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HomeMy WebLinkAbout2013/02/26 Item 03CITY COUNCIL AGENDA STATEMENT ~`~~ CITY OF ~" CHULA VISTA FEBRUARY 26, 2013, Item ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACKNOWLEDGING RECEIPT OF COUNCIL POLICY 220-01, THE CITY OF CHULA VISTA INVESTMENT POLICY AND GUIDELINES; AMENDING THE EXISTING POLICY; AND ANNUAL DELEGATION OF INVESTMENT ACTIVITY AUTHORITY TO THE DIRECTOR OFFINANCE/TREASURER INVESTMENT REPORT FOR THE QUARTER ENDED DECEMBER 31, 2012 SUBMITTED BY: DIRECTOR OF FIN E/TREASURER ~~~ REVIEWED BY: CITY MANAGER` ~~ ASSISTANT CITY ANAGER 4/STHS VOTE: YES ~ NO SUMMARY Per California Government Code Section 53607, on an annual basis the City Council may delegate to the City Treasurer the authority to conduct the investment activities of the City. And per Government Code Section 53646, the City Treasurer may annually present the City's Investment Policy to the City Council to reaffirm or make any changes to the existing policy. The Investment Policy provides guidelines for the investment of idle funds and affords the City various investment opportunities, as long as the investment is deemed prudent and is allowable under Government Code Section 53600, et seq. The City received the Certificate of Excellence Award from the Association of Public Treasurers United States and Canada (APT-US&C) in August 2007 for its Investment Policy, and most recently, the Policy was reviewed and adopted by City Council on March 13, 2012. At this time, staff is recommending an amendment to Section 9.0 clarifying the San Diego County Treasurer's Pooled Money Fund as an authorized and suitable investment. Transmitted herewith is the City's investment report for the quarter ended December 31, 2012. To meet the reporting requirements set forth in the California Government Code Sections 53600 et seq. and the City of Chula Vista Investment Policy, a separate report was distributed to the City Council last month. 3-1 FEBRUARY 26, 2013, Item ~=% Page 2 of 3 ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 (b)(4) of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION Council adopt the resolution and accept the report. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION Investment Policy The City's Investment Policy and Guidelines adopted on March 13, 2012 by Resolution 2012-034 is intended to provide direction for the prudent investment of temporazily idle cash, and for maximizing the efficiency of the cash management process. The stated goal is to enhance the economic condition of the City while ensuring the safety of funds invested. The policy includes a list of specific investment instruments available under the relevant California Government Code sections, 53600 et seq. and 53635. Each investment transaction is made in the context of first ensuring the "safety" of principal, second, investing only for that timeframe that the cash is not needed for operational purposes ("liquidity"), and last seeking the highest return possible ("yield") provided that the first two factors aze met. Per section 6.0 of the Investment Policy, the Director of FinancelTreasruer is delegated the authority and is responsible for all investment transactions undertaken. Pursuant to California Govermnent Code Section 53607, this delegation of authority is given on an annual basis by the City Council to the Treasurer of the City. Per section 18.0 of the Investment Policy, each fiscal yeaz the Finance Director shall provide a copy of the Policy for adoption by the City Council. At this time, staff recommends adding the San Diego County Treasurer's Pooled Money Fund as an authorized & suitable investment to improve transparency and clarity. The proposed language is included as Attachment C. puarterl~nvestment Report The total cash and investment portfolio as of December 31, 2012 was $193,252,393. This is an increase of $1,600,229 from September 30, 2012 to December 31, 2012. For the quarter ended December 31, 2012 the earned interest yield was 0.697%, a decrease from the 0.778% reported for the quarter ended September 30, 2012, reflecting reinvestment in lower yielding investments with longer maturity dates. The weighted average maturity as of December 31, 2012 was 2.38 years, an increase from the 1.96 years in the prior quarter. The weighted average maturity remains sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. 3-2 FEBRUARY 26, 2013, ltem:> Page 3 of 3 DECISION MAKER CONFLICT Staff has determined that the action contemplated by this item is ministerial in nature and does not require the City Council members to make or participate in making a governmental decision, pursuant to California Code of Regulations section 18702.4(a). Consequently, this item does not present a conflict under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware, nor has staff been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter. CURRENT YEAR FISCAL IMPACT Considering the projected timing of cash receipts and disbursements and the structure of the Pooled Investment Portfolio, the City should be able to comfortably meet overall cash flow needs over the next six months. There is no direct fiscal impact by this action. ONGOING FISCAL IMPACT There is no ongoing fiscal impact by this action. ATTACHMENTS A. Investment Report for the Quarter Ended December 31, 2012 B. Amended Council Policy 220-01, City of Chula Vista Investment Policy and Guidelines C. Proposed Amendments to City of Chula Vista Investment Policy and Guidelines, adding paragraph M. to section 9.0 Authorized & Suitable Investments Prepared by: E. Adachi, Associate Accountant, Finance Dept. 3-3 ~~fl/ r•~~ CITY OF CHULA VISTA Finance Department Investment Report for the Quarter Ended December 31, 2012 February 26, 2013 Honorable Mayor and City Council, I am pleased to present this report of investment activity for the quarter ended December 31, 2012 in compliance with the reporting requirements as set forth in the California Government Code Sections 53600 et seq. and the City of Chula Vista Investment Policy. The information presented in this report highlights the investment activity for the quarter ended December 31, 2012 as well as provides a comparison to the quarters ended September 30, 2012 and December 31, 2011. Market Overview The Federal Open Market Committee (FOMC) continues to maintain the key Fed Funds rate at a target range of 0.00% to 0.25% in hopes of stimulating the economy. Two-year Treasuries yielding 0.25% at the beginning of October remained the same at the end of December with very little fluctuation during the quarter. The overall consumer price index (CPI) rose 1.7% on ayear-over-year basis, and the core CPI (excluding food and energy) showed a 1.9% increase year-over-year. The Federal Reserve continues to monitor these increases to ensure that inflation remains under control. Portfolio Composition The table below provides a summary of the City's total investment portfolio as of December 31, 2012. The Investment Portfolio ($184,220,373), Cash/Time Deposits ($9,032,020) and Bank Trustee/Fiduciary Funds ($77,339,358) continue to be invested in accordance with the Government Code, bond covenants and the Council Investment Policy as adopted on March 13, 2012. 3-4 Investment Report Quarter ended 12/31/2012 Page 2 of 4 Summary of Cash and Investments as of December 31, 2012 of Investment Type Par Value Market Value Book Value Portfolio Investment Portfolio Federal Securities 113,000,000 113,168,253 112,998,500 41.76% Pooled Investments 71,220,373 71,255,384 71,220,373 26.32% Corporate Bonds 0 0 0 0.00% Subtotal 184,220,373 184,423,637 184,218,873 68.08% CashlTime Deposits $9 032,020 $9,032,020 $9,032,020 3.34% Total Cash & Investments Held by the City $193,252,393 $193,455,657 $193,250,893 71.42% Held by Bank Trustee/Fiduciary Funds (1) U. S. Government 2,021,563 2,037,260 2,021,563 0.75% Repurchase Agreement 0.00% Investment Agreements' 14,577,627 14,577,627 14,577,627 5.39% Mutual Funds' 58,039,904 58,039,904 58,039,904 21.45% Cash with Fiscal Agents 0 0 0 0.00% Restricted Cash 2,700,265 2,700,265 2,700,265 1.00% Total Held by Bank Trustee/Fiduciary Funds $77 339,358 $77,355,056 $77,339,358 28.58% Total Portfolio $270,591,751 $270,810,712 $270,590,251 100.00% (1) Reflects bond proceeds held by trustee in accordance with bond covenants. The graph below provides a snapshot of the portfolio composition by investment type for that portion of the portfolio not held by the bank trustee or in a fiduciary fund. Portfolio Composition as of December 31, 2012 ($184.2M Total Par Value) US Gove Agen 61 °~ 1% LAIF (State Pool) 17% 3-5 Investment Report Quarter ended 12/31/2012 Page 3 of 4 Portfolio Performance The summary information provided below includes the total portfolio income recognized for the last quarter as compared to the prior quarter and the same quarter one year ago. December 31 2012 September 30, 2012 December 31, 2011 Quarter-End Net Interest Earnings $ 326,555 $ 381,041 $ 505,055 Net Gains (Losses) from Sales $ - $ - $ 5,740 Net Total Income Recognized $ 326 555 $ 381 041 $ 510,795 Fiscal Year-fo-Date Netlnterest Earnings $ 707,596 $ 381,041 $ 1,066,036 Net Gains (Losses) from Sales $ - $ - $ 5,740 Net Total Income Recognized $ 707 596 $ 381 041 $ 1,071,776 This info comes from the monthly Sympm "Interest Earnings Summary' reports. This table shows the City's average yield to maturity as of December 31, 2012 as compared to the County of San Diego and other cities in the county. Carlsbad and Oceanside both have dedicated staff that actively manage their portfolios by buying and selling investments daily as opposed to our more passive "hold-to-maturity' investment style. Liquidity needs and risk tolerance can also affect yields. Benchmark Comparison Agency Yield Chula Vista 0.70% County of San Diego 0.31% Carlsbad' 1.15% EI Cajon 0.63% Oceanside 0.89% San Diego 0.59% 'Nov yield; Dec not available The following graph compares the monthly earned interest yield of the City's Portfolio Fund with the monthly average yields for the same period of the State of California Local Agency Investment Fund (LAIF) and the two-year and three-year treasury from December 2010 through December 2012. z.o r o.o r gencnmarK 1sr 1.ov o.s r Deo-10 Mar-11 Jun-tt SePl7 Dec-17 Mar-12 Jun-12 Sep-72 Dea12 -~-City -l-LAIF -i--2yr Treasury -f-3yr Treasury 3-6 Investment Report Quarter ended 12/31/2012 Page 4 of 4 rer section ~ti.~ or the atys investment roncy, the two-year U.S. Treasury and the Local Agency Investment Fund yields are the performance benchmarks to be used when determining whether market yields are being achieved. The three-year U.S. Treasury is added as an additional point of reference in der to rovide an u er ran a that is above the Benchmark f~ n,r'~~ ~ `Yield'e~~ '„AD City 0.70% 869 LAIF 0.33% 208 Year Treasury 0.25% 730 3 Year Treasu 0.36% 1,095 ADM =Average Days to Maturity or p pp g weighted average maturity of the City's portfolio, which is at 869 days. Investment Activify During the quarter, nine investments totaling $28,000,000 were redeemed prior to their maturity dates, and one investment for $2,000,000 matured. These monies represent pooled cash received from various funding sources such as sewer, TDIF, PAD, General Fund, etc. These funds were reinvested through the purchase of fifteen Federal Agency Securities totaling $45,998,500 using the City's Investment Policy guidelines to ensure safety, liquidity and yield. There is no further activity to report on other than routine investments in money market mutual funds by the City's fiscal agents. Conclusion The total cash and investment portfolio held by the City as of December 31, 2012 was $193,252,393. This is an increase of approximately $1.8M from September 30, 2012. For the quarter ended December 31, 2012, the earned interest yield was 0.697%, a decrease from the 0.778% reported for the quarter ended September 30, 2012, reflecting higher yielding investments being redeemed and then reinvested at lower interest rates. The weighted average maturity as of December 31, 2012 increased from the previous quarter's 1.96 years to 2.38 years which is within the Council Policy of less than 3.0 years. The weighted average maturity remains sufficiently liquid to enable the City to meet all operating requirements that might be reasonably anticipated. Considering the projected timing of cash receipts and disbursements and the structure of the Pooled Investment Portfolio, the City should be able to comfortably meet overall cash flow needs over the next six months. There is no direct fiscal impact by this action. certify that this report reflects the City of Chula Vista and related agencies pooled investments and is in conformity with the State of California Government Code on authorized investments and with the Investment Policy of the City of Chula Vista as stated in Resolution No. 2012-034 dated March 13, 2012. Respectfully submitted, Maria achadoorian Director of Finance/Treasurer 3-7 \ll CITY OF CHULAVISTA Chula Vista Investment Pool Portfolio Management Portfolio Summary December 31, 2012 City of Chula Vista 276 Fourth Ave Chula Vista CA 91910 (619)691-5250 Investments Par Value Market Value Book Value % of .Portfolio Term Days to Maturity YTM Managed POOl Accountl '31,059,317.98 31,094,329.01 31,059,317.96 16.06 1 1 0.326 Managed Pool Account 3 39,148,455.44 ~ 39,148,455.44 39,140,455.44 21.25 1 1 0.310 Managed Pool Accounl2 1,012,599.61 7,012,599.61 1012,599.fi1 0.55 1 1 0.360 Federal Agency Coupon Securities 4,000,000.00 4,002,500.00 4,OOOp00.00 2.17 1,096 773 0.700 Federal Agency Callables 109,000,000.00 109,165,752.50 108,998,500.00 59.17 .1,635 1,440 0.945 184,220,373.03 184,423,636.56 184,218,873.03 100.00% 992 669 0.697 Investments Total Earnings December 31 Month Ending Fiscal Year To Date Current Year 106,009.44 707,595.85 Average Daily Balance 178,251,131.09 182,080,905.99 Effective Rate of Return 0.70 % 0.77 % - W /'~^/f~~' / p / ~ t/ V U YVu /' 2 r r/ Phillip A. Davis, Assistant Direc or of Finance Reporting period 12/0112012-12I31I2012 Ron Oate: 01/231201 3 -12:22 Portfolio CHUL CC PM (PRF_PM1) SymRep16.41 2026 Report Ver. 5.00 Chula Vista Investment Pool Portfolio Management Portfolio Details -Investments December 31, 2012 CUSIP Investment# Managed Pool Account 1 BYS10197 10197 Managed Pool Account3 SYS10547 10547 Average Purchase Issuer Balance pate Local Agency Investment Fund Sr~btotal and Average 29,736,737.33 San Diego County Inv Pool Subtotal and Average 39,148,455.44 Stated Par Value Market Value Book Value Rate 31,059,317.98 31494329.01 31059,317.98 0.326 31,059,317.98 31,094,329.01 31,059,317.98 39,148,455.44 39,148,455.44 39,148,455.44 39,148,455.44 39,148,455.44 0.310 39,146,455.44 Page 2 Days [o VTM Maturity Term Maturity Date 1 1 9.3zs 1 1 0.326 1 1 0.310 1 1 0.310 Managed Pool Account2 SYS10507 10507 CalTrust SHort Term Fund 1,012,599.61 1,012,599.61 1,012,599.61 0.360 1 1 0.360 Subtotal and Average 1,012,599.61 1,012,599.61 1,012,599.61 1,012,599.61 7 1 0.360 Federal Agency Coupon Securities 3134G3LD0 10673 Federal Home Loan Mortgage Co. 02/13/2012 4,960,000.00 4 402,500.00 4,000,000.00 0.700 1,096 773 0.700 02/13/2015 rn Subtotal and Average 4,000,000.00 4,000,000.00 4,002,500.00 4,000,000.00 1,096 773 0.700 Feral Agency Callables 3134G3MR8 10fi75 Federal Home Loan Mortgage Co. 02/13/2012 3000,000. 00 3,010830.00 3,000,000.00 0.550 1,096 773 0.550 02/13/2015 3134G3NL0 10680 Federal Home Loan Modgage Co. 02/24/2012 4,000,000. 00 4,006,400.00 4,000,000.00 0.500 1,096 704 0.500 02/24/2015 313373VH2 10628 Federal Home Loan Bank 06/10/2011 3,000,000. 00 3,018,390.00 3,000,000.00 1.700 1,461 890 1.700 06/10/2015 3134G3E82 10667 Federal Home Loan Mortgage Co. 12/30/2011 3,000,000. 00 3,017,812.50 3,000,000.00 1.000 1,278 910 1.000 06/30/2015 3134G3JY7 10670 Federal Home Loan Modgage Co. 01/30/2012 3,000,000. 00 3,001 650.00 3,000 000 all 0.840 1,277 940 0.840 07/30/2015 3133EACY2 10679 Federal Farm Credit Bank 02/10/2012 3,000,000. 00 3,000,120.00 3,000,000.00 0.590 1,277 951 0.590 08/10/2015 3136FRX73 10647 Federal Nal'I M[g. Assoc. 09109/2011 3,000,000. 00 3,012,510.00 3 000,000.00 1.000 1 461 981 1.000 09/09/2015 31331 K5T3 10669 Federal Farm Credit Bank 01/11/2012 3,000,000. 00 3,000,660.00 3,000,000.00 1.020 1,461 1,105 1.020 Ot/ti/2016 3136GOJR3 10687 Federal Nal'I Mtg. Assoc. 06/04/2012 4,000,000. 00 4,008,680.00 4,000,000.00 0.950 1,460 1,249 0.950 06/03/2016 3134G3KK5 10672 Federal Home Loan Mortgage Co. 01/27/2012 3,000,000. 00 3,025,200.00 3,000,000.00 1.100 1,643 1,303 1.100 07/27/2016 3136FRX57 10649 Federal Nat'I Mtg. Assoc. 09/20!2011 3,000,000. 00 3,027,330.00 3,000,000.00 1.420 1,827 1,358 1.420 09/20/2016 313380226 10698 Federal HOme Loan Bank 10/24/2012 3,000,000. 00 2,999,580.00 3,000,000 00 0.625 1,461 1,392 0.625 10/24/2016 3136GOR78 10696 Federal Natl Mtg. Assoc. .10/2512012 3,000,000 .00 2,997,840 00 3,000 000.00 0.625 1,461 1,393 0.625 10/25/2016 3136GOW80 10699 Federal Nat'I Mtg. ASSOC, 10/25/2012 3000,000 .00 2998,770.00 3000,000.00 O.fi05 1,461 1,393 0.605 10/25/2016 313381078 10705 Federal Home Loan Bank 11/28/2012 3 000,000 .00 2,993,490.00 3,000,000.00 0.590 1,461 1,427 0.590 11/28/2016 31331 K6Y1 10671 Federal Farm Credit Bank 01/18/2012 3,000,000 .00 3,W1,500.00 3,000,000.00 1.270 1,827 1478 1.270 01/18/2017 3136FTK73 10676 Federal Nal'I Mtg. Assoc. 02/22/2012 3,000000 00 3,005,01000 3,000,000.00 1375 1,827 1,513 1.375 02/22/2017 3136FTP52 10681 Federal Nat'I Mlg. Assoc. 02/26/2012 3 000,000 .00 3,004,770.00. 3,000,000.00 1.100 1,827 1,519 1.097 02/28/2017 3136GOX89 10700 Federal Nat'I Mtg. Assoc 10/26/2012 3,000,000 .00 3,000,450.00 3,000,000.00 0.750 1,643 1,576 0.750 04/2fi12017 3136GOJX0 10685 Federal Nal'I Mtg. Assoc. 05/30/2012 4,000,000 .00 4,013,44000 4,000,000.00 1.250 1,826 t,fi 10 1.250 05/30/2077 Portfolio CHUL CC Run Hale: 01/23/2013 -12:22 PM (PRF_PM2) 6ymRepl 6.41.2026 Repod Ver. 5 00 Chula Vista Investment Pool Portfolio Management Portfolio Details -Investments December 31, 2012 Page 3 CUSIP Average Investment# Issuer Balance Pr~rchase Date Par Value Market Value Book Value Stated Rate Term Days to Maturity YTM Maturity Date Federal Agency Callables 3134G3XE5 10689 Federal Home Loan Mortgage Co. 06/07/2012 3,000,000.00 3 009,540.00 3,000,000.00 1.150. 1,826 1,618 1.150 06/07/2017 3133ECAL8 10708 Federal Farm Cretlit Bank 12/19/2012 3,000,000.00 2,991,930.00 3,000,000 00 0.730 1,643 1 fi30 0.730 06/19/2017 3135GOMN0 10690 Federal Nat'I Mtg. Assoc. 06/28/2012 3,000,000.00 3,012,240.00 3,000,000.00 1.125 1,826 1 639 1.125 06/28/2017 3133EAWY0 10691 Federal Farm Credit Bank -07/10/2012 3,000,000.00 3,010,170.00 3,000,000.00 1.040 1,826 1,fi51 1.040 07/10/2017 3134G3YZ7 10692 Federal Home Loan Modgage Co. 07/25/2012 3,000,000.00 3,001,875.00 3 000,000.00 1.100 1,826 1,666 1.100 07/25/2017 3133EAY28 10694 Federal Farm Credil Bank 09/21/2012 3,000,000.00 3,005,070.00 3000,000.00 0.830 1,826 1,724 0.830 09/21/2017 3133EA3J5 10695 Federal Farm Credit Bank 10/10/2012 4,000,000.00 3,995,625.00 4,000,000.00 0.900 1,626 1,743 0.900 10/1012017 3133EASA2 10701 Federal Farm Credil Bank 10/18/2012 3,000,000.00 3,006,030.00 3,000,000.00 0.870 1,826 1,751 0.870 10/1812017 313380234 10697 Federal Home Loan Bank 10/23/2012 3,000,000.00 3,000,210.00 3,000,000.00 0.900 1,826 1,756 0.900 10/23/2017 313381384 10703 Federal Home Loan Bank 11/09/2012 3,000,000.00 3,006,420.00 3,000,000.00 1 000 1,826 1,773 1.000 11/09/2017 313381307 10702 Federal Home Loan Bank 11/13/2012 3,000,000.00 3,004,800.00 2,998,500.00 0.675 1,826 1,777 0.885 11/1312017 3133814Lfi 10704 Federal Home Loan Bank 11/15/2012 3,000,000.00 3,003,360.00 3,000,000.00 1.050 1,826 1,779 1.050 11/15/2017 3134G32L3 10706 Federal Home Loan Mortgage C0.. 12/26/2012 3,000,004 00 2,988,630.00 3,000,000.00 0.850 1,826 1,820 0.850 12/26/2017 3136G14X4 10707 Federal Nat'I Mlg. Assoc. 12/27/2012 3,000,000 00 2,989,710.00 3,000,00400 0.900 1,626 1,821 0.900 12/27/2017 381 LC7 10710 Federal Home Loan Bank 12/28/2012 3,000,000.00 2,995,710.00 3,000,000.00 0.950 1,826 1,822 0.950 12/28/2017 -~ Suhtotal and Average 104,353,338.71 109,000,009.00 109,165,752.50 708,998,500.00 1,635 1 440 0.945 O , Total and Average 178,251,131.09 184,220,373.03 184,423,636.56 184,218,873.03 992 869 0.697 Portfolio GHUL CC Run Date'. 0112312013 -12:22 PM (PRF_PM2) SymRept 6.41.202b Chula Vista Investment Pool Portfolio Management Activity By-Type December 1, 2012 through December 31, 2012 Page 4 Stated Transaction Purchases Redemptions CUSIP Invesfinent# Issuer Rate Date or Deposits or Withdrawals Balance Managed Pool Account 1 (Monthly Summary) SY510197 10197 Local Agency Investment Fund 0.326 12 000 000 00 5,000 000.00 Subtotal 72,000,000.00 5,000,000.00 31,059,317.98 Managed Pool Account 3 (Monthly Summary) Subtotal 39,148,455.44 Managed Pool Account 2 (Monthly Summary) Subtotal 1,012,599.61 Federal Agency Coupon Securities Subtotal a,ooo,ooo.oo Federal Agency Callables 3f1~1KZ29 .10665 3113ECAL8 10700 373361 LC7 10710 3134G3BZ2 10664 3134G32L3 10706 3136FTXD6 10666 3136G14X4 10707 Fetleral Farm Credit Bank Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mongage Co. Federal Home Loan Mongage Co. Federal Nat'I Mtg. Assoc. Federal Nat'I Mtg. Assoc. Subtotal Total Run Hale: 01/2312013-1222 1.330 12/07/2012- 0.00 4,000,000.00 0.730 12/19/2012 3,000,000.00 0.00 0.950 12128/2012 3,000,000.00 0.00 1.250 12/14/2012 0.00 3,000,000.00 0.850 12/26/2012 3,000,000.00 0.00 1.100. 12/28/2012 0.00 3,000,000.00 0.900 12/27/2012 3,000,000.00 0.00 1z,o6apoo.oo 10,000,ooo.ao 24,000,000.00 15,000,000.00 108,998,500.00 184,218,873.03 Ponfolio CHUL CC PM (PRF_PM3) SymRep16.41.202b Report Ver. ~ 00 CUSIP Investmen[# Issuer Managed Pool Account 1 (Monthly Summary) SY510197 10197 Local Agency Investment Fund Subtotal Managed Pool Account 3 (Monthly Summary) Subtotal Page 4 Redemptions or Withdrawals Balance 0.324 0.00 9,000,000.00 0.00 9,000,000.00 24,059,317.98 ' 39,148,455.44 Managed Pool Account 2 (Monthly Summary) Subtotal Federal Agency Coupon Securities Subtotal 1,012,599.61 4,000,000.00 Federal Agency Callables 3133~3C7 10702 313384384 10703 313~4LG 10704 313381 C70 10705 3134G24U3 10G60 3134G25H1 10663 ! Run nale: 1217 912012 -14x7 Federal Home Loan Bank 0.875 11/13/2012 2,998,500.00 0.00 Federal Home Loan Bank 1.000 11/09/2012 3,000,000.00 0.00 Federal Home Loan Bank 1.050 11/15/2012 3,000,000.00 0.00 Federal Home Loan Bank 0.590 11/28!2012 3,000,000.00 0.00 Federal Home Loan Mortgage Co. - 1.250 11/16/2012 0.00 3,000,000.00 Federal Home Loan Mortgage Co. 1,125 11/23/2012 0.00 3,000,000,00 Subtotal 11,998,500.00 6,000,000.00 Total 11,998,500.00 15,000,000.00 Chula Vista Investment Pool Portfolio Managemenfi Activifiy By Type November 1, 2012 through November 30, 2012 Stated Transaction Purchases Rate Date nr naooou~ 106,998,500.00 175,218,873.03 Portfolio CHUL CC PM (PRF_PMa) SymRep16.41.202b Report Ver. 5.00 Chula Vista Investmenfi Pool Portfolio Management Activity By Type October 1, 2012 through October 31, 2012 Page 4 ~ Stated Transaction Purchases Retlemptions ~ CUSIP Investment# Issuer Rate Date or Deposits or Withdrawals balance Managed Pool Account 1 (Monthly Summary) ~, SY510197 10197 Local Agency Investment Fund 0.340 34,677.25 0.00 Subtotal 34,677.25 0.00 ~ 33,059,317.90 Managed Pool Account 3 (Monthly Summary) SY510547 10547 San Diego County Inv Pool 0.370 42,499.27 0.00 Subtotal 42,499.27 0.00 39,140,455.44 Managed Pool Account 2 (Monthly Summary) Subtotal 1,012,599.61 Federal Agency Coupon Securities 3733XV6U0 10542 Federal liome Loan Oank 1.750 10/09/2012 0.00 2,000,000.00 W Subtotal 0.00 2,000,000.00 4,000,000.00 Fed e ral Agency Callables (( ,,~~ 31331KG61 10655 Federal Farm Credit Bank 1.290 10119/2012 0.00 3,000,000.00 31331 KL24 10656 Federal Farm Credit Bank 1.540 10/26/2012 0.00 3,000,000.00 3133EA3J5 70695 Federal Farm Credit Bank 0.900 10110/2012 4,000,000.00 0.00 3133EA5A2 10701 Federal Farm Credit Bank 0,870 1011812012 3,000,000.00 - 0.00 313380234 10697 Federal Home Loan Bank 0.900 10/23/2012 3,000,000.00 0.00 313380226 10698 Federal Hame Loan eanlc 0.625 10/24/2012 3,000,000.00 0.00 3136FTHL6 10857 Federal Nal'I Mtg. Assoc. 1.100 10129/2012 0.00 ~ 3,000,000.00 3136FTHC6 10658 Federal Nal'I Mfg. Assoc. 1.000 10/26/2012 0.00 3,000,000.00 3136GOR78 10696 Federal Nafl Mlg. Assoc. 0.625 10/25/2012 3,000,000.00 0.00 , 3136GOW80 10699 Federal Nafl Mtg. ASSOC. 0.605 10/2512012 3,000,000.00 ~ 0,00 3136GOX89 10700 Federal Nal'I Mtg. Assoc. 0.750 10/26/2012 3,000,000.00 0.00 Subtotal 22,000,000.00 12,000,000.00 101,000,000.00 Total 22,077,176.52 14,000,000.00 178,220,373.03 Portfolio CHUL CC Run Dale'. 11120/2012-10:31 PM (PRF PM3)BymRept 6.4L202b Report Ver. 5.00 Chula Vista Investment Pool Portfolio Management Page 6 Activity Summary December 2011 through December 2012 Month End Year Numher of Securities Total Invested Yield [o Maturity 360 365 Equivalent Equivalent Managed Pool Rate Number of Investments Purchased Number of Investments Redeemed Average Term Average Days to Maturity December 2011 46 173,595,859.09 1.105 1.121 0.382 5 6 1,088 959 January 2012 47 203,135,286.16 0.990 1.003 0.385 4 3 943 819 February 2012 52 199,136,296.74 0.968 0.982 0.389 10 5 1,058. 929 March 2012 48 184,136,296.74 0.965 0.979 0.383 D 4 1,045 894 April 2012 45 167,184,426.85 0.881 0.893 0.367 0 3 958 814 May 2012 41 186,984,426.85 0.840 0.851 0.363 1 5 893 746 June 2012 39 202,985,726.85 0.773 .0.784 0.358 5 7 822 706 July 2012 38 190,143,196.51 0.787 0.798 0.363 2 3 880 750 August 2012 37 180,143,196.51 0.795 0.806 0.377 0 1 899 749 September 2012 34 170,143,196.51 0.767 0.778 0.348 1 4 864 715 October 2012 36 178,220,373.03 0.722 0.732 0.340 7 5 920 797 November 2012 38 175,218,873.03 0.730 0.741 0.324 4 2 1,004 873 D6~ember 2012 39 184,218,873.03 0.688 0.697 0.326 4 3 992 869 '-` Average 42 185,788,155.99 0.847 % 0.859 % 0.362 3 4 951 817 A Run Dale: 01/23/2013-12:22 Portfolio CHUL CC PM (PRF_PM415ymRep16.4L202b Report Ver. 5.00 Chula Vista Investment Pool Portfolio Management page 6 Distribution of Investments By Type December 2011 through December 2012 December January February March April May June July August September October November December Average Security Type 2011 2072 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 by Period Managed Pool Account 1 17.6 23.7 13.6. 14.2 20.4. 26.7 24.6 21.1 18.3 19.4 18.6 13.7 16.9 19.1 Short Term Pool Accounts Managed Pool Account 3 5.8 9.9 10.1 10.9 10.7 10.7 19.3 20.6 21.7 23.0 22.0 22.3 21.3 16.0 Managed Pool Account 2 0.6. 0.5 0.5 0.6 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0;6 0.6 0.6 Federal Agency Coupon Securities 1.2 1.0 3.0 3:3 3.2 3.2 3.0 3.2 3.3 3.5 2.2 2.3 2.2 2.7 Federal Agency Callables 73.7 64.0 71.8 70.1 64.1 57.8 52.7 54.7 56.1 53.5 56.7 61.1 59.2 61.2 Corporate Coupon Bonds 1.2 1.0 1.0 1.1 1.1 1.1 0.5°/ W Portfolio CHUL CC Run Date: m12312013 - 12:22 PM (PRF_PM5l Sym Repf 6.9L202b Report Ver. 5 00 Chula Vista Investment Pool Portfolio Management Interest Earnings Summary December 31, 2012 December 31 Month Ending W I J T CD/Coupon/Discount Investments: Interest Collected Plus Accrued Interest at End of Period Less Accrued Interest at Beginning of Period Less Accrued Interest at Purchase During Period Interest Earned during Period Adjusted by Capital Gains or Losses Earnings during Periods Pass Through Securities: Interest Collected Plus Accrued Interest at End of Period Less Accrued Interest at Beginning of Period Less Accrued Interest at Purchase During Period Interest Earned during Period Adjusted by Premiums and Discounts Adjusted by Capital Gains or Losses Earnings during Periods 155,369.44 231,624.58 301,073.17) 0.00) 85, 920.85 0.00 85,920.85 0.00 0.00 0.00) 0.00) 0.00 0.00 0.00 0.00 Fiscal Year To Date 628,537.77 231,624.58 293,356.10) 0.00) 566, 606.25 0.00 566,806.25 0.00 0.00 0.00) 0.00) 0.00 0.00 0.00 0.00 Page 7 Cash/Checking Accounts: Interest Collected 0.00 134,646.18 Plus Accrued Interest at End of Period 75,650.52 75,650.52 Less Accrued Interest at Beginning of Period ( 55,561.93) ( 69,507.10) Interest Earned during Period 20,088.59 _ 140,789.60 Total Interest Earned during Period ~ 106,009.44 707,595.85 Total Capital Gains or Losses 0.00 0.00 Total Earnings during Period 106,009.44 707,595.85 Run Dete: Ot/2312013 -12:22 Portfolio CHUL CC PM (PRF_PMGI SymRept 6 4 L202b Repotl Ver. 5.00 ~«r, ~~~ City of Chula Vista ~' Chula Vista Investment Pool 276 Fourth Ave Received Interest C hula Vista CA 91910 CITY OF (sls~ssl-azeo Sorted by Date Received -Grouped by Fund CHULAVISTA Received December 1, 2012 -December 31, 2012 Interest ' Security Par Current __ Date Received CUSIP Investment# Type Value Rale Date Due Dale Received Amount Due Amount Received Variance Funtl: Chula Vista Investment Pool December 2012 3136GOJR3 10607 MC1 4,000,000.00 0.950 12/03/2012 12/03/2012 18,89444 18,894.44 - 31331 KZ29 10665 MCi 000 1.330 12/07/2012 12/07/2012 26,600.00 26,600.00 - 3134G3XE5 10689 MC1 3,000,000,00 1.150 12/07/2012 12/07/2012 17,250.00 17,250.00 - 313373VH2 10628 MC7 3,000,000.00 1.700. 12/10/2012 12/10/2012 25,500.00 25,500.00 - 3134G3BZ2 .10664 MCt 0.00 1,250 12/14/2012 12/14/2012 18,750.00 18,750.00 - 3136FTXD6 10668 MC1 0.00 1.100 12/28/2012 12/28/2012 16,500.00 16,500.00 - 3135GOMN0 10fi90 MCi 3,000,000.00 1.125 12/28/2012 12/28/2012 16,875.00 16,875,00 - 3134G3E82 10667 MC1 3,000,000.00 1.000 12/30/2012 12/31/2012 15,000.00 15,000.00 - 9ubtotal 155,369.44 155,369.44 Chula Vlsta Investment Pool Subtotal 155,369.44 755,369.44 W Total 155,369.44 755,369.44 / / VVV ~ Total Cash Overpayment 0.00 Total Cash Shortfall 0.00 Run Date: 0112312013 -12:23 Portfolio CHUL CC RI (PRF_RI) SymRept e41 202E Repotl Vec SAO ~`~ /, ~- ~~ ' City of Chula Vista ~ ~ Chula Vista Investment Pool z7s Fourth Ave ~"~'''"~ " Accrued Interest Chula Vista CA 91910 CITY of (619)691-5250 CHU~.1~ V~STA Sorted by issuer -Investment Number December 1, 2012 -December 31, 2012 Adjusted Acc'd Int. Security Par Maturity Current `Beginning a[PU rchase Interest Interest "Entling CUSIP Investment# Type Value Date Rate Accrued Interest During Period Earned Received Accrued Interest Federal Farm Credit Bank 31331 KZ29 10fi65 MCi 0.00 12107/2015 1.330 25,713.33 000 886 fi7 26,600.00 0.00 31331 K5T3 10669 MCi 3,000,000.00 01/11/2016 1020 11,900.00 0.00 2,550.00 0.00 14,450.00 31331 K6Y1 10671 MCi 3,000,000.00 01/18/2017 1.270 14,075.83 0.00 3,175.00 000 17,250.83 3133EACV2 10679 MCi 3,000,000.00 08/10/2015 0.590 5,457.50 0.00 1,475.00. 0.00 6,932.50 3133EAVdYO 10691 MC1 3,000,000.00 07/10/2017 1.040 12,220.00 0.00 2600.00 0.00 14,820.00 3133EAY28 10694 MCi 3,000,000.00 09/21/2017 0.830 4,041.67 0.00 2075.00 0.00 6,916.67 3133EA3J5 10695 MC1 4,000,000.00 10/10/2017 0.900 5,100.00 0.00 3,000.00 0.00 8,100.00 3133EASA2 10701 MCi 3,000,000.00 10/18/2017 0.870 3,117.50 0.00 2,175.00 0.00 5,292.50 3133ECAL8 10708 MCi 3,000,000.00 06/19/2017 0730 000 0.00 730.00 0.00 730.00 Subtotal 25,000,000.00 82,425.83 0.00 18,666.67 26,600.00 74,492.50 Federal Home Loan Bank 313373VH2 10628 MCi 3,000,000.00 06/10!2015 1.700 24,225.00 0,00 4,250.00 25,500.00 2,975.00 3~380Z34 10697 MCi 3,000,000.00 10/23/2017 0.900 2,850.00 0.00 2,250.00 0.00 5,100.00 37.3080226 10698 MC1 3,000,000.00 10/24/2016 0625 1,927.08 0.00 1,562.50 0.00 3,489.58 3Q9J813C7 10702 MC1 3,000,000.00 11/13/2017 0.875 1,312.50 0.00 2,187.50 0.00 3,500.00 313381384 10703 MC1 3,000,000.00 11/09/2017 1.000 1,833.33 0.00 2,500.00 0.00 4,333.33 3133814L6 10704 MCi 3,000,000.00 11/15/2017 1.050 1,400.00 0.00 2,625.00 0.00 4,025.00 313381 078 10705 MCi 3,000,000.00 11/28/2016 0.590 147.50 0.00 1,475.00 0.00 1,622.50 313381107 10710 MC7 3,000,000.00 12/28/2017 0.950 000 0.00 237.50 0.00 237.50 Subtotal 24,000,000.00 33,695.41 0.00 17,087.50 25,500.00 25,282.91 Federal Home Loan Mortgage Co. 3134G3BZ2 10664 MCi 0.00 12/14/2015 1.250 17,39583 000 1,354.17 18,750.00 0.00 3134G3EB2 10667 MC1 3,000,000.00 .06/30/2015 1000 12,583.33 000 2,500.00 15,000.00 83.33 3134G3JY7 10670 MCi 3,000,000.00 07!30/2015 0.840 8,470.00 0.00 2,100.00 0.00 10,570.00 3134G3KK5 10672 MCt 3,000,000.00 07/27/2016 1.100 11,366.67 0.00 2,750.00 0.00 14,116.67 3134G3LD0 10673 FAC 4,000,000.00 02/13/2015 0.700 8,400.00 0.00 2,333.33 0.00 10,733.33 3134G3MR8 10675 MCi 3,000,000.00 02!13/2015 0.550 4,950.00 0.00 1,375.00 0.00 6,325.00 3134G3NL0 10680 MC1 ~ 4,000,000.00 02/24/2015 0.500 5,388.89 0.00 1,666.67 0.00 7,055.56 3134G3XE5 10689 MC1 3,000,000.00 06/07/2017 1.150 16,675.00 0.00 2,075.00 17,250.00 2,300.00 3134G3YZ7 10692 MCi 3,000,000.00 07/25/2017 1.100 11,550.00 D.DO 2,750.00 0.00 14,300.00 3134G32L3 10706 MCi 3,000,000.00 12/26/2017 0.850 0.00 0.00 354.17 0.00 354.17 Subtotal 29,000,000.00 96,779.72 0.00 20,058.34 51,000.00 fi5,II38.06 Beginning Accrued may not include investments that redemed in the previous month that had outstanding accrued interest. Ending Accrued includes outstanding purchase interest. Ran Dale: 0112312013 - 12:24 Portfolio CHUL CC AI (PRF_AI) SymRept 6.41.202b Report Ver. 5 00 Chula Vista Inve .nt Pool Accrued Interest Sorted by Issuer -Investment Number Page 2 Adjusted Acc'd Int. Security Par Maturity Current "Beginning at Purchase Interest Interest 'Ending CUSIP Investment# Type Value Date Rate Accrued Interest During Period Earned Received Accrued Interest Federal Nat'I Mtg. Assoc. 313fi FRX73 10647 MCt 3,000,00000 09109/2015 1.000 6,833.33 0.00 2,500. 00 0.00 9,333.33 3136FRX57 10649 MCt 3,000,00000 09/20/2016 1420 8,401.67 000 3,550. 00 0.00 11,951.67 3136FTXD6 10668 MCi 0.00 12/28/2015 1.100 14,025.00 0.00 2,475. 00 16,50000 0.00 3136FTK73 10676 MCi 3,000,00000 02/22/2017 1.375 11,343.75 0.00 3,437. 50 0.00 14,781.25 3136FTP52 10661 MCi 3,000,000.00 02/28/2017 1.100 8,52500 0.00 2,750 00 0.00 11,275.00 3136GOJX0 10685 MCi 4,000,000.00 05/30/2017 1.250 138.89 0.00 4,166. 67 0.00 4,305.56 3136GOJR3 10687 MCt 4,000,000.00 06/03/2016 0.950 18,683.33 0.00 3,166. 67 18,894.44 2,955.SG 3135GOMN0 10690 MCt 3,000,000.00 06/28/2017 1.125 14,343.75 000 2,812. 50 16,875.00 281.25 3136GOR78 10696 MCi 3,000,000.00 10/25/2016 0.625 1,875.00 0.00 1,562. 50 0.00 3,437.50 3136GOVV80 10699 MCi 3000,000.00 10/25/2016 0605 1,815.00 0.00 1,512. 50 0.00 3,327.50 313GGOX89 10700 MCi 3,000,000.00 04/26/2017 0.750 2,18750 0.00 1,875. 00 0.00 4,062.50 3136G 14X4 10707 MCi 3,000,000.00 12/27/2017 0.900 0.00 0.00 - 300. 00 0.00 300.00 Subtotal 35,000,000.00 88,172.22 0.00 30,108 .34 52,269.44 66,011.12 - Total 113,000,000.00 - 301,073.18 0.00 ~ 85,920 .85 155,369.44 231,624.59 W fD * Beginning Accrued may not include investments that redemed in the previous month that had outstanding accrued interest. Ending Accrued includes outstanding purchase interest Portfolio CHUL CC Ran Date: 0112312013 - 12:24 AI (PRF_AI) 6ymftept 6 4L202b Repotl Ver. flee ~«r, ~- --~ Cily of Chula Vista ~r Chula Vista Investment Pool z~s Fo9dn ~~e Realized Gains and Losses cnDlawStacnsls,o lrln QF (619)691-5250 CHU~ V~S1-A Sorted By MaturitylSale/Call Date SaleslCallslMaturities: December 1, 2012 -December 31, 2012 Investment# Par Value Sale Date Days Held Inv. r Purchase __. ___._ _-_-_-______ Maturity/Sale Realized Total Total Total Issue Type Date Current Rate Maturity Date Term book V@lue Proceeds Gain/Loss Earnings Net Earnings Yield 365 10665 MC1 12/07/2011 4,000,000.00 12/07/2012 366 4,000,000.00 4,000,000:00 0.00 53,200.00 53,200.00 1.326 Federal Farm Credit Bank 1.330 12/07/2015 1,461 10664 MC1 12114/2011 3,000,000.00 12/14/2012 366 3,000,000.00 3,000,000.00 0.00 37,500.00 37,500.00 1.247 Federal Home Loan Mortgage Co. 1.250 12/14/2015 1,461 10668 MC1 12128/2011 3,000,000.00 12/28/2012 3fi6 3,000,000.00 3,000,000.00 0.00 33,000.00 33,000.00 1.097 Federal Nafl Mtg. Assoc. 1.100 12/28/2015 1,461 Total Realized Gains/losses 10,000,000.00 70,000,000.00 0.00 / 123,700.00 W N O Run Dale'. 01I23I2013 - 12:24 123,700.00 1.234 Portfolio CHUL CC CG (PRF_CGR1) SymRept fi 4L2D2b Report Ver. 5.00 Schedule of Cash/lnve• as of December 31, 20 Bond Issue CV Public Financing Authority 2001-1/2001-2 RAD is with Fiscal Agen[ 2002 COP Police Facilities CFO O6-I Improvement Area A 2003 Refunding Cert of Participation CFD 2001-2 McMillin-Oiay Ranch 6 CFD OB-I Otay Ranch Village 6 CFD 07-I McMillin Otay Rnch Vllg 11 CFD 06-I Improvement Area B 2004 COP Civic Center Phase I Zoos COP Civic Center Phase II CVPFA 2005 Rev Refunding SerA CFD 01-1 Improvement Area B CFD 12-I McMillin Otay Rnch VIIg 7 CFD 13-I Otay Ranch VIIg 7 CFD 07-IB McMillin Otay Rnch Vllg 11 2010 COP Capital Facilities Refunding O6 5(,3ax Alloc Ref Bonds A O6 S~rdinate Tax Alloc Ref Bds r RDA 2008 Tax Alloc Ref Bonds CDBG Section 108 Loan Orange Tree MHP Grand Total as o(December 31, 2012 Trinity Plus Funding Co Invst Agrmt Trinity Plus Funding Co Invst Agrmt US Treasury Milestone Treasury Oblig FD Prem Shr Milestone Treasury Oblig FD Prem Shr Local Agency Investment Fund FSA Capital Mgmt Invst Agreement Milestone Treasury Oblig FDPrem Shr Milestone Treasury Oblig FD Prem Shr Milestone Treasury Oblig FD Prem Shr LAIF Milestone Treasury Oblig FDPrem Shr IAIF Milestone Treasury Oblig FD Prem Shr Dreyfus Inst'I Res Treasury FSA Capital Management Services LLC Dreyfus Inst'I Res Treasury FSA Investment Agreement Milestone Treasury Oblig FD Prem Shr Citigroup GIC #871615.1 Milestone Treasury Oblig FO Prem Shr Milestone Treasury Oblig FD Prem Shr Milestone Treasury Oblig FDPrem Shr LAIF Milestone Treasury Oblig FD Prem Shr LAIF Milestone Treasury Oblig FD Prem Shr Milestone Treasury PS Fund # M5 Rabobank International NY Branch Milestone Treasury PS Fund # MS CltiGroup Financial Products, Inc. GIC Milestone Treasury PS Fund # MS Cash -Interest Bearing Acct Cash -Interest Bearing Acct Trust Acct # Fiscal 94430303 US Bank 94430312 US Bank 94445202 US Bank 94445200 US Bank 94477000/3/4/5/9/10 US Bank 94477005/9 US Bank 94652201 US Bank 94652200 US Bank 94658900/03/04/05/OB/09/10 US Bank 94682100/03/04/05 US Bank 94682105 US Bank 784708000/03/04 US Bank 784708003 US Bank 786104000/3/4/5 US Bank 325544 BNY 325544 BNY 145757 BNY 145757 BNY 790488000+ US Bank Reserve Accounts US Bank 792183000-10 US Bank 791949000/4/6/7/8/12 US Bank '93774000/03/04/05/O6/07/OB/1 US Bank 793774003 US Bank 7 94 322 00 0/01 /0 3/0 9 US Bank 794322003 US Bank 136267000-136267005 US Bank 103986000/05 US Bank 103986003 US Bank 103987003/05 US Bank 103987003 US Bank 127926000106011 US Bank 1459703226 B of A 2324-80156 B of A IA Invtmnt Agrmt IA Invtmnt Agrmt USC US Trsy Notes MF Mutual Funds MF Mutual Funds MF Mutual Funds IA Invmnt Agrml MF Mutual Funds MF Mutual Funtls MF Mutual Funds MF Mutual Funds MF Mutual Funds MF Mutual Funds MF Mutual Funds MF Mutual Funds IA Invmnt Agrml MF Mutual Funds IA Invmnt Agrmt MF Mutual Funds IA Invmnt Agnnl MF Mutual Funds MF Mutual Funds MF Mutual Funds MF Mutual Funds MF Mutual Funds MF Mutual Funds MF Mutual Funds MF Mutual Funds IA Invmnt Agrmt MF Mutual Funds IA Invmnt Agrmt MF Mutual Funds RC Restricted Cash RC Restricted Cash Maturity Purchase 02-Sep-2017 04-Sep-01 02-Sep-2017 04-Sep-01 01-Sep-2013 11-Jun-03 01-Mar-2034 16-Sep-04 01-Mar-2036 17-Mar-2006 01-Sep-2032 09-Aug-2027 11-Sep-2006 26-Sep-2027 11-Sep-2006 30-Sep-2036 22-Jul-2008 1,201,778 426,SD0 2,021,563 3 5,075,392 4,867,757 811,797 1 1,404,563 2,440,613 1,602,219 777,990 2,345,565 1,718,449 125,400 2,395,911 63,750 1,272,459 12,862,490 6,436,873 5,277,471 2,136,943 4,044,880 1,148,027 1,270,133 213,623 2,831,004 1,027,945 312 1,004,365 3,623,372 2,048,442 651,823 77,339,358 Contractual Mkt Value 4,189,947 1,201,778 42G,500 2 037,260 3 5,075,392 4,867,757 811,797 1 1,404,563 2,440,613 1 602,219 777,990 2,345,565 1,718,449 125,400 2,395,911 63,750 1,272,459 12 882,490 6,436,873 5,277,471 2,136,943 4,044,880 1,148,027 1,270,133 213 623 2,831,004 1,027 945 312 1,004,365 3,623,372 2,048,442 651,823 77,355,056 1,201,778 426,500 2,021,563 3 5,075,392 4,867,757 811,797 t 1 404 563 2,440,613 1,602,219 777,990 2,345,565 1,7113,449 1 zs,a6D 2,395,011 63,750 1,272,459 12,882,490 6,436,873 5,277,471 2,136,943 4,044,860 1,148,027 1,270,133 213,623 2,831,004 1,027,945 312 1,004,3G5 3,fi23,372 2,048,442 651,823 77,339,358 5.600 5.600 5.835 var Var Var 3.100 Var Var Var Var Var Var 5.205 Var 5.010 Var 4.889 Var Var Var Var Var Var 4.980 Var 5.097 Var Var Var jlnanceltlata\invesl\Invi3 xls City ofi Chula Vista CashlTime Deposits 31-Dec-12 CASH IN BANK Bank of America -General Account Bank of America -Payroll Account California Bank -Direct Deposit Account Wells Fargo Bank-CV Workers Comp Account CASH ON HAND Petty Cash Fund TIME DEPOSIT Bank of America Time Deposit Cash/Time Deposits as ofi 12/31/2012 j:financeldata\Cash and Time Deposits FY1213 DEC 3'1~2Q~1~.DRAFT.xIs 8,184, 963 0 3, 020 526,987 8,714,970 7,050 7,050 310,000 310,000 9,032,020 As of 01/29/2012 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 1 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) 1.0 Purpose• This "Investment Policy and Guidelines" (the "Investment Policy") Policy is intended to provide guidelines for the prudent investment of the City of Chula Vista's (the "City") cash balances, and outline policies to assist in maximizing the efficiency of the City's cash management system, while meeting the daily cash flow demands of the City. 2.0 Policy: The investment practices and policies of the City of Chula Vista aze based upon state law and prudent money management. The primary goals of these practices aze: A. To ensure compliance with all Federal, State, and local laws governing the investment of public funds under the control of the Director of Finance/Treasurer. B. To protect the principal monies entrusted to the City's Finance Department. C. To provide sufficient liquidity such that funds are available.as needed to meet those immediate and/or future operating requirements of the City, including but not limited to payroll, accounts payable, capital projects, debt service and any other payments. D. Achieve a reasonable rate of return within the parameters of prudent risk management while minimizing the potential for capital losses arising from market changes or issuer default. 3.0 Scope• This Investment Policy applies to all financial assets of the City of Chula Vista, as indicated in 3.1 below. These funds are accounted for in the City's Comprehensive Annual Financial Report. 3.1 Funds: The Director of Finance/Treasurer is responsible for investing the unexpended cash in the City Treasury for all funds, except for the employee's retirement funds, which are administered separately, and those fmids which aze managed separately by trustees appointed under indenture agreements. The Director of Finance/Treasurer will strive to maintain the level of investment of this cash as close as possible to 100%. These funds are described in the City's annual financial report and include: • General Fund • S ecial Revenue Funds 3-23 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-01 02/26/13 2 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 20'02-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) • Capital Project Funds • Enterprise Funds • Trust and Agency Funds • Any new fund created by the legislative body, unless specifically exempted This Investment Policy applies to all transactions involving the financial assets and related activity of the foregoing funds. 4.0 Prudence: The standard of prudence to be used by the Director of Finance/Treasurer shall be the "prudent investor standard". This shall be applied in the context of managing an overall portfolio. The "prudent investor standard" is applied to local agencies; pursuant to California Government Code Section 53600.3 which provides, in pertinent part: " ... all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency...." 4.1 Personal Responsibility: The Director of Finance/Treasurer, Assistant Director of Finance, Treasury Manager and Associate Accountant as investment officers acting in accordance with written procedures and the Investment Policy and exercising due diligence, shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations aze reported to the City Council in a timely fashion and appropriate action is taken to control adverse developments. 5.0 Objective: Consistent with this aim, investments aze made under the terms and conditions of California 3-24 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 3 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) Government Code Section 53600, et seq. Criteria for selecting investments and the absolute order of priority are: 5.1 Safety: Safety of principal is the foremost objective of the investment program. Investments of the City of Chula Vista shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. 5.2 Liquidity: The City of Chula Vista's investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated and to maintain compliance with any indenture agreement, as applicable. Liquidity is essential to the safety of principal. 5.3 Return on Investments: The City of Chula Vista's investment portfolio shall be designed with the objective of attaining a market-average rate of return throughout budgetary and economic cycles (market interest rates), within the City's Irivestment Policy's risk parameters and the City's cash flow needs. See also Section 16.1. 6.0 Delegation of Authority: The Director of Finance/Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls and written procedures to regulate the activities of subordinate officials. The responsibility for the day-to-day investment of City funds will be delegated to the Associate Accountant under the general direction of the Assistant Director of Finance. 7.0 Ethics and Conflicts of Interest: In addition to state and local statutes relating to conflicts of interest, all persons involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officers are required to file annual disclosure statements as re uired for ublic officials who manage ublic investments" [as defined and required by the 3-25 COUNCIL POLICY CITY OF CFIULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-01 02/26/13 4 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) Political Reform Act and related regulations, including Government Code Sections 81000, et seq., and the rules, regulations and guidelines promulgated by California's Fair Political Practices Commission (FPPC)]. 8.0 Authorized Financial Dealers and Institutions: The City's Director of Finance/Treasurer will maintain a list of the financial institutions and brokers/dealers authorized to provide investment and depository services and will perform an annual review of the financial condition and registrations of qualified bidders and require annual audited financial statements to be on file for each company. The City will utilize Moody's Securities or other such services to determine financially sound institutions with which to do business.. The City shall annually send a copy of the current Investment Policy to all financial institutions and brokers/dealers approved to do business with the City. As far as possible, all money belonging to, or in the custody of, a local agency, including money paid to the City's Director of Finance/Treasurer or other official to pay the principal, interest, or penalties of bonds, shall be deposited for safekeeping in state or national banks, savings associations, federal associations, credit unions, or federally insured industrial loan companies in this state selected by the City's Director of Finance/Treasurer; or may be invested in the investments set forth in Section 9.0. To be eligible to receive local agency money, a bank, savings association, federal association, or federally insured industrial loan company shall have received an overall rating of not less than "satisfactory" in its most recent evaluation by the appropriate federal financial supervisory agency of its record of meeting the credit needs of Califomia's communities, including low- and moderate- income neighborhoods. To provide for the optimum yield in the investment of City funds, the City's investment procedures shall encourage competitive bidding on transactions from approved brokers/dealers. In order to be approved by the City, the dealer must meet the following criteria: (i) the dealer must be a "primary" dealer or regional dealer that qualifies under Securities and Exchange Commission Rule 15C3-1 (Uniform Net Capital Rule); (ii)the dealer's institution must have an office in California; (iii)the dealer must be experienced in institutional trading practices and fazniliar with the California Government Code as related to investments appropriate for the City; and (iv) all other applicable criteria, as may be established in the investment procedures. All brokers/dealers and financial institutions who desire to become qualified bidders for investment transactions must submit a "Broker/Dealer Application" and related documents relative to eligibility including a current audited annual financial statement, U4 form for the broker, proof of state registration, proof of National Association of Securities Dealers certification and a certification of having read and understood the 3-26 COUNCIL POLICY CITY OF CIIULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 5 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) City's Investment Policy and agreeing to comply with the Investment Policy. The City's Director of Finance/Treasurer shall determine if they aze adequately capitalized (i.e. minimum capital requirements of $10,000,000 and five yeazs of operation). 9.0 Authorized & Suitable Investments: The City is authorized by California Government Code Section 53600, et. seq., to invest in specific types of securities. Investments not specifically listed below are deemed inappropriate and prohibited: A. BANKERS' ACCEPTANCES, maximum 25% of portfolio (up to 40% with Council approval). Maximum term 180 days. Banks must have a short term rating of at least AUDI and along-term rating of A or higher as provided by Moody's Investors Service or Standard and Poor's Corp. No more than 30% of the agency's money may be invested in the bankers' acceptances of any one commercial bank pursuant to this section. B. NEGOTIABLE CERTIFICATES OF DEPOSIT, These are issued by commercial banks and thrift institutions against funds deposited for specified periods of time and earn specified or variable rates of interest. Negotiable certificates of deposit (NCD) differ from other certificates of deposit by their liquidity. NCDs are traded actively in secondary markets. In compliance with California Code 53601.8, all FDIC insured CD's, whether directly placed or placed through a private sector entity, will be classified as a Negotiable Certificate of Deposit. a. Maximum Maturity 1. The maximum maturity of a NCD issue shall be 5 years. 2. The maximum maturity of any FDIC insured CD's, whether directly placed or placed through a private sector entity, shall be 13 months. b. Maximum Exposure of Portfolio -The maximum exposure to the Portfolio for this category shall be 30%. c. Maximum Exposure Per Issue -The maximum exposure to a single issue shall be 2.5% of the Portfolio value. d. Maximum Exposure Per Issuer -The maximum exposure to a single issuer shall be 5% of the Portfolio value. e. Minimum Credit Requirement 1. All NCD must have the following investment grade from one of these rating firms. If unrated by Standard & Poor's, security would need to be authorized by Standard & Poor's with a shadow rating prior to purchase. a) Standard & Poor's - A-1 or A (lon -team when applicable) 3-27 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 6 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26!94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2112/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) b) Moody's - P-1 or A (long-term when applicable) c) Fitch - F-1 or A (long-term when applicable) (For NCD's 1 year or less, use short-term rating) (For NCD's over 1 year, use long-term rating) 2. There is no minimum credit requirement for FDIC insured CD's, whether directly placed or placed through a private sector entity. C. COMMERCIAL PAPER, maximum 25% of portfolio. Maximum term 270 days. Commercial paper of prime quality of the highest ranking or of the highest letter and number rating as provided for by Moody's Investor Services, Standard & Poor's and Fitch Financial Services. The issuing corporation must be organized and operating within the United States, with total assets in excess of $500 million and shall issue debt, other than commercial paper, that is rated "A" or higher by Moody's, S&P and Fitch. Split ratings (i.e. A2/Pl) are not allowable. No more than 10% of the outstanding commercial paper of any single corporate issue may be purchased. D. BONDS ISSUED BY THE CITY OR ANY LOCAL AGENCY WITHIN THE STATE OF CALIFORNIA. Bonds must have an "A" rating or better from a nationally recognized authority on ratings. E. OBLIGATIONS OF THE UNITED STATES TREASURY United States Treasury Notes, bonds, bills or certificates of indebtedness, or those for which the faith and credit of the United States are pledged for the payment of principal and interest. There is no limit on the percentage of the portfolio that can be invested in this category. F. FEDERAL AGENCIES Debt instruments issued by agencies of the Federal government. Though not general obligations of the U.S. Treasury, such securities are sponsored by the government or related to the government and, therefore, have high safety ratings. The following are authorized Federal Intermediate Credit Bank (FICB), Federal Land Bank (FLB), Federal Home Loan Bank (FHLB), Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC), Government National Mortgage Association (GNMA), Tennessee Valley Authorities (TVA), Student Loan Marketing Association (SLMA) and Small Business Administration (SBA). There is no limit on the percentage of the portfolio that can be invested in this category. G. REPURCHASE AGREEMENT, maximum term 3 months. Investments in repurchase agreements may be made, on any investment authorized in this section, when the term of the agreement does not exceed 3 months. A Master Re urchase Agreement 3-28 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-01 02/26/13 7 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) must be signed with the bank or broker/dealer who is selling the securities to the City. H. REVERSE-REPURCHASE AGREEMENTS (Requires Council approval for each transaction) Reverse repurchase agreements or securities lending agreements may be utilized only when al] of the following conditions are met: a) The security to be sold on reverse repurchase agreement or securities lending agreement has been owned and fully paid for by the local agency for a minimum of 30 days prior to sale. b) The total of all reverse repurchase agreements and securities lending agreements on investments owned by the local agency does not exceed 20% of the base value of the portfolio. c) The agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security. d) Funds obtained or funds within the pool of an equivalent amount to that obtained from selling a security to a counter parry by way of a reverse repurchase agreement or securities lending agreement, shall not be used to purchase another security with a maturity longer than 92 days from the initial settlement date. of the reverse repurchase agreement or securities lending agreement, unless the reverse repurchase agreement or securities lending agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security. Investments in reverse repurchase agreements, securities lending agreements, or similar investments in which the local agency sells securities prior to purchase with a simultaneous agreement to repurchase the security shall only be made with primary dealers of the Federal Reserve Bank of New York or with a nationally or state-chartered bank that has or has had a significant banking relationship with a local agency. e) For purposes of this policy, "significant banking relationship" means any of the following activities of a bank: i. Involvement in the creation, sale, purchase, or retirement of a local agency's bonds, warrants, notes, or other evidence of indebtedness. ii. Financing of a local agency's activities: iii. Acceptance of a local agency's securities or funds as deposits. L MEDIUM-TERM CORPORATE NOTES, maximum 20% of ortfolio (30% with Council 3-29 COUNCIL POLICY CITY OF CFIULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY NUMBER EFFECTIVE PAGE GUIDELINES DATE 220-O1 02/26/13 8 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) approval), with a maximum remaining maturity of five yeazs or less. Notes eligible for investment shall be "A" rated or its equivalent or better as determined by a nationally recognized rating service. J. TIME DEPOSITS-CERTIFICATES OF DEPOSIT (non-negotiable certificates of deposit.) Maximum of 3 years. Deposits must be made with banks or savings & loan that have a short term rating of Al/Pl or a long term rating of at least a single A from a generally recognized authority on ratings. K. OBLIGATIONS OF THE STATE OF CALIFORNIA Obligations must be "A" rated or better from a nationally recognized authority on ratings. L. MONEY MARKET FUNDS, maximum 15% of portfolio. (Requires Council approval for each transaction) No more than 10% of the agency's surplus funds may be invested in shares of beneficial interest of any one Money Market fund. Local agencies may invest in "shares of beneficial interest" issued by diversified management companies which invest only in direct obligations in U.S. Treasury bills, notes and bonds, and repurchase agreements with a weighted average of 60 days or less. They must have the highest rating from two national rating agencies, must maintain a daily principal per share value of $1.00 per shaze and distribute interest monthly, and must have a minimum of $500 million in assets under management. The purchase price of the shares may not include commission. M. SAN DIEGO COUNTY TREASURER'S POOLED MONEY FUND Also known as the San Diego County Investment Pool, the pool is a local government money fund created to invest the assets of the County of San Diego and other public agencies located within the County. The three primary objectives of the County Pool are to safeguard principal; to meet liquidity needs of Pool participants; and to achieve an investment return on the funds within the guidelines of prudent risk management. Investment in the County Pool is highly liquid and the City may invest with no portfolio percentage limit. N. THE LOCAL AGENCY INVESTMENT FUND (LAIF) LAIF is a special fund of the California State Treasury through which any local government may pool investments. The City may invest up to $50 million in this fund. Investments in LAIF are highly liquid and may be converted to cash within 24 hours. O. Investment Trust of California (CaITRUST) 3-30 COUNCIL POLICY CITY OF CI3ULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 9 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11);2012-034(3/13/12) The City may invest in shares of beneficial interest issued by the Investment Trust of California (Ca1TRUST), a local government investment pool established by local entities as a joint powers authority pursuant to California Government Code Sections 6509.7 and 53601(p), provided: • Ca1TRUST investments are limited to the securities and obligations authorized for local agency investment pursuant to Subdivisions (a) to (n), inclusive, of California Government Code Section 53601; and • CaITRUST shall have retained an investment adviser that: Is registered or exempt from registration with the Securities and Exchange Commission; Has not less than five years experience investing in the securities and obligations authorized for local agency investment pursuant to subdivisions (a) to (n), inclusive, of California Government Code Section 53601; and Has assets under management in excess of five hundred million dollars ($500,000,000). 9.1 Investment Pools: The City's Director of Finance/Treasurer or designee shall be required to investigate all local government investment pools and money market mutual funds prior to investing and performing at least a quarterly review thereafter while the City is invested in the pool of the money market fund. LAIF is authorized under provisions in Section 16429.1 of the California Government Code as az~ allowable investment for local agencies even though some of the individual investments of the pool are not allowed as a direct investment by a local agency. 10.0 Portfolio Adjustments: Should any investment listed in section 9.0 exceed apercentage-of-portfolio limitation due to an incident such as fluctuation in portfolio size, the affected securities may be held to maturity to avoid losses. When no loss is indicated, the Director of Finance/Treasurer shall consider reconstructing the portfolio basing his or her decision on the expected length of time the portfolio will be unbalanced. If this occurs, the City Council shall be nofified. 11.0 Collateralization: Under provisions of the California Government Code, California bazilcs, and savings and loan associations are required to secure the City's deposits by pledging goverunent securities with a value of 110 % of rincipal and accrued interest. California law also allows financial institutions to secure 3-31 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-01 02/26/13 10 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) City deposits by pledging first trust deed mortgage notes having a value of 150% of the City's total deposits. Collateral will always be held by an independent third party. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the City and retained. The mazket value of securities that underlay a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities and the value shall be adjusted no less than quarterly. Since the market value of the underlying securities is subject to daily market fluctuations, the investments in repurchase agreements shall be in compliance if the value of the underlying securities is brought back up to 102% no later than the next business day. The Director of Finance/Treasurer, at his or het discretion, may waive the collateral requirement for deposits that are fully insured up to $100,000 by the Federal Deposit Insurance Corporation. The right of collateral substitution is granted. 12.0 Safekeeping and Custody: All City investments shall identify the City of Chula Vista as the registered owner, and all interest and principal payments and withdrawals shall indicate the City of Chula Vista as the payee. All securities shall be safe kept with the City itself or with a qualified financial institution, contracted by the City as a third party. All agreements and statements will be subject to review annually by external auditors in conjunction with their audit. In the event that the City has a financial institution hold the securities, a sepazate custodial agreement shall be required. All securities shall be acquired by the safekeeping institution on a "Delivery-Vs-Payment" (DVP) basis. For Repurchase Agreements, the purchase may be delivered by book entry, physical delivery or by third-party custodial agreement consistent with the Government Code. The transfer of securities to the counter pazry bank's customer book entry account may be used for book entry delivery. 13.0 Diversification: The City's investment portfolio will be diversified to avoid incurring unreasonable and avoidable risks associated with concentrating investments in specific security types, maturity segment, or in individual financial institutions. With the exception of U.S. Treasury securities and authorized pools, no more than 60% of the total investment portfolio will be invested in a single security type or with a single financial institution. In addition, no more than 10% of the investment portfolio shall be in securities of any one issuer except for U.S. Treasuries and U.S. Government Agency issues. A. Credit risk, defined as the risk of loss due to failure of the insurer of a security, shall be mitigated by investing in those securities with an "A" or above rating and approved in the Investment Policy and by diversifying the investment portfolio so that the failure of anyone issuer would not unduly harm the City's cash flow. 3-32 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT. POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 I1 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) B. Market risk, defined as the risk of market value fluctuations due to overall changes in the general level of interest rates, shall be mitigated by structuring the portfolio so that securities mature at the same time that major cash outflows occur, thus eliminating the need to sell securities prior to their maturity. It is explicitly recognized herein, however, that in a diversified portfolio, occasional measured losses are inevitable azid must be considered within the context of overall investment return. The City's investment. portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated: 14.0 Maximum Maturities: To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing more than five (5) years from the date of purchase, unless, the legislative body has granted express authority to make that investment either specifically, or as a part of an investment program approved by the City Council. 15.0 Internal Control: The Director of Finance/Treasurer shall establish a system of internal controls designed to prevent loss of public funds due to fraud, employee error, misrepresentation by third parties, or unanticipated market changes. No investment personnel may engage in an investment transaction except as provided for under the terms of this Investment Policy and the procedure established by the Director of Finance/Treasurer. The external auditors shall annually review the investments with respect to the Investment Policy. This review will provide internal control by assuring compliance with policies and procedures for the investments that are selected for testing. Additionally, account reconciliation and verification of general ledger balances relating to the purchasing. or maturing of investments and allocation of investments to fund balances shall be performed by the Finance Department and approved by the Director of Finance/Treasurer. To provide further protection of City funds, written procedures prohibit the wiring of any City funds without the authorization of at least two of the following five designated City staff: 1. Director of Finance/Treasurer 2. Assistant Director of Finance 3. Treasury Manager 3-33 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 12 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) 4. Fiscal Operations Manager 5. Associate Accountant 16.0 Performance Standards: This Investment Policy shall be reviewed at least annually by the Director of Finance/Treasurer to ensure its consistency with the overall objective of preservation of principal, liquidity, and return, and its relevance to current law and financial and economic trends. All financial assets of all other funds shall be administered in accordance with the provisions of this Investment Policy. The monies entrusted to the Director ofFinance/Treasurer will be held in a passively managed ("hold to maturity") portfolio. However, the Director of Finance/Treasurer will use best efforts to observe, review, and react to changing conditions that affect the portfolio, and to do so in a manner that is consistent with this Investment Policy. 16.1 Market Yield (Benchmark): The investment portfolio shall be managed to attain amarket-average rate of return throughout budgetary and economic cycles, taking into account the City's investment risk constraints and cash flow. Investment return becomes a consideration only after the basic requirements of investment safety and liquidity have been met. Because the investment portfolio is designed to operate on a'hold- to-maturity' premise (or passive investment style) and because of the safety, liquidity, and yield priorities, the performance benchmark that will be used to determine whether market yields are being achieved shall be the average of the monthly LAIF rate and the 12-month rolling average 2 -Year Constant Maturity Treasury (CMT) rate. While the City will not make investments for the purpose of trading or speculation as the dominant criterion, the Director of Finance/Treasurer shall seek to enhance total portfolio return by means of ongoing portfolio and cash management. The prohibition of highly speculative investments precludes pursuit of gain or profit through unusual risk and precludes investments primarily directed at gains or profits from conjectural fluctuations in market prices. The Director of Finance/Treasurer will not directly pursue any investments that are leveraged or deemed derivative in nature. However, as long as the original investments can be justified by their ordinary earning power, trading in response to changes in market value can be used as part of on- goingportfolio management. 17.0 ReportinE' 3-34 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 13 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) The Director of Finance/Treasurer shall submit a quarterly investment report to the City Council and City Manager following the end of each quarter. This report will include the following elements: • Type of investment • Institutional issuer • Purchase date • Date of maturity • Amount of deposit or cost of the investment • Face value of the investment • Current market value of securities and source of valuation • Rate of interest • Interest earnings • Statement relating the report to its bompliance with the Statement of Investment Policy or the manner in which the portfolio is not in compliance • Statement on availability of funds to meet the next six month's obligations • Monthly and year-to-date budget amounts for interest income • Percentage of portfolio by investment type • Days to maturity for all investments • Comparative report on monthly investment balances & interest yields • Monthly transactions • Compare portfolio yield to the yield attained by the County of San Diego and the five largest cities in the county for the same period. In addition, a commentary on capital markets and economic conditions may be included with the report. 18.0 Investment Policy Adoption: Each fiscal year, the Finance Director shall provide a copy of the City's current Investment Policy and Guidelines to the City Council. By virtue of a resolution of the City Council of the City of Chula Vista, the Council shall acknowledge the receipt of the Policy for the respective fiscal year. GLOSSARY AGENCIES: Federal agency securities. ASKED: The rice at which securities aze offered. (The rice at which a firm will sell a securi to an 3-35 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 14 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) investor.) BANKERS' ACCEPTANCE (BA): A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. The drafts are drawn. on a bank by an exporter or imparter to obtain funds to pay for specific merchandise. An acceptance is a high-grade negotiable instrument. BASIS POINT: One one-hundredth of a percent (i. e., 0.01 %) BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.) BROKER: A broker brings buyers and sellers together for a commission. He does not take a position. CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large-denomination CDs are typically negotiable. COLLATERAL: Securities, evidence of deposit or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to. secure deposits of public monies. COMMERCIAL PAPER: Short term unsecured promissory note issued by a corporation to raise working capital. These negotiable instruments are purchased at a discount to par value or at par value with interest bearing. Commercial paper is issued by corporations such as General Motors Acceptance Corporation, IBM, Bank of America, etc. COUPON: a). The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value. b) A certificate attached to a bond evidencing interest due on a payment date. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus recei t is delivery of securities with an 3-36 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 15 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) exchange of a signed receipt for the securities. DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering-price shortly after sale also is considered to be at a discount. DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued at a discount and redeemed at maturity for full face value (e.g., U.S. Treasury Bills). DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions (e.g., S&Ls, small business firms, students, farmers; farm cooperatives, and exporters). FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A Federal agency that insures bank deposits, currently up to $100,000 per deposit. FEDERAL FUNDS RATE: The rate of interest at which Federal funds are traded. This rate is currently pegged by the Federal Reserve though open-market operations. FEDERAL HOME LOAN BANKS (FHLB): The institutions that regulate and lend to savings and loan associations. The Federal Home Loan Banks play a role analogous to that played by the Federal Reserve Banks vis-a-vis member commercial banks. FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC): Created to promote the development of a nationwide secondary market in mortgages. It does this by purchasing residential mortgages from financial institutions insured by an agency of the federal government and selling its interest in them through mortgage backed securities. The interest and principal payments from the mortgages pass through to the investors either monthly, semiannually or annually. FEDERAL LAND BANK (FLB): Long-term mortgage credit provided to farmers by Federal Land Banks. These bonds are issued at irregular times for various maturities ranging from a few months to ten years. FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA, like GNMA was 3-37 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-01 02/26/13 16 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) chartered under the Federal National Mortgage Association Act in 1938. FNMA is a Federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA's securities are highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other presidents serve on a rotating basis. The committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of aseven-member Board of Governors in Washington, D.C.; 12 regional banks and about 5,700 conunercial banks are members of the system. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA OR GINNIE MAE): Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA or VA mortgages. The term "pass-through" is often used to describe Ginnie Mass. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes. LOCAL GOVERNMENT INVESTMENT POOL (LGIP): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment. MARKET VALUE: The price at which a security is trading and could presumable be purchased or sold. MARKET REPURCHASE AGREEMENT: A written contract covering all future transactions 3-38 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY EFFECTIVE GUIDELINES NUMBER DATE PAGE 220-O1 02/26/13 17 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11);2012-034(3/13/12) between the parties to repurchase-reverse agreements that establish each party's rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller-borrower. MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. NEGOTIABLE CERTIFICATES OF DEPOSIT: Unsecured obligations of the financial institution, bank or savings and loan, bought at par value with the promise to pay face value plus accrued interest at maturity. They are high-grade negotiable instruments, paying a higher interest rate than regular certificates of deposit. OFFER: The price asked by a seller of securities. (When you are buying securities, you ask for an offer). OPEN MARKET OPERATIONS: Purchases and sales of government and certain other securities in the open mazket by the New York Federal Reserve Bazilc as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit: Sales have the opposite effect. Open market operations are the Federal Reserve s most important and most flexible monetary Policy tool. PORTFOLIO: Collection of securities held by an investor. PRIMARY DEALER: A group of government securities dealers who submit daily reports of mazket activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker/dealers, banks and a few um~egulated firms. PRUDENT PERSON RULE: An investment standazd. In some states, the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state- the so -called "legal list". In other states, the trustee may invest in a security if it is one that would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. 3-39 COUNCIL POLICY CITY OF CHULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY NUMBER EFFECTIVE GUIDELINES DATE PAGE 220-O1 02/26/13 18 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) REPURCHASE AGREEMENT (RP OR REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their position. Exception: when the Fed is said to be doing RP, it is lending money that is, increasing bank reserves. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection. STUDENT LOAN MARKETING ASSOCIATION (SLMA or SALLIE MAE): A U.S. Corporation and instrumentality of the U.S. Government. Through its borrowings, funds are targeted for loans to students in higher education institutions. SLMA securities aze highly liquid and aze widely accepted. SMALL BUSINESS ADMINISTRATION (SBA): The portion of these securities which are guaranteed by the Federal government to provide financial assistance through direct loans and loan guarantees to small businesses. Cash flows from these instruments may not be in equal installments because of prepayments. SECONDARY MARKET: A mazket made for the purchase and sale of outstanding issues following the initial distribution. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. SEC RULE 15C3-1: See "Uniform Net Capital Rule". TENNESSEE VALLEY AUTHORITIES (TVA): A U.S. Corporation created in the 1930s to electrify the Tennessee Valley area; currently a major utility headquartered in Knoxville, Tennessee. TVA securities are highly liquid and are widely accepted. TREASURY BILLS: Anon-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills aze issued to mature in three months, six months, or one year. TREASURY BOND: Long-term U.S. Treasury securities having initial maturities of more than 10 years. TREASURY NOTES: Intermediate-term coupon bearing U.S. Treasury having initial maturities of 3-40 COUNCIL POLICY CITY OF CIlULA VISTA SUBJECT: INVESTMENT POLICY AND POLICY NUMBER EFFECTIVE PAGE GUIDELINES DATE 220-01 02/26/13 19 OF 19 ADOPTED BY: Resolution No. 17578 DATED: 07/26/94 AMENDED BY: Resolution Nos. 18571 (2/4/97); 19375 (2/16/99); 2000-050 (2/15/00); 2001-026 (2/13/01); 2002-039 (2/12/02); 2005-184 (6/7/05); 2006-176 (6/13/06); 2008-054 (2/12/08); 2010-045 (3/2/10); 2011-020 (2/22/11); 2012-034(3/13/12) one year to ten years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nomnember broker/dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a fine, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) Income Yield is obtained by dividing the current dollar income by the current market price for the security. (b) Net Yield or Yield to Maturity is the current income yield minus any premium above paz or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. 3-41 CITY OF CHULA VISTA INVESTMENT POLICY AND GUIDELINES L MEDIUM-TERM CORPORATE NOTES, maximum 20% of portfolio (30% with Council approval), with a maximum remaining maturity of five years or less. Notes eligible for investment shall be "A" rated or its equivalent or better as determined by a nationally recognized rating service. J. TIME DEPOSITS-CERTIFICATES OF DEPOSIT (non-negotiable certificates of deposit.) Maximum of 3 years. Deposits must be made with banks or savings & loan that have a short term rating of Al/Pl or along term rating of at least a single A from a generally recognized authority on ratings. K. OBLIGATIONS OF THE STATE OF CALIFORNIA Obligations must be "A" rated or better from a nationally recognized authority on ratings. L. MONEY MARKET FUNDS, maximum 15% of portfolio. (Requires Council .approval for each transaction) No more than 10% of the agency's surplus funds may be invested in shares of beneficial ~~ interest of any one Money Market fund. Local agencies may invest in shares of beneficial interest" issued by diversified management companies which invest only in direct obligations in U.S. Treasury bills, notes and bonds, and repurchase agreements with a weighted average of 60 days or less. They must have the highest rating from two national rating agencies, must maintain a daily principal per share value of $1.00 per share and distribute interest monthly, and must have a minimum of $500 million in assets under management. The purchase price of the shares may not include commission. M San Diego County Treasurer's Pooled Money Fund located within the County The three primary obiectives of the Comity Pool are to safeguard principal to meet liquidity needs of Pool participants• and to achieve an investment return on the funds within the guidelines of prudent risk management Investment m the County Pool is highly liquid and the City may invest with no portfolio percentage limit. #LN. THE LOCAL AGENCY INVESTMENT FUND (LAIF) LAIF is a special fund of the California State Treasury through which any local government may pool investments. The City may invest up to $50 million in this fund. Investments in LAIF are highly liquid and may be converted to cash within 24 hours. hFO. Investment Trust of Califomia (Ca1TRUST) The City may invest in shares of beneficial interest issued by the Investment Trust of Califomia (Ca1TRUST), a local government investment pool established by local entities as a joint powers authority pursuant to California Government Code Sections 6509.7 and 53601(p), provided: 8 3-42 RESOLUTION NO. 2013- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACKNOWLEDGING RECEIPT OF COUNCIL POLICY 220-01, THE CITY OF CHULA VISTA INVESTMENT POLICY AND GUIDELINES; AMENDING THE EXISTING POLICY; AND ANNUAL DELEGATION OF INVESTMENT ACTIVITY AUTHORITY TO THE DIRECTOR OF FINANCE/TREASURER WHEREAS, the City of Chula Vista's "Investment Policy and Guidelines," adopted on March 13, 2012, by Resolution No. 2012-034 (the Policy), is intended to provide direction for the prudent investment of temporarily idle cash and to maximize the efficiency of the cash management process; and WHEREAS, the stated goal of the Policy is to enhance the economic condition of the City while ensuring the safety of funds invested; and WHEREAS, the Policy includes a list of specific investment instruments available pursuant to California Government Code sections 53600, et. seq. and 53635; and WHEREAS, each investment transaction is made in the context of first ensuring the "safety" of principal, second, investing only for that timeframe that the cash is not needed for operational purposes ("liquidity"), and last seeking the highest return possible ("yield") provided that the first two factors are met; and WHEREAS, in accordance with Section 18.0 of the Policy, staff has provided the City Council with a copy of the City's Investment Policy; and WHEREAS, staff recommends that the Policy be amended to more clearly state that the San Diego County Treasurer's Pooled Money Fund is an authorized and suitable investment; and WHEREAS, City staff recommends that the Policy be amended to reflect these changes; and WHEREAS, pursuant to California Government Code section 53607, the City Council may delegate the authority to conduct investment activities of the City to the treasurer on an annual basis. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula V ista that the Director ofFinance/Treasurer is delegated the authority to conduct and supervise the investment activities of the City. 3-43 Resolution No. Page 2 BE IT FURTHER RESOLVED that the City Council ofthe City of Chula Vista does hereby amend the City Investment Policy and Guidelines by adding section 9.0 M., in the form presented to the City Council, a copy of which shall be kept on file in the Office of the City Clerk. Presented by Maria Kachadoorian Director of Finance 3-44 Approved as to form by.,