BACKGROUND:
On November 7, 2006, Orange County voters approved the renewal of the Measure M one-half cent sales tax for transportation improvements. This renewal plan is designated as Measure M2 and provides funding for 30 years to relieve traffic congestion. As part of Measure M2, taxpayer safeguards and audits are provided to ensure appropriate use of funds.
One safeguard requirement under the M2 Ordinance is for each local agency to adopt and provide an annual expenditure report to OCTA each year in the template form provided by OCTA. This expenditure report is a detailed financial report used to track financial activity to account for M2 funds, developer/traffic impact fees, and funds expended by the jurisdiction to satisfy Maintenance of Effort (MOE) requirements. The report includes all M2 net revenue, fund balances and interest earned, and will identify expenditure by activity type and funding source.
The report is required six months after each jurisdiction’s fiscal year end and must be adopted by Resolution before submittal to OCTA. The attached M2 Expenditure Report demonstrates the City is in compliance with the requirements of M2.
FISCAL IMPACT:
Over the past five years, Measure M2 has provided between $720,000 and $850,000 of annual revenues to the City for street maintenance and other purposes. Failure to submit the M2 Annual Expenditure Report could suspend or delay M2 funding.
ATTACHMENTS:
• FY 2021/2022 M2 Expenditure Report
• Proposed Resolution M2 Expenditure Report FY 2021/2022
4.10 Packet Pg. 203
City of Laguna Hills
M2 Expenditure Report
Fiscal Year Ended June 30, 2022
Beginning and Ending Balances
Schedule 1
Line
No.
Amount Interest
A-M Freeway Environmental Mitigation 1 $ - $ -
O Regional Capacity Program (RCP) 2 $ - $ -
P Regional Traffic Signal Synchronization Program (RTSSP) 3 $ - $ - Q Local Fair Share 4 $ - $ -
R High Frequency Metrolink Service 5 $ - $ -
S Transit Extensions to Metrolink 6 $ - $ -
T
Convert Metrolink Station(s) to Regional Gateways that
connect Orange County with High-Speed Rail Systems 7 - $ - $ U
Senior Mobility Program or Senior Non-Emergency Medical Program
8 113,312 $ - $
V Community Based Transit/Circulators 9 $ - $ -
W Safe Transit Stops 10 $ - $ -
X Environmental Cleanup Program (Water Quality) 11 $ - $ - Other* 12 165 $ - $
13 $ 113,476 $ -
Monies Made Available During Fiscal Year 14 980,437 $ 1,379 $ 15 $ 1,093,914 $ 1,379
Expenditures During Fiscal Year 16 737,574 $ 1,379 $
A-M Freeway Environmental Mitigation 17 $ - $ -
O Regional Capacity Program (RCP) 18 $ - $ -
P Regional Traffic Signal Synchronization Program (RTSSP) 19 $ - $ - Q Local Fair Share 20 $ - $ -
R High Frequency Metrolink Service 21 $ - $ -
S Transit Extensions to Metrolink 22 $ - $ -
T
Convert Metrolink Station(s) to Regional Gateways that
connect Orange County with High-Speed Rail Systems 23 - $ - $ U
Senior Mobility Program or Senior Non-Emergency Medical Program
24 154,526 $ - $
V Community Based Transit/Circulators 25 $ - $ -
W Safe Transit Stops 26 $ - $ -
X Environmental Cleanup Program (Water Quality) 27 $ 200,000 $ - Other* 28 1,813 $ - $
* Orange County TDA Backfill
Description
Balances at Beginning of Fiscal Year
Balances at Beginning of Fiscal Year
Total Monies Available (Sum Lines 13 & 14)
Balances at End of Fiscal Year
4.10.a
Packet Pg. 204 Attachment: FY 2021/2022 M2 Expenditure Report (3027 : M2 Expenditure Report FY 2021/2022) City of Laguna Hills M2 Expenditure Report
Fiscal Year Ended June 30, 2022
Sources and Uses
Schedule 2
Line
No.
Amount Interest
A-M Freeway Projects 1 $ - $ -
O Regional Capacity Program (RCP) 2 $ - $ -
P Regional Traffic Signal Synchronization Program (RTSSP) 3 $ - $ - Q Local Fair Share 4 $ 731,430 $ 929
R High Frequency Metrolink Service 5 $ - $ -
S Transit Extensions to Metrolink 6 $ - $ -
T
Convert Metrolink Station(s) to Regional Gateways that connect Orange County with High-Speed Rail Systems 7 - $ - $
U Senior Mobility Program or Senior Non-Emergency Medical Program 8 $ 47,358 $ 450 V Community Based Transit/Circulators 9 $ - $ -
W Safe Transit Stops 10 $ - $ -
X Environmental Cleanup Program (Water Quality) 11 $ 200,000 $ - Other* 12 1,648 $ - $
13 980,437 $ 1,379 $
A-M Freeway Projects 14 $ - $ -
O Regional Capacity Program (RCP) 15 $ - $ -
P Regional Traffic Signal Synchronization Program (RTSSP) 16 $ - $ - Q Local Fair Share 17 $ 731,430 $ 929
R High Frequency Metrolink Service 18 $ - $ -
S Transit Extensions to Metrolink 19 $ - $ -
T
Convert Metrolink Station(s) to Regional Gateways that connect Orange County with High-Speed Rail Systems 20 - $ - $
U Senior Mobility Program or Senior Non-Emergency Medical Program 21 $ 6,144 $ 450 V Community Based Transit/Circulators 22 $ - $ -
W Safe Transit Stops 23 $ - $ -
X Environmental Cleanup Program (Water Quality) 24 $ - $ - Other 25 - $ - $
26 737,574 $ 1,379 $
27 242,863 $ - $
* Orange County TDA Backfill
Description
Revenues:
Expenditures:
TOTAL REVENUES (Sum lines 1 to 12)
TOTAL BALANCE (Subtract line 26 from 13)
TOTAL EXPENDITURES (Sum lines 14 to 25)
4.10.a
Packet Pg. 205 Attachment: FY 2021/2022 M2 Expenditure Report (3027 : M2 Expenditure Report FY 2021/2022) City of Laguna Hills
M2 Expenditure Report
Fiscal Year Ended June 30, 2022
Streets and Roads Detailed Use of Funds
Schedule 3
Line
No. MOE2 +Developer / Impact Fees
O
O
Interest
P
P
Interest
Q
Q
Interest
X
X
Interest
Other
M23
Other
M2
Interest
Other* TOTAL
1 $ 150,582 $ - - $ - $ - $ - $ - $ - $ - $ - $ 6,144 $ 450 $ - $ 157,176 $ New Street Construction 2 - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Street Reconstruction (CIP 517) 3 2,633 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 2,633 $ Signals, Safety Devices, & Street Lights (CIP 168) 4 - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Pedestrian Ways & Bikepaths 5 - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Storm Drains (CIP 403, CIP 410 + CIP 412) 6 223,627 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 223,627 $ Storm Damage 7 - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 8 226,260 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 226,260 $ Right of Way Acquisition 9 - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 10 226,260 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 226,260 $ Patching 11 - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Overlay & Sealing 12 - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Street Lights & Traffic Signals 13 $ 721,214 $ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 721,214 $ Storm Damage 14 - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Other Street Purpose Maintenance 15 $ 211,190 $ - - $ - $ 731,430 $ 929 $ - $ - $ - $ - $ - $ 943,550 $ 16 932,404 $ - $ - $ - $ - $ - $ 731,430 $ 929 $ - $ - $ - $ - $ - $ 1,664,764 $ 17 $ 294,819 $ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 2,727,851 $ 3,022,670 $ 18 1,604,065 $ - $ - $ - $ - $ - $ 731,430 $ 929 $ - $ - $ 6,144 $ 450 $ 2,727,851 $ 5,070,870 $ 19 1
Includes direct charges for staff time Legend
2 Local funds used to satisfy maintenance of effort (MOE) requirements Project 3 Other M2 includes A-M, R,S,T,U,V, and W A-M
+ Transportation related only O
* Gas Tax& SB1 RMRA & Grants and Contrib P
Q
R
S
T
U
V
W
X
Community Based Transit/Circulators
Safe Transit Stops
Environmental Cleanup Program (Water Quality)
Regional Traffic Signal Synchronization Program (RTSSP) Local Fair Share
High Frequency Metrolink Service
Transit Extensions to Metrolink
Convert Metrolink Station(s) to Regional Gateways that connect Orange County with High-Speed Rail Systems
Senior Mobility Program or Senior Non-Emergency Medical Program Regional Capacity Program (RCP)
Type of Expenditure
Indirect and/or Overhead 1
Construction & Right-of-Way
Total Construction
Total Construction & Right-of-Way
Maintenance
Total Maintenance1
Other
GRAND TOTALS (Sum Lines 1, 10, 16, 17)
Description
Freeway Projects
Interim Finance Director Confirmation
Any California State Constitution Article XIX streets and road eligible expenditure may be “counted” in local jurisdictions’ calculation of MOE if the activity is supported (funded) by a local jurisdictions’ discretionary funds (e.g. general fund). The California State Controller also provides useful information on Article XIX and the Streets and Highways Code eligible expenditures in its “Guidelines Relating to Gas Tax Expenditures for Cities and Counties”. I have reviewed and am aware of these guidelines and their applicability in calculating and reporting on Maintenance of Effort expenditures.
Interim Finance Director initial: _______________
4.10.a
Packet Pg. 206 Attachment: FY 2021/2022 M2 Expenditure Report (3027 : M2 Expenditure Report FY 2021/2022) City of Laguna Hills
M2 Expenditure Report
Fiscal Year Ended June 30, 2022
Local Fair Share Project List
Schedule 4
PROJECT NAME AMOUNT EXPENDED
Street Maintenance Contract 732,359.61
$ 732,359.61
4.10.a
Packet Pg. 207 Attachment: FY 2021/2022 M2 Expenditure Report (3027 : M2 Expenditure Report FY 2021/2022) City of Laguna Hills
M2 Expenditure Report
Fiscal Year Ended June 30, 2022
Signature Page
Irwin Bornstein
Date
13 An Actual General Fund Revenue excerpt from a jurisdiction's Annual Comprehensive Finance Report (ACFR) must be provided as backup documentation.
I hereby certify that:
☐ All the information attached herein and included in schedules 1 through 4 is true and accurate to the best of my knowledge;
☐ The interest earned on Net Revenues allocated pursuant to the Ordinance shall be expended only for those purposes for which the Net Revenues were allocated;
☐ The City of Laguna Hills is aware of the State Controller’s “Guidelines Relating to Gas Tax Expenditures for Cities and Counties”, which is a guide for determining MOE Expenditures for M2 Eligibility purposes; ☐ The City’s Expenditure Report is in compliance with direction provided in the State Controller’s “Guidelines Relating to Gas Tax Expenditures for Cities and Counties;” and ☐ The City of Laguna Hills has expended in this fiscal year an amount of local discretionary funds for streets and roads purposes at least equal to one of the maintenance of effort requirements below 10:
A) The City met the existing FY 2021-22 MOE benchmark dollar amount.
B) The City met a proportional MOE benchmark amount of FY 2021-22 General Funds Revenues that is at least equal to the percent listed in column C of Exhibit 2 in the M2 Eligibility Guidelines. 13 Interim Finance Director (Print Name)
Signature
4.10.a
Packet Pg. 208 Attachment: FY 2021/2022 M2 Expenditure Report (3027 : M2 Expenditure Report FY 2021/2022) RESOLUTION NO. 2022-12-13-X
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAGUNA HILLS, CALIFORNIA, CONCERNING THE
MEASURE M2 (M2) EXPENDITURE REPORT FOR THE
CITY OF LAGUNA HILLS FOR FISCAL YEAR ENDED
JUNE 30, 2022
The City Council of the City of Laguna Hills, California, hereby finds, determines, declares, and resolves as follows:
WHEREAS, local jurisdictions are required to meet eligibility requirements and submit eligibility verification packages to the Orange County Transportation Authority (OCTA) in order to remain eligible to receive M2 funds; and WHEREAS, local jurisdictions are required to adopt an annual M2 Expenditure Report as part of one of the eligibility requirements; and WHEREAS, local jurisdictions are required to account for Net Revenues, developer/traffic impact fees, and funds expended by local jurisdiction in the M2 Expenditure Report that satisfy the Maintenance of Effort requirements; and WHEREAS, the M2 Expenditure Report shall include all Net Revenue, fund balances, interest earned and expenditures identified by type and program or project; and
WHEREAS, the M2 Expenditure Report must be adopted and submitted to the OCTA each year within six months of the end of the local jurisdiction’s fiscal year to be eligible to receive Net Revenues as part of M2.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF LAGUNA HILLS, CALIFORNIA, DOES HEREBY INFORM OCTA THAT:
A. The M2 Expenditure Report is in conformance with the template provided in the Measure M2 Eligibility Guidelines and accounts for Net Revenues including interest earned, expenditures during the fiscal year and balances at the end of fiscal year.
B. The M2 Expenditure Report is hereby adopted by the City of Laguna Hills.
C. The City of Laguna Hills’ Finance Director is hereby authorized to sign and submit the Measure M2 Expenditure Report to OCTA for the fiscal year ending June 30, 2022.
4.10.b
Packet Pg. 209 Attachment: Proposed Resolution M2 Expenditure Report FY 2021/2022 (3027 : M2 Expenditure Report FY 2021/2022) Resolution No. 2022-12-13-X
PASSED, APPROVED, AND ADOPTED THIS 13th day of December 2022. , MAYOR
ATTEST:
______________________________________
JENNIFER LEE, CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF LAGUNA HILLS )
I, Jennifer Lee, City Clerk of the City of Laguna Hills, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. 2022-12-13-X adopted by the City Council of the City of Laguna Hills, California, at a Regular Meeting thereof held on the 13th day of December 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
(SEAL)
_____________________________________
JENNIFER LEE, CITY CLERK
4.10.b
Packet Pg. 210 Attachment: Proposed Resolution M2 Expenditure Report FY 2021/2022 (3027 : M2 Expenditure Report FY 2021/2022) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: December 13, 2022
TO: Mayor and Council Members
FROM: Irwin Bornstein
Interim Finance Director
ISSUE: Treasurer's Investment Report for September 2022 RECOMMENDATION: That the City Council receive and file the Treasurer's Investment Report for the month of September 2022.
SUMMARY:
The Treasurer’s Investment Report for the month of September 2022 is submitted herewith. Previously, quarterly treasurer’s reports were submitted off-agenda to City Council members to meet the legal requirement that such reports be transmitted to the members of the governing body within 30 days of quarter-end. The quarterly treasurer’s reports were then summarized within quarterly financial reports presented to the City Council on regular City Council meeting agendas. Beginning with this September 2022 report, staff now plans to prepare treasurer’s reports monthly rather than quarterly, and to utilize a more summarized format to facilitate the more frequent reporting cycle.
The monthly reports will still be transmitted off-agenda to City Council members in an effort to deliver them within 30 days following month-end, and they will also now be included on City Council meeting agendas.
The City’s total portfolio as of September 30, 2022, was $21,559,391. The portion of the total portfolio managed by the City Treasurer consisted of cash on hand, demand deposits, State Local Agency Investment Fund (LAIF) and Investment Trust of California (CalTRUST) investments and totaled $19,287,797. Fiscal and custodial agents managed an additional $2,271,593, utilizing demand deposits, money market fund and LAIF investments.
4.11 Packet Pg. 211
Treasurer's Report for September 2022
December 13, 2022
Interest income for the month of September was $44,692. FY 2022/2023 year-to-date interest earnings of $48,603 are 49% of the annual budget of $100,000. The unrealized loss on the portfolio as of September 30 was $231,530, based on market value information provided by LAIF. This is the result of the rising interest rate environment.
However, by law the City is guaranteed to receive the full book value of all LAIF deposits at the time of withdrawal.
The average yield on the City’s total portfolio for the month of September was 1.28%, compared to the LAIF average monthly yield of 1.51%, the average three-month bank CD rate of 3.21%. and US Treasury bill rates of 3.29%, 3.95%, and 4.03% for threemonth, six-month and one-year maturities, respectively. The Treasurer’s strategy for the past quarter has been to maximize liquidity and not invest in any new fixed maturity instruments, given the rising interest rate environment. Additional investments in sameday CalTrust and LAIF instruments are anticipated in the coming months as a means of increasing the overall return on the overall portfolio. Cash and investment balances in total decreased during September by $972,710, from $22,532,101 to $21,559,391, and are not expected to increase in any significant degree until December, when substantial property tax receipts for FY 2022/2023 begin to occur.
ATTACHMENTS:
• Treasurer's Investment Report - September 2022
4.11 Packet Pg. 212
1 4.11.a
Packet Pg. 213 Attachment: Treasurer's Investment Report - September 2022 (3034 : Treasurer's Report for September 2022) Fund
Balance
9/1/2022 Receipts Disbursements
Balance
9/30/2022
General $ 11,214,873 $ 1,330,776 $ 2,556,112 $ 9,989,538 MGP Development Application - VALH Project (75) - - (75) Gas Tax 242,530 76,181 - 318,711
SB1 RMRA - 57,436 - 57,436
Measure M (99,327) 143,914 47,434 (2,847)
AB 2766 216,777 10,220 - 226,997
Senior Mobility Program 169,106 9,318 538 177,887
CARITS 1,276,481 - - 1,276,481
Beverage Recycling 8,549 - - 8,549
CR&R Recycling Fee 189,069 - - 189,069
C&D Forfeited Deposits 10,079 - 11,814 (1,736)
SB 1383 Grant 44,872 - - 44,872
Quimby Act Park In Lieu Fee - VALH 2,000,000 - - 2,000,000 CASp 26,798 - - 26,798
Water Conservation 343,539 - - 343,539
Grants and Contributions (140,237) 3,025 - (137,212)
Public Art 192,180 - - 192,180
Public Art - VALH MGP 350,000 - - 350,000
CARES Act Assistance - State 413 - - 413
American Rescue Plan Act 3,732,689 - - 3,732,689
Liability Self-Insurance 107,455 - 3,424 104,031
Parks Equipment Maintenance 365,700 - - 365,700
Sports Complex Equipment Maintenance 120,000 - - 120,000 Community Center Equipment Maintenance 120,000 - - 120,000 Storm Drain/Slope Repair Reserve 31,771 - - 31,771
Capital Improvement Project (3,384) 3,384 - 0
Debt Service 1,788,585 4,653 3,384 1,789,854
Business Type - City Hall 223,656 134,965 123,875 234,746 TOTALS $ 22,532,101 $ 1,773,871 $ 2,746,581 $ 21,559,391 Market Value Book Value Purchase Date Maturity Date
Remaining Life
Days Yield
Deposits and Investments Managed by City Treasurer:
Demand Deposits a
Bank of the West - Account ending 0838 $ 3,090,111 $ 3,090,111 1 0.35% Union Bank - Account ending 1077 3,506,071 3,506,071 1 not avail.
Less: Net Reconciling Items (755,081) (755,081)
Total Demand Deposits $ 5,841,101 $ 5,841,101 1 0.35%
Multiple Maturity Certificates of Deposit
Bank of America - Account ending 0905 $ 20,000 $ 20,000 4/16/2022 10/16/2022 16 5.12% Bank of America - Account ending 1155 50,502 50,502 5/19/2022 11/18/2022 49 5.12% Total Certificates of Deposit $ 70,502 $ 70,502 40 5.12% State Local Agency Investment Fund (LAIF)
Account ending 407 $ 11,802,864 $ 12,034,395 1
b 1.51%
Investment Trust of California (CalTRUST)
BlackRock FedFund (TFDXX) - Account ending 273-10 1,331,180 $ $ 1,331,180 1 b 2.31%
Deposits and Investments With Fiscal and Custodial Agents:
Bank of New York Mellon Trust Company - Fiscal Agent:
2010 Lease Payment Fund:
JP Morgan US Treasury Plus Premier #3920 $ 1,398,202 $ 1,398,202 2/18/2010 On Demand 1 2.30% 2010 Reserve Fund:
State Local Agency Investment Fund (LAIF)
Account ending 056 d
390,384 390,384 1/26/2010 Restricted 1.51%
JP Morgan US Treasury Plus Premier #3920 1,269 1,269 On Demand 1 2.30% 1,789,854 1,789,854
Demand Deposits with Custodial Agents:
Essex Realty Management Inc. - Custodial Agent e :
Community Center Building Management
Pacific Western Bank - Account ending 2974 221,389 221,389 On Demand On Demand 1 - Civic Center Leasing Operations
Union Bank - Account ending 3422 82,012 82,012 On Demand On Demand 1 - Union Bank - Money Market Account ending 6762 152,734 152,734 On Demand On Demand 1 0.05% WEX Health Inc. - Custodial Agent f :
Flexible Spending Account 25,604 25,604 On Demand On Demand 1 - 481,739 481,739 0.02%
$ 2,271,593 $ 2,271,593
Cash Receipts and Disbursements by Fund
Deposits and Investments Detail
2 4.11.a
Packet Pg. 214 Attachment: Treasurer's Investment Report - September 2022 (3034 : Treasurer's Report for September 2022) FOOTNOTES TO THE TREASURER’S INVESTMENT REPORT – SEPTEMBER 2022 a Represents total bank balances of $6,596,182, less a net total amount of reconciling items (primarily, deposits in transit and outstanding checks) of $ -$756,152.86.
.
b
Remaining life days is noted in this report as one day for both the State Local Agency Investment Fund (LAIF) and the Investment Trust of California (CalTRUST), because the funds can be withdrawn within one day’s notice without penalty from both of these investment vehicles. The weighted average maturity for the investments within these funds as of September 30, 2022 is as follows:
State Local Agency Investment Fund (LAIF) 304 days
Investment Trust of California (CalTRUST): BlackRock FedFund (TFDXX) 17 days
c
Includes accrued LAIF interest for the quarter ending September 30, 2022 of $40,950.03 d State Local Agency Investment Fund (LAIF) balances held by Bank of New York Mellon Trust Company as trustees of Certificates of Participation related to the 2010 Refinancing Project are reported at market value in the City’s general ledger.
e
Custodial accounts are maintained by Essex Realty Management, Inc. for the property management of the Laguna Hills Community Center and Civic Center. Essex Realty Management, Inc. manages these funds in accordance with the property management agreements. Funds are held in demand accounts established by Essex as an agent for the City of Laguna Hills. Funds are liquid and are utilized to fund operating expenditures as budgeted.
f
The City provides an IRC Section 125 Flexible Spending Account (FSA) for eligible employees. The third-party administrator (TPA) for the FSA is WEX Health Inc. (WEX). Funds provided to WEX for the administration of the plan are held in a custodial account with Bell State Bank & Trust, Fargo, ND, and remain the asset of the City. As custodian and TPA, WEX makes distributions from the account in accordance with the FSA plan document or as otherwise agreed upon or directed by the City. Funds may be withdrawn by the City at any time and are subject to the City’s creditors in the same manner as with its other demand deposit accounts. 3 4.11.a
Packet Pg. 215 Attachment: Treasurer's Investment Report - September 2022 (3034 : Treasurer's Report for September 2022) September 1.513
August 1.276
July 1.090
0.00003699565555327
0.980760962
LAIF Earnings Ratio(2):
LAIF Fair Value Factor(1):
PMIA Daily(1): 1.63%
LAIF Apportionment Rate 1.35 (2):
PMIA Quarter to Date(1): 1.29%
PMIA Average Life 304 (1):
Treasuries
66.59%
Agencies
19.79%
Certificates of
Deposit/Bank Notes
6.44%
Time
Deposits
2.20%
Commercial
Paper
4.59%
Corporate
Bonds
0.22%
Loans
0.17%
Notes: The apportionment rate includes interest earned on the CalPERS Supplemental Pension Payment pursuant to Government Code 20825 (c)(1) and interest earned on the Wildfire Fund loan pursuant to Public Utility Code 3288 (a).
Source:
(1) State of California, Office of the Treasurer
(2) State of Calfiornia, Office of the Controller
PMIA Average Monthly
Effective Yields(1)
PMIA/LAIF Performance Report
as of 10/14/22
Daily rates are now available here. View PMIA Daily Rates Quarterly Performance
Quarter Ended 09/30/22
Chart does not include $3,917,000.00 in mortgages, which equates to 0.002%. Percentages may not total 100% due to rounding.
Pooled Money Investment Account
Monthly Portfolio Composition (1)
09/30/22
$222.9 billion
4 4.11.a
Packet Pg. 216 Attachment: Treasurer's Investment Report - September 2022 (3034 : Treasurer's Report for September 2022) Carrying Cost Plus
Description Accrued Interest Purch. Amortized Cost Fair Value Accrued Interest United States Treasury:
Bills $ 46,457,160,163.94 $ 46,657,126,553.35 $ 46,514,062,000.00 NA Notes $ 101,947,915,596.75 $ 101,931,736,332.18 $ 98,369,732,500.00 $ 237,324,054.50 Federal Agency:
SBA $ 334,748,643.50 $ 334,663,003.17 $ 335,043,755.16 $ 569,406.02 MBS-REMICs $ 3,916,682.58 $ 3,916,682.58 $ 3,897,852.17 $ 17,633.20 Debentures $ 8,593,591,055.03 $ 8,592,721,013.39 $ 8,353,930,850.00 $ 19,156,465.50 Debentures FR $ - $ - $ - $ -
Debentures CL $ 2,650,000,000.00 $ 2,650,000,000.00 $ 2,574,109,000.00 $ 18,005,248.00 Discount Notes $ 30,277,339,791.63 $ 30,410,365,854.03 $ 30,310,774,000.00 NA Supranational Debentures $ 2,229,190,558.99 $ 2,229,010,003.43 $ 2,133,180,400.00 $ 7,597,861.50 Supranational Debentures FR $ - $ - $ - $ -
CDs and YCDs FR $ - $ - $ - $ -
Bank Notes $ 100,000,000.00 $ 100,000,000.00 $ 99,780,349.59 $ 775,000.00 CDs and YCDs $ 14,260,000,000.00 $ 14,260,000,000.00 $ 14,229,806,876.24 $ 76,472,855.58 Commercial Paper $ 10,239,348,756.91 $ 10,295,023,243.07 $ 10,275,778,388.91 NA Corporate:
Bonds FR $ - $ - $ - $ -
Bonds $ 481,185,800.06 $ 481,129,063.95 $ 451,006,190.00 $ 2,646,445.75 Repurchase Agreements $ - $ - $ - $ -
Reverse Repurchase $ - $ - $ - $ -
Time Deposits $ 4,909,000,000.00 $ 4,909,000,000.00 $ 4,909,000,000.00 NA PMIA & GF Loans $ 367,981,000.00 $ 367,981,000.00 $ 367,981,000.00 NA TOTAL $ 222,851,378,049.39 $ 223,222,672,749.15 $ 218,928,083,162.07 $ 362,564,970.05 Fair Value Including Accrued Interest $ 219,290,648,132.12 Repurchase Agreements, Time Deposits, PMIA & General Fund loans, and Reverse Repurchase agreements are carried at portfolio book value (carrying cost).
The value of each participating dollar equals the fair value divided by the amortized cost (0.980760962).
As an example: if an agency has an account balance of $20,000,000.00, then the agency would report its participation in the LAIF valued at $19,615,219.23 or $20,000,000.00 x 0.980760962.
State of California
Pooled Money Investment Account
Market Valuation
9/30/2022
5 4.11.a
Packet Pg. 217
Attachment: Treasurer's Investment Report - September 2022 (3034 : Treasurer's Report for September 2022) Pooled Money Investment Account
Portfolio as of 09-30-2022
1 day 31 days 61 days 91 days 121 days 151 days 181 days 211 days 271 days 1 year 2 years 3 years 4 years to to to to to to to to to to to to to
ITEM 30 days 60 days 90 days 120 days 150 days 180 days 210 days 270 days 1 year 2 years 3 years 4 years 5 year/outTREASURY $ 10,050 10,700 $ 9,800 $ 5,750$ 8,600$ 12,650 $ $ 1,150 9,150$ 20,100 $ 43,000$ 16,950 $ 800 $ $ 300 $ 66.43% 149,000 AGENCY2 $ 4,200$ 7,685 3,625$ 3,156$ 3,400$ 4,475$ 2,300$ 4,660$ 3,865$ 3,755$ 2,725 $ $ 1,000 $ 350 $ 45,196 20.15% CDs + BNs $ 4,510 1,400$ 1,950$ 1,700$ 1,650$ 1,300$ 1,400$ 50$ 400 $ $ 14,360 6.40% CP $ 3,050 2,450$ 1,550$ 1,450$ 750$ 900$ $ 200 $ 10,350 4.61% TDs $ 1,239 694$ 1,502$ 567$ 204$ $ 704 $ 4,909 2.19%
CORP BND $ 55 20$ 25$ 25$ 79 $ 123$ $ 74 $ 75 $ 0.21% 476 REPO $ 0.00% -BAs $ 0.00% -
TOTAL 27,183 $ $ 18,794 18,427$ 12,678$ 14,604$ 20,049$ $ 13,860 5,075 $ 24,390$ 46,834$ 19,798 $ 1,874 $ $ 224,291 725 $ 100.00% Percent 12.12% 8.38% 8.22% 5.65% 6.51% 8.94% 2.26% 6.18% 10.87% 20.88% 8.83% 0.84% 0.32% Cumulative % 12.12% 20.50% 28.71% 34.37% 40.88% 49.82% 52.08% 58.26% 69.13% 90.01% 98.84% 99.68% 100.00% 1 Figures are rounded to the nearest million. Percentages may be off due to rounding. Totals do not include PMIA and General Fund loans. 2 SBA Floating Rate Securities are represented at coupon change date. Mortgages are represented at current book value.
PAR VALUES MATURING BY DATE AND TYPE
Maturities in Millions of Dollars1
Total Weight (%
of Total)
6 4.11.a
Packet Pg. 218
Attachment: Treasurer's Investment Report - September 2022 (3034 : Treasurer's Report for September 5 FedFund (Institutional shares)
October 2022 Factsheet
BlackRock Liquidity Funds
Investment objective
* Sources: BlackRock, Inc. and JP Morgan.
The investment advisor and/or other service providers for the BlackRock FedFund (Institutional Shares) sometimes waive a portion of their fees or reimburse expenses to the Fund. When they do, operating expenses are reduced and total returns to shareholders in the Fund increase. These waivers and reimbursements can be discontinued at any time. Without such waivers and reimbursements, which were in effect for all or a portion of the period shown, the 7-day SEC yield would be 2.86%2. 7-day SEC yield as of 10/31/22 was 2.87%2.
% Net total return3 (9/30/22)
Performance data represents past performance and does not guarantee future results. Yields will vary. Current performance may be lower or higher than the performance data quoted. Please call 800- 441-7450 or log on to www.blackrock.com/cash to obtain
performance data current to the most recent month-end.
% Maturity distribution (days)
Not FDIC Insured ▪ No Bank Guarantee ▪ May Lose Value
Fund details
Symbol TFDXX
Size $146,146.4 million
Inception October 1, 1975
Strategy Government
Fund type Institutional
NAV type Constant
Minimum investment $3 million
Trading deadline 5pm (ET)
Weighted average maturity (WAM)4 17 days
Weighted average life (WAL)5 41 days
Standard and Poor’s6 AAAm
Moody’s6 Aaa-mf
Gross expense ratio † 0.19%
Net expense ratio † 0.17%
CUSIP # 09248U700
Portfolio # 0081
†
Expenses are as of the most current prospectus. Investment dividend expense, interest expense, acquired fund fees and expenses and certain other fund expenses are included in the Net. BlackRock may contractually agree to waive or reimburse certain fees and expenses until a specified date. Contractual waivers are terminable upon 90 days’ notice by a majority of the fund’s non-interested trustees or by a vote of the majority of the outstanding voting securities of the fund. The investment advisor and/or other service providers may also voluntarily agree to waive certain fees and expenses which can be discontinued at any time without notice. When waivers or reimbursements are in place, the operating expenses are reduced and total returns to the shareholder in the fund increase. Please see the prospectus for additional information.
Asset allocation %‡
‡ Does not reflect other receivables and payables.
FedFund seeks as high a level of current income as is consistent with liquidity and stability of principal.
Investment policy
FedFund invests at least 99.5% of its total assets in cash, U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, and repurchase agreements secured by such obligations or cash.
Performance (30-day yield %)*, 1
0.03 0.02 0.03 0.03 0.13 0.28
0.65 1.01
1.45 2.00
2.31 2.83
0.00 0.50
1.00 1.50
2.00 2.50
3.00 11/2112/21
1/222/223/224/225/226/227/228/229/22
10/22
74.9 0.6 1.1 2.8 1.3 6.2 1.6
11.5 0
20 40
60 80
100
1-7 8-14 15-30 31-60 61-90 91-120 121-150 > 150
63.6 19.0
12.3 5.1
0 10 20 30 40 50 60 70
U.S. Treasury Repo Agreement
U.S. Treasury Debt
U.S. Gov't Agency Repo Agreement
U.S. Gov't Agency Debt
1 year 3 year 5 year 10 year Since inception
0.66 0.49 1.03 0.60 2.84
7 4.11.a
Packet Pg. 219
Attachment: Treasurer's Investment Report - September 2022 (3034 : Treasurer's Report for September 2022) 6 Important Notes
You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment fund strategy. The opinions expressed may change as subsequent conditions vary.
This material must be preceded or accompanied by a prospectus (https://www.blackrock.com/cash/literature/prospectus/pro-brliquidityinstitutionalshares-feb.pdf). 1 Average annualized 30-day SEC yields are based on net investment income excluding distributed gains or losses for the period shown. Past performance is no guarantee of future results. Yields will fluctuate as market conditions change. 2 The 7-Day yield is computed in accordance with methods prescribed by the SEC. The 7-Day SEC yield excludes distributed capital gains/losses. 3 The fund’s current yield more closely reflects the current earnings of the fund than the total net return quotations. 4 Weighted Average Maturity: Calculated by the final maturity for a security and the interest rate reset date held in the portfolio. This is a way to measure a fund’s sensitivity to potential interest rate changes. 5 Weighted Average Life: Measurement of a fund’s sensitivity to a deteriorating credit environment; potential credit spread changes or tightening liquidity conditions.
The WAL calculation is based on a security’s stated final maturity date or, when relevant, the date of the demand feature when the fund may receive payment of principal and interest. 6 BlackRock provides compensation in connection with obtaining or using third-party ratings and rankings. The Fund is currently rated by S&P and Moody’s. Ratings by S&P and Moody’s apply to the credit quality of a portfolio and are not a recommendation to buy, sell or hold securities of a Fund, are subject to change, and do not remove market risks associated with investments in the Fund. For complete information on the methodology used by each rating agency, please visit the following websites.
S&P - http://www.standardandpoors.com/en_US/web/guest/article/-/view/sourceId/504352; Moody’s - https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
All portfolio information provided is as of October 31, 2022 unless otherwise noted, and is subject to change.
Prepared by BlackRock Investments, LLC, member FINRA
FOR MORE INFORMATION: Visit www.blackrock.com/cash or email [email protected] ©2022 BlackRock, Inc. All rights reserved. BLACKROCK, is a registered trademark of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other marks are the property of their respective owners. 8 4.11.a
Packet Pg. 220 Attachment: Treasurer's Investment Report - September 2022 (3034 : Treasurer's Report for September 2022) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: December 13, 2022
TO: Mayor and Council Members
FROM: Irwin Bornstein
Interim Finance Director
ISSUE: Annual Review of Investment & Portfolio Policies and Delegation of Investment Authority to the City Treasurer
RECOMMENDATION: That the City Council adopt a Resolution entitled: "A Resolution of the City Council of the City of Laguna Hills, California, delegating investment authority to the City Treasurer and approving a policy for the investment of surplus City funds and rescinding Resolution No. 2021-12-14-4." SUMMARY:
State law specifies that the treasurer or chief fiscal officer of the local agency may annually render to the legislative body of that local agency and any oversight committee of that local agency a statement of investment policy, which the legislative body of the local agency shall consider at a public meeting. The City’s current Investment and Portfolio Policies require that the policies be annually reviewed and adopted by resolution of the City Council. State law also allows the City Council to delegate its investment authority to the City Treasurer for up to one year at a time.
Staff has reviewed the City’s 2022 Investment and Portfolio Policies and is recommending just one change to the existing policies for 2023:
1. Update to Section VIII. “Reporting”
Staff proposes that the frequency of the Treasurer’s investment reports be changed from quarterly to monthly. To facilitate a monthly reporting process, staff will be reducing the length of the report, while still including all of the information required by State law and Council policy.
4.12 Packet Pg. 221
2023 Investment Policy
December 13, 2022
The existing Investment and Portfolio Policies continue to comply with State law and are consistent with the recommended best practices promulgated by the Government Finance Officers Association.
A Resolution to adopt the 2023 Investment and Portfolio Policies and delegate the investment authority to the City Treasurer for the year 2023 is attached. Staff is recommending approval.
ATTACHMENTS:
• Proposed Resolution - Investment Policy 2023
• Attachment A - Proposed 2023 Investment Policy
4.12 Packet Pg. 222
RESOLUTION NO. 2022-12-13-X
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAGUNA HILLS, CALIFORNIA, DELEGATING
INVESTMENT AUTHORITY TO THE CITY TREASURER
AND APPROVING A POLICY FOR THE INVESTMENT OF
SURPLUS CITY FUNDS AND RESCINDING RESOLUTION
NO. 2021-12-14-4
WHEREAS, pursuant to Laguna Hills Municipal Code Section 2-16.020, the City Council has appointed the City Manager as the City Treasurer; and WHEREAS, pursuant to Government Code Section 53607, the City Council may delegate its investment authority to the City Treasurer for up to one year; and WHEREAS; pursuant to Government Code Section 53646, the City Council of the City of Laguna Hills, has publicly considered an annual statement of investment policy and desires to adopt such policy to guide the investment management of the Deputy Treasurer under the supervision of the City Treasurer.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA
HILLS, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
SECTION 1. This Resolution rescinds Resolution No. 2021-12-14-4.
SECTION 2. The City Council hereby delegates investment authority to the City Treasurer.
SECTION 3. The City Council hereby adopts the investment policy, attached hereto as Exhibit “A” and incorporated herein by this reference.
SECTION 4. The effective date of this Resolution is January 1, 2023.
PASSED, APPROVED, AND ADOPTED this 13
th day of December 2022.
____________________________________
, MAYOR
ATTEST:
______________________________________
JENNIFER LEE, CITY CLERK
4.12.a
Packet Pg. 223 Attachment: Proposed Resolution - Investment Policy 2023 (3026 : 2023 Investment Policy) Resolution No. 2022-12-13-X
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF LAGUNA HILLS )
I, Jennifer Lee, City Clerk of the City of Laguna Hills, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. 2022-12-13-X adopted by the City Council of the City of Laguna Hills, California, at a Regular Meeting thereof held on the 13
th day of December, 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
(SEAL)
_____________________________________
JENNIFER LEE, CITY CLERK
4.12.a
Packet Pg. 224 Attachment: Proposed Resolution - Investment Policy 2023 (3026 : 2023 Investment Policy) 2023 INVESTMENT & PORTFOLIO POLICY
CITY OFLAGUNA HILLS
4.12.b
Packet Pg. 225 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy) .
.
.
.
.
.
.
.
.
Investment and Portfolio Policies
Calendar Year 2023
TABLE OF CONTENTS
I. Policy ...................................................................................................... 1 II. Scope ..................................................................................................... 1 III. Objectives............................................................................................... 1 IV. Standards of Care................................................................................... 3 V. Safekeeping and Custody ...................................................................... 4 VI. Authorized and Suitable Investments..................................................... 5 VII. Competitive Selection of Investment Instrument.................................... 7 VIII. Reporting................................................................................................. 7 IX. Annual Investment Policy and Adoption................................................. 8 Appendix A - Glossary of Terms.................................................................. 9
4.12.b
Packet Pg. 226 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
I Policy
It is the Policy of the City of Laguna Hills to invest in a manner, which will ensure the safety of public funds by mitigating credit and interest rate risk, and provide sufficient liquidity to meet all operating requirements. The City shall also strive to attain a return on investment that is reasonable given that safety of principal and liquidity are the primary objectives in these policies and yield is secondary. The investment program shall be operated in conformity with federal, state and other legal requirements, including the State of California Government Code Section 53601, et, seq., these policies and written administrative procedures.
II Scope
This investment policy applies to the investment of all funds of the City and the City of Laguna Hills Public Improvement Corporation, including the following:
General Fund
Special Revenue Funds
Capital Projects Funds
Funds Held Under Trust Indenture
These funds are accounted for in the City’s Annual Comprehensive Financial Report.
Except for cash in certain restricted and special funds, the City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.
Investments under the trust indenture will be held separately and made in accordance with the indenture requirements.
III Objectives
Funds of the City will be invested, by the City Treasurer, or authorized deputies of the Treasurer (hereinafter collectively referred to as “the Treasurer”) in accordance with these policies and written administrative procedures. The primary objectives, in priority order, of investment activities shall be:
1) Safety
Safety of principal is the foremost objective of the City’s investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio and the mitigation of credit risk and interest rate risk.
a) Credit Risk
Credit Risk is the risk of loss due to the failure of the security issuer or backer.
Credit Risk may be mitigated by:
4.12.b
Packet Pg. 227 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
i. limiting investments to the safest types of securities listed under Section VI herein, which shall be limited to those investments backed by the U.S. Government, or an agency thereof, overnight accounts managed by the City’s primary bank, the Local Agency Investment Fund (LAIF), and other specific investments described in Section VI; ii. diversifying the portfolio to avoid concentration of securities from a specific issuer, except issuers of U.S. Treasury securities, so that the failure of any one issuer will not place an undue financial burden on the City;
iii. monitoring all of the City’s investments on a frequent basis to anticipate and respond accordingly to a significant reduction of creditworthiness of any of the depositories, including the City’s primary bank; and iv. performing appropriate due diligence to assure the credit worthiness of any portfolio investment made.
b) Interest Rate Risk
Interest rate risk is the risk that the market value of securities in the portfolio will fall due to changes in general interest rates. To reduce interest rate risk, the City shall limit the maximum maturity horizon of the securities that comprise its portfolio, keeping in mind that the longer the maturity horizon, the greater the price volatility. In accordance with the Government Accounting Standards Board reporting requirements, the portfolio could show unrealized gains or losses for any reporting period.
Interest rate risk may be mitigated by:
i. structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity; and
ii. investing operating funds primarily in shorter-term securities. 2) Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands (static liquidity). Since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets (dynamic liquidity) and a portion of the portfolio should be invested in readily available funds, to ensure that appropriate liquidity is maintained to meet ongoing obligations.
3) Yield
The rate of return on the City’s investment portfolio is of secondary importance to the safety and liquidity objectives described above. The City’s investment strategy is passive and investments are limited to relatively low-risk securities in anticipation of earning a rate of return throughout
4.12.b
Packet Pg. 228 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
budgetary and economic cycles, commensurate with the City’s investment risk constraints and the cash flow characteristics of the portfolio.
The yield shall be designed to attain an average rate of return through market cycles. Although no “benchmark” rate of return is assumed, the portfolio’s yield shall be compared for reporting purposes to LAIF and the 3-month bank CD rate published by the Federal Reserve. These indices are considered benchmarks for lower risk investment transactions and therefore represent a comparable minimum standard for the portfolio’s rate of return.
IV Standards of Care
1) Prudence
The City’s investment portfolio is subject to public scrutiny and review and should be managed with due care and consideration. The portfolio should be created and maintained with the professionalism and care worthy of the public trust.
The standard of prudence to be applied to the Treasurer shall be the “prudent investor rule”, which states, “when investing, reinvesting, purchasing, acquiring, exchanging, selling, and managing public funds, a trustee (the governing body or Treasurer) shall act with care, skill, prudence, and diligence under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.” The Treasurer, acting in accordance with written procedures and exercising due diligence, shall not be held personally responsible for a specific security’s credit risk or market price changes, provided that these deviations are reported immediately and that appropriate action is taken to control adverse developments.
2) Ethics and Conflict of Interest
Employees of the City shall refrain from personal business activity that could conflict with the proper execution of the investment program, or which could impair their ability to make impartial investment decisions. State law, City statutes, and City personnel and purchasing practices shall be followed to avoid conflict of interest or the appearance thereof. Employees shall disclose any financial interests or personal relationships with any financial institutions, brokers or securities dealers that conduct business within its jurisdiction, and any personal financial/investment positions that could be related to their management of the portfolio. The Treasurer shall be prohibited from doing business with any broker or securities dealer with whom the City does business, with the exception of the City’s primary bank for banking services. Employees shall subordinate their personal investment transactions to those of the City, particularly with regard to the time of purchases and sales.
4.12.b
Packet Pg. 229 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
3) Delegation of Authority
Authority to manage the City’s investment program is delegated to the City Treasurer by Resolution of the City Council of the City of Laguna Hills, California. Management responsibility is hereby delegated to the Finance Director/Deputy Treasurer under the direction of the City Treasurer.
The Deputy Treasurer shall establish written procedures for the operation of the investment program consistent with this investment policy, together with a system of internal controls to regulate the activities of subordinates.
V Safekeeping and Custody
1) Authorized Financial Institutions, Depositories and Brokers/Dealers Investment transactions will be undertaken with securities dealers, brokers and depositories authorized to provide investment services. In addition, the City shall maintain a “Qualified Institution” list of approved security broker/dealers selected by creditworthiness, including the minimum capital requirement of $10 million and at least five years of operation. The City shall conduct periodic evaluations, or whenever deemed necessary, of each financial institution’s standing to determine whether it should remain on the “Qualified Institution” listing. Securities dealers not affiliated with a bank shall be required to be classified as reporting dealers affiliated with the New York Federal Reserve Bank, as primary dealers that qualify under Securities and Exchange Commission Rule 15C3-1 (uniform net capital rule).
All financial institutions and brokers/dealers who desire to become qualified for investment transactions with the City must supply the following:
1) Audited financial statements demonstrating compliance with State and Federal capital adequacy guidelines. Audited financial statements will be submitted annually to the City. 2) Proof of National Association of Securities Dealers (NASD) certification, except for counterparties in Certificates of Deposits transactions. 3) Proof of State Registration
4) Completed broker/dealer questionnaire, except for Certificates of Deposits counterparties. 5) Certification of having read and understood and agreeing to comply with the City’s Investment Policies, as well as to disclose potential conflicts or risks to public funds that might arise out of business transactions between the firm/depository and the City. 6) Evidence of adequate insurance coverage.
In addition, all financial institutions shall agree to undertake reasonable efforts to preclude imprudent transactions involving the City’s funds. The supervising officer shall agree to exercise due diligence in monitoring the activities of other officers and subordinate staff members engaged in transactions with the City. Employees of any firm or financial institution offering securities or
4.12.b
Packet Pg. 230 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
investments to the City shall be trained in the precautions appropriate to public-sector investment and shall be required to familiarize themselves with the City’s Investment and Portfolio Policies. 2) Internal Control
Treasurer shall establish a system of written internal control policies and procedures, which shall be reviewed annually by the independent auditor. The controls shall be designed to prevent loss of public funds due to fraud, error, misrepresentation, unanticipated market changes or imprudent actions.
3) Delivery vs. Payment
All trades where applicable will be executed by delivery vs. payment (DVP). This ensures that securities are deposited in the eligible financial institution prior to the release of funds. A third party custodian or the trust department of the City’s primary bank will hold securities. Evidence of safekeeping shall be in the form of safekeeping receipts and monthly statements reporting the securities held by the institution.
VI Authorized and Suitable Investments
1) Investment Types
Investment of City funds are restricted to the following instruments that shall mature within one year from the time of purchase unless otherwise stated:
a) U.S. Treasury bills.
b) U.S. Treasury notes or bonds.
c) Insured or fully collateralized certificates of deposit issued by a qualified Public Depository Institution of the State of California.
d) Money market mutual funds whose portfolios consist entirely of U.S. government securities and are rated at the highest letter or numerical rating from at least two of the three largest nationally recognized rating services, or which retain an Investment advisor meeting requirements specified in Government Code Section 53601(k)(2). e) State Treasurer’s Local Agency Investment Fund.
f) Overnight Government Securities (U.S. Treasuries, Agencies, and Instrumentalities) Investment Account managed by the City’s primary bank.
g) Overnight Commercial Paper Investment Account managed by the City’s primary bank. h) Overnight repurchase agreements managed by the City’s primary bank where the market value of the securities underlying the repurchase agreement is 102 percent or greater than the value of funds borrowed.
i) Commercial Paper rated a minimum of “P-1” by Moody’s and “A-1” by Standard and Poor’s, or equivalent, as provided by a nationally recognized rating agency, maturing not more that 180 days after the date of purchase. The issuer is a corporation organized and operating in the United States with assets in excess of $500 million.
4.12.b
Packet Pg. 231 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
j) Prime Bankers’ Acceptances with a maximum term of 270 days and a rating of “P-a” by Moody’s and “A-1 +” by Standard and Poor’s or equivalent as provided by a nationally recognized rating agency issued within the U.S. by depository institutions. k) Investment Trust of California, a Joint Powers Authority, doing business as CalTRUST In all instances, the City will not purchase the aforementioned instruments by the use of leveraged or margin accounts or by taking short positions in any investment instrument; i.e., selling investments the City does not own.
Investments of funds held under a trust indenture may have maturities up to two years in duration. 2) Portfolio Diversification
The City will diversify use of investment instruments to avoid incurring unreasonable risks inherent in over investing in specific instruments, individual financial institutions or maturities.
DIVERSIFICATION BY INVESTMENTS
Maximum
Percent of
Portfolio
U.S. Treasury Obligations (bills, notes and bonds) 50%
Certificates of Deposit (CDs) Commercial Banks 50%
Certificates of Deposit (CDs) Savings and Loan 25%
State Treasurer’s Local Agency Investment Fund 75%
CalTRUST
Overnight investment accounts managed by
City’s primary bank
75%
50%
Commercial Paper 10%
Banker’s Acceptances 15%
Money Market Mutual Funds 15%
DIVERSIFICATION BY INSTITUTION/ISSUER
Maximum
Percent of
Portfolio
Certificates of Deposit (CDs) Commercial Banks 25%
Certificates of Deposit (CDs) Savings and Loan $250,000 maximum
4.12.b
Packet Pg. 232 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
3) Maximum Maturities
Investment maturities for operating funds shall be scheduled to coincide with projected cash flow needs, taking into account large routine expenditures as well as considering sizable blocks of anticipated revenue.
4) Collateralization
Collateralization will be required on repurchase agreements in order to anticipate market changes and provide a level of security for all funds.
For certificates of deposits greater than $250,000, collateral will be required at 110% of principal for government securities collateral, and 150% of principal for first mortgage collateral. Certificates of deposits for $250,000 or less, inclusive or earned interest at maturity may be invested in any FDIC insured commercial bank or savings and loan accounts.
Collateral will always be held by an independent third party, or the trust departments of the City’s primary bank. A clearly marked evidence of ownership, such as safekeeping receipt and monthly statement of securities held must be provided to the City.
VII Competitive Selection of Investment Instruments
When purchasing or selling securities, the Treasurer shall select the security which provides the highest rate of return within the parameters of these policies and according to the current objectives and needs of the City’s portfolio. The Treasurer, at his discretion, may purchase investments through the investment or trust department of the City’s primary bank without soliciting proposal forms to other banks or broker/dealers. The City Treasurer may also purchase investments using a competitive process by soliciting proposals from the financial dealers in the “Qualified Institutions” list.
If a specific maturity date is required, either for cash flow purposes or for conformance to maturity guidelines, bids will be requested for instruments, which meet the maturity requirement. If no specific maturity is required, a market trend (yield curve) analysis will be conducted to determine which maturities would be most advantageous. Selection by comparison to a current market price may be utilized when, in the judgment of the Treasurer, competitive bidding would inhibit the selection process.
VIII Reporting
The Treasurer shall submit monthly investment reports to the City Council that summarizes recent market conditions, economic developments and anticipated investment conditions. The report shall summarize the investment strategies employed in the most recent quarter and describe the portfolio in terms of investment securities, maturities, risk characteristics and other pertinent features. The report shall explain the quarter’s total investment return and compare the return on LAIF and the 3-month bank CD rate published by the Federal Reserve. The report shall disclose all transactions during the quarter.
4.12.b
Packet Pg. 233 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
As part of the City’s annual audit, the independent auditor shall evaluate investment performance and conduct an operations audit. The purpose of these examinations shall be to obtain suggestions for improved future performance, and to verify that the Treasurer has acted in accordance with this investment policy and written investment procedures.
IX Annual Investment Policy and Adoption
The City’s investment policy shall be annually reviewed and adopted by resolution of the City Council of the City of Laguna Hills, California. The policy and the related internal control procedures shall be reviewed annually by the City’s independent auditors, and any modifications to the policy must be approved by the City Council.
4.12.b
Packet Pg. 234 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
Appendix A–Glossary of Terms
ACCRUED INTEREST: Interest earned but not yet received.
ACTIVE DEPOSIT: Funds which are immediately required for disbursement.
AGENCIES: Federal agency securities and/or government-sponsored enterprises.
AMORTIZATION: An accounting practice of gradually decrease/increasing an asset’s book value by spreading its depreciation/accretion over a period of time.
ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR): The official annual report of the City. It is the set of financial statements for a state, municipality or other governmental entity that comply with the accounting requirements established by the Governmental Accounting Standards Board (GASB). It includes combined statements prepared in conformity with Generally Accepted Accounting Principles (GAAP). It also includes supporting schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed Statistical Section.
ASKED PRICE: The price at which securities are offered.
BANKERS’ ACCEPTANCE: a draft or bill exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer.
BASIS POINT: One one-hundredth of one percent (.01%)
BEAR MARKET: A period of generally pessimistic attitudes and declining market prices.
BENCHMARK: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and average duration of the portfolio’s investments.
BID PRICE: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid). See Offer Price and Asked Price.
BOND: A financial obligation for which the issuer promises to pay the bondholder a specified stream of future cash flows, including periodic interest payments and a principal repayment.
BOND EQUIVALENT YEILD: The basis on which yields on notes and bonds are quoted.
BOOK VALUE (COST VALUE): The purchase price at which a debt security is shown on the holder’s balance sheet. Book value is the purchase price less amortization of premium or plus accretion of discount.
BROKER: An individual or firm that brings buyers and sellers together for commission.
BULL MARKET: A period of time of generally optimistic attitudes and increasing market prices.
CALLABLES: Securities that the issuer has the right to redeem prior to maturity.
4.12.b
Packet Pg. 235 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large denomination CD’s are typically negotiable. CD’s may be eligible for FDIC insurance.
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.
CONSTANT MATURITY TREASURY (CMT): An average yield of a specific Treasury maturity sector for a specific time frame. This is a market index for reference of past direction of interest rates for a given Treasury maturity range.
COST VALUE (BOOK VALUE): The purchase price at which a debt security is shown on the holder’s balance sheet.
COUPON: a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on a bond’s face value; b) a certificate attached to a bond evidencing interest due on a payment date.
CREDIT ANALYSIS: A critical review and appraisal of the economic and financial conditions or of the ability to meet debt obligations.
CURRENT YIELD: The interest paid on an investment expressed as a percentage of the current price of the security.
CUSTODY: A banking service that provides safekeeping for the individual securities in a customer’s investment portfolio under a written agreement which also calls for the bank to collect and pay out income, to buy, sell, receive and deliver securities when ordered to do so by the principal.
DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account.
DEBENTURE: A bond secured only by the general credit of the issuer.
DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.
DEMAND DEPOSIT ACCOUNT: Accounts whose balance is available to meet immediate cash needs. Cash withdrawals can be made at any time.
DERIVATIVES: (1) Financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index(s) or security(s), and may include a leveraging factor, or (2) financial contracts based upon notional amounts whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities or commodities). Moreover, financial products that are dependent for their value on an underlying financial instrument, a commodity, or an index representing values of groups of such instruments or assets.
DISCOUNT: The difference between the cost price of a security and its maturity when quoted at a lower than face value. A security selling below original offering price shortly after sale is also considered to be at a discount.
4.12.b
Packet Pg. 236 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued 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.
DURATION: The weighted average maturity of a bond’s cash flow stream, where the present value of the cash flows serve as the weights; The future point in time at which on average, an investor has received exactly half of the original investment, in present value terms; A bond’s zero-coupon equivalent; The fulcrum of a bond’s present value cash flow time line.
FANNIE MAE: Trade name for the Federal National Mortgage Association (FNMA). See FNMA.
FED WIRE: A wire transmission service established by the Federal Reserve Bank to facilitate the transfer of funds through debits and credits of funds between participants within the Fed system.
FEDERAL CREDIT AGENCIES: Agencies of the Federal Government set up to supply credit to various classes of institutions and individuals, e.g., Savings and Loans, small business firms, students, farm cooperatives, and exporters.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits, currently up to $250,000 per entity; Insurance provided to customers of a subscribing bank, which guarantees deposits to a set limit.
FEDERAL FUNDS RATE: The rate of interest at which Federal funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations.
FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks, which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLBs is to liquefy the housing related assets of its members who must purchase stock in their district bank.
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC): The FHLMC was created under the Federal Home Loan Mortgage Act, Title III of Emergency Home Finance Act of 1970, as a stockholder owned government-sponsored enterprise. Freddie Mac, as the corporation is called, is charged with providing stability and assistance to the secondary home mortgage market by buying first mortgages and participation interests and reselling these securities in the form of guaranteed mortgage securities. Although agency obligations are not explicitly guaranteed by the federal government, the rating agencies believe that in the unlikely event of financial difficulties, the federal government will support the agency to the extent necessary to provide for full and timely payment on their securities.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA, like GNMA, was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation’s purchases included a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.
4.12.b
Packet Pg. 237 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money.
FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system.
FINANCIAL ADVISOR: A firm of bank that acts in a financial advisory capacity with respect to a new issue of municipal securities pursuant to a written contract.
FISCAL AGENT/SPONSOR: a) A fiscal agent, fiscal sponsor, or financial agent is a proxy that manages fiscal matters on behalf of another party. b) A financial institution with trust powers which acts in a fiduciary capacity for the benefit of the bondholders in enforcing the terms of the bond contract. A fiscal agent may assist in the redemption of bonds or coupons at maturity, disbursing dividends, and handling tax issues. For example, the United States Federal Reserve is the fiscal agent of the federal government of the United States.
FREDDIE MAC: The trade name for the Federal Home Loan Mortgage Corporation. See FHLMC.
GINNIE MAE: The trade name for the Government National Mortgage Association. See GNMA.
GOVERNMENT ACCOUNTING STANDARDS BOARD: The independent organization that establishes and improves standards of accounting and financial reporting for U.S. state and local governments.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA): Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. Security holder is protected by the full faith and credit of the U.S.
Government. Ginnie Mae, as these securities are called, are backed by the FHA, VA, or FmHA mortgages.
The term “pass-throughs” is often used to describe Ginnie Maes.
INACTIVE DEPOSITS: Funds not immediately needed for disbursements.
INTEREST RATE: The annual yield earned on an investment, expressed as a percentage.
INVESTMENT AGREEMENTS: An agreement with a financial institution to borrow public funds subject to certain negotiated terms and conditions concerning collateral, liquidity and interest rates.
LIQUIDITY: Refers to the ability of an asset to be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done on these quotes.
LOCAL AGENCY INVESTMENT FUND (LAIF): The Local Agency Investment Fund (LAIF), is a voluntary program created by statute; began in 1977 as an investment alternative for California's local governments and special districts and it continues today under the California State Treasurer's administration. The enabling legislation for the LAIF is Section 16429.1 et seq. of the California Government Code. This program offers local agencies the opportunity to participate in a major portfolio, which invests hundreds of millions of dollars, using the investment expertise of the State Treasurer's Office investment staff at no additional cost to the taxpayer.
4.12.b
Packet Pg. 238 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
This in-house management team is comprised of civil servants. The Local Investment Advisory Board (LIAB) provides oversight for LAIF. The LAIF is part of the Pooled Money Investment Account (PMIA).
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 presumably be sold.
MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties repurchase/reverse repurchase agreement that establishes each party’s in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller borrower.
MATURITY: The date upon which the principal or stated value of an investment becomes due and payable.
MONEY MARKET MUTUAL FUNDS: Open-ended mutual fund that invests in commercial paper, bankers’ acceptances, repurchase agreements, government securities, certificates of deposit, and other highly liquid and safe securities, and pays money market rates of interest. The fund’s net asset value remains a constant $1/share, with the interest rate increasing or decreasing.
NATIONAL RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO): A rating organization designated by the SEC as being nationally recognized.
NEW ISSUE: Term used when a security is originally “brought” to market.
OFFER PRICE: The price at which a broker/dealer/seller will offer securities to an investor. See Asked Price and Bid Price.
OPEN MARKET OPERATIONS: Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC, in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; Sales have the opposite effect. Open market operations are the Federal Reserve’s most important and most flexible monetary policy tool. Under the Federal Reserve Act, the Fed uses purchases and sales of government and Federal Agency securities to add to or subtract from commercial bank reserves.
Goals are to sustain economic growth, high employment, and reasonable price stability.
PAPER GAIN OR LOSS: Term used for unrealized gain or loss on securities being held in a portfolio based on comparison of current market quotes and their original cost. This situation exists, as long as the security is held while there is a difference between cost value (book value) and the market value.
PERFECTED DELIVERY: Refers to an investment where the actual security or collateral is held by an independent third party representing the purchasing entity.
POOLED MONEY INVESTMENT ACCOUNT (PMIA): The PMIA began in 1955 and oversight is provided by the Pooled Money Investment Board (PMIB) and an in-house Investment Committee. The Investment Division of the State Treasurer’s Office manages the PMIA under statutory authority granted by California Government Code sections 16430 and 16480.4. The Pooled Money Investment Board governs the PMIA. The State Treasurer chairs the Board, which also includes the State Controller and the State Director of Finance. Through PMIA, the State Treasurer invests taxpayers’ money to manage the State’s cash flow and strengthen the
4.12.b
Packet Pg. 239 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
financial security of local governmental entities. The PMIA has three primary sources of funds: the State general fund; special funds held by State agencies; and moneys deposited by cities, counties and other entities into the Local Agency Investment Fund (LAIF).
PORTFOLIO: Collection of securities held by an investor.
PRIMARY DEALER: A group of government securities dealers who submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker-dealers, banks, and a few unregulated firms.
PRUDENT 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 which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital, PURCHASE DATE: The date in which a security is purchased for settlement on that or a later date.
QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits.
RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price.
This may be the amortized yield to maturity on a bond or the current income return.
REPURCHASE AGREEMENT (RP or REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the agreement are structured to compensate for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to do be doing RP, it is lending money, that is, increasing bank reserves.
REVERSE REPURCHASE AGREEMENT (Reverse REPO): A reverse-repurchase agreement (reverse repo) involves an investor borrowing cash from a financial institution in exchange for securities. The investor agrees to repurchase the securities at a specified date for the same cash value plus an agreed upon interest rate.
Although the transaction is like a repo, the purpose of entering into a reverse repo is quite different. While a repo is a straightforward investment of public funds, the reverse repo is borrowing.
RISK: Degree of uncertainty of return on an asset.
SAFEKEEPING: a) The service provided by banks and trust companies for clients when the bank or trust company stores the securities, takes in coupon payments, and redeems issues at maturity b) A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in a bank’s vaults for protection. See custody.
SEC RULE 15(C)3-1: See Uniform Net Capital Rule. Also called Net Capital Rule and Net Capital Ratio.
SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following the initial distribution.
4.12.b
Packet Pg. 240 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy)
CITY OF LAGUNA HILLS
INVESTMENT AND PORTFOLIO POLICIES
2023
SECURITIES AND EXCHANGE COMMISSION (SEC): Agency created by Congress to protect investors in securities transactions by administering securities legislation.
SETTLEMENT DATE: The date at which a trade is cleared by delivery of securities against funds.
SPREAD: a) The yield or price difference between the bid and offer on an issue. b) The yield or price difference between issues.
STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, etc.) and Corporations that have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivatives-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options, and shifts in the shape of the yield curve.
SWAP: The sale of one issue and the simultaneous purchase of another for some perceived advantage.
TREASURY BILLS: A non-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 BONDS: Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than ten (10) years.
TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two (2) to ten (10) years.
TRUST COMPANY: A trust company is a legal entity that acts as a fiduciary or agent on behalf of a person or business, for the purpose of administration, management and the eventual transfer of assets to a beneficial party. The trust company acts as a custodian for trusts, estates, custodial arrangements, asset management, stock transfer, beneficial ownership registration and other related arrangements. See Trustee.
TRUSTEE: A financial institution with trust powers that act in a fiduciary capacity for the benefit of the bondholders in enforcing the terms of the bond contract. See Trust Company.
U.S. GOVERNMENT AGENCIES: Instruments issued by various U.S. Government Agencies most of which are secured only by the credit worthiness of the particular agency.
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 SEC RULE 15(C)3-1, 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 are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.
YIELD: The rate of annual income return on an investment, expressed as a percentage. a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. b) YIELD AT 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.
YIELD CURVE: Yield calculations of various maturities at a given time to observe spread difference.
4.12.b
Packet Pg. 241 Attachment: Attachment A - Proposed 2023 Investment Policy (3026 : 2023 Investment Policy) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: December 13, 2022
TO: Mayor and Council Members
FROM: Jarad Hildenbrand
City Manager
ISSUE: Resolution Recognizing a Time Capsule at the Community Center and Directing Future City Councils to Open the Time Capsule on the City’s 60TH Anniversary and 100TH Anniversary
RECOMMENDATION: That the City Council: 1) Adopt a Resolution entitled: “A Resolution of the City Council of the City of Laguna Hills, California, recognizing the time capsule at the Community Center and recommending future City Councils to open the time capsule on the 60th and 100th anniversaries of the City of Laguna Hills.”; and 2) Approve the inventory submitted by the Heritage Day Ad Hoc Committee.
SUMMARY:
A time capsule containing items of significance pertaining to the City’s 30th Anniversary will be enclosed at the Community Center. The City’s Heritage Day Ad Hoc Committee, Laguna Hills Chamber of Commerce, and Moulton Museum compiled a number of items from residents and interested parties and placed them in the capsule. At a meeting on Tuesday, December 6, 2022, the Heritage Day Ad Hoc Committee, representatives from Laguna Hills Chamber of Commerce and Moulton Museum, approved the inventory of items placed the time capsule. That inventory is attached as Exhibit A to the proposed resolution.
In December 2022, the time capsule will be buried at the Community Center; to be opened on the City’s 60th anniversary on December 20, 2051. The attached Resolution requests that a future Laguna Hills City Council open the time capsule on December 20, 2051, or at mutually acceptable date in order to commemorate the City’s 60th Anniversary. The Resolution also requests that the 2051 City Council add to and
4.13 Packet Pg. 242
Time Capsule
December 13, 2022
rebury the time capsule for another 40 years to be unearthed by the 2091 City Council in celebration of the City’s 100th Anniversary.
ATTACHMENTS:
• Proposed Resolution - Time Capsule and Inventory
4.13 Packet Pg. 243
RESOLUTION NO. 2022-12-13-x
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAGUNA HILLS, CALIFORNIA, RECOGNIZING THE TIME
CAPSULE AT THE COMMUNITY CENTER AND
RECOMMENDING FUTURE CITY COUNCILS TO OPEN
THE TIME CAPSULE ON THE 60TH AND 100TH
ANNIVERSARIES OF THE CITY OF LAGUNA HILLS
The City Council of the City of Laguna Hills, California, hereby finds, determines, declares, and resolves as follows:
WHEREAS, on December 20, 1991, the City of Laguna Hills was officially incorporated as a general law City in the State of California; and WHEREAS, due to the coronavirus (COIVD) pandemic and related restrictions, the City of Laguna Hills celebrated its 30th Anniversary during the 2022 calendar year; and
WHEREAS, in December 2022, the City will bury the 30th Anniversary time capsule near the butterfly garden at the Laguna Hills Community Center & Sports Complex; and
WHEREAS, the time capsule contains items of significance, inventoried in Exhibit “A”, related to the City of Laguna Hills compiled by the Heritage Day Ad Hoc Committee, Laguna Hills Chamber of Commerce and Moulton Museum; and WHEREAS, the City Council believes it would be appropriate and fitting for a future City Council to unearth the time capsule 30 years from now, on the City’s 60th Anniversary, December 20, 2051, or on a mutually acceptable date to the then City Council; and
WHEREAS; the City Council further believes that the 2051 City Council should add to the time capsule and rebury it for 40 years to be unearthed again by the 2091 City Council on the City’s 100th Anniversary, December 20, 2091, or on a mutually acceptable date to the then City Council; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA
HILLS, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
SECTION 1. That the City Council of 2022 hereby asks the City Council of 2051 to unearth the time capsule on December 20, 2051, or on a mutually agreed upon date, to share its contents with the community and commemorate the 60th Anniversary of the City of Laguna Hills.
4.13.a
Packet Pg. 244 Attachment: Proposed Resolution - Time Capsule and Inventory (3036 : Time Capsule) Resolution No. 2022-12-13-x
SECTION 2. That the City Council of 2022 further asks that the City Council of 2051 add to and rebury the time capsule for another 40 years, and asks the City Council of 2091 to unearth the time capsule on December 20, 2091, or on a mutually agreed upon date, to share its contents with the community and commemorate the 100th Anniversary of the City of Laguna Hills.
PASSED, APPROVED, AND ADOPTED this 13th day of December, 2022. ____________________________________
, MAYOR
ATTEST:
______________________________________
JENNIFER LEE, CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF LAGUNA HILLS )
I, Jennifer Lee, City Clerk of the City of Laguna Hills, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. 2022-12-13-x adopted by the City Council of the City of Laguna HiIls, California, at a Regular Meeting thereof held on the 13th day of December, 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
(SEAL)
_____________________________________
JENNIFER LEE, CITY CLERK
4.13.a
Packet Pg. 245 Attachment: Proposed Resolution - Time Capsule and Inventory (3036 : Time Capsule) Resolution No. 2022-12-13-x
Exhibit A
Inventory of Time Capsule Contents
• Laguna Hills High School 2022 Yearbook
• Lomarena Elementary School 2022 Yearbook
• Valencia Elementary School 2022 Yearbook
• San Joaquin Elementary School 2022 Yearbook
• Laguna Hills Little League hat
• 2022 Laguna Hills Little League 50-Year booklet
• Laguna Hills Hawks Football Fill-Ins for September 2, 2022 • Laguna Hills Hawks 2022 Yearbook
• Nellie Gail Ranch drink coaster
• Set of bolts and washers
• City of Laguna Hills Invoice for the purchase of the Time Capsule • Copy of Customer Receipts from Laguna Hills businesses in 2022 • Billboard Top 50 Songs of 2022
• IMDB Top 100 Movies of 2022
• 2022 Certified General Election Results for Laguna Hills from Orange County Registrar of Voters
• The Pony Express Magazine for May 2022
• Moulton Museum Grand Opening bandana
• Moulton Museum Grand Opening flyer
• Moulton Museum Grand Opening Passport Booklet
• Gifted pictures from Moulton Museum
• Costco Savings Booklet for September 2022
• Meet the Mayors Magazine 2022-2023
• Orange County Business Journal November 2022
• Laguna Hills Chamber of Commerce 2022 2nd Annual Car Show flyer • The Coast Village Market 2022 event flyer
• Village at Laguna Hills community flyer
4.13.a
Packet Pg. 246 Attachment: Proposed Resolution - Time Capsule and Inventory (3036 : Time Capsule) Resolution No. 2022-12-13-x
• Laguna Hills student forms 2022
• Shane Bieber signed MLB baseball card
• Shane Bieber MLB All-Star Game MVP photo
• 2022 General Election Voter Information Guide
• City of Laguna Hills 2022 First Annual Heritage Day Save the Date • City of Laguna Hills 2022 First Annual Heritage Day Call for Sponsorships • City of Laguna Hills 2022 First Annual Heritage Day Schedule of Events • City of Laguna Hills 2022 First Annual Heritage Day Pie Eating Contest flyer • City of Laguna Hills 2022 First Annual Heritage Day Thank You flyer • City of Laguna Hills 2022 Laguna Hills Memorial Day Race flyer • City of Laguna Hills 2022 Laguna Hills Memorial Day Race Runner’s Map • Laguna Hills Chamber of Commerce 2022 First Annual Gala Pamphlet • OC Local Laguna Hills Booklet
• Laguna Hills Living Magazine September 2022
• The Orange County Register Newspaper - August 28, 2022 • The Epoch Times Newspaper - November 10-15, 2022
• The Epoch Times Newspaper - November 16-21, 2022
• Horseshoe
• City of Laguna Hills 30th Anniversary Public Giveaway Gift – fidget spinner with charging cables
• City of Laguna Hills 30th Anniversary Public Giveaway Gift – magnetic chip clip • USB Storage Drive with City Logos and City and community photos • 2022 City of Laguna Hills and Dark Horse Battalion Memorial Day Race Medal • Fourteen menus from local businesses and restaurants in Laguna Hills in 2022
4.13.a
Packet Pg. 247 Attachment: Proposed Resolution - Time Capsule and Inventory (3036 : Time Capsule) City of Laguna Hills
City Council/Planning Agency
Staff Report
DATE: December 13, 2022
TO: Mayor and Council Members
FROM: Jennifer Lee
City Clerk
ISSUE: City Council "Other Agencies" Appointed Representatives RECOMMENDATION: That the City Council take the following actions:
1) Review the City of Laguna Hills City Council “Other Agencies” Appointed Representatives List, provide directions to staff regarding any necessary changes for appointments to the list, and by motion, approve the City Council “Other Agencies” Appointed Representatives List, as revised by the City Council; and 2) Adopt a Resolution entitled: “A Resolution of the City Council of the City of Laguna Hills, California designating and appointing its Representative to the Orange County Fire Authority’s Board of Directors; “ and
3) Approve and direct the City Clerk to prepare and post an updated FPPC Disclosure Form 806 to reflect all paid appointments to “Other Agencies” boards, committees, and/or commissions in accordance with state law.
SUMMARY:
As a regular practice, following the City Council’s reorganization in December, the City Council reviews the “Other Agencies” list of Commissions, Boards, and Committees, to which it appoints individuals to represent the City during the forthcoming year. This list is included as an attachment to this report. Positions with specific requirements are described below.
7.2.1 Packet Pg. 248
City Council "Other Agencies" Appointed Representatives December 13, 2022
Orange County Fire Authority
Council Member Sedgwick has served as Director to the Orange County Fire Authority’s Board of Directors since January 2015. With Council Member Sedgwick being termed out of office, the City Council must choose a new Director to represent the City and that action must be formalized by a Resolution approved by a majority vote of the total membership of the City Council. Included as an attachment to this report is the proposed resolution which would formalize the City Council’s change of representative.
Form 806
The Fair Political Practices Commission has mandated that Form 806 be used to report additional compensation that officials receive when appointing themselves to positions on committees, boards, or commissions of a public agency, special district, and joint powers agency or authority. Each agency must post on its website a single Form 806 which lists all the paid appointment positions. When there is a change in compensation, or a new appointment, Form 806 must be updated to reflect the change. Included as an attachment to this report is a copy of the currently posted Form 806. An updated Form 806 will be posted to the City’s website indicating tonight’s decision designating a new representative to OCFA’s Board of Directors, as well as any other applicable changes made by the City Council.
ATTACHMENTS:
• City Representatives List
• Proposed Resolution Designating a Representative to OCFA Board of Directors • Form 806
7.2.1 Packet Pg. 249
CITY OF LAGUNA HILLS
CITY REPRESENTATIVES
NAME OF AGENCY/COMMITTEE REPRESENTATIVES DATE APPOINTED Association of California Cities - OC Delegate: Mayor
Alternate: Mayor Pro Tempore
01/14/1992
12/12/1995
Operational Area Council (Emergency) Representative: Caskey Alternate: Pezold
12/14/2021
12/14/2021
Orange County Fire Authority Director: Vacant
OC Public Libraries
Library Advisory Board
Representative: Wheeler
Alternate: Pezold
01/14/2020
01/14/2020
Orange County Mosquito & Vector Control District Trustee Member: Pezold 01/14/2020 Term expires 1/1/2024
South Orange County Watershed Management Area
Executive Committee
Member: Wheeler
Alternate: Caskey
01/12/2021
12/14/2021
Southern California Association of Governments (SCAG
General Assembly)
Delegate: Wheeler
Alternate: Heft
02/12/2019
01/08/2019
Transportation Corridor Agency
-San Joaquin Hills Transportation Corridor Agency
Director: Heft
Alternate: Pezold
03/01/2018
02/12/2019
Audit Committee Pezold
Caskey
09/28/2021
12/14/2021
Events, Communication, and Beautification Committee Pezold Heft
06/28/2022
06/28/2022
Economic Development Committee Wheeler
Caskey
06/28/2022
06/28/2022
December 1, 2022
7.2.1.a
Packet Pg. 250 Attachment: City Representatives List (3028 : City Council "Other Agencies" Appointed Representatives) RESOLUTION NO. 2022-12-13-X
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAGUNA HILLS, CALIFORNIA, DESIGNATING AND
APPOINTING ITS REPRESENTATIVE TO THE ORANGE
COUNTY FIRE AUTHORITY’S BOARD OF DIRECTORS
The City Council of the City of Laguna Hills, California, hereby finds, determines, declares, and resolves as follows:
WHEREAS, the City, as a “member” of the Orange County Fire Authority Joint Powers Authority (JPA) is entitled to appoint a representative director (“Director”) to the Orange County Fire Authority’s Board of Directors; and WHEREAS, each member agency, by resolution of its governing body, shall designate and appoint one representative to act as its Director on the Authority Board of Directors, except the County whose Board of Supervisors shall appoint two representatives to act as its Directors; and
WHEREAS, each Director shall be a current elected member of the governing body; and
WHEREAS, each Director shall hold office until the selection of a successor by the appointing body; and
WHEREAS, each Director is to serve at the pleasure of his or her appointing body and may be removed at any time, with or without cause, at the sole direction of that appointing body; and
WHEREAS, any vacancy shall be filled in the same manner as the original appointment of a Director.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA
HILLS, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
SECTION 1. Designate and appoint Council Member as
its Director to the Orange County Fire Authority Board of Directors.
SECTION 2. The City Council hereby directs the City Clerk to transmit a copy of this Resolution to the Clerk of the Authority of the Orange County Fire Authority prior to their next regularly scheduled board meeting.
SECTION 3. This Resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify as to the adoption of this Resolution.
7.2.1.b
Packet Pg. 251 Attachment: Proposed Resolution Designating a Representative to OCFA Board of Directors (3028 : City Council "Other Agencies" Appointed Resolution No. 2022-12-13-X
PASSED, APPROVED, AND ADOPTED this 13
th day of December 2022.
____________________________________
, MAYOR
ATTEST:
______________________________________
JENNIFER LEE, CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF LAGUNA HILLS )
I, Jennifer Lee, City Clerk of the City of Laguna Hills, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. 2022-12-13-X adopted by the City Council of the City of Laguna Hills, California, at a Regular Meeting thereof held on the 13
th day of December 2022, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
(SEAL)
_____________________________________
JENNIFER LEE, CITY CLERK
7.2.1.b
Packet Pg. 252 Attachment: Proposed Resolution Designating a Representative to OCFA Board of Directors (3028 : City Council "Other Agencies" Appointed
7.2.1.c
Packet Pg. 253 Attachment: Form 806 (3028 : City Council "Other Agencies" Appointed Representatives)