G sii'rfi'� j (( e� 5tR CN 09 ss•3R3 '*t+�n "yea„'" ` , .9 w U Y y� att 6{µbryy, w y„, U 7 oil 4 SE• � I} , T.0 U d 'I, 6 °. W a .- O C_ .. 3I, K U p7 'Z° W E' N O L3 t'7 f'F. �p .-1 v�1 Z $ i(f it's M' 'Rx tai r f Z. l N 7 V r M (fit wi' 9 7 r 3 b r .�. LA T ; Par"; h yN OoN L p!'� �66 ,.. Oi ( OD is �Ny ena. 0ri �O M O 7 M N"i f- V 0 M N CO h r O 'O '� 'Lg. A fy ' {� N 1"s O A V M N ^ N ' O 7 "� F d U lC W v W a , a a a a o r 0 N - o o v O U E U M 7 ri o 0 0 o v WCa Tr131 .. co i �y r N N 0\ b O '/1 ^ U O l 0 mr�Je6o N 4S''n O C 7 0 a0 V N N m 3 W O W W 'O T M O ; h� ' t hp M N _ `Pi �;'!?l Fi -d u a M M ... N enc.' N O LZ' Fti X f�14 1 Pp,�"I 3' • d N cP D. FY 1 '-- ^ 'Ci rt.i Ca) 1 w P O 0 01 O de .l" 'n O a! w v� rn M oo p+ 'O in \� 61 M Or h 00 to co r 'O+. d a! O r 'O r 7 V 'O h v a .-. ry m q! r!k: ,+y o v oo >, town ^ C v r N 'n .� � Y a E A A 9 W , I Al 7 > p d' 6 N ,0 h k C ' N 7 to 0 O' en ett U ,arn 'n ed C 7 0o N 'n N pp y Ki 'n Ai tF .q R w O 4 6 o 'O oo o V; . N Oho {�- 'n N N r,'r-, I.-+ ." y bm +'s. 2 C O ... O O a 'S .0 7 N 7 7 4 q E d d .� °� N O\ r O O' 'n r ON en Y N O 75 a M 'O N D\ env-. O u o, d 72 .) eo vi in ,-: 7 N N H v U m 9 Y 7 N « p C i 0 Y o V y c V p c a LL m (� 4 �.. m > m y, eC...”;'[..„ q R W rt t O N t 0 s : - Zp G Q 1 i a" = e d s a fig. o < 7 A > o a o .... 7 to s N .0'0 C H O d y A 'y W v .d k � .. 7 Y a L L w y A > >E Z aC .p 1- E f') 0 ^ Y E,y d y L i--. (n. w V O \ — Q y o 7 ... n 'd Y, u W ") w G u v 'V e. , b A G ,01 ^ i 12 s i' 8 to,. ,. O E<' aa+i 4 c e a m p .10.1 O Z ., t. a vsF• aata, Fna o W wc7wwv w PALM DESERT REDEVELOPMENT AGENCY _ COMBINED STATEMENT OF ACC '. REVENUES&EXPENDITURE.. COMPARED TO BUDGET 31-Mar-99 RDA RDA %of (FAV)UNFAV Budget YID Budget Actual YTD Budget Variance REVENUES 1 Tax increment 31,312,423 23,484,317 14,267,201 60.75% 9,217,117 2 Interest 1,886,400 1,414,800 2,227,909 157.47% (813,109) Sales of Property 307,550 0.00% (307,550) 3 Reimbursement From Other Agencies 800,000 600,000 418,741 69.46% 183,259 3 Other Revenue 64,000 48,000 89,404 186.26% (41,404) 3 Transfers In 462,000 346,500 0.00% 346,500 4 Palm Desert Housing Authority Revenue 3,198,191 2,398,643 2,237,689 93.29% 160,954 TOTAL REVENUES 37,723,014 28,292,261 19,546,494 8,745,766 FAV(UNFAV) EXPENDITURES Variance Administrative Costs 1,223,797 917,848 712,362 77.61% 205,486 Professional Services 2,501,004 1,875,753 435,098 23.20% 1,440,655 Property Tax Administrative Fee 812,290 609,218 480,816 78.92% 128,402 Cost of Inventory Sold Capital Outlay Office Equipment 36,000 27,000 15,554 57.61% 11,446 Deep Canyon/Hwy 111 4,099 3,074 0.00% 3,074 Parking Spaces 16,000,000 12,000,000 0.00% 12,000,000 1-10 Interchanges 250,000 250,000 250,000 100.00% Joni Drive Extension 250,000 187,500 0.00% 187,500 Desert Willow-Mountain View Course 24,774,435 18,580,826 1,648,869 8.87% 16,931,957 Desert Willow-Firecliff Course 11,666,905 8,750,179 1,063,224 12.15% 7,686,954 Washington Street Improvements 300,000 225,000 0.00% 225,000 Fred Waring Improvements 435,000 326,250 0.00% 326,250 Project Area 4 Perimeter Landscape 374,000 280,500 0.00% 280,500 Street Improvements 428,255 321,191 0.00% 321,191 Storm Drain Improvements 2,200,000 1,650,000 0.00% 1,650,000 Desert Crossing Improvements 43,450 32,588 0.00% 32,568 Hwy 111/74 Improvements 175,000 0.00% (175,000) Parking Lot Improvements 55,259 41,444 55,720 0.00% (14,276) HOUSING New Houses-for Resale HIP#7 786,165 589,624 198,739 33.71% 390,885 Home Improvement Program 1-6 70,056 52,542 18,447 34,095 Santa Rosa Rehab Program 568,818 426,614 348,722 81.74% 77,892 5 Desert Rose Project 199,000 149,250 296,134 198.41% (146,884) 5 Portola Palms Project 105,326 78,995 223,608 (144,613) Land Purchases/Bldg Improvements 340,350 255,263 0.00% 255,263 Palm Desert Housing Authority Expenditures 4,758,403 3,568,802 1,266,977 35.50% 2,301,826 Decline in Value on Inventory Held For Resale Payments to Other Govemmental Agencies 7,270,900 5,453,175 949,320 17.41% 4,503,855 Bond Issuance Costs 2,889 (2,889) Bond Discount 6 Interest And Fiscal Charges 12,801,112 9,600,834 11,377,297 118.50% (1,776,463) 6 Principal Payments 1,325,000 993,750 1,325,000 133.33% (331,250) Transfers Out Including Low/Mod 14,674,296 11,005,722 0.00% 11,005,722 TOTAL EXPENDITURES 104,253,920 78,252,940 20,843,775 57,409,165 •TAX INCREMENT REVENUE IS USED TO PAY DEBT. 1. Tax increment is received In Jan and May 2.Trustee statements have not been posted as of month end. 3. Received at various time during the year. 4. 98r99 Revenue and Expenditures will be posted after 97I98 year end is closed. 5. Expenses offset by House Sales 6. P&I payments are paid at various bores during the year. P 8 N 8 ^ tAV : 8R N O 8 S R$ m 8 R 8 m 8 A $ 6 4 SSStg S E " XRX X�ki9�Eg�tQXFX'!ER _ R § e Pal w E . am5 P.EIESm' F`E1 b ' 1 R > N bn F + 8 8 it. nmg 88 9: 8811 q 1 n $ RidEill Fzil S 51 n 6.41 8 888 8 RR 8R888nrb- s $ sry$ 8i tV $ 0 3l 5 555 5 05 §s5555^555�5: i R i V my q P O O C b SrV mq ^m .Q$'po4$ �$yry �{py m N 1e1� Ol V F a y N V l0 O P E �N m m n n N N m Y p V $ 8$8 8 88 888888888888$ $ 8 8 8 22 r20 N N. U Ss O O IS, $ $ E Ep: 8 a AV ' m8 3 m > ry N V b N § V O N so 8 S b m N C Vq - P 6- 8 f s Vr O A O$ 28 Q84 1/ay-Q* 'A NpO A O RE Rl 1pO UI `E VJ NVI V O ' : EN ;0 tti n K to « 88 p$ g 8 $ 8 YS8 8 b es- 1-1 yqiiS 3 iy leN8^q Nt pt to O O 0 m Y N N $ 3 O m O O m R e 3 88 8 8 88 8 88 8 $ r GG .q 8 N - N P 0 V ^ m m pb p� pp p N p y� � q p � n. NO � O N $8 ii O l'l ,Z Aq S W f I O, O m S nnSt w8tak US AOA?m 5 SS S iT tun m N R a m r b g � 8 m O Y� q y� m p yy NN N y p I m, $ 2 l2 14 $ tp8 1- O r W 0 A m 8 O aOn P g n § § m $ Z 01 b A \ A�q n N O 1 p m mqm�qqN rQ _ s.1 O Pg O n ,q N m N N F O S m N V m V . W J 2 0 p p a y1 p p p p p p m O O $ O N $ 8 N O A O b, $$ N S 8 O a a N `do N ni ri N fironl $ $ W b K s; � v N t m mw w �' P S N o 1 Cl N V !1 N O b 88 8888 88 8 8888,8 8 88 8 eg &§ � 5 H 5 mmg55 3 III PO .$beta t4VH m 2°128 $ 41 *. jb2 R— OO : m F r ' eOt '. ...- III a�i Y 2LT, lii O O #n W<watI a s w s ii n 9 n s = @ EQ E l 1 8 pa ra' w ^y Ys � z 111 ' t3y t ua r w N 5 `i JPI$iIHhi11flIhI 1i>p `�t'gfiltH r v c jIjjjll v w `yVZS 5 d. EYCJi g _ m 1jIiij!; o ii - a' o I' 2 i4 S3l dbW g In 4i E ~ d / k 0 0 0 3 1 6 d 6 W Q . 0 ' OO # 8482 § 828882 ) - � � = eeso2 $ , af � - $\ ( \ ° � a \ � \ ea op m ® 0. ) k § 0 kN. o. < , , . a k% ( cd \is \\2 ; § § m § /) \ co co _ or a el cl aa # § m m ® ) \ § b £ , - § ¥) e §. * \ \ - @ ) - , 0 NO Of k ma /m Z in In \0 * f (cri k } � 0 LLI ma ± ) � �2 ©. § 2 § ) \kk kka 88888888888 //\ • *\/ ij0 REE -@0a. .7 \ ; M. i$ ƒ/ ay wool- ill ` m ?< � ce < m > y § [ k . \ . . . . . . �Ill ( ° ® � 2 a e ff 2 m 2 | , $ e E § . § k \ a / . £ o $ t50 § 8 A 7 ! ! e 2 ` Ek | cq ` ! - )< 0 ) § k & ■ . a § l5 - ® kk - el Zg / 1)E Z < 8C/2j \ \ } - 2 . mM W < 8E88 81,*-- .- .- 88888888o9?: 88888888 02888881 O oi O O Y a m 1- o O OO O C O o O Oi a C C G O O a OO N O O O C o G C g _ O r (P(p. - 01 1Cy�p O p� U f A N A. A M N f0 O. tri eel r y N.. a 8 N c`+ a 01 01 n Co E. E. Q G iG a 8 2 o r2' 2 v w : e a a 0 8py CO u� �p a 01 N g CO co COY 0 N 0. CD p- W (D CC a s S CO 8 `g' 3..23.. N. a z 2 CCpp V X W N sr NtrO a 00 a? Z laY — r CO I.- 0 O O N N m V O CO n A S S I� O Qy a s n V n d IQi � Idn . F = f a 7--. A w W W la we r m p5p 0 CC CO 08888888 88 8888 _ a8.8888888 . 8X 8 O ~ oet � ta y W oet Z et C q c W m E c c17pi Es Q LL H Q u S 2 > .4 .2 c E tlJ . y G y v _ c ! n m E d E m C ? p en m - cat E ? Ec > . > E ? m f m E - Lu yX N O �` N 'N L N N d Q EdIiIfl C i '��S I c o t8� a:R` o p� m�i ry d o 6 c •c 01 d o4O8a = � oa. u. ay r�' xa o O 'E � n m n cmo )- za ° E m mEo_ - � F- SmKOi- aaaacg c� 3 a = a1- W X a' W City of Palm Desert Parkview Office Complex Income Statement For March 1999 March-99 March-99 # % YTD YTD # % Budget Actual Variance Variance Budget Actual Variance Variance Revenues Rental $ 58,900 $ 52,195 $ (6,705) 88.62% `.;' ;; ` $ 530,100 $ 536,936 $ 6,836 101.29% Dividends/Interest $ 1,200 $ 2,862 $ 1,662 238.54% 'x $ 10,800 $ 25,315 $ 14,515 234.40% �ll Total Revenues $ 60,100 $ 55,058 $ (5,042) 91.61%.;;; . ._,. $ 540,900 $ 562,251 $ 21,351 103.95% • Expenses Professional-Accounting Sr Auditing $ 3,700 $ 5,161 $ (1,461) 139.49%._. $ 33,300 $ 46,449 $ (13,149) 139.49% Professional-Management Fee $ 5,500 $ 5,563 $ (63) 101.15% $ 49,500 $ 58,868 $ (9,368) 118.93% Tenant Improvements $ 5,800 $ - $ 5,800 0.00% $ 52,200 $ 7,760 $ 44,440 14.87% Repairs Sr Maintenance Building $ 9,100 $ 930 $ 8,170 10.22% ', $ 81,900 $ 42,519 $ 39,381 51.92% Repairs&Maintenance-Landscaping $ 1,079 $ - $ 1,079 0.00% $$ 9,711 $ - $ 9,711 0.00% Utilities-Water $ 250 $ 97 $ 153 38.92% $ 2,250 $ 809 $ 1,441 35.96% Utilities-Gas/Electric $ 4,300 $ 3,304 $ 996 76.84% p}.a... $ 43,200 $ 38,436 $ 4,764 88.97% Utilities-Trash $ 450 $ 551 $ (101) 122.54% �. '; $ 4,050 $ 4,987 $ (937) 123.14% Telephone $ 150 $ 28 $ 122 18.79% x,S" ". $ 1,350 $ 1,223 $ 127 90.59% Insurance $ 521 $ - $ 521 0.00%*;a $ 4,687 $ - $ 4,687 0.00% Total Expenses $ 30,850 $ 15,635 $ 15,215 50.68% ' $ 282,148 $ 201,051 $ 81,097 71.26% t..a Invest1999-Invest C Parlcview Office Complex Vacancy Rate Schedule by Suite February 1999 Suite Square No. Tenant Feet 73-710 Fred Waring Drive-Two(2) Story Building 100 Hanover 2,560 102 Bergren 1,360 103 Multiple Sclerosis 488 104 Arthritis Foundation 960 106 Vacant 928 108 Senator Kelly 785 112 Assemblyman Bailin 1,406 114 Chamber of Commerce 1,478 118 Vacant 1,250 119 City/CVAG Conference Room 1,380 120 Golf Dimensions 1,750 200 CVAG 4,292 200A Vacant(space is not available to lease) 841 201 U.S.District Court 604 203 Accounting Services 480 205 Coachella Valley Economic Partnership 700 208 Ferguson&Bernheimer 960 210 Wilson,Pesota Sr Pichardo 3,040 211 Alzheimer's Association 937 Invest;Vacancy Report r �. Parkview Office Complex Vacancy Rate Schedule by Suite February 1999 Suite Square No. Tenant Feet 217 Mcmillan 775 220 CA.State Dept.of Agriculture 1,607 222 WMA Securities 2,981 Total square footage(2 story Building) 31,562 Vacancy Rate--3,019/31562= 9.57% 73-720 Fred Waring Drive-One Story Building 100 State of California-Water Resources 15,233 102 Vacant(Received a lease agreement from the State of CA Rehabilitation Dept) 4,396 Total Square Footage 19,629 Vacancy Rate--4,396/19,629=22.4% Overall Vacancy Rate for Both Buildings: Vacancy Rate-7,415/51,191= 14.48% Note:we are in the process of drafting blueprints for the State of CA Rehabilitation Department.(Expected lease start date September 30,1999) Invest;Vacancy Report City of Palm Desert Desert Willow Budget Vs Actual For the month of March 1999 Budgeted Actual Budgeted Actual March March $ Percentage Year to Year to $ Percentage Revenue 1999 1999 Variance Valiance Date Date Variance Variance Course&Ground $ 785,233 $ 883,546 $ 98,313 112.52% $ 3,489,834 $ 3,367,874 $ (121,960) 96.51% Cans $ 34,584 $ 32,310 $ (2,274) 93.42% $ 160,340 $ 142,120 $ (18,220) 88.64% Golf Shop $ 67,415 $ ` 79,713 $ 12.298 118.24% $ 354,465 $ 350.730 $ (3,735) 98.95% Range 3,550 $ 2,315 $ (1,235) 65.21% $ 17,673 $ 10,094 $ (7,579) 57.12% Food&Beverage Ibilliars,76,065 $ 64,673 $ (11,392) 85.02% $ 358,481 $ 290,719 $ (67,762) 81.10% Interest Income $ 1,500 $ - $ (1,500) 0.00% $ 13,500 $ 9,260 $ (4,240) 68.59% jTotal Revenues $ 968,347 $ 1,062,557 $ 94,210 109.73% $ 4,394,293 $ 4,170,797 $ (223,496) 94.913j Payroll Perimeter Landscaping $ 9085 $ 7,592 $ 1,493 83.57% $ 81,765 $ 68.385 $ 13,380 83.64% Proshop $ 10.539 $ 11,888 $ (1,349) 112.80% $ 77,052 $ 73.964 $ 3,088 95.99% Cart $ 18,737 $ 16,805 $ 1,932 89.69% $ 136,578 $ 105,356 $ 31,222 77.14% Course&Ground $ 95,166 $ 90,854 $ 4,312 95.47% $ 768,182 $ 768,231 $ (49) 100.01% Golf Operations $ 18,229 $ 21,583 $ (3,354) 118.40% $ 145,254 $ 160,531 $ (15,277) 110.52% General&Administration $ 23,786 $ 25,126 $ (1,340) 105.63% $ 211,684 $ 179,167 S 32,517 84.64% Food&Beverage $ 15,127 $ 16,369 S (1,242) 108.21% $ 130,070 $ 113,777 $ 16,293 87.47% Total Payroll $ 190,669 $ 190,217 $ 452 99.76% $ 1,550.585 $ 1,469,411 $ 81,174 94.76J Other Expenditures Perimeter Landscaping $ 4,900 $ 4,129 $ 771 84.27% $ 44,100 $ 33,439 $ 10,661 75.83% Proshop $ 6,000 $ (328) $ 6,328 -5.47% $ 33,690 $ 30,649 $ 3,041 90.97% Proshop-COGS $ 34,863 S 38,589 $ (3,726) 110.69% $ 188,563 $ 182,504 $ 6,059 96.79% Can $ 40,423 $ 50,712 $ (10.2891 125.45% $ 247,797 $ 252,543 $ (4,746) 101.92% Course&Ground-North Course $ 41,585 $ 29,021 $ 12,564 69.79% $ 562,983 $ 471,263 $ 91,720 83.71% Course&Ground-South Course $ 43,891 $ 44,520 $ (629) 101.43% $ 311,586 $ 246,831 $ 64,755 79.22% Course&Ground-Desert Pallet-N $ 3,700 $ - $ 3,700 0.00% $ 37,700 $ - $ 37,700 0.00% Course&Ground-Desert Pallet-S $ 2,445 $ - $ 2,445 0.00% $ 24,915 $ - $ 24,915 0.00% Golf Operations $ 1,050 $ 297 $ 753 28.29% $ 24,190 $ 19.950 $ 4,240 82.47% General&Administration $ 32,446 $ 55,345 $ (22,899) 170.58% $ 370,853 $ 412,911 $ (42,058) 111.34% Range $ 250 $ 2.223 $ (1,973) 889.20% $ 19,200 $ 16,007 S 3,193 83.37% Food&Beverage $ 4,020 $ 6,359 $ (2,339) 158.18% $ 41,300 $ 52,963 $ (11,663) 128.24% Food&Beverage COGS $ 26.623 $ 25,130 $ 1,493 94.39% $ 125,469 $ 126,956 $ (1,487) 101.19% Management Fee $ 25,000 S 25,000 $ - 100.00% $ 181,250 $ 189,943 $ (8,693) 104.80% Financing/Lease $ 9,079 $ 8,030 $ 1,049 88.45% $ 75,844 $ 72,199 $ 3,645 95.19% Total Other Expenditure $ 276,275 S 289,027 $ 12 752 104.62% $ 2,289 440 $ 2,108,158 $ 181,282 92.08% David Ledbetter Academy Learning Center Revenues $ 60,000 S 62,310 $\1/4.2,310 103.85% $ 285,000 $ 219,636 $ (65,364) 77.07% Reimbursements to David Leadbetter $ (51,000) $ (52,964) $ (1,964) 103.85% $ (242,250) $ (186,590) $ 55,660 77.02% Other Expenditures $ (1,450) $ (1,377) $ 73 94.97% $ (13,050) S (12,392) $ 658 94.96% Learning Center Income(Loss) $ 7,550 $ 7,969 $ 419 105.55% $ 29,700 $ 20,654 $ (9,046) $ 2.49 Net Income(Loss $ 508,953 $ 591,282 $ 82,329 116.18% $ 583,968 $ 613,882 $ 29,914 105.129A6J 7......--11 Dw9899;Financial Statement . • City of Palm Desert Desert Willow Budget Vs Actual For the month of March 1999 Budgeted Actual Budgeted Actual March March $ Percentage Year to Year to $ Percentage Revenue 1999 1999 Variance Variance Date Date Variance Variance Coarse&Ground $ 785,233 $ 705,827 $ (79,406) 89.89% $ 3,489,834 $ 3,367,874 $ (121,960) 96.51% Cans $ 34,584 $ 28,126 $ (6,458) 81.33% $ 160,340 $ 142,120 $ (18,220) 88.64% Golf Shop $ 67,415 S 64,889 $ (2,526) 96.25% $ 354,465 $ 350,730 $ (3,735) 98.95% Range $ 3,550 $ 2,095 $ (1,455) 59.01% $ 17,673 $ 10,094 $ (7,579) 57.12% Food&Beverage $ 76,065 $ 50,166 $ (25,899) 65.95% $ 358,481 $ 290,719 $ (67,762) 81.10% Interest Income $ 1,500 $ 891 $ (609) 59.40% $ 13,500 $ 9,260 $ (4,240) 68.59% Total Revenues $ 968,347 $ 851,994 $ (116,353) 87.98% $ 4,394,293 $ 4,170,797 $ (223,496) 94.91%j Payroll Perimeter Landscaping $ 9,085 $ 7,639 $ 1,446 84.08% $ 81,765 $ 68,385 $ 13,380 83.64% Proshop $ 10,539 $ 12,771 $ (2,232) 121.18% $ 77,052 $ 73,964 $ 3,088 95.99% Cart $ 18,737 $ 14,991 $ 3,746 80.01% $ 136,578 $ 105,356 $ 31,222 77.14% Course&Ground $ 95,166 $ 102,106 $ (6,940) 107.29% $ 768,182 $ 768,231 S (49) 100.01% Golf Operations $ 18,229 $ 19,158 $ (929) 105.10% $ 145,254 $ 160,531 $ (15,277) 110.52% General&Administration $ 23,786 $ 19,319 $ 4,467 81.22% $ 211,684 $ 179,167 $ 32,517 84.64% Food&Beverage $ 15,127 $ 14,113 $ 1,014 93.30% $ 130,070 $ 113,777 $ 16,293 87.47% `Total Payroll $ 190,669 $ 190,097 $ 572 99.70% $ 1,550,585 $ 1,469,411 $ 81,174 94.76i Other Expenditures Perimeter Landscaping $ 4,900 $ 4,192 $ 708 85.55% $ 44,100 $ 33,439 $ 10,661 75.83% Proshop $ 6,000 $ 3,589 $ 2,411 59.82% $ 33,690 $ 30,649 $ 3,041 90.97% Proshop-COGS $ 34,863 $ 32,379 $ 2,484 92.87% $ 188,563 $ 182,504 $ 6,059 96.79% Cart $ 40,423 $ 42,450 $ (2,027) 105.01% $ 247,797 $ 252,543 $ (4,746) 101.92% Course&Ground-North Course $ 41,585 $ 39,876 $ 1,709 95.89% $ 562,983 $ 471,263 $ 91,720 83.71% Course&Ground-South Course $ 43,891 $ 32,280 $ 11,611 73.55% $ 311,586 $ 246,831 $ 64,755 79.22% Course&Ground-Desert Pallet-N $ 3,700 $ - $ 3,700 0.00% $ 37,700 $ - $ 37,700 0.00% Course&Ground-Desert Pallet-S $ 2,445 $ $ 2,445 0.00% $ 24,915 $ - $ 24,915 0.00% Golf Operations $ 1,050 $ 56 $ 994 5.33% $ 24,190 $ 19,950 $ 4,240 82.47% General&Administration $ 32,446 $ 52,452 $ (20.006) 161.66% $ 370,853 $ 412,911 $ (42,058) 111.34% Range $ 250 $ 408 $ (158) 163.20% $ 24,200 $ 16,007 $ 8,193 66.14% Food&Beverage $ 4,020 $ 4,982 $ (962) 123.93% $ 41,300 $ 52,963 $ (11,663) 128.24% Food&Beverage COGS $ 26,623 $ 20,555 $ 6,068 77.21% $ 125,469 $ 126,956 $ (1,487) 101.19% Management Fee $ 25,000 $ 25,000 $ - 100.00% $ 181,250 $ 189,943. $ (8,693) 104.80% Financing/Lease $ 9,079 $ 8,240 $ 839 90.76% $ 75,844 $ 72,199 $ 3,645 95.19% Total Other Expenditures $ 276,275 $ 266,459 $ 9,816 96.45% $ 2,294,440 $ 2,108,158 $ 186,282 91.88%1 David Leadhetter Academy Learning Center Revenues $ 60,000 $ 43,871 $ (16,129) 73.12% $ 285.000 $ 219,636 $ (65,364) 77.07% Reimbursements to David Leadbetter $ (51,000) $ (37,290) $ 13,710 73.12% $ (242,250) $ (186,590) $ 55,660 77.02% Other Expenditures $ (1,450) $ (1,377) $ 73 94.97% $ (13,050) $ (12,392) $ 658 94.96% Learning Center Income(Loss) $ 7,550 $ 5,204 $ (2,346) 68.93% $ 29,700 $ 20,654 $ (9,046) $ 2.49 Net Income(Loss) $ 508,953 $ 400,642 $ (108,311) 78.72% $ 578,968 $ 613,882 $ 34,914 106.03%1 Dw9899;Financial Statement ! \ \ ( \ ci \ 7 g 0 ) { \ ( ( / \ \ 2 | / = g NN 0 21 § - 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'eases 8 8 m eg . . . s �- z 111 . 1Pl g 5 ee_'IMUamLI --RAM T -� s <2 E - - 1 511 1.t. . au.« : - t fii F g i FIRECLIFF COURSE-MARCH 1999 Description No.Of Revenue Avg.Per Pot to Rounds Per P08 Round Total Resident Rounds Resident Fee-Weekend-Winter 574 $ 25,830 $ 45.00 11.47c% Resident Fee-Weekday-Winter 955 $ 42,975 $ 45.00 19.08% Resident Twilight-Winter 75 $ 3,375 $ 45.00 1.50% Resident Fee-Weekday-Fall Total Resident 1,604 $ 72,180 $ 45.00 32.04% Non Resident Winter Fee-Posted Weekend 705 765 $ 9q 668 $ 117.14 15.26%% Winter Fee-Posted Weekday Winter Fee-9 Hole Weekday 29 $ 1,595 $ 55.00 0.58% Winter Fee-9 Hole Weekend 3 $ 165 $ 55.00 0.06% Winter Fee-IROC MBR Guest 6 $ 648 $ 108.00 0.12% Winter Fee-IROC MBR WKDY 14 $ 1,344 $ 96.00 0.28% Winter Fee-IROC Des. PRTY Wlmd 7 $ 700 $ 100.00 0.14% Winter Fee-IROC Des.PRTY Wkdy 13 $ 1,440 $ 110.77 0.26% Winter Fee-Wholesale Replay 38 $ 2,280 $ 60.00 0.76% Winter Fee-Wholesale Weekend 292 $ 35,040 $ 120.00 5.83% Winter Fee-Wholesale Weekday 291 $ 29,100 $ 100.00 5.81% Fall Fee-Wholesale Weekend 8 $ 600 $ 75.00 0.16% Winter Fee-Wholesale Twilight Fee 4 $ 320 $ 80.00 0.08% Winter Fee-Twilight 251 $ 19,850 $ 79.08 5.01% Winter Fee-Super Twilight 38 $ 1,701 $ 44.76 0.76% Winter Fee-Posted Replay 10 $ 800 $ 80.00 0.20% Winter Fee Passbook Weekday 79 $ 7,505 $ 95.00 1.58% Winter Fee Passbook Weekend 23 $ 2,530 $ 110.00 0.46% Winter Fee-P.S.Golfer Fee(wkdy) 8 $ 800 $ 100.00 0.16% Winter Fee-Leadbetter Fee 19 $ 1,425 $ 75.00 0.38% Winter Fee-Leadbetter Twilight Fee 46 $ 2,300 $ 50.00 0.92% Winter Fee-Passbook Wkdy 50 $ 4,750 $ 95.00 1.00% Winter Fee-Passbook WKND 14 $ 1,540 $ 110.00 0.28% Fee Special Event Variable 249 $ 71,311 $286.39 4.97% Total Non Resident Rounds 2,961 $ 373,910 $ 126.28 59.15% Other Rounds Junior Walking 23 230 $ 10.00 0.46% Charity Event 1 25 $ 25.00 0.02% Total Other 24 255 $ 10.63 0.48% Complimentary VIP 59 0 $ - 1.18% PGA Member 19 0 $ - 0.38% COD/PDHS 238 0 $ - 4.75% Donation 72 0 $ - 1.44% Employee 21 0 $ - 0.42% Employee Guest 8 0 $ - 0.16% Total Complimentary 417 0 $ - 8.33% Total Round(FireCliff) 5,006 446,345 $ 89.16 100.00% I- --� MOUNTAINVIEW COURSE-MARCH 1999 Description No.Of Revenue Avg.Per Pet to Rounds Per P08 Round Total Resident Rounds Resident Fee-Weekend-Winter 537 $ 24,165 $ 45.00 10.48% Resident Fee-Weekday-Winter 1,187 $ 53,415 $ 45.00 23.17% Resident Twilight-Winter 48 $ 2,160 $ 45.00 0.94% . Resident Fee-Weekday-Fall Total Resident 1,772 $ 79,740 $ 45.00 34.59% Non Resident Winter Fee-Posted Weekend 531 $ 73,102 $ 137.67 10.37% Winter Fee-Posted Weekday 591 $ 68,672 $ 116.20 11.54% Winter Fee-9 Hole Weekday 1 $ 55 $ 55.00 0.02% Winter Fee-9 Hole Weekend - $ - $ 0.00% Winter Fee-IROC MBR Guest 4 $ 384 $ 96.00 0.08% Winter Fee-IROC MBR wknd 3 $ 336 $ 112.00 0.06% Winter Fee-IROC MBR WKDY 5 $ 480 $ 96.00 0.10% Winter Fee-IROC Des. PRTY Wknd 50 $ 3,500 $ 70.00 0.98% Winter Fee-IROC Des.PRTY Wkdy 56 $ 3,360 $ 60.00 1.09% Winter Fee-IROC Des.PRTY Twilight 1 $ 80 $ 80.00 0.02% Winter Fee-Wholesale Replay 60 $ 3,600 $ 60.00 1.17% Winter Fee-Wholesale Weekend 414 $ 49,680 $ 120.00 8.08% Winter Fee-Wholesale Weekday 349 $ 34,900 $ 100.00 6.81% Fall Fee-Wholesale Weekend (12) $ 900 $ (75.00) -0.23% Fall Fee-Wholesale Weekday 4 $ 300 $ 75.00 0.08% Winter Fee-Wholesale Twilight Fee - $ - $ - 0.00% Winter Fee-Twilight 224 $ 17,630 $ 78.71 4.37% Winter Fee-Super twilight 39 $ 1,755 $ 45.00 0.76% Winter Fee-Posted Replay - $ - $ - 0.00% Winter Fee Passbook Weekday 67 $ 6,365 $ 95.00 1.31% Winter Fee Passbook Weekend 39 $ 4,290 $ 110.00 0.76% Winter Fee-P.S. Golfer Fee(wkdy) 10 $ 1,000 $ 100.00 0.20% Winter Fee-P.S.Golfer Fee(wknd) 2 $ 250 $ 125.00 0.04% Winter Fee-Leadbetter Fee 33 $ 2,475 $ 75.00 0.64% Winter Fee-Leadbetter Twilight Fee 57 $ 2,850 $ 50.00 1.11% Winter Fee-Passbook Wkdy 32 $ 3,040 $ 95.00 0.62% Winter Fee-Passbook WKND 5 $ 550 $ 110.00 0.10% Fee Special Event Variable 584 $ 104,074 $ 178.21 11.40% Total Non Resident Rounds 3,149 $ 383,628 $ 121.83 61.47% Other Rounds Junior Walking 15 $ 150 $ 10.00 0.29% Charity Event - $ - $ - 0.00% Total Other 15 $ 150 $ 10.00 0.29% Complimentary VIP 23 $ - $ - 0.45% PGA Member 2 $ - $ - 0.04% COD/PDHS 124 $ - $ - 2.42% Donation 13 $ - $ - 0.25% Employee 25 $ - $ - 0.49% Employee Guest - $ - $ - 0.00% Total Complimentary 187 $ - $ - - 3.65% Total Round(Mountainview) 5,123 $ 463,518 $ 90.48 100% C. — Desert Willow-Combined Analysis-March 1999 Resident 3,376 $ 151,920 $ 45.00 33.33% Non-Resident 6,110 $ 757,538 $ 123.98 60.32% Other 39 $ 405 $ 10.38 0.39% Complimentary 604 $ - $ - 5.96% Desert Willow Totals 10,129 • 909,863 $ 89.83 100.00% . . n ; ; , !;! 2 q f z } ! ! %| }! - 3 ` ! § ! 1 @ , P E C % ! K } § 2 ! ` » � at P 1 ! � Pi s % { \ _§ $ | N {) ! I! ! , In : ! 7 ` | ƒf \ | { , CO ni oi . \ e +r $ 2 | £ 4 z ` ` } / 0 7 8 ) A , � ! � fI ' 13C--:°: CO ,U ! I ! . � • City of Palm Desert Desert Willow Three Month Cash Reserve Analysis Three Month Projected Expenditures April May June Projected Expenditures Payroll $ 182,444 $ 166,129 $ 165,216 $ 513,789 'tbus $ 40,671 $ 30,648 $ 23,943 $ 95.262 Operating $ 254,175 $ 248,183 $ 223,012 $ 725,370 [Totals II $ 477,290 $ 444,960 $ 412.171 $ 1,334,4211 Cash Reserve Analysis One Month Three Months Required Reserve I 1 $ 477,290.00 $ 1,334,421.00 I [Cash on Hand I $ 1,454,654.87 $ 1,454,654.87 I Variance-Favorable(Unfavorable) I 1 $ 977,364.87 $ 120,233.87 I Reconciliation of adjusted cash requirement Reconciled Cash on hand $ 1,268,606.40 Add: Preopening&Grandopening Owed by the City $ 20,230.31 Preopening owed by the RDA $ 3,593.18 October Deficit Owed by Kemper $ 72,619.86 n Perimeter(Cash Owed By City of Palm Desert) $ 89,605.12 Adjusted Cash on Hand $ 1,454,654.87 Adjusted Reserve Requirement $ 477,290.00 Adjusted Cash Balance $ 977,364.87 r Represents operating deficit owed by Kemper Sports. 2 Represents 88% of perimeter expenditures to date. a Represents budgeted expenditures for April 1999. Does not Include interest on city loan. Includes only 12% of the projected perimeter landscaping expenditures. Dw9999;Cash Com Pali.-Jesert Recreation Facilities Cori. .ation Income Statement Mar-99 Mar-99 k Budget Actual Variance Variance Food & Beverage Revenues $76,065 $64,673 ($11,392) 85.02% Total Revenues $76,065 $64,673 ($11,392) 85.02% Salaries $15,127 $16,369 ($1,242) 108.21% Cost of Goods Sold-F&B $26,623 $25,130 $1,493 94.39% Food & Beverage Expense $4,020 $6,359 ($2,339) 158.18% Total Expenses $45,770 $47,858 ($2,088) 104.56% Net Income (Loss) $30,295 $16,815 Note: The above revenues and expenditures are also included in the Desert Willow analysis. Dw9899;PDRFC Budget NEW CITY OF PALM DESERT 1999 BROKER RFI LIST 1. TDI, Inc. Withdrew (Capital Position) Attention: Mr. Don W. Collins Vice President 23 Corporate Plaza, Suite 210 Newport Beach, CA 92660 2. Provident Advisers, Inc. Withdrew (MMMF) Attention: Mr. Scott K. Laudeman Vice President 465 North Halstead Street, Suite 110 Pasadena, CA 91107 3. Higgins Capital Management, Inc. No Response Attention: Ms. Deborah M. Higgins President 2223 Avenida de la Playa, Suite 210 La Jolla, CA 92037 4. Gilford Securities, Inc. Withdrew (Capital Position) Attention: Mr. Robert D. Allen Vice President 550-C Newport Center Drive, Suite 197 Newport Beach, CA 92260 5. Vining Sparks Withdrew (Capital Position) Attention: Mr. Ken Erbeznik 500 Newport Center Drive Newport Beach, CA 92660 6. Goldman Sachs & Company No Response Attention: Ms. Bonnie Robinson 555 California Street, Suite 44th Floor San Francisco, CA 94104 7. J.P. Morgan Securities No Response Attention: Ms. Heather Hiatt 101 California Street, 37th Floor San Francisco, CA 94111 r City of Palm Desei 1999 Broker RFI List Page 2 of 2 8. NationsBanc Montgomery Securities, LLC Submitted Ape (3-22-99) Attention: Mr. Kenneth Herman Managing Director 300 South Grand Avenue, 19th Floor Los Angeles, CA 90071 THE MIDDLE MARKET The following California local government agencies have investment portfolios of $100 million to $1 billion: Local Government Agency portfolio Size 1$ Millions) City of San Jose 950 City of Anaheim 900 City of Long Beach 800 City of Fresno 580 City of Irvine 500 County of Placer 350 City of Palm Desert 327 Irvine Ranch Water District 325 San Diego County Water Authority 300 City of Pasadena 275 County of Solano 260 City of Cerritos 220 Port of San Diego 190 Rancho California Water District 144 City of Bakersfield 125 City of Ontario 115 City of Oceanside 115 City of Palm Desert Internal Correspondence Date: Monday, 26 April 1999 Subject: Broker-Dealer Application of NationsBanc Montgomery Securities From: Thomas W. Jeffrey, Investment Manager To: Paul S. Gibson, City Treasurer RECOMMENDATION That the City of Palm Desert and the Palm Desert Redevelopment Agency approve the application of NationsBanc Mongtomery Securities LLC ("NMS, to serve as a broker-dealer for both entities, based upon NMS's strong capital position; its large product inventory; and the professional reputation of the AIMS broker who would be assigned to the relationship. BACKGROUND The City solicited a broker-dealer application from NMS, due to its large product inventory. Profile of the Firm NMS, a Delaware limited liability company, is 99.9 percent owned by NationsBank and 0.1 percent owned by BankAmerica. NationsBank is a super-regional bank that is headquartered in Charlotte, North Carolina, the banking capital of the South. Prior to the "merger" between BankAmerica and NationsBank (better described as a Crocker-style takeover by NationsBank), NMS operated as BancAmerica Robertson Stephens. NMS is a primary dealer in U.S. Government securities, and maintains regional offices in San Francisco and in Los Angeles. In 1998, the Los Angeles office executed 49,000 transactions for a total trading volume of $67 billion. The Los Angeles office does business with 225 local government agencies, most of which are in California. NMS is registered with the SEC, the NASD, the NYSE, and the State of California Department of Corporations as a broker-dealer. As of 12-31-98, NMS's net capital position was $27-7 million, which was $205 million higher than its minimum net capital requirement of $72 million. roker-Dealer Application of NationsBanc Montgomery 99mere Securities 26 April 1999 Page 2 of 3 For the quarter ended 12-31-98, NMS reported no political contributions in its MSRB Rule G-37 filing. NMS submitted all of the documents (15) that are required as part of the City's application process for new brokers. NMS's amended Form BD (NASD Broker-Dealer Registration) dated 11-20-98 listed 52 complaints and administrative proceedings over a 15-year period. Nineteen complaints were directed at BankAmerica and its affiliates; 33 were directed at NationsBank and its affiliates. A comparison with Morgan Stanley Dean Witter's (an approved broker) Form BD showed a similar number of total complaints and administrative proceedings. BankAmerica's complaints typically related to a failure to file reports on time; a failure to follow procedure; or a failure to notify customers. BankAmerica inherited some of these complaints from SeaFirst; Continental Illinois; and Security Pacific, after it merged with them. NationsBank had several complaints relating to securities fraud; violation of investment-related statutes; and misleading sales literature. NationsBank inherited most of the serious complaints, however, from Barnett Investments (Florida) and from Boatman's Investments (Arkansas), after it merged with them. Profile on the Account Representative Ken Herman, the Managing Director of NMS's Los Angeles office, would be the City's exclusive sales contact at NMS. He has 26 years of securities sales experience with BankAmerica, having risen through the ranks. During that time, no complaints were filed and no administrative proceedings were initiated against him (per Herman's NASD Form U-4). Herman's portfolio consists of 75 local government agencies, most of which are in California. NMS did not comply with the City's requirement of four governmental references, due to a NMS policy on customer confidentiality. Ken Herman, however, is well-known through the California Municipal Treasurer's Association. Leslie Wells, a trader with Union Bank of California (one of the City's four approved brokers) and a member of the LAIF Advisory Board, worked with Herman for a number of years at BankAmerica, and recommended him highly. • Rroker-Dealer Application of NationsBanc Montgomery Securities 26 April 1999 Page 3 of 3 FISCAL IMPACT The approval of NMS as a broker for the City would enlarge the pool of potential securities from which the City could purchase. This might increase portfolio profitability by an undetermined amount, by lowering the cost of securities purchases. o-/ KENNETH G.HERMAN 1116 N. Engelwild Drive Glendora,California 91741 (626) 857-0049 PROFESSIONAL SUMMARY Seasoned investment manager with a strong background in taxable government sales: proven financial and administrative skills; action-minded with a determination and commitment to succeed. SUMMARY OF EXPERIENCE 1987 to Present NationsBanc Montgomery Securities,LLC BankAmerica, Corp. Los Angeles, California Managing Director Responsible for the distribution of fixed income securities to major institutional investors within the Southwest region of the country. 1984- 1987 Capital Markets Group Bank of America San Francisco,California Vice President-National Sales Manager Responsible for full distribution and marketing of investment products,which include: municipal bonds,taxable government investments and money market liability instruments. Network responsibilities: fifteen offices and seventy employees, of which two are Regional Vice President/Managers. 1985 sales volume equaled twenty-three billion dollars. 1981 - 1984 Capital Markets Group Bank of America Atlanta, Georgia Vice President-Regional Sales Manager Responsible for the seven Southeastern States for the full distribution of taxable government securities to institutional investors. This office was opened through my efforts and proved to be the quickest office to become profitable ever opened by the Investment Division. Network responsibilities: one office, seven employees,with annual sales volume of seventeen billion dollars. 1973 - 1981 Capital Markets Group Bank of America Los Angeles, California Senior Account Executive Institutional salesman for the distribution of taxable government securities to institutional investors. Consistently produced in the top five of national sales ranking during tenure. EDUCATION AND LICENSES 1977 -Masters Program-Teaching Administration California State University,Northridge, CA 1971 -B.A. Business Full California Teaching Credential Series 3, Series 7, Series 8, Series 24, Series 52, Series 53, Series 63 REFERENCES Available upon request. OFFICE OF THE TREASURER CITY OF PALM DESERT BROKER-DEALER REQUEST FOR INFORMATION For Calendar Year 1999 _. 105 • '• �►" lab R:4/h r r err Vitt i yak • :• Paul S. Gibson Treasurer 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 CANDIDATE: NATIONSBANC MONGTOMERY SECURITIES SECTION I: STATEMENT OF POSITION AND GENERAL REQUIREMENTS The City of Palm Desert, the Palm Desert Redevelopment Agency, and the Palm Desert Housing Authority (hereafter referred to collectively as the "City") are local governmental agencies that operate under the laws of the State of California. The City manages a combined portfolio of approximately $300 million, which includes United States Treasury and Agency obligations, corporate obligations, and selected money market instruments. The City has adopted a written "Statement of Investment Policy" which governs the operation of its investment program. A copy of this document is enclosed. The City annually reviews Requests for Information ("RFI") which are completed and submitted by broker-dealers that wish to qualify as authorized providers of financial services to the City. The City will notify all broker-dealer candidates, in writing, on whether their request for such status has been approved or denied. If a candidate's request is denied or if its RFI is rejected for being incomplete or late, then that candidate shall not be eligible to reapply for three years. Regional broker-dealers shall be eligible for consideration as authorized providers of financial services to the City only if they: 1. Have a net capital position in excess of $ 100 million; 2. Have been in existence for more than five years; 3. Are currently licensed as a broker-dealer by the State of California; and 4. Are headquartered or have a branch office in California. The City shall not transact business with an authorized broker-dealer until all of the documentation that both parties require, has been executed and delivered. SECTION II: APPLICATION DEADLINE AND REQUIRED DOCUMENTS The City must receive the following documents from each broker-dealer candidate by no later than 4:30 p.m. on Wednesday, 31 March 1999: ✓ A completed "Broker-Dealer Request For Information". if A copy of the firm's most recent Annual Report. City of Palm Desert 1999 Broker-Dealer RFI Page 2 of 9 A copy of the firm's NASDAQ "Certificate of Membership". A copy of the firm's NASDAQ "Form BD - Uniform Application for Broker- Dealer Registration". A copy of the firm's current "Form BD Status Report". A copy of the firm's current Municipal Securities Rulemaking Board Rule G- 37 filing. A copy of the firm's State of California Department of Corporations "Broker- Dealer's Certificate". A copy of NASDAQ "Form U-4 - Uniform Application for Securities Industry Registration or Transfer" for each employee with whom the City would be trading. Certified documentation of the firm's capital adequacy, as measured by Federal Reserve Standards. A copy of the current "Form U-4 Status Report" on each firm employee with whom the City would be trading. ✓ A resume on each firm employee with whom the City would be trading. A trading resolution from the firm. A copy of the firm's wiring and delivery instructions. Samples of research reports or market information that the firm regularly provides to public sector clients. ✓ Samples of the firm's trade documentation. These documents may be delivered in person, by post, or by courier to: City of Palm Desert Attention: Thomas Jeffrey, Investment Manager 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 If a broke&ulealer candidate fails to submit the above-referenced documents by the specified deadline, then its RFI shall be deemed to have been automatically rejected by the City. That candidate shall not be eligible to reapply for three years. City of Palm Desert 1999 Broker-Dealer RFI Page 3 of 9 If you have any questions about this RFI, then please call Mr. Jeffrey at 760.346.0611 , extension 383. SECTION III: REQUEST FOR GENERAL INFORMATION FROM BROKER-DEALER CANDIDATE 1 . Firm Name: NATIONSBANC MONTGOMERY SECURITIES LLC 2. Contact Address: 300 S. GRAND AVE, 19th Floor LOS ANGELES, CA 90071 3. Contact Personnel:KEN HERMAN Sales Representative Supervising Manager Name: KEN HERMAN Name: SAME Title: MANAGING DIRECTOR Title: TEL: ( 213) 229-3204 TEL: ( ) TEL: (800) 766-2632 TEL: (800) 4. Please identify all personnel who would be trading with or quoting securities prices to the City. # of Years in # of Years Name Title Institutional Sales with Firm Telephone KEN HERMAN MANAGING DIRECTOR 30 26 (213) 229-3204 Please provide information on the history, details, and status or disposition of any disciplinary actions or complaints, arbitration, or litigation involving the above personnel. See attachment 5. Which of the personnel who are listed in Question 4 have read the City's "Statement of Investment Policy", adopted 11 February 1 999? KEN HERMAN City of Palm Desert 1999 Broker-Dealer RFI Page 4 of 9 6. Please describe any formal program of supervision that your firm has established for the sales representative who is listed in Question 3. See attachment 7. Please provide four references from California public sector clients that have established relationships with the sales representative who is listed in Question 3. Indicate: (a) name of governmental agency; (b) contact person; (c) address; (d) telephone number; and (e) length of relationship. FOR CONFIDENTIALITY REASONS, NATIONBANC MONTGOMERY SECURITIES„LLC DOES NOT DISCLOSE CUSTOMER INFORMATION. 8. Is your firm: (check one) ❑ A Dealer ❑ A Broker x❑ A Broker/Dealer 9. Does your firm regularly report to the Market Reports Division of the Federal Reserve Bank of New York as a "primary dealer"? (check one) Yes. NationsBanc Montgomery Securities LLC(and or its EtYes ❑ No predecessor firms) has been a Primary Dealer since April, 1994. Bank of America has been a Primary Dealer since 1965. If yes, how long has your firm been a primary dealer? 10. Please answer the following questions only if your firm IS NOT a primary dealer. a. Does your firm have a net capital position in excess of $100 million? (check one) ❑ Yes ❑ No b. Has your firm been in existence for more than five years? (check one) ❑ Yes ❑ No c. Is your firm currently licensed as a broker-dealer by the State of California? (check one) ❑ Yes ❑ No d. Is your firm headquartered or does it have a branch office in California? (check one) O Yes ❑ No City of Palm Dese 1999 Broker-Dealer RFI Page 5 of 9 11 . Is your firm a member of the National Association of Securities Dealers? (check one) E Yes ❑ No If "no", why not? 12. Which of the following entities has the authority to oversee the operation of your firm, in terms of examinations, rules, and regulations? (check appropriate choices) ❑ FDIC fI SEC ® NYSE ❑ Comptroller of Currency ® Federal Reserve System ❑ Other (example: state regulatory agency) (specify) Multistate firms please note: It is not necessary to include regulatory agencies that do not have jurisdiction over the your firm's activities in California. 13. Is your firm owned by a holding company? (check one) Ell Yes ❑ No If "yes", what is the holding company's name and };F>NKAMERICA CORPORATION its net capitalization? TOTAL EQUITY AS OF 9/30/98 is (BAC) APPROXIMATELY $47.3 BILLION 14. Has your firm consistently complied with the Federal Reserve Bank's capital adequacy guidelines? Please provide certified documentation of your current capital adequacy as measured by Federal Reserve Standards. (check one) x❑ Yes ❑ No If "no", please explain. 15. What was your firm's total volume in United States Treasury and Agency securities trading last year? Firm-Wide: $ 3 TRILLION # Of Transactions: Approx 135,000 Your Office: $67 Billion # of Transactions: Approx 49,000 16. Which of the following instruments are regularly offered by your trading desk? (check appropriate choices) Lf T-Bills ❑x Bankers's Acceptances (Domestic) ❑' T-Notes ❑ Bankers's Acceptances (Foreign) City of Palm De.r' 1999 Broker-Dealer RFI Page 6 of 9 [ T-Strips fl Certificates of Deposit E Repurchase Agreements gx Commercial Paper E Reverse Repo Agreements ® Medium-Term Notes ® Agencies (specify) ® Money Market Mutual Funds 17. Which of the financial instruments that are described in Question 16 does your firm specialize in marketing? NationBanc Montgomery Securities LLC does not specialize in any particular 18. Please describe the capital line and trading limits of the branch office of your firm that would be trading with the City. See attachment. 19. Is your firm a member of the Securities Investor Protection Corporation ("SIPC")? (check one) ® Yes ❑ No 20. If "no" to Question 19, does your firm participate in any program that provides securities insurance coverage for a public sector client which purchases the financial instruments that are listed in Question 16, on a receipt-versus-payment ("RVP") basis? (check one) ❑ Yes ❑ No If "yes", please explain. 21 . If "no" to Question 20, please explain why your firm does not carry any securities insurance coverage for its customers. 22. Please indicate a percentage breakdown of your firm's client base by portfolio size. NATIONSBANC MONTGOMERY SECURITIES DEALS MIANLY WITH LARGE INSTITUTIONS AND MIDDLE MARKET CLIENTS. 23. How many and what percentage of your securities transactions failed last month? Last year? 1% 24. What precautions does your firm take to protect the interests of the public when dealing with public sector clients as investors? See attachment 25. What trade documentation (e.g., transaction information, confirmations, statements, etc.) would your firm provide to the City? See at ac men City of Palm Desq 1999 Broker-Dealer RFI Page 7 of 9 26. What portfolio information, if any, does your firm request from its public sector clients? See Attachment 27. What makes your firm the best broker/dealer for the City? What advantage would the City gain by trading with your firm? What makes us stand out as one of is our reputation - our knowledge of the capital markets as a primary dealer - our long term relationship with California Municiaplities and our commitment to our customers. SECTION IV: REQUEST FOR BROKER-DEALER CANDIDATE DISCLOSURE 28. Have any of your firm's public sector clients sustained a loss on a securities transaction within the last five years, arising from a misunderstanding or misrepresentation of the risk characteristics of a financial instrument that was recommended by and purchased through your firm? (check one) See Attachment ❑ Yes ❑ No If "yes", please describe each matter briefly. 29. Have any of your firm's public sector clients claimed, in writing, within the last five years, that your firm was responsible for any investment losses? (check one) ® Yes ❑ No If "yes", please describe each matter briefly. See Attachment 30. Has your firm been subject to any litigation, arbitration, or regulatory proceedings, either pending, adjudicated, or settled, within the last five years, that involved allegations of improper, fraudulent, disreputable or unfair activities related to the sale of securities to or the purchase of securities from institutional clients? (check one) ❑ Yes No If "yes", please describe each matter briefly. See Attachment 31 . Has your firm been subject to a regulatory, state, or federal agency investigation, within the last five years, for alleged improper, fraudulent, disreputable, or unfair activities related to the purchase or sale of securities? (check one) See Attachment ❑ Yes ❑ No If "yes", please describe each matter briefly. SECTION V: CERTIFICATION aL onsBanc 1Vlon gomery Seri e iuties Question 4. Please provide information on the history,details,and status or disposition on any disciplinary actions or complaints,arbitration,or litigation involving the above personnel. From time to time,regulatory,state,or federal agencies may make non-public inquiries concerning the activities of NationsBanc Montgomery Securities LLC,its affiliates and their employees. Those firms and their employees may or may not be made aware of such inquiries;and such inquiries may not result in the institution of public proceedings. It is the policy of NationsBanc Montgomery Securities LLC to decline to comment on the existence or subject matter of any such non-public inquiries. Not withstanding the foregoing,of NationsBanc Montgomery Securities LLC knows of no such public inquiries which would materially adversely affect its ability to perform the services described herein. Question 6. Please describe any formal program of supervision that your firm has established for the sales representative who is listed in question 3. The SEC,NYSE,NASD,MSRB and other self-regulatory organizations,state securities commissions and broker-dealers themselves have long recognized that supervision is an essential ingredient in the maintenance of public trust and confidence in the integrity of the securities markets. To the that end,and as specifically required by NYSE Rule 342,NASD Rule 3010 and MSRB Rule G-27,NMS has established,maintains and enforces written policies and procedures that enable Supervisory Principals to supervise their personnel. In accordance with NYSE Rule 342 the NMS Chairman has overall authority and responsibility internal supervision and control of NMS and compliance with securities laws and regulations. Question 14. Has your firm consistently complied with the Federal Reserve Bank's capital adequacy guidelines?Please provide certified documentation of your current capital adequacy as measured by Federal Reserve Standards. Yes,except as explained below: On February 12, 1991,NCNB Capital Markets,Inc,Had a deficit net capital position which resulted from an inadvertent operations error. The operation error was corrected the following day and on February 13, 1991,NCNB Capital Markets,Inc.had sufficient extess net capital. After discussion with the NASD,the company made the appropriate notification pursuant to SEC Regulation 17a-11. For the period March 27—30, 1997 and April 1 —7, 1997,BancAmerica Securities,Inc.(the"Company") (a predecessor to NMS)had a net capital position that may have been below the amount required under Rule 15c3-1 (the"Net Capital Rule"). This situation resulted from the Company taking a 15%'haircut' on $150 million of Rule 144A Notes(the"Notes")based upon its understanding of the provisions of the Net Capital Rule believed to be applicable to the Notes. Based upon a re-evaluation of the Notes under theNet Capital Rule,the company recognized there was an issue as to whether a 100%"haircut"should have been taken in respect of the Notes similar debt securities. Assuming a 100%"haircut"was required under the Net Capital Rule,the Company's net capital would have been below the amount required for the period mentioned above. The Company made the appropriate notification under SEC Regulation 17a-11. Question 18. Please describe the capital line and trading limits of the branch office of your firm that would be trading with the City. NationsBanc Montgomery Securities LLC complies with SEC regulations on capital and reserve requirement. Trading limits,though administered under strict risk management policies,are sufficient to provide a wide range of securities products to meet customer's needs. NationsBanc Montgomery Securities LLC Department 6513 300 S. Grand Avenue, 19th Floor Los Angeles, CA 90071 Question 24. What precautions does your firm take to protect the interest of the public when dealing with public sector clients as investors? NationsBanc Montgomery Securities,LLC complies with applicable federal&state securities laws. Other than the firm's compliance with applicable laws,it does not take any specific measures to protect the interests of the public when dealing with government agencies. Question 26. What portfolio information,if any,does you firm request from it's public sectors clients? NationsBanc Montgomery Securities LLC requires that the sales representative read public clients' investment policy guidelines and review portfolio information when applicable. Question 28. Have any of your firm's public sector clients sustained a loss on a securities transaction within the last five years,arising from a misunderstanding or misrepresentation of the risk characteristics of a financial instrument that was recommended by and purchased through your firm? Yes.In the Orange County bankruptcy proceeding(In re Orange County,U.S.B.C.,C.D. Cal.No.SA 94- 22272JR),the County has sued a number of broker-dealers.In a separate proceeding,the County has sued BancAmerica Securities,Inc.(a predecessor firm to NationsBanc Montgomery Securities LLC)alleging among other things that it allowed or encouraged the former County Treasurer to enter into unmatched reverse repurchase transactions. In October 1995,the Farm credit Bank of Texas("FCBT')brought an action against NationBanc Capital Markets,Inc. (`NCMI"),a predecessor to NMS,alleging that NCMI sold it a single,unsuitable derivative product.This matter was ultimately resolved through binding arbitration conducted by the American Arbitration Association,with the result that all relief requested by the FCBT was denied. Question 29. Have any of your firm's public sector clients claimed,in writing,within the last five years,that your firm was responsible for any investment losses? Yes. In the Orange County bankruptcy proceeding(In re Orange County,U.S.B.C.,C.D. Cal.No. SA 94- 22272JR),the County has sued a number of broker-dealers.In a separate proceeding,the County has sued BancAmerica Securities,Inc.(a predecessor firm to NationsBanc Montgomery Securities LLC)alleging among other things that it allowed or encouraged the former County Treasurer to enter into unmatched reverse repurchase transactions. In October 1995,the Farm credit Bank of Texas("FCBT")brought an action against NationBanc Capital Markets,Inc.(`NCMI"),a predecessor to NMS,alleging that NCMI sold it a single,unsuitable derivative product.This matter was ultimately resolved through binding arbitration conducted by the American Arbitration Association,with the result that all relief requested by the FCBT was denied. Question 30. Has your firm been subject to any litigation,arbitration,or regulatory proceedings, either pending,adjudicated,or settled,within the last five years,that involved allegations of improper,fraudulent,disreputable or unfair activities related to the sale of securities to or the purchase of securities from institutional clients? No. To the best of our knowledge,there has been no material litigation,arbitration or regulatory proceedings either pending,adjudicated or settled that our fum has been subject to within the last five years that involved allegations of improper,fraudulent,disreputable or unfair activities related to the sale of securities to or the purchase of securities from institutional clients. For purposes of this section, proceedings are material if our independent accountant applying generally accepted accounting principals determines that such proceedings required disclosure on our fmancial statements. Question 31. Has your firm been subject to a regulatory,state,or federal agency investigation, within the last five years,for alleged improper,fraudulent,disreputable,or unfair activities related to the purchase or sale of securities? From time to time,regulatory,state or federal agencies may make non-public inquiries concerning the activities of NationsBanc Montgomery Securities LLC,its affiliates and their employees. Those firms and their employees may or may not be made aware of such inquiries;and such inquiries may not result in the institution of public proceedings. It is the policy of NationsBanc Montgomery Securities LLC to decline to comment on the existence or subject matter of any such non-public inquiries. City of Palm Desert 1999 Broker-Dealer RFI Page 8 of 9 I hereby certify that I have read and that I understand the investment policies and objectives of the City of Palm Desert, the Palm Desert Redevelopment Agency, and the Palm Desert Housing Authority (hereafter referred to collectively as the "City"), as represented in the City's "Statement of Investment Policy", adopted 11 February 1999. My firm will ensure that all affected sales personnel will be routinely informed of the City's investment objectives, horizon, outlook, strategies, and risk constraints, as the City provides such information. My firm will notify the City Treasurer immediately, by telephone, and, in writing, in the event of a material adverse change in its financial condition, or of any violation of Municipal Securities Rulemaking Board Rule G-37. My firm pledges to exercise due diligence in informing the City Treasurer of all foreseeable risks associated with any financial transactions that my firm undertakes with the City. I attest to the accuracy of my firm's response to the City's Request For Information. NOTE: Completion of this Request For Information is only part of the City of Palm Desert's review process, and DOES NOT guarantee that the candidate will be authorized to provide financial services to the City. This section must be signed by the sales representative who is listed in Question 3. Firm: (7' i/it gn Signed: Title: `2 et. - 5 ?-1-147' Date: This section must be countersigned by the Managing Director or by the most senior person in charge of the government securities operations section. Firm: Marreel#114---- Signed: Title: �Gfii Date: 3 ll City of Palm Desert Internal Correspondence Date: Tuesday, 27 April 1999 Subject: Requalification of Approved Brokers From: Thomas W. Jeffrey, Investment Manager /4 To: Paul S. Gibson, City Treasurer RECOMMENDATION That the City of Palm Desert and the Palm Desert Redevelopment Agency approve the continued retention of Norwest Investment Services and Salomon Smith Barney as broker-dealers for the City and for RDA. BACKGROUND The following broker-dealers have submitted sufficient materials to the City Treasurer for a decision to be made on their requalification. Norwest Investment Services (formerly Wells Fargo Institutional Securities) • Broker Integrity. Tony Garcia, the account representative, continues to have a clean Form U-4 Report (no complaints). • Net Capital Position. Norwest's most recent Statement of Financial Condition stated that, as of 12-31-98, its minimum net capital position was $7.3 million in excess of required net capital per SEC Rule 15c3-1 . Norwest is temporarily below the City minimum net capital requirement of $100 million for secondary brokers, due to reorganization issues relating to the merger. This shortfall should be corrected in July 1999 when Norwest is rolled back into Wells Fargo Bank. At that time, it will have a net capital position in excess of $20 billion since it will be part of Wells Fargo Bank. • Trade Failure Rate. Norwest reported a trade failure rate of less then one percent during 1998. • Y2K Compliance. Norwest's computer systems are Y2K-compliant, in terms of clearing financial transactions in the Year 2000. • Litigation. Norwest confirmed that there were no material litigation, arbitration, or regulatory proceedings either threatened or pending against it. Also, that there were no public sector client losses over the last 12 months arising from misrepresentations concerning financial instruments. • Political Contributions. Norwest has made no recent political contributions per its MSRB G-37/38 filing for the quarter ended 12/31/98. Reaualification of Approved Brokers 27 April 1999 Page 2 of 2 Salomon Smith Barney ("SSB") • Broker Integrity. Bill Blackwill, the account representative, continues to have a clean Form U-4 Report (no complaints). • Net Capital Position. Citigroup's most recent Annual Report stated that, as of 12-31-98, SSB's minimum net capital position was $2.8 million in excess of required net capital per SEC Rule 15c3-1 . • Trade Failure Rate. SSB reported a trade failure rate of 0.1 percent during 1998. • Y2K Compliance. SSB's computer systems are Y2K-compliant, in terms of clearing financial transactions in the Year 2000. • Litigation. SSB stated that there were no material litigation, arbitration, or regulatory proceedings either threatened or pending against it. Also, that there were no public sector client losses over the last 12 months arising from misrepresentations concerning financial instruments. • Political Contributions. SSB's most recent MSRB G-37/38 filing could not be obtained at this time, because it has not yet been added to the MSRB website. APR-28-99 WED 10:27 AM WELLS FARGO FAX NO. 4ib39992t1U r. ue • Norwest Investment Sendcos Inc. 420.Montgomery Street Second Floor M.JFSIIIx7Vf San Rtancesco. Cafilann8 94 ro4 6&71'ICrtiS April 28, 1999 Mr. Thomas Jeffrey Investment Manager; City of Palm Desert 73-510 Fred Waring Drive Palm Desert,CA 92260-2578 . Dear Thomas: As a follow on to your recent broker/dealer requalification request, one item needs to be explained. It is currently anticipated that our unit,Norwest Investment.Services.(NISI), in California will be merged into Wells.Fargo Bank in tuly of this year. As indicated in the ;questionnaire current net capital is below $100 million due to preferred.capital. efficiency objectives. The subsidiaryy has always had the option of capital:wing itself at • • whatever level was deemed-appropriate for effective execution of the business plan. At • such time as we are merged back into the bank our capital position will be that of the bank and as of the last audited financials was in excess of$20 billion. We do not anticipate any change is our ability to service our clients in the new environment as we will continue to work closely with NISI to take advantage of their position and capability. Please call should you have any questions. Sincerely, • -r641 G esilia Tony Garcia Vice President • OFFICE OF THE TREASURER CITY OF PALM DESERT BROKER-DEALER REQUALIFICATION QUESTIONNAIRE For Calendar Year 1999 • •Ar, _ . • . • : _ • 4� *„ .„ •'• R4teof ' alc.0 .•• •. ig73 ••.• Paul S. Gibson Treasurer 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 BROKER: NORWEST INVESTMENT SERVICES, INC. SECTION I: STATEMENT OF POSITION AND GENERAL REQUIREMENTS City of Palm Desert 1999 Broker-Dealer Requalification Questionnaire Page 2 of 6 The City of Palm Desert, the Palm Desert Redevelopment Agency, and the Palm Desert Housing Authority (hereafter referred to collectively as the "City") annually review the financial condition and registration of broker-dealers that previously have been qualified to provide financial services to the City, in order to determine whether these broker- dealers should remain on the City's "Approved Provider List". As part of this process, the City also provides each currently authorized broker-dealer with a copy of the City's most current "Statement of Investment Policy" and a certification form. Each broker-dealer is required to complete and submit the certification form as proof that it has received the City "Statement of Investment Policy"; read it; and intends to comply with it. If a broker-dealer cannot comply with all of the provisions in the City's "Statement of Investment Policy", then that broker-dealer should revise and initial the section(s) in question, and return the executed certification form along with a letter explaining the broker-dealer's reasons for not being able to comply. The City will notify all previously qualified broker-dealers, in writing, on whether they have been requalified to continue to provide financial services to the City. SECTION II: QUESTIONNAIRE DEADLINE AND REQUIRED DOCUMENTS The City must receive the following documents from each currently authorized broker- dealer by no later than 4:30 p.m. on Friday, 16 April 1999: ✓ A completed "Broker-Dealer Requalification Questionnaire". ✓ A copy of the firm's most recent Annual Report. ✓ A copy of the firm's NASDAQ "Certificate of Membership". ✓ A copy of the firm's NASDAQ "Form BD — Uniform Application for Broker-Dealer Registration". ✓ A copy of the firm's current "Form BD Status Report". ✓ A copy of the firm's current Municipal Securities Rulemaking Board Rule G-37 filing. ✓ A copy of the fimn's State of California Department of Corporations "Broker- Dealer's Certificate". ✓ A copy of NASDAQ "Form U-4 — Uniform Application for Securities Industry Registration or Transfer for each employee with whom the City would be trading. City of Palm Desert 1999 Broker-Dealer Requalification Questionnaire Page 3 of 6 ✓ Certified documentation of the firm's capital adequacy, as measured by Federal Reserve Standards. 1 A copy of the current "Form U-4 Status Report" on each firm employee with whom the City would be trading. These documents may be delivered in person, by post, or by courier to: City of Palm Desert • Attention: Thomas Jeffrey, Investment Manager 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 If a currently authorized broker-dealer fails to submit the above-referenced documents by the specified deadline then the City shall suspend all business dealings with that broker-dealer, and may elect to terminate its business relationship with that broker dealer. If you have any questions about this questionnaire, then please call Mr. Jeffrey at 760.346.0611, extension 383. SECTION III: REQUEST FOR GENERAL INFORMATION FROM CURRENTLY AUTHORIZED BROKER-DEALER 1. Firm Name: Norwest Investment Services, Inc. 2. Contact Address: 420 Montgomery Street, 2"d Floor MAC 0101-028 San Francisco, CA 94104 3. Contact Personnel: Sales Representative Supervising Manager Name: Tony Garcia Name: Rick Allen Title: Vice President Title: Senior Vice President TEL: (415) 222-5869 TEL: (415) 222-2962 TEL: (800) 353-4331 TEL: (800) 353-4331 City of Palm Desert 1999 Broker-Dealer Requalification Questionnaire Page 4 of 6 4. Has your firm operated under a different business name at any time during the last 12 months? (check one) Yes. The Wells Fargo Bank Dealer was combined with Norwest Investment Services, Inc (NISI) on 3/8/99. This was the natural result of the merger between Wells Fargo & Co. and Norwest Corp that was closed in November of last year. We anticipate that there will be a further name change in the year as NISI converts to a Wells Fargo name after certain legal and regulatory issues are settled. 5. Where is your firm headquartered (city and state)? Minneapolis, MN 6. Is your firm owned by a holding company? (check one) Yes, NISI is a wholly owned subsidiary of Wells Fargo & Co., headquartered in San Francisco, CA, with net capital of$16.7 Billion. 7. If your firm IS NOT a primary dealer, does it currently have a net capital position in excess of$100 million? (check one) No, as a subsidiary of Wells Fargo & Co. the Norwest Investment Services has chosen to capitalize itself at a level consistent with legal and regulatory requirements, prudence and capital efficiency. At June 30, 1998, NISI had Equity capital of$66.3 Million and net capital of$38.6 Million. 8. Has your firm consistently complied with the Federal Reserve Bank's capital adequacy guidelines over the last 12 months? Please provide certified documentation of your current capital adequacy as measured by Federal Reserve Standards. (check one) Yes 9. How many and what percentage of your securities transactions failed last month? During the last 12 months? Less than 1%. City of Palm Desert 1999 Broker-Dealer Requalification Questionnaire Page 5 of 6 10.At this point in time, does your firm have data processing systems that are capable of clearing financial transactions for clients in the Year 2000 ("Y2K compliant")? (please check) Yes SECTION IV: REQUEST FOR AUTHORIZED BROKER-DEALER DISCLOSURE 11. Have any of your firm's public sector clients sustained a loss on a securities transaction within the last 12 months, arising from a misunderstanding or misrepresentation of the risk characteristics of a financial instrument that was recommended by and purchased through your firm? (check one) No 12. Have any of your firm's public sector clients claimed, in writing, within the last 12 months, that your firm was responsible for any investment losses? (check one) No 13. Has your firm been subject to any litigation, arbitration, or regulatory proceedings, either pending, adjudicated, or settled, within the last 12 months, that involved allegations of improper, fraudulent, disreputable or unfair activities related to the sale of securities to or the purchase of securities from institutional clients? (check one) No 14. Has your firm been subject to a regulatory, state, or federal agency investigation, within the last 12 months, for alleged improper, fraudulent, disreputable, or unfair activities related to the purchase or sale of securities? (check one) No SECTION V: CERTIFICATION I hereby certify that I have read and that I understand the investment policies and objectives of the City of Palm Desert, the Palm Desert Redevelopment Agency, and the Palm Desert Housing Authority (hereafter referred to collectively as the "City"), as represented in the City's "Statement of Investment Policy", adopted 11 February 1999. My firm will ensure that all affected sales personnel will be routinely informed of the City of Palm Desert 1999 Broker-Dealer Requalification Questionnaire Page 6 of 6 City's investment objectives, horizon, outlook, strategies, and risk constraints, as the City provides such information. My firm will notify the City Treasurer immediately, by telephone, and, in writing, in the event of a material adverse change in its financial condition, or of any violation of Municipal Securities Rulemaking Board Rule G-37. My firm pledges to exercise due diligence in informing the City Treasurer of all foreseeable risks associated with any financial transactions that my firm undertakes with the City. I attest to the accuracy of my firm's response to the City's Request For Information. NOTE: Completion of this Requalification Questionnaire is only part of the City of Palm Desert's review process, and DOES NOT guarantee that the broker- dealer will continue to be authorized to provide financial services to the City. This section must be signed by the sales representative who is listed in Question 3. Firm: NORWEST INVESTMENT SERVICES, INC Signed: 6&4&C- TONY GIA Title: VICE PRESIDENT Date: 4/12/99 This section must be countersigned by the Managing Director or by the most senior person in charge of the government securities operations section. Firm: NO INVESTMENT SERVICES, INC Signed: RICK ALLEN Title: SENIOR VICE PRESIDENT Date: 4/12/99 OFFICE OF THE TREASURER CITY OF PALM DESERT BROKER-DEALER REQUEST FOR INFORMATION For Calendar Year 1999 4aft- inO` -�+- _ � CD ryi Paul S. Gibson Treasurer 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 CANDIDATE: SALOMON SMITH BARNEY RX DATE/TIME : SEP, - 18' 96 (WED) 16 : 49 P UV3 APR-OS-95 14 : 34 FROM: CIT"^OF PALM DESERT 1D: 76P-C41G372 PAGE 3/31 SECTION I: STATEMENT OF POSITION ANDJq AL JREQUIREMENTS 'H The City of Palm Desert, the Palm Desert Redevelopment Agency, and the Palm Desert Housing Authority (hereafter referred to collectively as the "City") annually review the financial condition and registration of broker-dealers that previously have been qualified to provide financial services to the City, in order to determine whether these broker-dealers should remain on the City's "Approved Provider List". As part of this process, the City also provides each currently authorized broker- dealer with a copy of the City's most current "Statement of Investment Policy" and a certification form. Each broker-dealer is required to complete and submit the certification form as proof that it has received the City "Statement of Investment Policy"; read it; and intends to comply with it. If a broker-dealer cannot comply with all of the provisions in the City's "Statement of Investment Policy", then that broker-dealer should revise and initial the section(s) in question, and return the executed certification form along with a letter explaining the broker-dealer's reasons for not being able to comply. The City will notify all previously qualified broker-dealers, in writing, on whether they have been requalified to continue to provide financial services to the City. SECTION II: QUESTIONNAIRE DEADLINE AND REQUIRED DOCUMENTS The City must receive the following documents from each currently authorized broker-dealer by no later than 4:30 p.m. on Friday, 16 April 7999: 1 , A completed "Broker-Dealer Requalification Questionnaire". v A copy of the firm's most recent Annual Report. � t �` QA copy of the firm's NASDAQ "Certificate of Membership". - 1/41\ cam" eeA copy of the firm's NASDAQ "Form BD - Uniform Application for Broker- - Dealer Registration". — � lyn A copy of the firra current "Form BD Status Report". A copy of the firm's current Municipal Securities Rulemaking Board Rule G�- (� 3 7 filing. cu,i o�.._ A.S.s o\�n-`-vw —k — \-Q0.52. A a tL �r�� p�`Un-R.C�, -eMno�� c .Hats . RR DATE/TIME : SEP. - 18' 96 (WEDI 16 . 49 r UU4 APR-05-99 14t34 FROM:CI ?`r^OF PALM DESERT ID: 7SPaA19372 PAGE 4/31 City of Palm Desert 1999 Broker-Dealer Requalification Questionnaire Page 2 of 6 4" A copy of the firm's State of California Department of Corporations "Broker- e- Dealer's Certificate". 4 A copy of NASDAQ "Form U-4 - Uniform Application for Securities Industry Registration or Transfer" for each employee with whom the City would be trading. Certified documentation of the firm's capital adequacy, as measured by Federal Reserve Standards. g, A copy of the current "Form U-4 Status Report" on each firm employee with whom the City would be trading. These documents may be delivered in person, by post, or by courier to: City of Palm Desert Attention: Thomas Jeffrey, Investment Manager 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 If a currently authorized broker-dealeasils to_submit the above-referenced documents by the specified deadline. then the City shall suspend all busineso Ijp�ings with that broker-dealer aid may elect_ ° terminate its business relationship with that broker dealer. If you have any questions about this questionnaire, then please call Mr. Jeffrey at 760.346.0611 , extension 383. SECTION III: REQUEST FOR GENERAL INFORMATION FROM CURRENTLY AUTHORIZED BROKER-DEALER - 1 . Firm Name: Salomon Smith Barney Inc. 2. Contact Address: 660 Newport Center Drive, Ste. 1100 Newport Beach, CA 92660 RX DATE/TIME : SEE - 18' 96 (WED) 16 : 49 P. 005 APR-05-99 14 : 34 FROM:CIT`"^OF PALM DESERT 1D: 79P-R416372 PAGE 5/31 City of Palm Desert 1999 Broker-Dealer Requalification Questionnaire Page 3 of 6 3. Contact Personnel: aajtsiteementitlyg $uaervising Manager Name: Bill Blackwell Name: Robert B. Martensen Title: Senior Vice President-InvestmentsTitle: Senior Vice President/Resident Manager TEL: ( 949 ) 717-5440 TEL: ( 949 ) 717-5400 TEL: (800) 258-6663 TEL: (800) 468-3352 4, Has your firm operated under a different business name at any time during the last 12 months? (check one) g, Yes E No If "yes", please identify the prior name; the date of the name change; and the reason for the name change. 5. Where is your firm headquartered (city and state)? New York, NY 6. Is your firm owned by a holding company? (check one) x Yes ❑ No If "yes", what is the holding company's name; its net capitalization; and where is it headquartered (city and state)? Citigroup - New York, NY See attached financials. 7. If your firm IS NOT a primary dealer, does it currently have a net capital position in excess of $100 million? (check one) Yes ❑ No B. Has your firm consistently complied with the Federal Reserve Bank's capital adequacy guidelines over the last 12 months? Please provide certified documentation of your current capital adequacy as measured by Federal Reserve Standards. (check one) x Yes E No If "no", please explain. RX DATE/TIME :SEP -18' 96 (WED) 16 : 49 P 006 APR-05-96 14 . 36 FROM: CITrOF PALM DESERT ID : 76^416372 PACE 6/31 City of Palm Desert 1999 Broker-Dealer Requalification Questionnaire Page 4 of 6 9. How many and what percentage of your securities transactions failed last month? During the last 12 months? Last month - unavailable Last year - less than 1/10th of 1% - closer to 1/10 of 1% - prox 1000/year. 10. At this point in time, does your firm nave data processing systems that are capable of clearing financial transactions for clients in the Year 2000 ("Y2K compliant")? (please check) Q Yes ❑ No If "no", please explain and indicate when your firm's data processing systems will most likely be Y2K compliant. SECTION IV: REQUEST FOR AUTHORIZED BROKER-DEALER DISCLOSURE 11 . Have any of your firm's public sector clients sustained a loss on a securities transaction within the last 12 months, arising from a misunderstanding or misrepresentation of the risk characteristics of a financial instrument that was recommended by and purchased through your firm? (check one) YeS Kx No If "yes", please describe each matter briefly. 12. Have any of your firm's public sector clients claimed, in writing, within the last 12 months, that your firm was responsible for any investment losses? (check one) See reverse ❑ Yes T, No If "yes", please describe each matter briefly. 13. Has your firm been subject to any .litigation, prpitratiQn, or regulatory g g .Pr _edinas, either pending, adjudicated, or settled, within the last 12 months, that involved allegations of improper, fraudulent, disreputable or unfair activities related to the sale of securities to or the purchase of securities from institutional clients? (check one) see reverse Yes ❑ No If "yes", please describe each matter briefly, 14. Has your firm been subject to a regulatory, state, or federal agency investigation, within the last 12 months, for alleged improper, fraudulent, disreputable, or unfair activities related to the purchase or sale of securities? (check one) see reverse NA OniLr , i,'iC 0:T. - 0 iv ! cI JJ ,U t , APR-05—SS 14 : 35 FROM :CITY_OF PALM DESERT ID: 7603416372 PACE 7/31 City of Palm Desert 1999 Broker-Dealer Requalification Questionnaire Page 5 of 6 ❑ Yes ❑ No If "yes", please describe each matter briefly. SECTION V: CERTIFICATION I hereby certify that I have read and that I understand the investment policies and objectives of the City of Palm Desert, the Palm Desert Redevelopment Agency, and the Palm Desert Housing Authority (hereafter referred to collectively as the "City"), as represented in the City's "Statement of Investment Policy", adopted 11 February 1999. My firm will ensure that all affected sales personnel will be routinely informed of the City's investment objectives, horizon, outlook, strategies, and risk constraints, as the City provides such information. • My firm will notify the City Treasurer upon request, in the event of a material adverse change in its financial condition, or of any violation of Municipal Securities Rulemaking Board Rule G-37. My firm pledges to exercise due diligence in informing the City Treasurer of all foreseeable risks associated with any financial transactions that my firm undertakes with the City. I attest to the accuracy of my firm's response to the City's Request For Information. *PLEASE NOTE CHANGE TO SECOND PARAGRAPH OF CERTIFICATION* NOTE: Completion of this Requalification Questionnaire is only part of the City of Palm Desert's review process, and DOES NOT guarantee that the broker-dealer will continue to be authorized to provide financial services to the City. This section must be signed by the sales representative who is listed in Question 3. Firm; SalomL2 0 Smith Barney Inc. Signed: Title: Senior Vice President - Investments Institutional Fixed Income Group Date! L-1/ `-yai`j RR DATE/TIME : SEP, - 18' 96 (WED) 1b : 49 r uua APR-05-98 14 : 35 FROM:CI T+"'OF PALM DESERT ID: 78i"`416372 PACE B/31 City of Palm Desert 1999 Broker-Dealer Requalification Questionnaire Page 6 of 6 This section must be countersigned by the Managing Director or by the most senior person in charge of the government securities operations section. Firm: Salomon Smith Barney Signed: Title: Senior Vice President / Resident Manager Date: 1999 Tentative Legislative Deadlines Page 1 of 2 1111 1999 TENTATIVE LEGISLATIVE DEADLINES COMPILED BY THE OFFICE OF THE CHIEF CLERK Dec. 7, 1998 1999-2000 Regular Session convenes for Organizational Session at noon. (Art. IV, Sec. 3(a)). Jan. 1 Regular statutes passed in 1998 take effect(Art, IV, Sec. 8(c)). Jan. 4 Legislature reconvenes (J.R. 51(a)(1)). Jan. 10 Budget must be submitted by Governor on or before this date (Art. IV, Sec. 12(a)). Jan. 22 Last day to submit bill requests to Legislative Counsel. s Feb. 26 Last day to introduce bills (J.R. 61(a)(1)). (A 43 1423 I A17?2 oboes b) Mar. 25 Spring Recess begins on adjournment(J.R. 51(a)(2)). Apr. 5 Legislature reconvenes from Spring Recess(J.R. 51(a)(2)). Apr. L. AS 142.3 AMc.uDED AwtD READ Sreco.J0 T.si Apr. 23 Last day for policy committees to hear and report Assembly fiscal bills for referral to fiscal committees (J.R. 61(a)(2)). May 14 Last day for policy committees to hear and report nonfiscal Assembly Bills (J.R. 61(a)(3)). May 21 Last day for policy committees to meet prior to June 7. (J.R. 61(a)(4)). May 28 Last day for fiscal committees to hear and report Assembly Bills to the Floor(J.R. 61(a)(5)). Last day for fiscal committees to meet prior to June 7 (J.R. 61(a)(6)). June 4 Last day for Assembly to pass Assembly Bills (J.R. 61(a)(7)). June 7 Committee meetings may resume (J.R. 61(a)(8)). June 15 Budget Bill must be passed by midnight(Art. IV, Sec. 12(c)). July 16 Last day for policy committees to meet and report Senate Bills (J.R. 61(a)(9)). Summer Recess begins on adjournment, provided Budget Bill has been enacted (J.R. 51(a)(3)). http://www.assembly.ca.gov/clerk/991egcalendar.htm 4/27/99 AB 1423 Assembly Bill - INTRODUCED Page 1 of 2 BILL NUMBER: AB 1423 INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Steinberg FEBRUARY 26, 1999 An act to amend Section 53646 of the Government Code, relating to local agency finance. LEGISLATIVE COUNSEL'S DIGEST AB 1423, as introduced, Steinberg. Local agency finance: investments. Existing law requires the treasurer or chief fiscal officer of a local agency to render a quarterly report to the chief executive officer, the internal auditor, and the legislative body of the local agency containing specified information concerning the investments and moneys held by the local agency. The report is required to be submitted within 30 days following the end of the quarter covered by the report. This bill would require instead that the report be submitted within 31 days following the end of the quarter. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 53646 of the Government Code is amended to read: 53646. (a) (1) In the case of county government, the treasurer shall annually render to the board of supervisors and any oversight committee a statement of investment policy, which the board shall review and approve at a public meeting. Any change in the policy shall also be reviewed and approved by the board at a public meeting. (2) In the case of any other local agency, the treasurer or chief fiscal officer of the local agency shall annually render to the legislative body of that local agency and any oversight committee of that local agency a statement of investment policy, which the legislative body of the local agency shall consider at a public meeting. Any change in the policy shall also be considered by the legislative body of the local agency at a public meeting. (b) (1) The treasurer or chief fiscal officer shall render a quarterly report to the chief executive officer, the internal auditor, and the legislative body of 1 agency. The quarterly report shall be so submitted withi Cap days following the end of the quarter - -ed by the report. Except as provided in subdivisions (e) and (f) , this report shall include the type of investment, issuer, date of maturity par and dollar amount invested on all securities, investments and moneys held by the local agency, and shall additionally include a description of any of the local agency's funds, investments, or programs, that are under the management of contracted parties, including lending http://www.leginfo.ca.gov/pub/bill/asm/ab_1401-1450/ab_1423_bill_19990226_introduced.html4/27/99 AB 1423 Assembly Bill - INTRODUCED Page 2 of 2 programs. With respect to all securities held by the local agency, and under management of any outside party that is not also a local agency or the State of California Local Agency Investment Fund, the report shall also include a current market value as of the date of the report, and shall include the source of this same valuation. (2) The quarterly report shall state compliance of the portfolio to the statement of investment policy, or manner in which the portfolio is not in compliance. (3) The quarterly report shall include a statement denoting the ability of the local agency to meet its pool's expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall, or may, not be available. (4) In the quarterly report, a subsidiary ledger of investments may be used in accordance with accepted accounting practices. (c) Pursuant to subdivision (b) , the treasurer or chief fiscal officer shall report whatever additional information or data may be required by the legislative body of the local agency. (d) The legislative body of a local agency may elect to require the report specified in subdivision (b) to be made on a monthly basis instead of quarterly. (e) For local agency investments that have been placed in the Local Agency Investment Fund, created by Section 16429.1, in National Credit Union Share Insurance Fund-insured accounts in a credit union, in accounts insured or guaranteed pursuant to Section 14858 of the Financial Code, or in Federal Deposit Insurance Corporation-insured accounts in a bank or savings and loan association, in a county investment pool, or any combination of these, the treasurer or chief fiscal officer may supply to the governing body, chief executive officer, and the auditor of the local agency the most recent statement or statements received by the local agency from these institutions in lieu of the information required by paragraph (1) of subdivision (b) regarding investments in these institutions. (f) The treasurer or chief fiscal officer shall not be required to render a quarterly report, as required by subdivision (b) , to a legislative body or any oversight committee of a school district or county office of education for securities, investments, or moneys held by the school district or county office of education in individual accounts that are less than twenty-five thousand dollars ($25,000) . http://www.leginfo.ca.gov/pub/bill/asm/ab_1401-1450/ab_1423_bill_19990226_introduced.html4/27/99 AB 1423 Assembly Bill -AM' NDED Page 1 of 3 41111 BILL NUMBER: AB 1423 AMENDED BILL TEXT AMENDED IN ASSEMBLY APRIL 6, 1999 INTRODUCED BY Assembly Member Steinberg FEBRUARY 26, 1999 An act to amend Ceeti.en Sections 8855 and 53646 of the Government Code, relating to local agency finance. LEGISLATIVE COUNSEL'S DIGEST AB 1423, as amended, Steinberg. Local agency finance: investments. D.ci..ti..g (1) Existing law requires the treasurer or chief fiscal officer of a local agency to render a quarterly report to the chief executive officer, the internal auditor, and the legislative body of the local agency containing specified information concerning the investments and moneys held by the local agency. Tln, ice-it it requited to b., o thMitt..d within 30 days following th, end of the y,.,.a L.... c.NCLctl by th.. report. Existing law establishes the California Debt and Investment Advisory Commission with a specified membership and prescribes its duties with respect to assisting state and local agencies with respect to their financial responsibilities and powers. This bill would require inet..ad that the ...rest L, every county to submit copies of its 2nd and 4th quarterly reports to the California Debt and Investment Advisory Commission. The bill would also require any other local agency that does not currently invest 100t of its investment portfolio in the county treasury to submit those reports. A local agency not submitting a report would be required to file with the commission a certification that it is not subject to the reporting requirement. These reporting requirements would impose new duties on local agencies and therefore would impose a state-mandated local program. This bill would require the commission to collect, maintain, and provide comprehensive information on local agency investments of public funds and to receive local government investor portfolio information as determined by the commission. (2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1, 000, 000 statewide and other procedures for claims whose statewide costs exceed $1, 000, 000. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. Vote: majority. Appropriation: no. Fiscal committee: ne- yes . State-mandated local program: -ere- yes . http://www.leginfo.ca.gov/pub/bill/asm/ab_140.../ab_1423_bill_19990406_amended_asm.htm 4/27/99 AB 1423 Assembly Bill -AMENDED Page 2 of THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 8855 of the Government Code is amended to read: 8855. (a) There is created the California Debt and Investment Advisory Commission, consisting of nine members , ®..le..l...l as follows: (1) The Treasurer, or his or her designee. (2) The Governor or the Director of Finance. (3) The Controller, or his or her designee. (4) Two local government finance officers appointed by the Treasurer, one each from among persons employed by a county and by a city or a city and county of this state, experienced in the issuance and sale of municipal bonds and nominated by associations affiliated with these agencies. (5) Two Members of the Assembly appointed by the Speaker of the Assembly. (6) Two Members of the Senate appointed by the Senate Committee on Rules. (b) (1) The term of office of an appointed member is four years, but appointed members serve at the pleasure of the appointing power. In case of a vacancy for any cause, the appointing power shall make an appointment to become effective immediately for the unexpired term. (2) Any legislator's Members of the Legislature appointed to the commission shall meet with and participate in the activities of the commission to the extent that the participation is not incompatible with their respective positions as Members of the Legislature. For purposes of this chapter, the Members of the Legislature shall constitute a joint interim legislative committee on the subject of this chapter. (c) The Treasurer shall serve as chairperson of the commission and shall preside at meetings of the commission. The commission, on or after January 1, 1982, and annually thereafter, shall elect from its members a vice chairperson and a secretary who shall hold office until the next ensuing December 31 and shall continue to serve until their respective successors are elected. (d) Appointed members of the commission shall not receive a salary, but shall be entitled to a per diem allowance of fifty dollars ($50) for each day's attendance at a meeting of the commission not to exceed three hundred dollars ($300) in any month, and reimbursement for expenses incurred in the performance of their duties under this chapter, including travel and other necessary expenses. (e) The commission shall do all of the following: (1) Assist all state financing authorities and commissions in carrying out their responsibilities as prescribed by law, including assistance with respect to federal legislation pending in Congress. (2) Upon request of any state or local government units, to assist them in the planning, preparation, marketing, and sale of new debt issues to reduce cost and to assist in protecting the issuer's credit. (3) Collect, maintain, and provide comprehensive information on all state and all local debt authorization, sold and outstanding, and serve as a statistical clearinghouse for all state and local debt issues. This information shall be readily available upon request by any public official or any member of the public. http://www.leginfo.ca.gov/pub/bill/asm/ab_140.../ab_1423_bill_19990406_amended_asm.htm 4/27/99 AB 1423 Assembly Bill -AMP'NDED Page 3 of 5 , (4) Maintain contact with state and municipal bond issuers, underwriters, credit rating agencies, investors, and others to improve the market for state and local government debt issues and to promote the safety of local agency investment of public funds I (5) Undertake or commission studies on methods to reduce the costs and improve credit ratings of state and local issues and to promote the safety of local agency investment of public funds I (6) Recommend changes in state laws and local practices to improve the sale and servicing of state and local debts and to promote the safety and liquidity of the local agency public fund investments (7) Establish a continuing education program for local officials having direct or supervisory responsibility over municipal investments, and undertake other activities conducive to the disclosure of investment practices and strategies for oversight purposes. (8) Collect, maintain, and provide comprehensive information on local agency investments of public funds and serve as a statistical clearinghouse for local agency investment to promote the best investment practices and policies. This information shall be readily available upon request by any public official or any member of the public no sooner than January 1, 2001. (f) The local governmental investor of any public funds, no later than 60 days after the close of the second and fourth quarters of each calendar year, shall provide the quarterly reports required pursuant to Section 53646 and, no later than 60 days after the close of the quarter of each calendar year and 60 days after the subsequent amendment thereto, provide the statement of investment policy required pursuant to Section 53646, to the commission by mail, postage prepaid. (g) The commission may require the submission of information that I it determines necessary to meeting the commission's obligations pursuant to this section. (f) (h) The commission may adopt bylaws for the regulation of its affairs and the conduct of its business. — (i) The issuer of any proposed new debt issue of state or local government shall, no later than 30 days prior to the sale of any debt issue at public or private sale, give written notice of the proposed sale to the commission, by mail, postage prepaid. This subdivision shall also apply to any nonprofit public benefit corporation incorporated for the purpose of acquiring student loans. (h)— (j) The notice shall include the proposed sale date, the name of the issuer, the type of debt issue, and the estimated principal amount thereof. Failure to give this notice shall not affect the validity of the sale. --('r)— (k) The issuer of any new debt issue of state or local government, not later than 45 days after the signing of the bond purchase contract in a negotiated or private financing, or after the acceptance of a bid in a competitive offering, shall submit a report of final sale to the commission by mail, postage prepaid, or by any other method approved by the commission. A copy of the final official statement for the issue shall accompany the report of final sale. The commission may require information to be submitted in the http://www.leginfo.ca.gov/pub/bill/asm/ab_140.../ab_1423_bill_19990406_amended asm.htm 4/27/99 AB 1423 Assembly Bill -AMENDED Page 4 of report of final sale that it considers appropriate. )_ (1) The commission shall publish a monthly newsletter describing and evaluating the operations of the commission during the preceding month. (m) The commission shall meet on the call of the chairperson, or at the request of a majority of the members, or at the request of the Governor. A majority of all nonlegislative members of the commission constitutes a quorum for the transaction of business. (1)— (n) All administrative and clerical assistance required by the commission shall be furnished by the office of the Treasurer. SEC. 2. Section 53646 of the Government Code is amended to read: 53646. (a) (1) In the case of county government, the treasurer shall annually render to the board of supervisors and any oversight committee a statement of investment policy, which the board shall review and approve at a public meeting. Any change in the policy shall also be reviewed and approved by the board at a public meeting. (2) In the case of any other local agency, the treasurer or chief fiscal officer of the local agency shall annually render to the legislative body of that local agency and any oversight committee of that local agency a statement of investment policy, which the legislative body of the local agency shall consider at a public meeting. Any change in the policy shall also be considered by the legislative body of the local agency at a public meeting. (b) (1) The treasurer or chief fiscal officer shall render a quarterly report to the chief executive officer, the internal auditor, and the legislative body of the local agency. The quarterly report shall be so submitted within —34— 30 days following the end of the quarter covered by the report. Except as provided in subdivisions (e) and (f) , this report shall include the type of investment, issuer, date of maturity par and dollar amount invested on all securities, investments and moneys held by the local agency, and shall additionally include a description of any of the local agency's funds, investments, or programs, that are under the management of contracted parties, including lending programs. With respect to all securities held by the local agency, and under management of any outside party that is not also a local agency or the State of California Local Agency Investment Fund, the report shall also include a current market value as of the date of the report, and shall include the source of this same valuation. (2) The quarterly report shall state compliance of the portfolio to the statement of investment policy, or manner in which the portfolio is not in compliance. (3) The quarterly report shall include a statement denoting the ability of the local agency to meet its pool's expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall, or may, not be available. (4) In the quarterly report, a subsidiary ledger of investments may be used in accordance with accepted accounting practices. (c) Pursuant to subdivision (b) , the treasurer or chief fiscal officer shall report whatever additional information or data may be required by the legislative body of the local agency. (d) The legislative body of a local agency may elect to require the report specified in subdivision (b) to be made on a monthly basis http://www.leginfo.ca.gov/pub/bill/asm/ab_140.../ab_1423_bill_19990406_amended_asm.htm 4/27/99 AB 1423 Assembly Bill - AN«'NDED Page ' of D 1 instead of quarterly. (e) For local agency investments that have been placed in the Local Agency Investment Fund, created by Section 16429.1, in National Credit Union Share Insurance Fund-insured accounts in a credit union, in accounts insured or guaranteed pursuant to Section 14858 of the Financial Code, or in Federal Deposit Insurance Corporation-insured accounts in a bank or savings and loan association, in a county investment pool, or any combination of these, the treasurer or chief fiscal officer may supply to the governing body, chief executive officer, and the auditor of the local agency the most recent statement or statements received by the local agency from these institutions in lieu of the information required by paragraph (1) of subdivision (b) regarding investments in these institutions. (f) The treasurer or chief fiscal officer shall not be required to render a quarterly report, as required by subdivision (b) , to a legislative body or any oversight committee of a school district or county office of education for securities, investments, or moneys held by the school district or county office of education in individual accounts that are less than twenty-five thousand dollars ($25,000) . (g) Each county shall submit copies of its second and fourth quarterly reports to the California Debt and Investment Advisory Commission within 60 days of the completion of those reports. Any other local agency that does not currently invest 100 percent of its investment portfolio in its own county treasury or the treasury of the county in which it is located, as the case may be, for investment by the county treasurer pursuant to Section 53684 shall submit copies of its second and fourth quarterly reports to the commission within 60 days of the completion of those reports. A local agency not submitting a report pursuant to this subdivision shall file with the commission a certification that it is not subject to this reporting requirement within 60 days of the end of the second and fourth quarters of the calendar year. SEC. 3. Notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1, 000, 000) , reimbursement shall be made from the State Mandates Claims Fund. http://www.leginfo.ca.gov/pub/billlasm/ab_140.../ab_1423_bill_19990406_amended_asm.htm 4/27/99 AB 1423 Assembly Bill -Bill Analysis Page 1 of 3 S BILL ANALYSIS AB 1423 Page 1 Date of Hearing: April 14, 1999 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT John Longville, Chair AB 1423 (Steinberg) - As Amended: April 6, 1999 SUBJECT : Local agency financial reports. SUMMARY Requires local agencies to submit certain reports on investments to the California Debt and Investment Advisory Commission (CDIAC) . Specifically, this bill . 1)Requires CDIAC to maintain comprehensive information on all local investments and to serve as a clearinghouse for statistical information to promote best investment practices. The information shall be available to governmental agencies and the public by January 1, 2001. Allows CDIAC to require the submission of any information that it determines necessary to carry out this responsibility. 2)Requires each public agency to provide CDIAC with copies of investment reports and reports on compliance with the agency's investment policy. Under current law, these reports are required to be prepared and to be submitted to each local agency's legislative body. While the reports are produced either quarterly or monthly, only the second and fourth quarter reports would be required to be submitted to CDIAC. 3)Requires CDIAC in carrying out some of its existing responsibilities to also "promote the safety of local agency investments" . EXISTING LAW . 1)Creates, in the State Treasurer's Office, the California Debt and Investment Advisory Commission consisting of nine members: the Treasurer or designee, the Governor or the Director of Finance, the State Controller or designee, two local government finance officers appointed by the Treasurer, two members of the Assembly appointed by the Speaker of the Assembly, and two members of the State Senate appointed by the Senate Rules Committee. Terms are four years, but members are pleasure appointments. http://www.leginfo.ca.gov/pub/bill/asm/ab.../ab_1423_cfa_19990414_123705_asm_comm.htm 4/27/99 AB 1423 Assembly Bill- Bill Analysis Page 2 of 3 AB 1423 Page 2 The commission is to: a) Assist state financing authorities and commissions to carry out their responsibilities; b) Assist, upon request, state or local government agencies in planning, marketing or selling of new debts issues; c) Maintain comprehensive information on all state and local debt authorization, sold and outstanding; d) Maintain contact with bond issuers, investors and others to improve credit ratings of state and local issues; e) Undertake studies on methods to reduce costs of financing; f) Recommend changes in state law and local practices to improve the sale and servicing of state and local debts; and g) Establish a continuing education program for local officials. 2)The issuer of any new state or local bond shall provide notice to the commission not less than 30 days before and not less than 45 days after a sale. 3)The treasurer of a local agency shall annually provide to the legislative body and any oversight committee a statement of investment policy, which the legislative body shall review and approve at a public meeting. 4)The treasurer or chief financial officer shall provide to the legislative body a detailed quarterly report on the agency's investments. The legislative body may require that the report be made monthly. The report shall state whether the investments are in compliance with the agency's investment policy. For investments in certain institutions, such as investments in credit unions, the treasurer or chief financial officer may provide the legislative body with reports or statements from the institution. FISCAL EFFECT Unknown cost to the State General Fund due to this state-mandated local cost. COMMENTS . 1)The Treasurer's Office reports that there is no state oversight of local government investment practices, such as those that resulted in the $1.6 billion Orange County AB 1423 Page 3 http://www.leginfo.ca.gov/pub/bill/asm/ab.../ab_1423_cfa_19990414_123705_asm_comm.htm 4/27/99 AB 1423 Assembly Bill - Bill Analysis Page 3 of 3 bankruptcy. 2)After the Orange County bankruptcy, the Legislature established requirements on treasurers and chief financial officers to provide investment reports to their legislative bodies. In some cases, legislative bodies have the expertise to determine the appropriateness and safety of investment practices. In most cases, however, the legislative bodies probably don't have that expertise. Because the Treasurer's Office has the technical and financial expertise to review these reports, this bill provides a valuable oversight at little cost. 3)The committee may wish to ask about the benefits of a clearinghouse on local investment practices. All of the local documents are already public, so that is not an issue. An easier comparison of investment practices might help agencies to manage their funds more appropriately -- earning higher returns with less risk. On the other hand, a clearinghouse might allow investment rate comparisons that might lead to pressure to increase returns at a higher risk. REGISTERED SUPPORT / OPPOSITION . Support /State Treasurer's Office [SPONSOR] Opposition None on file Analysis Prepared by Clyde Macdonald / L. GOV. / (916) 319-3958 http://www.leginfo.ca.gov/pub/bill/asm/ab.../ab_1423_cfa_19990414_123705_asm_comm.htm 4/27/99