HomeMy WebLinkAbout2010/03/02 Item 2CITY COUNCIL
AGENDA STATEMENT
~~~ CITY OF
CHULA VISTA
MARCH 2, 2010, Item ~-
ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING THE EXISTING CITY
INVESTMENT POLICY AND GUIDELINES
INVESTMENT REPORT FOR THE QUARTER ENDED
DECEMBER 31, 2009
SUBMITTED BY: DIRECTOR OF FINA CE/TREASURER "~
REVIEWED BY: CITY MANAGE _
ASSISTANT CITY ANAGER 5/
4/STHS VOTE: YES ~ NO ^X
SUMMARY
Per California 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 in
August 2007 for its Investment Policy and most recently, the Policy was reviewed and adopted
by City Council on February 17, 2009. Adoption of the resolution approves an amendment to
the existing Investment Policy and Guidelines that adds an investment to the list of suitable
investments.
Transmitted herewith is the City's investment report for the quarter ended December 31, 2009.
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 as an informational item.
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.
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March 2, 2010, Item 2.
Page 2 of 6
RECOMMENDATION
Council approves the resolution and accepts the report.
BOARDS/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
Investment Policy Amendment
The City is contemplating investing a portion of its idle funds in local community banks. In
order to do so the City must amend its existing Investment Policy to allow for investments in
Certificates of Deposit utilizing a deposit placement service. Currently the only program that
offers a deposit placement service for Certificates of Deposit is the Certificate of Deposit
Account Registry Service better known as CDARS.
Negotiable Certificates of Deposit are an investment authorized by State Government Code and
is listed as an authorized investment in the current policy. The City has not invested in
Certificates of Deposit in the past because of the relatively low amount that may be invested to
remain within the FDIC insurable limits but also because of the administrative burden that would
be required to invest in certificates of deposit outside of the CDARS Program.
Banks that offer CDARS are members of a special network. When a public fund depositor
places a large deposit with a network member, that bank uses the CDARS service toplace City
funds into Certificates of Deposit issued by other members of the network. This occurs in
increments of less than the standard FDIC insurance maximum to ensure that both principal and
interest are eligible for full FDIC protection. Other network members do the same thing with
their customers' funds. With help from a sophisticated matching system, banks exchange funds
with other members of the Network. These exchanges, which occur on adollar-for-dollar basis,
bring the full amount of the City's original deposit back to each originating bank. As a result,
member banks can make the full amount of the City's deposit available for community lending
purposes (the money stays local!) and the City can access FDIC coverage from many banks
while working withjust one institution. Attached are FAQs for the CDARS program.
Senate Bill 2011 added Sections 53601.8 and 53635.8 to the Government Code, relating to local
agency investments. Existing law prescribes the instruments in, and criteria by, which local
agencies, as defined, may invest surplus funds. This bill authorized, until January 1, 2012, the
investment of up to 30% of those funds in certificates of deposit at a commercial bank, savings
bank, savings and loan association, or credit union that uses a private sector entity that assists in
the placement of certificates of deposit under specified conditions. Government Code Section
53601.8 in its entirety is included as an attachment to this report.
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March 2, 2010, Item ~
Page 3 of 6
Quarterly Investment Report
The total cash and investment portfolio as of December 31, 2009 was $152,272,815. This is a
decrease of approximately $5,073,512 from September 30, 2009 to December 31, 2009 due to
normal use of cash for City obligations. For the quarter ended December 31, 2009, the earned
interest yield was 1.903%, a decrease from the 2.273% reported for the quarter ended September
30, 2009, reflecting maturing securities purchased in periods of higher interest rates now being
reinvested in a lower interest rate environment. The weighted average maturity as of December
31, 2009 was 1.86 years, which was a decrease from 2.44 years for the prior quarter. The
weighted average maturity remains sufficiently liquid to enable the City to meet all operating
requirements that might be reasonably anticipated.
DECISION MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site
specific and consequently the 500 foot rule found in California Code of Regulations section
18704.2(a)(l) is not applicable to this decision.
CURRENT 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. Government Code Section 53601.8
B. Frequently Asked Questions
C. Investment Report for the Quarter Ended December 31, 2009
D. Investment Policy and Guidelines
Prepared by: Phi[iip Davis, Assistant Director, Finance Dept.
2-3
March 2, 2010, Item 2
Page 4 of 6
Full Text of Government Code 53601.8
ATTACHMENT A
Notwithstanding Section 53601 or any other provision of this code, a local agency, at its
discretion, may invest a portion of its surplus funds in certificates of deposit at a commercial
bank, savings bank, savings and loan association, or credit union that uses a private sector entity
that assists in the placement of certificates of deposit, provided that the purchases of certificates
of deposit pursuant to this section, Section 53635.8, and subdivision (h) of Section 53601 do not,
in total, exceed 30 percent of the agency's funds that may be invested for this purpose. The
following conditions shall apply:
(a) The local agency shall choose a nationally or state chartered commercial bank,
savings bank, savings and loan association, or credit union in this state to invest the
funds, which shall be known as the "selected" depository institution.
(b) The selected depository institution may submit the funds to a private sector entity that
assists in the placement of certificates of deposit with one or more commercial banks,
savings banks, savings and loan associations, or credit unions that are located in the
United States, for the local agency's account.
(c) The full amount of the principal and the interest that may be accrued during the
maximum term of each certificate of deposit shall at all times be insured by the Federal
Deposit Insurance Corporation or the National Credit Union Administration.
(d) The selected depository institution shall serve as a custodian for each certificate of
deposit that is issued with the placement service for the local agency's account.
(e) At the same time the local agency's fitnds are deposited and the certificates of deposit
are issued, the selected depository institution shall receive an amount of deposits from
other commercial banks, savings banks, savings and loan associations, or credit unions
that, in total, are equal to, or greater than, the full amount of the principal that the local
agency initially deposited through the selected depository institution for investment.
(f) A local agency may not invest surplus funds with a selected depository institution for
placement as certificates of deposit pursuant to this section on or after January 1, 2012. A
local agency's surplus funds, invested pursuant to this section before January 1, 2012,
may remain invested in certificates of deposit issued through a private sector entity for
the full term of each certificate of deposit.
(g) Notwithstanding subdivisions (a) to (f), inclusive, no credit union may act as a
selected depository institution under this section or Section 53635.8 unless both of the
following conditions are satisfied:
(1) The credit union offers federal depository insurance through the National Credit
Union Administration.
(2) The credit union is in possession of written guidance or other written communication
from the National Credit Union Administration authorizing participation of federally
insured credit unions in one or more certificate of deposit placement services and
affirming that the moneys held by those credit unions while participating in a deposit
placement service will at all times be insured by the federal government.
(h) It is the intent of the Legislature that nothing in this section shall restrict competition
among private sector entities that provide placement services pursuant to this section.
2-4
March 2, 2010, Item "~
Page 5 of 6
ATTACHMENT B
Certificate of Deposit Account Registry Service
Frequently Asked Questions.
Where can I find a list of rates for CDs offered through CDARS®?
Financial institutions that are members of the CDARS Network set the CD rates they will offer.
This allows them to price competitively for their local markets -and can benefit you, the
customer, as a result. Check with your financial institution to see if it participates in the
CDARS® service, or visit the CDARS Network Member Locator to find a CDARS Network
member in your area.
How can deposits greater than the standard FDIC insurance maximum be insured by the
FDIC?
Currently, the FDIC insures up to $250,000 per customer per financial institution*. So, you can
run around to multiple institutions to deposit your funds to receive the same coverage you get
using CDARS. Or you can place your large-dollar deposit with an institution that is a member of
the CDARS Network. That institution breaks your deposit into smaller amounts and places them
with other CDARS Network members. Then, those member institutions issue CDs in the
amounts under the FDIC maximum, so that your entire deposit is eligible for FDIC insurance. By
working with one Network member, you can receive insurance through many.
Who takes possession of my funds?
Your funds are transfer-ed from an account in your financial institution through The Bank of
New York Mellon into other financial institutions participating in CDARS, which in turn issue
the CDs for your account. The Bank of New York Mellon, which itself is a highly regulated
institution, is the largest custodian in the world. CDARS functions as the allocation service for
deposits but does not itself handle any depositor funds.
Who provides the additional FDIC insurance when I place deposits using CDARS?
The CDARS Network members that issue your CDs through CDARS provide you with access to
the additional FDIC insurance coverage. Working with just one financial institution, you get
coverage through many.
How can my funds be used locally if my CDs are from financial institutions all over the
country?
When CDARS Network members swap deposits on adollar-for-dollar basis, the same amount of
funds placed through the Network returns to your financial institution. As a result, the total value
2-5
March 2, 2010, Item Z
Page 6 of 6
of your original deposit can remain with your institution and be used for local lending.
(CDARS® ReciprocalSM transactions only.)
Is my account information safe?
Your account information is protected; your relationship remains between you and your financial
institution.
What happens when a CDARS Network member bank fails?
In most cases, the bank's CDs issued using CDARS are sold and transferred to a healthy
institution -the FDIC's preferred method for handling bank failures. In cases where the FDIC is
unable to find a healthy institution willing to accept such a transfer, it will arrange for the
payment of the insured principal and accrued interest to the depositors. This payment usually
occurs in a matter of days.
Please go to http://www.fdic.gov/deposit/index.html to learn more about FDIC insurance.
*On October 3, 2008, Congress temporarily raised the FDIC maximum from $100,000 to
$250,000 per insured capacity per bank.
Source: http://www.cdars.com/FAQs.aspx
2-6
``iii
-..-~ -~.
CIiY OF
CHULA VISTA
Finance Departm
Investment Report for the Quarter Ended December 31, 2009
March 2, 2010
Honorable Mayor and City Council,
I am pleased to present this report of investment activity for the quarter ended December 31,
2009 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 as well as
provides a comparison to the quarters ended September 30, 2009 and December 31, 2008.
Market Overview
The Federal Open Market Committee (FOMC) continued to maintain the key Fed Funds rate at
a target range of 0.00% to 0.25% in an effort to stimulate the economy. Two-year Treasuries
yielding 0.95% at the beginning of the quarter climbed slightly to 1.14% at the end of the quarter
as the markets move toward a slow recovery.
The overall consumer price index (CPI) rose 1.8% for the year and the core CPI (excluding food
and energy) showed a 1.7% increase year-over-year. Most economists, as well as the Federal
Reserve, forecast that inflation will remain muted for the coming year, and may even decline.
Portfolio Composition
The table below provides a summary of the City's total investment portfolio as of December 31,
2009. The Investment Portfolio ($143,089,239) CashlTime Deposits ($9,183,576) and Bank
Trustee/Fiduciary Funds ($113,966,370) continue to be invested in accordance with the
Government Code, bond covenants and the Council Investment Policy as adopted on February
17, 2009.
2-7
Honorable Mayor and City Council
Investment Report Quarter ended 12/31/2009
Page 2 of 4
Summary of Cash and Investments as of December 31, 2009
of
Investment Type Par Value Market Value Book Value Portfolio
Investment Portfolio
Federal Securities 93,000,000 93,303,669 92,994,925 34.93°
Pooled Investments 46,089,239 46,158,030 46,089,239 17.31%
Corporate Bonds 4 000 000 4 089 680 3 992 960 1 50°/
Subtotal 143,089,239 143,551,379 143,077,124 52.24°
CashlTime Deposits $9,183,576 $9,183,576 $9,183,576 3.45%
Total Cash & Investments Held by the City $152,272,815 $152,734,955 $152,260,700 57.19%
Held by Bank TrusteelFiduciary Funds (1)
U. S. Government 28,587,902 34,407,441 28,587,902 10.74%
Investment Agreements 25,934,366 25,934,366 25,934,366 9.74%
Mutual Funds 46,659,815 46,659,815 46,659,815 17.53%
Cash with Fiscal Agents 46,406 46,406 46,406 0.02%
Restricted Cash 12,737 881 12 737 881 12 737 881 4 78%
Total Held by Bank TrusteelFiduciary Funds $113 966 370 $119 785 909 $113 966 370 42.81
Total.Portfolio $266,239,185 $272,520,864 $266,227,070 100.00%
(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 31.2009
US Government Agenrv
64°/
(State Pool)
31
CalTrust
l%
2-8
Honorable Mayor and City Council
Investment Report Quarter ended 12/31/2009
Page 3 of 4
Portfolio Performance
Portfolio performance is provided in more detail in the attachments to the report. 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.
Total Portfolio Income Recognized
Accrual Basis
Total Portfolio December 31, 2009 September 30 2009 December 37 2008
Quarter-End
Net Interest Earnings $ 1,361,958 $ 298,056 $ 1,637,055
Net Gains (Losses) from Sales $ 24,938 $ -
Fiscal Year-to-Date
Net Interest Earnings $ 4,839,146 $ 942,217 $ 3,477,188
Net Gains (Losses) from Sales $ 24 938 $ -
Net Total Income Recognized $ 4 864 084 $ 942,217 $ 3,477,188
This info comes from the monthly Sympro "Interest Earnings Summary"reports
Benchmark Comnarison
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 2007 through
December 2009.
s.o°io
s.o%
a.o%
3.0%
2.0
1.0%
0.0%
Dec-07
Monthly Benchmark Comparison
2-9
Mar-OS Jun-08 Sep-08 Dec-OS Mar-09 Jun-09 Sep-09 Dec-09
t Ciry tLAIF -•~2yr Treasury i-3yr Treasury
Honorable Mayor and City Council
Investment Report Quarter ended 12/31 /2009
Page 4 of 4
Per Section 16.1 of the City's Investment Policy, the two-
year U.S. Treasury and the LocalAgency 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 order to provide an upper
range that is above the weighted average maturity of the
City's portfolio, which is at 680 days.
Investment Activity
Benchmarks' Yield' +ADM
City 1.99% 680
LAIF 0.57% 222
2 Year Treasury 1.14% 730
3 Year Treasu 1.67% 1,095
ADM = Avera a Da s to Maturit
During the quarter, eight investments totaling $28,000,000 matured/expired or were redeemed.
These monies represent pooled cash received from various funding sources such as sewer,
RDA, TDIF, PAD, General Fund, etc. The majority of these funds were reinvested through the
purchase of two Federal Agency Securities totaling $5,000,000 using the City's Investment
Policy guideline 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 as of December 31, 2009 was $152,272,815. This is an
increase of approximately $5,073,512 from September 30, 2009 to December 31, 2009. For the
quarter ended December 31, 2009, the earned interest yield was 1.903%, a decrease from the
2.273% reported for the quarter ended September 30, 2009, reflecting maturing securities
purchased in periods of higher interest rates now being reinvested in a lower interest rate
environment.
The weighted average maturity as of December 31, 2009 was 1.86 years as compared to 2.22
years for the prior quarter. 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.
I 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. 2009-33 dated
February 17, 2009.
Respectfully submitted,
~~
Maria Kachadoorian
Director of FinancelTreasurer
2-10
Summary of Cash and Investments as of December 31, 2009
of
Investment Type Par Value Market Value Book Value Portfolio
Investment Portfolio
Federal Securities 93,000,000 93,303,669 92,994,925 34.93%
Pooled Investments 46,089,239 46,158,030 46,089,239 17.31%
Corporate Bonds 4 000 000 4 089 680 3 992 960 1 50%
Subtotal 143,089,239 143,551,379 143,077,124 52.24%
Cash/Time Deposits $9,183,576 $9,183,576 $9,183,576 3.45%
Total Cash & Investments Held by the City $152 272,815 $152 734 955 $152 260 700 57.19%
Held by Bank Trustee/Fiduciary Funds (1)
U. S. Government
Investment Agreements
Mutual Funds
Cash with Fiscal Agents
Restricted Cash
Bank
28,587,902 34,407,441 28,587,902 10.74%
25,934,366 25,934,366 25,934,366 9.74%
46,659,815 46,659,815 46,659,815 17.53%
46,406 46,406 46,406 0.02%
12, 737, 881 12, 737, 881 12, 737, 881 4.78
13,966,370 $119,785,909 $113,966,370 42.81%
Total Portfolio $266,239,185 $272,520,864 $266,227,070 100.00%
(1) Reflects bond proceeds held by trustee in accordance with bond covenants.
Par value is the principal amount of the investment on maturity. All market values contained herein
are received from sources we believe are reliable, however we do not guarantee their accuracy.
Book value is the par value of the security plus or minus any premium or discount and accrued
interest that was included in the. purchase price.
~~~r,
ktit
cmr of
CHULA VISTA
Investments
City of Chula Vista
Chula Vista Investment Pool 276 Fourth Ave
Portfolio Management Chula Vista CA 91970
(619)691-5250
Portfolio Summary
December 31, 2009
Par Market Book % of Days to YTM
Value Value Value Portfolio Term Maturity
Managed POOl Accounti 44,079,670.85 44,148,462.07 44,079,670.85 30.81 1 1 0.569
Managed Pool Accounti 1,000,000.00 7,000,000.00 1,000,000.00 0.70 7 1 0.266
Managetl POOl ACCOUnt2 1,009,567.87 7,009,567.87 7,009,567.87 0.71 1 1 0.570
Federal Agency Coupon Securities 2,000,000.00 1,997,500.00 2,000,000.00 1.40 1,096 1,012 1.750
Federal Agency Callables 91000,000.00 91,306,168.75 90,994,925.00 63.60 1,322 1,012 ~ 2.552
Corporate Coupon Bonds 4,000,000.00 4,089,680.00 3,992,960.00 2.79 1,171 798 2.660
143,089,238.72 143,551,378.69 143,077,123.72 100.00% 889 680 1.903
Investments
Total Earnings December 31 Month Ending Fiscal Year To Date
Current Year 242,074.29 1,683,013.40
Av~ge Daily Balance 143,337,144.20 156,422,457.52
Effedtive Rate of Return 1.99°/ 2.13%
N
~2~ (,i~~ /-L 9- toi~
Phillip A. Davis, ssistant Director of Finance
Reporting period 1 2/01/2 0 0 9-1 213112 0 0 9 Portfolio CHUL
CC
Run Dale'. 012912010- 14'.43
PM (PRF_PMi) SymRep16.41202b
Report Ver. 5.00
Chula Vista Investment Pool
Portfolio Management
Portfolio Details - Investmehts
December 31, 2009
Page 2
Average Purchase Statetl Days to YTM Maturity
CUSIP Investment# Issuer Balance Date Par Value Marke[Value Book Value Rate Term Maturity Date
Managed Pool ACCOUnt7
SY610197 10197 Local Agency Investment Fund 44,079,670.85 44,148,462.07 44,079,670.85 0.569 1 1 0.569
Subtotal and Average 37,466,767.62 44,079,670.85 44,148,462.07 44,079,670.85 1 1 0.589
Managed Pool Account 3
SYS10547 10547 San Diego County Inv Pool
Subtotal antl Average 129,032.26
Managed Pool Account2
SYS10507 10507 CalTrus[SHort Term Fund
Subtotal and Average 1,011,523.83
Federal Agency Coupon Securities
3133XV6U0 10542
N
F~¢ral Agency Callables
31331GJV2 10509
31331GLB3 10514
31331GLY3 10518
31331GMWfi 10522
31331 G W L9 10531
31331GWG8 10534
31331GXN4 10537
31331GV89 10544
3133XP3Cfi 10469
3133XQJZ6 10477
3133XSWZ7 10516
3133XT5W2 10525
3133XTNJ1 10532
3128XBFM9 10513
3128XBGP1 10577
312BXBJB9 10521
3128XBXSfi 10528
3128XBL34 10535
3128XBL42 10536
312BX9AM2 10540
Run Dale: 01I29I2010- i443
Federal Home Loan Bank
12/2812009 1,000,000.00 1,000,000.00 7,000,000.00 0.266
7,000,000.00 1,000,000.00 1,000,000.00
1,009,567.87 1,009,567.87 1,009,567.87 0.570
7,009,567.87 1,009,567.87 1,009,567.87
1 0.266
1 0.266
1 0.570
1 0.570
10/09/2009 2,000,000.00 1,997,500.00 2,000,000.00 1.750 7,096 1,012 1.750 10/09/2012
Subtotal and Average 2,000,000.00 2,000,000.00 1,997,500.00 2,000,000.00 1,09fi 1,012 1.750
Federal Farm Credif Bank 01!12/2009 4,000,000.00 4,001,250.00 4,000,000.00 2.250 1,095 741 2.250 01/12/2012
Federal Farm Credit Bank 01!28/2009 3,000,000.00 3,003,750.00 3,000,000.00 2.600 1,461 1,123 2.600 01/28/2013
Federal Farm Credit Bank 02/11/2009 4,000,000.00 4,008,750.00 4,000,000.00 2.850 1,461 1,137 2.850 02!11/2073
Federal Farm Cretlit Bank 02/17/2009 4,000,000.00 4,008,750.00 4,000,000.00 2.470 1,095 777 2.470 02/17/2012
Federal Farm Credit Bank 05/20/2009 4,000,000.00 4,013,750.00 4,000,000.00 2.500 1,461 1,235 2.500 05/20/2073
Federal Farm Credit Bank 05/21/2009 4,000,000.00 4,010,000.00 4,000,000.00 1.1700 1,096 871 1.800 05/21/2072
Federal Farm Credit Bank 06/03/2009 3,000,000.00 3,027,187.50 3,000,0110.00 2.700 1,461 1,249 2.700 06/03/2073
Federal Farm Credil Bank 10/15/2009 3,000,000.00 2,989,687.50 3,000,000.00 2.050 1,096 1,016 2.050 10/15/2012
Federal Home Loan Bank 01/29/2008 4,000,000.00 4,010,000.00 4,000,000.00 4.000 1,627 1,124 4.000 01/29/2013
Federal Home Loan Bank 04/16/2008 3,000,000.00 3,027,787.50 3,000,000.00 3.750 1,826 1,201 3.750 04/76/2013
Federal Home Loan Bank 02/17/2009 3,000,000.00 3,005,625.00 3,000,000.00 2.250 1 095 777 2.250 02/17/2072
Federal Home Loan Bank 02/24/2009 3,000,000.00 3,014,062.50 3,000,000.00 3.250 1,826 1,515 3.250 02/24/2014
Federal Home Loan Bank 05/20/2009 3,000,000.00 3,012,787 50 3,000 000.00 2.500 1,461 1,235 2.500 05/20/2013
Federal Home Loan Mortgage CO. 01/27/2009 3,000,000.00 3,002,910.00 3,000,000.00 2.000 1,095 756 2.000 01/2712012
Federal Home Loan Mortgage Co. 02/02/2009 4,000,000.00 4,005200.00 4,000,000.00 2.250 1,095 762 2.250 02!02/2012
Federal Home Loan Mortgage Co. 02/17/2009 4,000,000.00 4,008,320.00 4,000,000.00 2.450 1,095 777 2.450 02!17/2012
Federal Home Loan Mon9age Co. 04/27/2009 3,000,000.00 3,019,980.00 2,998,125.00 2.000 1,096 847 2.022 04!27/2012
Fetleral Home Loan Mortgage Co. Ofi/09/2009 3,000,000.00 3,017,880.00 3,000,000.00 3.000 1,826 1,620 3.000 08/09/2014
Federal Home Loan Mortgage Co. Ofi/15/2009 3,000,000.00 3,010,781.25 3,000,000.00 2 000 1 096 896 2.000 06!15/2012
Federal Home Loan Modgage Co. 08/24/2009 4,000,000.00 4,020,160.00 3,996,600.00 2.250 7,096 966 2.278 08/24/2012
Portfolio CHUL
CC
PM (PRF_PM21 SymRppt fi.4L202b
Report Ver. 5.00
Chula Vista Investment Pool
Portfolio Management
Portfolio Details -Investments
December 31, 2009
Page 3
Average Purchase Stated Days to YTM Maturity
CUSIP Investment # Issuer Balance Date Par Value Market Value Book Value Rate Term Maturity Date
Federal Agency Callables
3136F9LC5 10496 Federal Nal'I Mtg. ASSOC. 04/29/2006
3136F94M2 70517 Federal Nal'I Mlg. Assoc. 01/27/2008
3136FHAA3 10523 Federal Nat'I Mtg. Assoc. 02/11/2009
3136FHAL9 10524 Fetleral Nafl Mlg. Assoc. 02/19/2009
3136FHMA0 10527 Federal Nat'I Mtg. Assoc. O4/29I2009
31398AXF4 10528 Federel Nat'I Mlg. Assoc. 05/12/2009
3136FHRM9 10529 Federal Nat'I Mtg. Assoc. 05/14/2009
Subtotal and Average 3,000,000.00
3,000,000.00 3,035,625.00 3,000,000.00
4,000,000.00 4,028,750.00 4,000,000.00
3,000,000.00 3,005,625.00 3,000,000.00
3,000,000.00 3,005,625.00 3,000,000.00
3,000,000.00 3,013,125.00 3,000,000.00
,3,000,000.00 3,006,562.50 3,000,000.00
3,000,000.00 2,893,437.50 3,000,000.00
97,000,000.00 91,306,166.75 90,994,925.00
4.000 1,828 1,214 4.000 04/29/2013
2.000 1,095 756 2.000 01/27!2012
2.000 730 406 2.000 02/11/2011
2.200 911 595 2.200 08/19/2011
2.250 1,279 1,032 2.250 10/29/2012
3.000 1,826 1,592 3.000. 05/12/2014
2.700 1,845 1,413 2.700 11/14/2013
1,322 1,012 2.552
Corporate Coupon Bonds
EH6482796 10499 General Electric Cap 72/09/2008 2,000,000.00 2,061,640.00 1,994,260.00 3.000 1,095 707 3.107 12/09/2011
36967HAH0 10508 General Electric Cap 01/08/2009 2,000,000.00 2,028,040.00 1,998,700.00 2.200 1,247 889 2.220 06/08/2012
Subtotal and Average 1,998,700.00 4,000,000.00 4,089,680.00 3,992,960.00 1,171 798 2.660
N
~ Total and Average 45,606,023.71 14J,089,238.72 743,551,378.69 143,077,123.72 869 680 1.903
Run Date: 01129/2010 -14:43
Portfolio CHUL
CC
PM (PRF_PM2)SymRept 6.4L262b
Chula Vista Investment Pool
Portfolio Management
Activity By Type
December 1, 2009 through December 31, 2009
Page 4
Stated Transaction Purchases Redemptions
CUSIP Inves[ment# Issuer Rate Da[a or Deposits or Withdrawals Balance
Managed Pool Account 7 (Monthly Summary)
SY510197 10197 Local Agency Investment Fund 0.569 17,000,000.00 0.00
Subtotal 17,000,000.00 0.00 44,079,670.85
Managed Pool Account 3 (Monthly Summary)
SY510547 10547 San Diego County Inv Pool 0.266 1,000,000.00 0.00
Subtotal 1,000,000.00 0.00 1,000,000.00
Managed Pool Account 2 (Monthly Summary)
SYS10507 10507 CalTrus[SHOrt Term FUnd 0.570 -2,021.16 0.00
Subtotal -2,021.16 0.00 1,009,567.87
Federal Agency Coupon Securities
Subtotal
tV 2,000,000.00
I
I
Fed
p
~l Agency Callables
t
n
3133FJSD1 10503 Federal Home Loan Bank 3.000 12/30/2009 0.00 3,000,000.00
3133XTWP7 10538 Federal Home Loan Hank 2.500 12/23/2009 0.00 3,000,000.00
3126XBCL4 10504 Federal Home Loan Mortgage Co. 2.100 12/30/2009 0.00 3,000,000.00
Subtotal 0.00 9,000,000.00 90,994,925.00
Corporate Coupon Bonds
Subtotal 3,992,960.00
Total 17,997,978.84 9,000,000.00 143,077,123.72
Run Oate: 01/2912010 -14:43
Portfolio CHUL
CC
PM (PRF_PM3) Symftepl6.4L202b
Report Ver. S.OD
Chula Vista Investment Pool
Portfolio Management
Page 7
Interest Earnings Summary
December 31, 2009
December 31 Month Ending Fiscal Year To Date
CD/Coupon/Discount Investments:
Interest Collected 281,708.33 1,636,234.99
Plus Accrued Interest at End of Period 655,670.62 655,670.62
Less Accrued Interest at Beginning of Period ( 715,350.30) ( 775,628.78)
Less Accrued Interest at Purchase During Period ( 0.00) ( 0.00)
Interest Earned during Period 222,028.65 1,516,276.83
Adjusted by Capital Gains or Losses 0.00 0.00
Earnings during Periods 222,028.65 1,516,276.83
Pass Through Securities:
Interest Collected 0.00 0.00
Plus Accrued Interest at End of Period 0.00 0.00
N Less Accrued Interest at Beginning of Period ( 0.00) ( 0.00)
Less Accrued Interest at Purchase During Period
J ( 0.00) ( 0.00)
O° Interest Earned during Period 0.00 0.00
Adjusted by Premiums and Discounts 0.00 0.00
Adjusted by Capital Gains or Lasses 0.00 0.00
Earnings during Periods 0.00 0.00
CashlChecking Accounts:
Interest Collected -2,021.16 395,621.46
Plus Accrued Interest at End of Period 55,198.24 55,198.24
Less Accrued Interest at Beginning of Period ( 33,191.44) ( 284,083.13)
Interest Earned during Period 19,985.64 166,736.57
Total Interest Earned during Period 242,014.29 1,683,013.40
Total Capital Gains or Losses 0.00 0.00
Total Earnings during Period
242,014.29
1,683,013.40
Run Dale: 01129/2010 -14:43
Portfolio CHUL
CC
PM (PRF_PM6)Symftept 6.41.202b
Repotl Ver. 5.00
Chula Vista Investment Pool
Portfolio Management
Activity Summary
December 2008 through December 2009
Page 5
Yield to Maturity
Managetl Number Numher
Month Number of Total 360 365 Pool of Investments of Investments Average Average
End Year Securities Invested Equivalent Equivalent Rate Purchased Redeemed Term Days to Maturity
December 2008 37 181,376,370.77 3.357 3.404 2.353 5 5 931 770
January 2009 39 198,764,684.51 2.858 2.898 2.046 9 7 778 666
February 2009 43 190,740,701.80 2.782 2.821 1.869 9 5 917 802
March 2009 39 179,249,941.22 2.709 2.747 1.822 0 4 902 771
April 2009 37 193,554,849.37 2.468 2.503 1.607 2 4 779 656
May 2009 39 203,565,491.69 2.369 2.402 1.530 7 5 813 701
June 2009 37 175,184,702.26 2.255 2.286 1.377 4 6 912 809
July 2009 37 175,468,951.01 2.117 2.147 1.035 1 1 915 799
August 2009 38 161,466,761.59 2.215 2.246 0.925 1 0 1,021 873
September 2009 38 153,967,772.17 2.242 2.273 0.750 0 0 1,071 892
October 2009 38 145,078,134.30 2.228 2.259 0.646 2 2 1,088 884
No~ember 2009 35 134,079,144.88 2.129 2.159 0.611 0 3 1,039 819
Dec@mber 2009 33 143,077,123.72 1.877 1.903 0.569 1 3 889 680
Os Average 38 171,967,279.18 ~ 2.431% 2.465% 1.318 3 3 927 779
Portfolio CHUL
CC
Run Oate'. 01/29/2010 -14:43
PM (PRF_PM4) SymRept 6.41.202b
Repotl Ver. 5 00
Chula Vista Investment Pool
Portfolio Management
Page s
Distribution of Investments By Type
December 2008 through December 2009
December January February March Aprll May June July Augus[ September October November December Average
Security Type 2008 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 by Period
Managed Pool Account 1 33.9 39.1 27.7 30.3 39.1 38.6 33.2 33.3 25.1 21.4 18.7 20.2 30.8 30.1 °/
Short Term Pool Accounts
Managed Pool Account 3 _ _ _ 0 7 0 1°~
Mana ed Pool Account 2
_.. 9_ ______ __ 0.6
.__. 0.5 0.5 0.6 0.5 0.5 0.6
___- -___ ____ 0.6 0.6
_. 0.7 0.7 ~ 0.8 0.7 0.6%
Federal Agency Coupon Securities
1.7
1.5
1.6 1.7 1.6 1.5 _ _._._.
1.4
1.5 _
1.4
1.1%
Federal Agency Callahles 62.8 56 8 68.1 65.3 56.8 57.5 63.9 63.8 71.8 75.3 76.5 74.6 63.6 65.9%
Corporate Coupon Bonds 1.1 2.0 2.1 2.2 2.1 2.0 2.3 2.3 2.5 2.6 2.8 3.0 2.8 2.3%
N
J
Run Date: 01/2912010 -14:43
Portfolio CHUL
CC
PM (PRF_PMS) SymRep16.41.202b
Repon Ver. 5 00
~~~r~
~'~-- ~~+ City of Chula, Vista
~` Chula Vista Investment Pool 276 Fourth Ave
~''~'"~' Realized Gains and Losses cnUia vi6ra cA s1s1o
CIN t~F. (619)691-5250 '
CHULAVISTA Sorted By Maturity/Sale/Call Date
Sales/Calls/Maturities: December 1, 2009 -December 31, 2009
Investment# Par Value Sale Date Days Held
Inv. Purchase MaturltylSale Realized Total Total Tetal
Issuer Type Date Current Rate Maturity Date Term Book Value Proceetls GainlLoss Earnings Net Earnings Yield 365
10538 MC1 06/22/2009 3,000,000.00 12/23/2009 784 3,000,000.00 3,000,000.00 0.00 37,708.33 37,708.33 2.493
Federal Home Loan Bank 2.500 06/22/2012 1,096
10503 MC1 12/30/2008 3,000,000.00 12/30/2009 365 3,000000.00 3,000,000.00 0.00 90,000.00 90,000.00 3.000
Federal Home Loan Bank 3.000 12/30/2013 1,826
10504 MC1 72/30/2008 3,000,000.00 12/30/2009 365 3,000,000.00 3,000,000.00 0.00 63,000.00 63,000.00 2.100
Federal Home Loan Mortgage Co. 2.100 12/30/2011 1,095
Total Realizetl Gains/Losses 9,000,000.00 9,000,000.00 0.00 190,708.33 790,708.33 2.531
N
CD
Portfolio CHUL
CC
Run Dale'. 01/2612010 - i6-.46 CG (PRF_CGR1) SymRep16.41.2026
Report Ver. 5.00
~~II~
cay of cnwa Vista
~r Chula Vista Investment Pool h
276 Fourt
Ave
K~~ ReC21VBC~ Interest Chula Vista CA 91910
CITY OF Sorted by Date Received -Grouped by Fund (619)691-5250 '
CHUTA VISTA
Received December 1, 2009 -December 31, 2009
Security Par Current Interest
Date Received CUSIP Investment# Type Valua Rate Date Due Date Received Amount Due Amount Received Variance
Fund: Chula Vista Investment Pool
December 2009 31337GXN4 10537 MC1 3,000,000.00 2.700 12/03/2009 12/03/2009 40,500.00 40,500.00 -
36967HAH0 10508 MC2 2,000,000.00 2.200 12/08/2009 12/08/2009 22,000.00 22,000.00 -
3128X8L34 10535 MC1 3,000,000.00 3.000 12/09/2009 11/09/2009 45,000.00 45,000.00 -
EH6482796 10499 MC2 2,000,000.00 3.000 12/09/2009 12109/2009 30,000.00 30,000.00 -
3128XBL42 10536 MC1 3,000,000.00 2.000 12/15/2009 17J15/2009 30,000.00 30,000.00 -
3133XTWP7 10538 MC1 0.00 2.500 12/22/2009 12/22/2009 37,500.00 37,500.00 -
3133XTWP7 10538 MC1 0.00 2.500 12/23/2009 12/23/2009 208.33 208.33 -
3133XSSD1 10503 MC1 0.00 3.000 12/30/2009 12/30/2009 45,000.00 45,000.00 -
3128XBCL4 10504 MC7 0.00 ~. 2.100 12/30/2009 12/30/2009 31,500.00 31,500.00 -
Subtotal 281,708.33 281,708.33
N Chula Vista Investment Pool Subtotal 281,708.33 281,708.33
N Total 281,708.33 281,708.33
O
Total Cash Overpayment 0.00
Total Cash ShoMall 0.00
Run Oata'. 011262010 -16:39
Portfolio CHUL
CC
RI (PRF_RI) SymRept 6 41 2 W b
Repon Ver. 5.00
~~tr,
City of Chula Vista
-~ Chula Vista Investment Pool 276 Fourth Ave
"~"~'~' Accrued Interest Chula Vista CA 91910
CIlYOF Sorted by Issuer -Investment Number (619)691-5250
CHUTAVISTA December 1, 2009 -December 31, 2009
Adjus[etl Acc'd lnt
Security Par Maturity Current `Beginning at Purchase Interest Interest 'Ending
CUSIP Investment# Type Value Date Rate Accruetl Interest During Period Earned Received Accrued Interest
CalTrust SHort Term Fund
SYS70507 10507 PA1 1,009,567.07 0.570 -1,547.83 0.00 564.52 -2,021.16 1,037.85
Suhtotal 7,009,567.87 -7,547.83 0.00 564.52 -2,021,16 1,037.85
Federal Farm Credit Bank
31331 GJV2 10509 MCt 4,000,000.00 01/72/2012 2.250 34,750.00 0.00 7,500.00 0.00 42,250.00
31331GLB3 10514 MC7 3,000,000.00 01/20/2013 2.600 26,650.00 0.00 6,500.00 0.00 33,150.00
3133tGLY3 10518 MC1 4,000,000.00 02/11/2013 2.850 34,833.33 0.00 9,500.00 0.00 44,333.33
31331GMW6 10522 MC1 4,000,000.00 02/17/2012 2.470 28,542.22 0.00 6,233.34 0.00 36,775.56
31337GWL9 10531 MC1 4,000,000.00 05/20!2013 2.500 3,055.56 0.00 8,333.33 0.00 11,388.89
37331GWD6 70534 MC1 4000,000.00 05/21/2012 1.800 2,000.00 0.00 6,000.00 0.00 8,000.00
31331GXN4 10537 MC7 3,000,000.00 06/03/2013 2.700 40,050.00 0.00 6,750.00 40,500.00 6,300.00
31331 GV89 10544 MC7 3,000,000.00 10115/2012 2.050 7,858.33 0.00 5,125.00 0.00 12,983.33
N
I Suhtotal 29,000,000.00 177,739.44 0.00 57,941.67 40,500.00 195,181.11
Feral Home Loan Bank
3133XP3C6 10469 MC1 4,000,000.00 01/2912013 4.000 54,222.22 0.00 13,333.34 0.00 67,555.56
3133XCJZ6 10477 MC7 3,000,000.00 04/1612013 3.750 14,062.50 0.00 ~ 9,375.00 0.00 23,437.50
3133XSSD1 10503 MC7 0.00 12/30/2013 3.000 37,750.00 0.00 7,250.00 45,000.00 0.00
3133XSWZ7 10516 MC1 3,000,000.00 02!17/2072 2.250 79,500.00 0.00 5625.00 0.00 25,125.00
3133XTSW2 10525 MC1. 3,000,000.00 02/24/2014 3.250 28,270.83 0.00 8,725.00 0.00 34,395.83
3133XTNJ1 10532 MC1 3,000,000.00 05/20/2013 2.500 2,291.67 0.00 6,250.00 0.00 8,541.67
3133XTWP7 10538 MC1 0.00 06/22/2012 2.500 33,125.00 0.00 4,583.33 37,708.33 0.00
3733XV6U0 10542 FAC 2,000,000.00 10/09/2012 1.750 5,055.56 0.00 2,916.66 0.00 7,972.22
Suhtotal 18,000,000.00 192,277.78 0.00 57,458.33 82,708.33 167,027.78
Federal Home Loan Mortgage Co.
3128XeCL4 70504 MC1 0.00 12/30/2011 2.100 26,425.00 0.00 5,075.00 31,500.00 0. 00
312BXBFM9 70513 MC1 3,000,000.00 01/27/2012 2.000 20,666.67 0.00 5,000.00 0.00 25,666. 67
3128XBGP7 10517 MC1 4,000,000.00 02/02/2012 2.250 29,750.00 0.00 7,500.00 0.00 37,250. 00
3128XBJ89 10521 MC1 4,000,000.00 02/17/2012 2.450 28,311.11 0.00 '. 6,166.67 0,00 36,477. 78
312BXBX56 10526 MCi 3000,000.00 04/27/2012 2.000 5,666.67 0.00 '. 5000.00 0.00 10,666. 67
3126XBL34 10535 MCt 3,000,000.00 06/09/2014 3.000 43,000.00 ~ 0.00 7,500.00 45,000.00 5,500. 00
3128X6 L42 10536 MC1 3,000,000.00 06/15!2012 2.000 27,686.67 0.00 5,000.00 30,000.00 2,666. 67
3128X9AM2 10640 MC1 4,000,000.00 08/24/2012 2.250 24,250.00 0.00 7,500.00 0.00 31,750. 00
Beginning Accrued may not include investments that redemed in the previous month that had outstanding accrued interest. Ending Accrued includes outstanding purchase interest.
Run Oale; 0129/2010 -1q:50
Portfolio CHUL
CC
AI (PRF_A9 SymR¢p16.41 2026
ftepart Ver. 5 00
Chula Vlsta Investment Pool
Accrued Interest
Sorted by Issuer -Investment Number Page 2
Adjusted Acc'd Int.
Security Par Maturity Current `Beglnning a[ Purchase Interest Interest ' Entling
CUSIP Inves[men[# Type Value Date Rate Accrued Interest During Period Earned Received Accrued Interest
Subtotal 24,000,000.00 205,736.12 0.00 50,741.67 106,500.00 149,977.79
Federal Nat'l Mtg. Assoc.
3136F9LC5 10496 MC7 3,000,000.00 04129!2013 4.000 10,66fi.fi7 0.00 10,000.00 0.00 20,fi66. 67
3136F94M2 10511 MC1 4,000,000.00 01/27/2012 2.000 27,555.56 0.00 6666.6fi 0.00 34,222. 22
3136FHAA3 10523 MC1 3,000,000.00 02111/2011 2.000 18,333.33 0.00 5,000.00 0.00 23,333. 33
3136FHAL9 10524 MC1 3,000,000.00 06/19/2011 2.200 18,700.00 0.00 s,soD.aD 0.00 24,200. 00
3136FHN1A0 10527 MC1 3,000,000.00 10/29/2012 2.250 fi,D00.00 0.00 5,625.00 0.00 11,625. 00
31398AXF4 10528 MC7 3,000,0OO.OD 05/12/2014 3.000 4,750.00 0.00 7,500.00 0.00 12,250. 00
3136FHRM9 10529 MC7 3,000,000.00 11!14/2013 2.700 3,825.00 0.00 6,750.00 0.00 10,575. 00
Subtotal 22,000,000.00 89,830.56 0.00 47,041.66 0.00 136,872. 22
General Electric Cap
EH6482796 10499 MC2 2,DDD,DDD.DD 12109/2011 3.000 28,fi88.52 0.00 5,102.69 30,000.00 3,791. 21
36967HAH0 10508 MC2 2,000,000.00 06/08/2012 2.200 21,077.88 0.00 3,742.fi3 22,000.00 2,820. 51
Subtotal 4,000,000.00 49,766.40 0.00 8,845.32 52,000.00 6,617. 72
Local Agency Investment Fund
SYS1~197 10197 LA1 44,079,670.85 0.569 34,739.27 0.00 19,391.97 0.00 54,137. 24
N Subtotal 44,079,670.85 34,739.27 0.00 19,391.97 0.00 54,131. 24
N
San Diego County Inv Pool
57510547 10547 LA3 1,000,000.00 0.2fi6 0.00 0.00 29.15 0.00 29. 15
Suhtotal 1,000,000.00 0.00 0.00 29.15 0.00 29. 15
Total 143,089,238.72 748,541.74 0.00 242,014.29 279,fi87.17 710,868. 86
`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
Run Dale' 01/29/2010-14:50 - AI IPRF_AI) 9ymRepf 6.41.202b
Repon Ver. 5 00
Schedule of Cashllnvestments with Fiscal Agent
as of Decemher 31, 2009
Bond Issue
Security Description
Trust Acct #
Type Maturity
Date Purchase
Date Par Value Contractual
Mkt Value Federal
Cost
Yield
94 CV Pension Oblig Bd Ist American Trs Oblig CL D Corp Tr 95439642 Mutual Funds - - - Var
COP 2000A Financing Proj Milestone Treasury Oblig FD Prem Shr 94418720121/24 Mutual Funds 2,008,063 2,008,063 2,008,063 Var
CV Public Financing Authority Milestone Treasury Oblig FD Prem Shr 34430300/1!2/3/415/8/9/10/1111 :Mutual Funds 3,108,416 3,108,416 3,108,416 Var
2007-712001-2 RAD Trinity Plus Funding Co Invst Agrmt 94430303 Invtmnt Agrmt 02-Sep-17 04-Sep-01 1,201,778 1,201,778 1,201,778 5.600
Trinity Plus Funding Co Invst Agrmt 94430312 Invtmnt Agrmt 02-Sep-17 04-Sep-01 426,500 426,500 426,500 5.600
2002 COP Police Facilities US Treasury 94445202 US Trsy Notes 2,021,563 2,099,380 2,099,380 5.835
Milestone Treasury Oblig FD Prem Shr 94445200/2/4 Mutual Funds 132,424 132,424 732,424 Var
CFD O6-I Improvement Area A Cash 94477000 Cash-Fiscal Agt - - -
Milestone Treasury Oblig FD Prem Shr 944 7 7 00 0/3/4/516/9/1 0 Mutual Funds 4,700,741 4,700,741 4,700,741 Var
Local Agency Investment Fund 94477005/6/9 Invmnt Agrmt 4,801,075 4,801,075 4,801,075 Var
2003 Refunding Cert of Participation FSA Capital Mgmt Invst Agreement 94652201 Invmnt Agrmt 01-Sep-12 11-Jun-03 1,132,000 7,132,000 1,132,000 3.100
Milestone Treasury Oblig FD Prem Shr 94652200/1 Mutual Funds 0 0 0 Var
CFD 2001-2 McMillin-Otay Ranch 6 Milestone Treasury Oblig FD Prem Shr 94658900/03/04/05/08/09/10 Mutual Funds 1,226,503 1,226,503 7,226,503 Var
CFD 08-I Otay Ranch Village 6 Milestone Treasury Oblig FD Prem Shr 3682100/03/04/05/06/07/10111/ Mutual Funds 2,433,891 2,433,891 2,433,891 Var
LAIF 94682105/12 Invmnt Agnnt 1,580,277 1,580,271 1,580,271
CFD 07-I McMillin Otay Rnch Vllg 11 Milestone Treasury Oblig FD Prem Shr 784708000/03/04/05/06/07 Mutual Funds 517,536 517,536 517,536 Var
LAIF 784708003/06 Invmnt Agrmt 2,391,799 2,391,799 2,391,799
CFD 06-I Improvement Area B Milestone Treasury Oblig FD Prem Shr 786104000/3/4/5 Mutual Funds ' 1,700,528 1,700,528 1,700,528 Var
2004 COP Civic Center Phase I Dreyfus Inst'I Res Treasury 325540-44 Mutual Funds 700 700 700 Var
FSA Capital Management Services LLC 325544 Invmnt Agrmt Oi-Mar-34 16-Sep-04 2,395,911 2,395,911 2,395,911 5.205
2006 COP Civic Center Phase II Dreyfus Inst'I Res Treasury 145756/57158/68/69 Mutual Funds 49,685 49,685 49,685 Var
FSA Investment Agreement 145757 Invmnt Agrmt 01-Mar-36 17-Mar.-2006 1,272,459 1,272,459 1,272,459 5.010
CVPFA 20175 Rev Refunding SerA Milestone Treasury Oblig FD Prem Shr 790488000+ .Mutual Funds 11,111,228 11,111,228 11,111,228 Var
Citigroup GIC #871615.1 Reserve Accounts Invmnt Agrmt 01-Sep-2032 6,436,873 6,436,873 6,436,873 4.889
US Treasury Escrow Accounts US Trsy Notes 26,566,339 32,308,061 32,308,061 Var
N Cash Cash-Fiscal Agt 46,406 46,406 46,406
CFD p1-1 Improvement Area B Milestone Treasury Oblig FD Prem Shr 792183003-10 Mutual Funds ~ 6,306,431 6,306,431 6,306,431 Var
CFDI'IQ_I McMillin Otay Rnch Vllg 7 Milestone Treasury Oblig FD Prem Shr 791949000/4/5/6/7/8/11/12 Mutual Funds 2,547,525 2,547,525 2,547,525 Var
CFDY3-I Otay Ranch Vllg 7 Milestone Treasury Oblig FD Prem Shr '93774000/03/04/05/O6/07/OB/1 ~ Mutual Funds 4,438,867 4,438,867 4,438,867 Var
LAIF 793774003 Invmnt Agrm[ 1,254,970 1,254,970 1,254,970
CFD 07-IB McMillin Otay Rnch Vllg 11 Milestone Treasury Oblig FD Prem Shr 794322000/01/03/04/05!09 Mutual Funds 1,182,345 1,182,345 1,182,345 Var
LAIF 794322003 Invmnt Agrmt 1,008,420 1,008,420 1,008,420
O6 Sr. Tax Alloc Ref Bonds A Milestone Treasury PS Fund # MS 103986000/05 Mutual Funds - - - Var
Rabohank International NY Branch 103986003 Invmnt Agrmt 09-Aug-2027 11-Sep-2006 7,027,945 1,027,945 1,027,945 4.980
O6 Subordinate Tax Alloc Ref Bds Milestone Treasury PS Fund # M5 103987003/05 Mutual Funds 96 96 96 Var
CiliGroup Financial Products, Inc. GIC 103987003 Invmnt Agrmt 26-Sep-2027 11-Sep-2006 1,004,365 1,004,365 1,004,365 5.097
RDA 2008 Tax Alloc Ref Bonds Milestone Treasury PS Fund # M5 127926000 to 6011 Mutual Funds 30-Sep-2036 22-Jul-2008 5,194,836 5,194,836 5,194,836 Var
CDBG Section 108 Loan Cash -Interest Bearing Acct 1459703226 Restricted Cash 7,983,594 7,983,594 7,983,594 Var
Orange Tree MHP Cash -Interest Beanng Accl 2324-80156 Restdcted Cash 605,865 605,865 605,865 Var
RDA Housing Program Cash -Interest Bearing Acct Various Restricted Cash 4,012,456 4,012,456 4,072,456 Var
CDBG Housing Program Cash -Interest Bearing Acct Various Restricted Cash 135,966 135,966 135,966 Var
Grand Total as of December 31, 2009 113,966,370 119,785,909 119,785,909
Filename:J:\finance\d ata\invest\inv 10.x1 s
j.ManceldalaGnvesNnv 1 e.xls
City of Chula Vista
Cash/Time Deposits
31-Dec-09
CASH IN BANK
Bank of America -General Account 8,401,408
Bank of America -Payroll Account 0
California Bank -Direct Deposit Account 1,774
Wells Fargo Bank-CV Workers Comp Account 464,243
8,867,426
CASH ON HAND
Petty Cash Fund 6,150
6,150
TIME DEPOSIT
Bank of America Time Deposit 310,000
310,000
CashlTime Deposits as of 12/31/2009
j:finance\data\Cash and Time Deposits FY0910 DEC 31, 2009.x1s
2-24
9,183,576
Draft as of January 29, 2010
ATTACHMENT D
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
EISEr4I~-F' 4F~~004„~009
1.0 Purpose: .
2.0 Policy:....
3.0 Scope:.....
4.0 Prudence:
3
3
3
4
5.0 Objective :.................................................................................................................................. 4
6.0 Delegation of Authority :........................................................................................................... 5
7.0 Ethics and Conflicts of Interest :................................................................................................ 5
8.0 Authorized Financial Dealers and Institutions :........................................................................ 5
9.0 Authorized & Suitable Investments :......................................................................................... 6
10.0 Portfolio Adjustments :..........................................................................................................10
11.0 Collateralization :................................................................................................................... 10
12.0 Safekeeping and Custody :....................................................................................................11
13.0 Diversification :..................................................................................................................... 11
14.0 Maximum Maturities :........................................................................................................... 12
15.0 Internal Control :.................................................................................................................... 12
16.0 Performance Standards :........................................................................................................ 12
17.0 Reporting :.............................................................................................................................13
18.0 Investment Policy Adoption :................................................................................................ 14
GLOSSARY ................................................................................................................................. 15
Adopted on March 2, 2010 by Resolution 2010-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
I;.rcr ,I., Y~.~P. ~004,~2-9d~9
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 are based upon state law and
prudent money management. The primary goals of these practices are:
A. To ensure compliance with all Federal, State, and local laws governing the investment of
public fends under the control of the Director ofFinance/Treasurer.
B. To protect the principal monies entrusted to the City's Finance Department.
C. 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 funds which are managed separately by trustees appointed under indenture
agreements. The Director ofFinance/Treasurer will strive to maintain the level of investment of
this cash as close as possible to 100%. These funds aze described in the City's annual financial
report and include:
• General Fund
• Special Revenue Funds
• 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.
Adopted on March 2, 2010 by Resolution 2010-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
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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 aze 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 and Treasury Manager 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 are made under the terms and conditions of California
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:
Adonted on March 2, 2010 by 12esolution ?010-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
rrcr~I_v~~u'.-~004,~~009
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
mazket-average rate of return throughout budgetary and economic cycles (market interest rates),
within the City's Investment 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 to regulate the activities of subordinate officials. The
responsibility for the day-to-day investment of City funds will be delegated to the Treasury
Manager 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 required for "public officials who manage public investments" [as defined and
required by the 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 faz 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
Adopted on March 2, 2010 by Resolution 3010-XX2:
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
Frcr~ =P~='8081?009
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
California'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
familiar 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 City's Investment Policy and agreeing to comply
with the Investment Policy. The City's Director of Finance/Treasurer shall determine if they are
adequately capitalized (i.e. minimum capital requirements of $10,000,000 and five years of
operation).
9.0 Authorized & Suitable Iuvestments:
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 Al/PI 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 CER'T'IFICATES OF DEPOSIT. These are issued by commercial banks and
thrift institutions aeainst funds deposited for specified periods of time and earn specified or
variab]e rates of interest. Ncuotiable certificates of deposit (NCD) differ fi'om other
certificates of deposit by their lie uidity. NCD`s are_tradeet actively in secondary markets. In
compliance with California Code 53601.8. all FDIC insured CD's wheCher directly priced or
Adopted on March 2 2019 by Resolution X010-XNK
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
r, rc~n_EAR ~n_~o,~zo91
placed through a private sector entity will be classified as a Ne°otiable Certificate of
DepoS1C.
a. Maximun Matures
1. 'The maximum maturity of a NCD issue shall be 5 years
2. The maximtun mahtrity of any FDIC insured CD's whether directly placed or placed throu~lt
aprivate sector entity. shall be 13 months.
U. Maximum Exposure of Portfolio -The maximtun exposure to the Portfolio for this cate~yv
shall be 309i,.
c. Maximum F.,xposure Per Issue -The maximum exposure to a single issue shall be 2 5°/„ of the:
Portfolio value.
d. Maximum Exnosure Per Issuet• -The maximum exposure to a sin<=le issuer shall be 5°% of the
Portfolio value.
e. Minimum Credit Requitement
1 _AI] NCD mast have the following inveshnent grade from one of these ratini; firms. If
unrated by Standard & Poor's, security would need to he authorized by Standard & Poor's
with a shadow rating_prior to purchase.
a) Standard & Poor's - A-1 or A (lono-teen when applicable)
>~ Moody's - P-1 or A (longterm when. applicable)
e} Fitch - F-1 or A f long-term when applicable)
fFor NCD's 1 year or less, use short-term rating
(For NCD's over 1 year, use loner-term ratin
2. There is no minimum credit requirement for FDiC insured C'D's whether directly
placed or placed through a private sector entity
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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/PI) 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.
Adonted on March 2 2010 by Resolution ~~10-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
C :I. Y;,iR :004,4'.0439
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 Association Notes (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 Repurchase
Agreement 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
all 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 awned 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 party 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
Adopted on March 2, 2010 by Resolution 2010-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
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 chapter, "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.
I. MEDIUM-TERM CORPORATE NOTES, maximum 20% of portfolio (30% with Council
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
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 Mazket 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 shazes may not include commission.
M. 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 $40 million in this fund. Currently, the
City has established two (2) agency funds through which the Director of Finance/Treasurer
may invest the unexpended cash for all funds: The City of Chula Vista City Fund, and the
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INVESTMENT POLICY AND GUIDELINES
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Chula Vista Redevelopment Agency Fund. Investments in LAIF are highly liquid and may
be converted to cash within 24 hours.
N. Investment Trust of California (Ca1TRUST)
The City may invest in shares of beneficial interest issued by the Investment Trust of
California (CaITRUST), 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
• Ca1TRUST 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 or the money market
fund. LAIF is authorized under provisions in Section 16429.1 of the California Government
Code as an 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 notified.
11.0 Collateralization:
Under provisions of the Califomia Government Code, California banks, and savings and loan
associations are required to secure the City's deposits by pledging government securities with a
Adopted on March 2 2019 by Resolution ~O10-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
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value of 110 % of principal and accrued interest. California law also allows financial institutions
to secure 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 market 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 her 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 separate 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 party 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.
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
Adopted on March 2, 2010 by Resolution 2010-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
l-, pgr ~ r~ . =°-z04S1~84I9
securities prior to their maturity. It is explicitly recognized herein, however, that in a
diversified portfolio, occasional measured losses are inevitable and 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 ofFinance/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 ofFinance/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 four designated City staff:
1. Director of Finance/Treasurer
2. Assistant Director of Finance
3. Treasury Manager
4. Fiscal Operations Manager
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 of Finance/Treasurer will be held in a passively managed
("hold to maturity") portfolio. However, the Director of Finance/Treasurer will use best efforts
Adopted on March 2, 2010 by Resolution 2010-XXX
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CITY OF CHULA VISTA
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Elcr- a~,~; y~;,-ro ~nno0o/0434
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 par, of on-going portfolio management.
17.0 Reporting:
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 compliance 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
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F[cr +~~~I~F.AR-20{)$~~049
• Comparative report on Monthly Investment Balances & Interest Yields
• Monthly transactions
This quarterly investment report shall be an information item for the City Council and City
Manager. In addition, a commentary on capital markets and economic conditions may be
included with the report.
18.0 Investment Policy Adoption:
By virtue of a resolution of the City Council of the City of Chula Vista, the Council shall
acknowledge the receipt and filing of this annual statement of Investment Policy for the
respective fiscal year.
Adopted on March ?, 2010 by Resolution X010-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
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GLOSSARY
AGENCIES: Federal agency securities.
ASKED: The price at which securities are offered. (The price at which a firm will sell a security
to an 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 importer 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
Adopted on March 2 2010 by Resolution ~O10-XX~:
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
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with an exchange of money for the securities. Delivery versus receipt is delivery of securities
with an 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
chartered under the Federal National Mortgage Association Act in 1938. FNMA is a Federal
corporation working ender 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
Adopted on March 3, 2010 by Resolution 3010-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
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 Boazd 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 commercial 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 barilcers, 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 Maes.
LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a
substantial less 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 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
Adopted on March 2, 2010 by Resolution 2010-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
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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 market by the New York Federal Reserve Bank as directed by the FOMC
in order to influence the volume of money and credit in the economy. Purchases inject reserves
into the bank system and stimulate growth of money and credit: Sales have the opposite effect.
Open market operations aze the Federal Reserve's most important and most flexible monetary
Policy too].
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 unregulated
firms.
PRUDENT PERSON RULE: An investment standard. 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 mazket price.
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
aze 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 ASSOCIATION NOTES (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 are
widely accepted.
Adopted on March 2, 2019 by Resolution ?010-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
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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 are 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 one yeaz to ten years.
UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that
member firms as well as nonmember broker/dealers in securities maintain a maximum ratio of
indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio.
Indebtedness covers all money owed to a firm, including margin loans and commitments to
purchase securities, one reason new public issues aze spread among members of underwriting
syndicates. Liquid capital includes cash and assets easily converted into cash.
YIELD: The rate of annual income return on an investment, expressed as a percentage. (a)
Income Yield is obtained by dividing the current dollar income by the current market price for
the security. (b) Net Yield or Yield to Maturity is the current income yield minus any premium
above par or plus any discount from par in purchase price, with the adjustment spread over the
period from the date of purchase to the date of maturity of the bond.
Adopted on March ?, 2010 by Resolution 2010-XXX
2-43
RESOLUTION NO.2010-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING THE EXISTING CITY
INVESTMENT POLICY AND GUIDELINES
WHEREAS, the City is contemplating investing a portion of its idle funds in local
community banks, and in order to do so the City must amend its existing Investment Policy to
allow for investments in Certificates of Deposit utilizing a deposit placement service; and
WHEREAS, currently the only program that offers a deposit placement service for
Certificates of Deposit is the Certificate of Deposit Account Registry Service better known as
CDARS; and
WHEREAS, Negotiable Certificates of Deposit are an investment authorized by State
Government Code and is listed as an authorized investment in the current policy; and
WHEREAS, the City has not invested in Certificates of Deposit in the past because of the
relatively low amount that may be invested to remain within the FDIC insurable limits but also
because of the administrative burden that would be required to invest in certificates of deposit
outside of the CDARS Program; and
WHEREAS, banks that offer CDARS aze members of a special network in which a
public fund depositor places a large deposit with a network member that uses the CDARS
service to place City funds into Certificates of Deposit issued by other members of the network;
and
WHEREAS, this occurs in increments of less than the standard FDIC insurance
maximum to ensure that both principal and interest are eligible for full FDIC protection; and
WHEREAS, other network members do the same thing with their customers' funds, and
with help from a sophisticated matching system, banks exchange funds with other members of
the Network; and
WHEREAS, these exchanges, which occur on a dollaz-for-dollar basis, bring the full
amount of the City's original deposit back to each originating bank, and as a result, member
banks can make the full amount of the City's deposit available for community lending purposes
and the City can access FDIC coverage from many banks while working with just one
institution; and
WHEREAS, Senate Bill 2011 added Sections 53601.8 and 53635.8 to the Government
Code, relating to local agency investments; and
WHEREAS, this bill authorized, until January 1, 2012, the investment of up to 30% of
those funds in certificates of deposit at a commercial bank, savings bank, savings and loan
association, or credit union that uses a private sector entity that assists in the placement of
certificates of deposit under specified conditions.
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Resolution No. 2010-
Page 2
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista amends the existing City Investment Policy and Guidelines, as reflected on the Attachment
D to the Agenda Statement accompanying this Resolution, a copy of which is on file in the
Office of the City Clerk.
Presented by
Maria Kachadoorian
Director of Finance/Treasurer
Approved as to form by
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Ba~M' s el' ~
~Cit ~ ttorney
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
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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 a market-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-going portfolio management.
17.0 Reporting:
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 compliance with the Statenient 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
Adopted on March 2. 2010 bv Resoluliou 2010-XXX
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CITY OF CHULA VISTA
INVESTMENT POLICY AND GUIDELINES
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. Comparative report on Monthly Investment Balances & Interest Yields
. Monthly transactions
,
This quarterly investment report shall be an information item for the City Council and City
Manager. In addition, a commentary on capital markets and economic conditions may be
included with the report.
18.0 Investment Policy Adoption:
By virtue of a resolution of the City C01.incil of the City of Chula Vista, the Council shall
acknowledge the receipt and filing of this annual statement of Investment Policy for the
respective fiscal year.
'. .
Adopted on March 2. 2010 bv Resolution 20 I a-xxx
2-38
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March 2, 2010
From:
Mayor & City Council
Mitch Thompso~
Councilmember Mitch Thompson
To:
Subject: Item 2, City Investment Policy and Guidelines
Recommendation:
To Section 17, Reporting (pg 2-37 of agenda item), add the following element for
inclusion in the quarterly repOli to Council:
Comparison ofthc City's overall investment return with that of the County and five
largest cities in the County. Uthe rate of return of the city is greater than .25% less than
the average of those jurisdictions, an explanation as to why there is a difference.
Cc: Donna Norris
Jim Sandoval
Maria Kachadorian