Agenda packet — West Sacramento City Council, June 5, 2024 (part 4 of 7)

Strategic Plan Integration
The City’s mission includes a City Government that is Financially Sound, and the Council’s goal for achieving a Financially Sound City Government is furthered by ensuring compliance with federal guidelines governing capital assets using federal funds as the City works to maximize the leveraging of local funds with various state, federal and other grants.

Alternatives
In addition to the recommended action, the Council could elect to reject the administrative policy and reject updating the Capital Asset Policy. This is not recommended as the policy will help implement more streamlined asset management, increase audit reporting accuracy, and allow for more centralized documentation of the City’s capital assets.

Coordination and Review
Not applicable
Budget/Cost Impact
There is no immediate budget impact by adopting the Capital Asset Policy; however, not maintaining a policy may impact financial reporting and future receipt or award of federal grant monies which could have a significant impact on the City’s budget.

ATTACHMENT(S)

1. Capital Asset Policy – IV-C-04 - Effective June 5, 2024 (Redlined)

2. Capital Asset Policy – IV-C-04 – Effective June 5, 2024 (Clean)

3. Capital Asset Disposal Request Form – Effective June 5, 2024

4. Capital Asset Policy – IV-C-04 - Effective October 1, 2024 (Redlined)

5. Capital Asset Policy – IV-C-04 – Effective October 1, 2024 (Clean) 568
1 CITY OF WEST SACRAMENTO
ADMINISTRATIVE POLICY NUMBER: IV-C-04
DATE: August 3, 2022June
5, 2024
SUBJECT: CAPITAL ASSET POLICY AUTHORITY: City Council

PURPOSE
To establish procedures to ensure the proper safeguarding, handling, and reporting of City-wide capital assets.

POLICY
Administration of this policy shall be the responsibility of the Finance Department. Each City Department Head is responsible for ensuring that proper purchasing guidelines are followed, and to ensure that fixed assets are adequately controlled and used for appropriate City purposes.

Definitions
Capital Assets: Major assets that are used in operations and have initial useful lives extending beyond a single reporting period. Capital assets with an original unit cost of greater than or equal to the City’s capitalization threshold (see table below), including ancillary costs, and with a useful life of five years or more will be capitalized for financial accounting purposes.

Infrastructure Assets: Long-lived capital assets that normally are stationary in nature and can be preserved to a significantly greater number of years than most capital assets. They include, among other things, roads, bridges, water and sewer systems, and drainage systems.

Infrastructure assets with an original unit cost of greater than or equal to the City’s capitalization threshold of $100,000, including ancillary costs, and with a useful life of twenty-five years or more will be capitalized for financial accounting purposes.

Pooled/Bulk Assets: Certain items such as tools, furniture, equipment and computers are generally below the capitalization threshold individually but are typically purchased or held in large quantities which may represent significant financial impact overall. In these cases, the City shall create a pool of assets as opposed to individual assets. Pooled asset purchases of $25,000 or more of the same item (e.g., laptops or office chairs) or items used for the same purpose (e.g., various exercise equipment for a gym) may be capitalized as a single asset.

Asset’s Historical Cost for Capitalization
Land: The purchase price and cost of preparing land for its intended use. Examples of ancillary costs include search costs, attorney’s fees, liens assumed, taxes assumed, grading costs, and land improvements with an indefinite life.

Building: The purchase price, contract price, or job order costs, and any other expenditure necessary to put a building or structure into its intended state of operation. Additional expenditures may include professional fees, costs of fixed fixtures (non-detachable) to the floor, ceilings and walls, insurance premiums, and related costs incurred during the period of construction.

Structure and Improvement: Permanent (i.e., non-detachable) improvements that add value to land (e.g., fences, retaining walls, easements, road access). This account also is used for leasehold improvements.
569
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
2 Furniture, Fixtures, and Equipment: The total purchase price less any applicable discounts and any ancillary payments required to place the asset in its intended state of operation.

Computer Equipment and Software: The total purchase price less any applicable discounts and any ancillary payments required to place the asset in its intended state of operation. Systems (i.e., servers) constructed that in the aggregate exceed the capitalization threshold will not be capitalized.

Vehicles: The total purchase price less any applicable discounts and ancillary payments required to place the asset in its intended state of operation.

Infrastructure: The purchase price, contract price, or project costs, and any other expenditures necessary to put the asset into its intended state of operation. Additional expenditures may include professional fees, damage claims, insurance premiums, and related costs incurred during the period of construction. Examples include roads, gutters, bridges, traffic signals, water and sewer systems, drainage systems, monuments, electric, and gas lines.

Construction in Progress: The total amount expended to date on uncompleted buildings, pipelines, or other capital project under construction. When the project is completed, the cumulative costs are then transferred to the appropriate capital asset accounts.

Functional Category: The functional asset category will be shown in the notes to the financial statements as follows:

Governmental Business Type
General Government Sewer
Public Works Water
Public Safety Port
Community Development Refuse
Culture and Recreation

PROCEDURE

1. Acquisition: The City shall follow all procurement procedures in accordance with the City’s Purchasing Policy and Procurement Procedures Manual. In addition, all procurement must follow Federal guidelines as outlined in the Uniform Guidance 2 CFR part 200.318 through 200.326.

2. Inventory Management: The City shall adhere to the requirements of 2 CFR 200.313, as it applies to the equipment management requirements related to all federal grants awarded to this agency. The purpose of the physical inventory is to verify the existence and location of fixed assets, and to validate the accuracy of the City’s accounting records. Each Department shall conduct and manage an annual inventory, as well as notify the Finance Department of assets purchased by the City or acquired with federal funding. Inventory tags shall be issued by the Finance Department after acquisition for tracking purposes. At minimum, the following must be provided/recorded:
 Description of the property
 Serial number/ID number of each item
 Source of funding
570
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
3 o If multiple sources, list each source with dollar amount or % of funding used for equipment purchase
 Title holder/Department in possession
 Acquisition date
 Total cost
 Percentage of Federal participation in the project costs for the federal award under which the property was acquired including the location, use, and condition of the property at time of acquisition (if applicable)
In addition,
 For any equipment distributed to a single individual (i.e., turnout gear), it shall be the individual’s responsibility to advise their supervisor of any loss, damage, or theft of the property. In the event of any loss, damage, or theft the supervisor will investigate and document all results found.
 All equipment must be thoroughly inspected monthly for upkeep, and periodically undergo necessary maintenance to ensure safety and longevity of equipment. The supervisor shall report all equipment maintenance needs to the Department Head.

3. Disposal: It shall be the City’s policy to receive as much value as possible in exchange for the property to be disposed. In determining “value”, all costs of the exchange shall be considered, including demolition, delivery costs, auction fees, and sales tax.

In general, disposal of tangible capital assets may occur by auction/sale, trade-in, donation, destruction, loss, or abandonment. It’s recommended that departments seek preferred forms of disposition such as interdepartmental transfer within the City or donation to another agency in need. However, special circumstances may be considered for certain assets and police property listed below.
a. Office Furniture: Before offering property for sale, other City departments and community-based organizations may be offered an opportunity to select what they want at no cost to them.
b. City Vehicles: The City’s preferred method for disposal of vehicles is through competitive bid or auction. However, on occasion and in accordance with the following guidelines, vehicles may be sold to another public agency, business, or company:
i. The vehicle was scheduled for replacement.
ii. A public agency, business or company has expressed interest in purchasing it. iii. The purchase price for the vehicle is based on Blue Book value or other comparative data approved by the Director of Finance.
iv. Vehicles shall not be sold to a private individual or company owned by a City employee or in which a City employee has financial interest. v. All sales shall be “as is.”
vi. The City Manager shall approve all sales in advance of the sale and upon review of relevant information.
c. Police Property: There are several state laws pertaining to the disposition of certain personal property in possession of the police department by way of seizure, evidence, found property, etc. City Council has adopted Ordinance 93-9 relating to disposition of unclaimed property by the police. Accordingly, the Chief of Police shall review the property with the City Attorney for additional guidance. 571
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
4 Once an appropriate form of disposition is identified, departments will be responsible for completing the Capital Asset Disposal Request Form signed by the appropriate department head and submitting to the Finance Department for approval. Upon disposal, the department must inform the Finance Department of the result of the disposal and provide the required disposal information to finalize the form.

Under no circumstances shall City employees be allowed personal possession of a capital asset after disposal.

4. Depreciation: The City will utilize the straight-line method for depreciation. Depreciation will be calculated on an annual basis. New additions do not place the asset into service until the beginning of the fiscal year following acquisition for purposes of calculating depreciation. No depreciation will be posted for the initial portion of the year in which the asset was acquired.

Asset Type Useful Life Threshold
Land N/A N/A
Building 50 years $10,000
Structures & Improvements 10-40 years $10,000
Equipment
(Pooled Purchase)
5-10 years $5,000
$25,000
Infrastructure 25 years $100,000
Construction in Progress N/A $100,000
572
1 CITY OF WEST SACRAMENTO
ADMINISTRATIVE POLICY NUMBER: IV-C-04
DATE: June 5, 2024
SUBJECT: CAPITAL ASSET POLICY AUTHORITY: City Council

PURPOSE
To establish procedures to ensure the proper safeguarding, handling, and reporting of City-wide capital assets.

Pooled/Bulk Assets: Certain items such as tools, furniture, equipment and computers are generally below the capitalization threshold individually but are typically purchased or held in large quantities which may represent significant financial impact overall. In these cases, the City shall create a pool of assets as opposed to individual assets. Pooled asset purchases of $5,000 or more of the same item (e.g., laptops or office chairs) or items used for the same purpose (e.g., various exercise equipment for a gym) may be capitalized as a single asset.

Structure and Improvement: Permanent (i.e., non-detachable) improvements that add value to land (e.g., fences, retaining walls, easements, road access). This account also is used for leasehold improvements.
573
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
2 Furniture, Fixtures, and Equipment: The total purchase price less any applicable discounts and any ancillary payments required to place the asset in its intended state of operation.

Vehicles: The total purchase price less any applicable discounts and ancillary payments required to place the asset in its intended state of operation.

Functional Category: The functional asset category will be shown in the notes to the financial statements as follows:

Governmental Business Type
General Government Sewer
Public Works Water
Public Safety Port
Community Development Refuse
Culture and Recreation

PROCEDURE

2. Inventory Management: The City shall adhere to the requirements of 2 CFR 200.313, as it applies to the equipment management requirements related to all federal grants awarded to this agency. The purpose of the physical inventory is to verify the existence and location of fixed assets, and to validate the accuracy of the City’s accounting records. Each Department shall conduct and manage an annual inventory, as well as notify the Finance Department of assets purchased by the City or acquired with federal funding. Inventory tags shall be issued by the Finance Department after acquisition for tracking purposes. At minimum, the following must be provided/recorded:
 Description of the property
 Serial number/ID number of each item
 Source of funding
o If multiple sources, list each source with dollar amount or % of funding used for equipment purchase
574
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
3  Title holder/Department in possession
 Acquisition date
 Total cost
 Percentage of Federal participation in the project costs for the federal award under which the property was acquired including the location, use, and condition of the property at time of acquisition (if applicable)
In addition,
 For any equipment distributed to a single individual (i.e., turnout gear), it shall be the individual’s responsibility to advise their supervisor of any loss, damage, or theft of the property. In the event of any loss, damage, or theft the supervisor will investigate and document all results found.
 All equipment must be thoroughly inspected monthly for upkeep, and periodically undergo necessary maintenance to ensure safety and longevity of equipment. The supervisor shall report all equipment maintenance needs to the Department Head.

In general, disposal of tangible capital assets may occur by auction/sale, trade-in, donation, destruction, loss, or abandonment. It’s recommended that departments seek preferred forms of disposition such as interdepartmental transfer within the City or donation to another agency in need. However, special circumstances may be considered for certain assets and police property listed below.
a. Office Furniture: Before offering property for sale, other City departments and community-based organizations may be offered an opportunity to select what they want at no cost to them.
b. City Vehicles: The City’s preferred method for disposal of vehicles is through competitive bid or auction. However, on occasion and in accordance with the following guidelines, vehicles may be sold to another public agency, business, or company:
i. The vehicle was scheduled for replacement.
ii. A public agency, business or company has expressed interest in purchasing it. iii. The purchase price for the vehicle is based on Blue Book value or other comparative data approved by the Director of Finance.
iv. Vehicles shall not be sold to a private individual or company owned by a City employee or in which a City employee has financial interest. v. All sales shall be “as is.”
vi. The Finance Director or designee shall approve all sales in advance of the sale and upon review of relevant information.
c. Police Property: There are several state laws pertaining to the disposition of certain personal property in possession of the police department by way of seizure, evidence, found property, etc. City Council has adopted Ordinance 93-9 relating to disposition of unclaimed property by the police. Accordingly, the Chief of Police shall review the property with the City Attorney for additional guidance.

Once an appropriate form of disposition is identified, departments will be responsible for completing the Capital Asset Disposal Request Form signed by the appropriate department 575
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
4 head and submitting to the Finance Department for approval. Upon disposal, the department must inform the Finance Department of the result of the disposal and provide the required disposal information to finalize the form.

Under no circumstances shall City employees be allowed personal possession of a capital asset after disposal.

Asset Type Useful Life Threshold
Land N/A N/A
Building 50 years $10,000
Structures & Improvements 10-40 years $10,000
Equipment
(Pooled Purchase)
5-10 years $5,000
Infrastructure 25 years $100,000
Construction in Progress N/A $100,000
576
Capital Asset Disposal Request Form
City of West Sacramento
Finance Department
Date: _____________
Fixed Asset Number: _________ Description: ___________________________________ Department: ________________________________
Requestor: ____________________________________________ Date: ___________ Requestor Email: _____________________________ Phone: ______________________ Grant Award (if applicable): _____________________
Funding Agency: _____________________________
Department Head (sign): _________________________________ Date: ____________ Department Head (print): _________________________________ ☐ Request to: Dispose of Asset
Reason for Disposal: ______________________________________________________ _______________________________________________________________________ ☐ Request to: Sell or Donate Assets
Donate/Sell to: ___________________________________________________________ Sale Price: ______________________
Fair Market Value: ________________
☐ Request to: Transfer Assets within the City
To Department: __________________________________________________________ Approval
Finance Director (sign): __________________________________ Date: __________________ Finance Director (print): __________________________________ 577
For Finance Use Only:
☐ Report of: Disposal of Asset
Salvage Value: ___________________________________________________________ Date of Disposal: _______________
☐ Report of: Sale or Donated Assets
Donated/Sold to: _________________________________________________________ Sale Price: ______________________ Fair Market Value: ________________ Date of Sale/Donation: _________________
☐ Report of: Transfer of Assets within the City
To Department: __________________________________________________________ Date of Transfer: ___________________
☐ Report of: Lost or Stolen Assets
Date of Loss: _______________
Finance Director (sign): __________________________________ Date: __________________ Finance Director (print): __________________________________ 578
1 CITY OF WEST SACRAMENTO
ADMINISTRATIVE POLICY NUMBER: IV-C-04
DATE: June 5October 1,
2024
SUBJECT: CAPITAL ASSET POLICY AUTHORITY: City Council

PURPOSE
To establish procedures to ensure the proper safeguarding, handling, and reporting of City-wide capital assets.

Pooled/Bulk Assets: Certain items such as tools, furniture, equipment and computers are generally below the capitalization threshold individually but are typically purchased or held in large quantities which may represent significant financial impact overall. In these cases, the City shall create a pool of assets as opposed to individual assets. Pooled asset purchases of $105,000 or more of the same item (e.g., laptops or office chairs) or items used for the same purpose (e.g., various exercise equipment for a gym) may be capitalized as a single asset.

Structure and Improvement: Permanent (i.e., non-detachable) improvements that add value to land (e.g., fences, retaining walls, easements, road access). This account also is used for leasehold improvements.
579
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
2 Furniture, Fixtures, and Equipment: The total purchase price less any applicable discounts and any ancillary payments required to place the asset in its intended state of operation.

Vehicles: The total purchase price less any applicable discounts and ancillary payments required to place the asset in its intended state of operation.

Functional Category: The functional asset category will be shown in the notes to the financial statements as follows:

Governmental Business Type
General Government Sewer
Public Works Water
Public Safety Port
Community Development Refuse
Culture and Recreation

PROCEDURE

2. Inventory Management: The City shall adhere to the requirements of 2 CFR 200.313, as it applies to the equipment management requirements related to all federal grants awarded to this agency. The purpose of the physical inventory is to verify the existence and location of fixed assets, and to validate the accuracy of the City’s accounting records. Each Department shall conduct and manage an annual inventory, as well as notify the Finance Department of assets purchased by the City or acquired with federal funding. Inventory tags shall be issued by the Finance Department after acquisition for tracking purposes. At minimum, the following must be provided/recorded:
 Description of the property
 Serial number/ID number of each item
 Source of funding
580
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
3 o If multiple sources, list each source with dollar amount or % of funding used for equipment purchase
 Title holder/Department in possession
 Acquisition date
 Total cost
 Percentage of Federal participation in the project costs for the federal award under which the property was acquired including the location, use, and condition of the property at time of acquisition (if applicable)
In addition,
 For any equipment distributed to a single individual (i.e., turnout gear), it shall be the individual’s responsibility to advise their supervisor of any loss, damage, or theft of the property. In the event of any loss, damage, or theft the supervisor will investigate and document all results found.
 All equipment must be thoroughly inspected monthly for upkeep, and periodically undergo necessary maintenance to ensure safety and longevity of equipment. The supervisor shall report all equipment maintenance needs to the Department Head.

In general, disposal of tangible capital assets may occur by auction/sale, trade-in, donation, destruction, loss, or abandonment. It’s recommended that departments seek preferred forms of disposition such as interdepartmental transfer within the City or donation to another agency in need. However, special circumstances may be considered for certain assets and police property listed below.
a. Office Furniture: Before offering property for sale, other City departments and community-based organizations may be offered an opportunity to select what they want at no cost to them.
b. City Vehicles: The City’s preferred method for disposal of vehicles is through competitive bid or auction. However, on occasion and in accordance with the following guidelines, vehicles may be sold to another public agency, business, or company:
i. The vehicle was scheduled for replacement.
ii. A public agency, business or company has expressed interest in purchasing it. iii. The purchase price for the vehicle is based on Blue Book value or other comparative data approved by the Director of Finance.
iv. Vehicles shall not be sold to a private individual or company owned by a City employee or in which a City employee has financial interest. v. All sales shall be “as is.”
vi. The Finance Director or designee shall approve all sales in advance of the sale and upon review of relevant information.
c. Police Property: There are several state laws pertaining to the disposition of certain personal property in possession of the police department by way of seizure, evidence, found property, etc. City Council has adopted Ordinance 93-9 relating to disposition of unclaimed property by the police. Accordingly, the Chief of Police shall review the property with the City Attorney for additional guidance. 581
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
4 Once an appropriate form of disposition is identified, departments will be responsible for completing the Capital Asset Disposal Request Form signed by the appropriate department head and submitting to the Finance Department for approval. Upon disposal, the department must inform the Finance Department of the result of the disposal and provide the required disposal information to finalize the form.

Under no circumstances shall City employees be allowed personal possession of a capital asset after disposal.

Asset Type Useful Life Threshold
Land N/A N/A
Building 50 years $10,000
Structures & Improvements 10-40 years $10,000
Equipment
(Pooled Purchase)
5-10 years $510,000
Infrastructure 25 years $100,000
Construction in Progress N/A $100,000
582
1 CITY OF WEST SACRAMENTO
ADMINISTRATIVE POLICY NUMBER: IV-C-04
DATE: October 1, 2024
SUBJECT: CAPITAL ASSET POLICY AUTHORITY: City Council

PURPOSE
To establish procedures to ensure the proper safeguarding, handling, and reporting of City-wide capital assets.

Pooled/Bulk Assets: Certain items such as tools, furniture, equipment and computers are generally below the capitalization threshold individually but are typically purchased or held in large quantities which may represent significant financial impact overall. In these cases, the City shall create a pool of assets as opposed to individual assets. Pooled asset purchases of $10,000 or more of the same item (e.g., laptops or office chairs) or items used for the same purpose (e.g., various exercise equipment for a gym) may be capitalized as a single asset.

Structure and Improvement: Permanent (i.e., non-detachable) improvements that add value to land (e.g., fences, retaining walls, easements, road access). This account also is used for leasehold improvements.
583
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
2 Furniture, Fixtures, and Equipment: The total purchase price less any applicable discounts and any ancillary payments required to place the asset in its intended state of operation.

Vehicles: The total purchase price less any applicable discounts and ancillary payments required to place the asset in its intended state of operation.

Functional Category: The functional asset category will be shown in the notes to the financial statements as follows:

Governmental Business Type
General Government Sewer
Public Works Water
Public Safety Port
Community Development Refuse
Culture and Recreation

PROCEDURE

2. Inventory Management: The City shall adhere to the requirements of 2 CFR 200.313, as it applies to the equipment management requirements related to all federal grants awarded to this agency. The purpose of the physical inventory is to verify the existence and location of fixed assets, and to validate the accuracy of the City’s accounting records. Each Department shall conduct and manage an annual inventory, as well as notify the Finance Department of assets purchased by the City or acquired with federal funding. Inventory tags shall be issued by the Finance Department after acquisition for tracking purposes. At minimum, the following must be provided/recorded:
 Description of the property
 Serial number/ID number of each item
 Source of funding
o If multiple sources, list each source with dollar amount or % of funding used for equipment purchase
584
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
3  Title holder/Department in possession
 Acquisition date
 Total cost
 Percentage of Federal participation in the project costs for the federal award under which the property was acquired including the location, use, and condition of the property at time of acquisition (if applicable)
In addition,
 For any equipment distributed to a single individual (i.e., turnout gear), it shall be the individual’s responsibility to advise their supervisor of any loss, damage, or theft of the property. In the event of any loss, damage, or theft the supervisor will investigate and document all results found.
 All equipment must be thoroughly inspected monthly for upkeep, and periodically undergo necessary maintenance to ensure safety and longevity of equipment. The supervisor shall report all equipment maintenance needs to the Department Head.

In general, disposal of tangible capital assets may occur by auction/sale, trade-in, donation, destruction, loss, or abandonment. It’s recommended that departments seek preferred forms of disposition such as interdepartmental transfer within the City or donation to another agency in need. However, special circumstances may be considered for certain assets and police property listed below.
a. Office Furniture: Before offering property for sale, other City departments and community-based organizations may be offered an opportunity to select what they want at no cost to them.
b. City Vehicles: The City’s preferred method for disposal of vehicles is through competitive bid or auction. However, on occasion and in accordance with the following guidelines, vehicles may be sold to another public agency, business, or company:
i. The vehicle was scheduled for replacement.
ii. A public agency, business or company has expressed interest in purchasing it. iii. The purchase price for the vehicle is based on Blue Book value or other comparative data approved by the Director of Finance.
iv. Vehicles shall not be sold to a private individual or company owned by a City employee or in which a City employee has financial interest. v. All sales shall be “as is.”
vi. The Finance Director or designee shall approve all sales in advance of the sale and upon review of relevant information.
c. Police Property: There are several state laws pertaining to the disposition of certain personal property in possession of the police department by way of seizure, evidence, found property, etc. City Council has adopted Ordinance 93-9 relating to disposition of unclaimed property by the police. Accordingly, the Chief of Police shall review the property with the City Attorney for additional guidance.

Once an appropriate form of disposition is identified, departments will be responsible for completing the Capital Asset Disposal Request Form signed by the appropriate department 585
Administrative Policy IV-C-04
Capital Asset Policy
(continued)
4 head and submitting to the Finance Department for approval. Upon disposal, the department must inform the Finance Department of the result of the disposal and provide the required disposal information to finalize the form.

Under no circumstances shall City employees be allowed personal possession of a capital asset after disposal.

Asset Type Useful Life Threshold
Land N/A N/A
Building 50 years $10,000
Structures & Improvements 10-40 years $10,000
Equipment
(Pooled Purchase)
5-10 years $10,000
Infrastructure 25 years $100,000
Construction in Progress N/A $100,000
586

CITY COUNCIL AGENDA REPORT
MEETING DATE: June 5, 2024 ITEM #11
SUBJECT:

CONSIDERATION OF THE TREASURER’S QUARTERLY FINANCIAL REPORT ON THE CITY’S INVESTMENT PORTFOLIO FOR THE PERIOD ENDING MARCH 31, 2024, AND ANNUAL UPDATES TO THE CITY’S INVESTMENT POLICY
INITIATED OR REQUESTED BY: REPORT COORDINATED OR PREPARED BY:
[ ] Council [X] Staff
[ ] Other
Marc Rotteveel, Senior Finance Analyst
Finance Department
ATTACHMENT [X] Yes [ ] No [ ] Information [ ] Direction [ ] Action

OBJECTIVE
The purpose of this report is to provide the City Council with the treasurer’s quarterly report on the City’s investment portfolio for the quarter ending March 31, 2024 as outlined by the Government Code 53646(b) (1) and to propose updates to the City’s Investment Policy consistent with applicable Government Code.

RECOMMENDED ACTION
Staff respectfully recommends that the City Council receive and file the Treasurer’s Quarterly Financial Report on the City’s investment portfolio for the period ending March 31, 2024, and approve the recommended changes to the City’s investment policy.

BACKGROUND
All local agencies are required to file regular financial reports with their legislative body on the status of their investment portfolio. One of the roles of the City’s Finance Department is to manage investments of the City to ensure that cash flow needs are met while maximizing the investment portfolio.

The funds invested in the City’s treasury are made up of pooled cash from all funds in the City’s General Ledger, including funds held in Trust for other agencies (i.e., the Yolo-Sacramento Port District and West Sacramento Flood Control Agency (WSAFCA) JPA). City staff structure investment maturities in such a way to optimize return while ensuring enough liquid funds are available to meet the operating and capital needs of the City and agencies for which the City acts as Treasurer. The pooled cash also includes impact fee revenues collected from developers and set aside until sufficient funds are available to implement the capital projects for which they were collected, and reserve funds for budget stabilization to ensure fiscal stability of the City and its various services to the community.

It should be noted that the majority of the funds held in the City’s treasury are legally restricted and may only be used for the purposes for which they are collected. Moreover, the funds may only be invested in investments permitted by California Government Code 53600 (Code) et. al, and the City’s investment policy.

Under section 53646(b)(1) of the Government Code, the City Treasurer may prepare and transmit a quarterly financial report to the City Council on the City’s investment portfolio. This report includes:

1. The type of investment, issuer, date of maturity, and par and dollar amount invested on all securities, investments and funds held by the City;

2. A current market value as of the date of the report;

3. A stated compliance of the portfolio to the statement of the City’s adopted investment policy, or manner in which the portfolio is not in compliance; and

4. A statement denoting the ability of the local agency to meet its pool’s expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall or may not be available. Once a year, the statement of investment policy is included in the report.

This quarterly report is produced in a format designed to provide stakeholders a broad profile of the City’s Investment Portfolio. While staff are only transmitting portions of the report with key investment results, a full report with additional detail is available upon request. 587
Quarterly Treasurer’s Report and Annual Update to City’s Investment Policy June 5, 2024

Page 2 ends

ANALYSIS
This quarterly financial report summarizes the status of pooled treasury investments as of March 31, 2024. For the quarter-end, the City’s treasury investments comprised investments with a book value of $305,567,575 and a market value of $302,350,605. These figures do not include accrued interest of $731,772, which represents interest income the City has earned but not yet received. The Book Value represents the carrying value of the securities and is based on what the City paid for the security, net of amortization of premiums or accretion of discounts to date, whereas Market Value is a constantly changing amount based on how the securities markets value our portfolio. Market values fluctuate with changes in interest rates, and price has an inverse relationship to interest rates.

The City continues to maintain sufficient liquidity to meet its expenditure requirements for the next six months.

Local Agency Investment Fund (LAIF), which is the California State Treasurer’s investment pool, and California Asset Management Program (CAMP), a local government investment pool, comprised the City’s most liquid funds, and totaled 33.3% of the investment portfolio. These funds are available to the City within one day.

Additionally, the City held $14.2 million in its operating bank account, which fluctuates depending on cash needs to meet City obligations. Those funds not held in the short-duration investment pools or cash are invested in a diversified portfolio of securities as allowed by Code and the City’s investment policy. The portfolio’s duration, sector allocation, and maturity structure are actively managed throughout the quarter. In total, the City’s consolidated investments maintain an average maturity of 335 days.

The City’s portfolio is designed to provide safety and liquidity and continues to meet its goals. City staff and the City’s investment adviser continue to focus on any market dynamics that pose risks to the portfolio.

City of West Sacramento Consolidated Sector Allocation
March 31, 2024 December 31, 2023
ABS

3.4%
Agency

7.9%
Cash

15.6%
CMO

5.2%
Corporate

12.2%
LAIF

37.4%
Local Gov
Investment
Pool

2.0%
Money
Market Fund

0.0%
Municipal
Bonds

0.3%
Supranation
al

2.3%
US Treasury

13.8%
ABS

2.5% Agency

6.8%
Cash

4.7%
Corporate

11.5%
LAIF

31.8%
Local Gov
Investment
Pool

1.8%
Money
Market
Fund

19.9%
Municipal
Bonds

0.2%
Supranation
al

2.1%
US Treasury

13.8%
Agency
CMBS

4.8%

58.3%

5.6% 8.8% 7.2%

20.1%

55.7%

5.5%

15.1%

6.8%

16.8%
0%
10%
20%
30%
40%
50%
60%
70%
0-0.50 0.50-1 1-2 2-3 3-5 3/31/2024 12/31/2023
City of West Sacramento Consolidated Maturity Distribution Maturity (Yrs.)
Percentage of Portfolio
588
Quarterly Treasurer’s Report and Annual Update to City’s Investment Policy June 5, 2024

Page 3 ends

The City’s portfolio of securities (excluding cash, LAIF, and CAMP) maintains its duration in line with its performance-measuring benchmark. Duration is a risk measure indicating the portfolio’s fair value sensitivity to changes in interest rates. As of March 31, 2024, portfolio duration was 2.5 years, which is 96% of its duration target, as measured by the portfolio’s risk and performance-measuring benchmark (which had a duration of 2.6 years). The portfolio continues to maintain strong diversification in sectors, issuers, and maturities.

Economic Outlook
Recent economic data has shown above trend growth fueled by a rise in consumer spending and a continuing healthy US job market. Inflationary trends are subsiding, but core levels remain above the Fed’s target. Given the cumulative effects of restrictive monetary policy and tighter financial conditions, the City’s investment advisor believes the economy will gradually soften and the Fed will loosen monetary policy in 2024.

As expected at the March meeting, the Federal Open Market Committee voted unanimously to leave the Federal Funds rate unchanged at a target range of 5.25 - 5.50%. The March Summary of Economic Projections (SEP) showed stronger real GDP growth outlook and higher core inflation projections for 2024 on resilient labor market and consumer data. The median projection for Federal Funds rate by year-end remained the same at 4.625%, implying three 0.25% cuts. It is likely the FOMC will loosen monetary policy in mid-2024 as inflation and economic growth continue to moderate.

Discussion of Performance
The following is a summary of the City’s holdings by investment type, including each sector’s yield to maturity.

Yield to maturity measures the interest income the City is expected to earn for the coming 12 months, assuming nothing in the portfolio changes. As of March 31, 2024, the weighted average yield to maturity of the City’s consolidated investments was 3.8%:

Investment Type Par Value Market Value Book Value % of
Portfolio
Days to
Maturity
Yield to
Maturity
Asset-backed Securities (ABS) $7,605,997 $7,503,840 $7,578,058 2.5% 898 3.3% Agency $21,490,000 $20,606,964 $21,481,842 6.8% 573 1.3% Cash $14,198,684 $14,198,684 $14,198,684 4.7% 1 0.3%
Corporate $35,955,000 $34,658,340 $35,541,806.76 11.5% 1,080 3.4% LAIF $96,292,715 $96,292,715 $96,292,715 31.9% 1 4.3%
Local Gov Investment Pool $5,562,741 $5,562,741 $5,558,741 1.8% 1 5.5% Money Market Fund $60,167,185 $60,167,185 $60,167,185 19.9% 1 5.2% Municipal Bonds $730,000 $719,269 $731,701 0.2% 183 1.9% Supranational $6,775,000 $6,392,260 $6,669,147 2.1% 996 2.2% US Treasury $43,030,000 $41,689,825 $42,686,419 13.8% 427 3.2% Agency CMBS $15,287,000 $14,558,782 $14,661,276 4.8% 1,438 4.4% Grand Total $307,094,322 $302,350,605 $305,567,575 100% 335 3.8% The portfolio’s return comprises interest income as well as fair value appreciation, both of which are a function of movements in interest rates available in the capital markets. Interest income continues to be robust (the investment portfolio of securities is expected to earn was also 3.0% for the next year—up from 2.9% last quarter; when LAIF, CAMP and cash are included the expected earnings are 3.8%). Staff also took steps to move funds from LAIF, which was providing yields less than 4.1%, to be managed as a separate liquidity portfolio, apart from the City’s main portfolio. The maturities in this portfolio go no longer than six months. The yield on this component of the City’s investments averages 5.2% and is valued at approximately $60 million. Staff continue to work closely with the City’s investment adviser to diversify the portfolio to improve safety, liquidity, and return. In the current quarter, staff will continue to evaluate liquidity needs and, where possible, continue the investment in longerduration securities.

Investment Policy
Senate Bill 1489 (SB 1489) recently made changes to the sections of California Government Code which governs the investment of public funds. Though none of the changes require the City to update its investment policy, staff believe that the safety and liquidity of the City’s investment portfolio would be enhanced by adopting the recent changes to California Government Code, as well as select best practices:
589
Quarterly Treasurer’s Report and Annual Update to City’s Investment Policy June 5, 2024

Page 4 ends

 Pursuant to Senate Bill 1489, effective January 1, 2023, the Code specified that the purchase of securities with trade settlement periods longer than 45 days is prohibited. City staff is recommending adding this change in the Suitable and Authorized Investments section of the Portfolio.  City staff is also recommending adding a change in the Reporting section of the Investment Policy for staff to submit the voluntary quarterly reports to council from 30 days to 45 days after the quarter end.

Environmental Considerations
Not Applicable
Commission Recommendation
Not applicable
Strategic Plan Integration
The City’s mission includes a City Government that is Financially Sound, and the Council’s goal for achieving a Financially Sound City Government is furthered by investing the City treasury in a manner that ensures safety and liquidity first, and where possible a yield on “excess cash”. The preparation of regular quarterly reports on the City’s investments supports the mission and this goal.

Alternatives
Since this agenda report transmits a quarterly financial report pursuant to Government Code section 53646(b) (1), alternatives have not been presented.

Coordination and Review
Not applicable
Budget/Cost Impact
The investment portfolio, as a whole, earned returns at least consistent with the revenue estimates contained in the budget.

ATTACHMENTS

1. Excerpts from Chandler Asset Management Investment Report (March 31, 2024)

2. Proposed Investment Policy (IV-C-2) – Redline

3. Proposed Investment Policy (IV-C-2) - Clean
590
Compliance As of March 31, 2024
Category Standard Comment
U.S. Treasuries No limit; 5 years max maturity Complies Federal Agencies 30% max per Agency/GSE issuer; 20% max agency callable securities; 5 years max maturity Complies Supranational Obligations
"AA" rating category or higher by a NRSRO; 30% max; 10% max per issuer; 5 years max maturity; USD denominated senior unsecured unsubordinated obligations; Issued or unconditionally guaranteed by IBRD, IFC, or IADB Complies Municipal Securities (CA, Other States) "A" rating category or better by a NRSRO; 30% max; 5% max per issuer; 5 years max maturity Complies Corporate Medium Term Notes
"A" rating category or better by a NRSRO; 30% max; 5% max per issuer; 5 years max maturity; Issued by corporations organized and operating within the U.S. or by depository institutions licensed by the U.S. or any state and operating within the U.S.

Complies
Asset-Backed, Mortgage-Backed,
Mortgage Pass-Through Securities, and
Collateralized Mortgage Obligations
"AA" rating category or better by a NRSRO; 20% max (combined); 5% max per Asset-Backed or Commercial Mortgage security issuer; 5 years max maturity; From Issuers not defined in US Treasuries and Federal Agencies sections of the Authorized Investments section of the policy
Complies
Negotiable Certificates of Deposit
(NCD)
The amount of NCD insured up to the FDIC limit does not require any credit ratings; Any amount above FDIC insured limit must be issued by institutions with "A-1" short-term debt rating or better by a NRSRO; or "A" long-term rating category or better by a NRSRO; 30% max (combined with CDARS); 5% max per issuer; 5 years max maturity Complies
Certificate of Deposit Placement
Service (CDARS) 30% max (combination of Certificates of Deposit, including CDARS); 5 years max maturity Complies FDIC Insured Time Deposits (Nonnegotiable CD/TD)
Non-Negotiable Certificates of Deposit in state or federally chartered banks, savings and loans, or credit unions; The amount per institution is limited to maximum covered under FDIC; 20% max combined FDIC & Collateralized CD/TD; 5 years max maturity
Complies
Collateralized Time Deposits (Nonnegotiable CD/TD)
Non-Negotiable Certificates of Deposit in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with securities in accordance with California law; 20% max combined FDIC & Collateralized CD/TD; 5 years max maturity Complies
Collateralized Bank Deposits No limit; Deposits with financial institutions will be collateralized with pledged securities per California Government Code
Complies
Banker’s Acceptances "A-1" short-term rated or better by a NRSRO; or "A" long-term rating category or better by a NRSRO; 40% max; 5% max per issuer; 180 days max maturity
Complies
City of West Sacramento Consolidated Portfolio
This portfolio is a consolidation of assets managed by Chandler Asset Management and assets managed internally by City of West Sacramento. Chandler relies on City of West Sacramento to provide accurate information for reporting assets and producing this compliance statement. 12 591
Compliance As of March 31, 2024
Category Standard Comment
Commercial Paper
25% max; 40% max, if the Agency’s investment assets under management are >$100 million (under a provision sunsetting on January 1, 2026); 5% max per issuer; 270 days maturity; 10% max of the outstanding commercial paper of any single issuer; Issued by an entity that meets all of the following conditions in either (a) or (b): a. (i) organized and operating within the U.S. with assets > $500 million; (ii) "A-1" rated or better by a NRSRO; (iii) "A" rating or better by a NRSRO, if issuer has debt obligations; b. (i) organized within the U.S. as a special purpose corporation, trust, or limited liability company; (ii) must have program-wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond; (iii) rated "A-1" or better by a NRSRO Complies
Money Market Mutual Funds
Registered with SEC under Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria: (i) Highest rating by two NRSROs; or (ii) Retained an investment adviser registered or exempt from SEC registration with > 5 years experience and with AUM >$500 million; 20% max combined Money Market Mutual Funds and Mutual Funds; 20% max per Money Market Mutual Fund Complies
Mutual Funds
Invest in securities as authorized under CGC, Section 53601 (a) to (k) and (m) to (q) inclusive and meet either of the following criteria: (i) Highest rating by two NRSROs; or (ii) Retained an investment adviser registered or exempt from SEC registration with > 5 years experience investing in securities authorized by CGC, Section 53601 and with AUM >$500 million; 20% max combined Money Market Mutual Funds and Mutual Funds; 10% max per Mutual Fund Complies
Local Agency Investment Fund (LAIF) Maximum amount permitted by LAIF; Not used by investment adviser Complies Local Government Investment Pools No issuer limitation Complies Repurchase Agreements 1 year max maturity; 102% Collateralized; Not used by investment adviser Complies Minimum Budgeted Operating
Expenditures in Short Term Investments
Minimum 6 months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements Complies
Max Per Issuer 5% max per single issuer, unless otherwise specified in the policy Complies Maximum Maturity 5 years maximum maturity, except as otherwise stated in the policy Complies City of West Sacramento Consolidated Portfolio
This portfolio is a consolidation of assets managed by Chandler Asset Management and assets managed internally by City of West Sacramento. Chandler relies on City of West Sacramento to provide accurate information for reporting assets and producing this compliance statement. 13 592
Portfolio Characteristics
City of W Sacramento Operating
03/31/24 12/31/23
Benchmark* Portfolio Portfolio
Average Maturity (yrs) 2.68 2.80 2.76
Average Modified Duration 2.52 2.49 2.38
Average Purchase Yield n/a 3.04% 2.88%
Average Market Yield 4.57% 4.95% 4.53%
Average Quality** AA+ AA AA/Aa1
Total Market Value 127,039,828 126,642,737
*ICE BofA 1-5 Yr US Treasury & Agency Index
**Benchmark is a blended rating of S&P, Moody’s, and Fitch. Portfolio is S&P and Moody’s respectively.

PORTFOLIO SUMMARY
Portfolio Characteristics
Sector Allocation
Account Summary
Maturity Distribution
Top Issuers
Credit Quality
Average Modified Duration 1.04
Average Coupon 3.63%
Average Purchase YTM 3.77%
Average Market YTM 4.53%
Average Quality AA+
Average Final Maturity 1.17
Average Life 1.14
Beg. Values as of
03/01/2024
End Values as of
03/31/2024
Market Value 304,812,104.99 302,350,604.84
Accrued Interest 628,159.46 731,772.16
Total Market Value 305,440,264.45 303,082,376.99
Income Earned 336,946.01 344,077.97
Cont/WD (5,810,854.66) (3,420,186.29)
Par 309,606,090.61 307,094,322.03
Book Value 308,290,631.19 305,567,575.17
Cost Value 307,919,969.99 305,214,860.98
LAIF 31.85%
Dreyfus Government Cash Management Fund 19.90%
United States 13.67%
FHLMC 6.48%
FNMA 3.90%
California Asset Mgmt Program 1.84%
International Bank for Recon and Dev 1.45%
Inter-American Development Bank 0.67%
*See Footnote
The credit quality is a weighted average calculation of the highest of S&P, Moody’s’ and Fitch 594

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%
0 - 0.25 0.25 - 0.50 0.50 - 1 1 - 2 2 - 3 3 - 4 4 - 5 5+ March 31, 2024 December 31, 2023
March 31, 2024 vs. December 31, 2023
0 - 0.25 0.25 - 0.50 0.50 - 1 1 - 2 2 - 3 3 - 4 4 - 5 5+ 03/31/24 0.5% 0.6% 14.9% 24.9% 14.8% 32.8% 11.5% 0.0%
12/31/23 1.2% 0.5% 12.3% 33.6% 15.0% 25.8% 11.5% 0.0%
City of W Sacramento Operating
Duration Distribution As of March 31, 2024
22 595

HOLDINGS REPORT
City of West Sacramento Operating Portfolio | Account #10675 | As of March 31, 2024 Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
ABS
44891WAC3 HALST 2022-A A3 1.16 01/15/2025 41,684.48 01/11/2022 41,683.56 99.81 41,606.66 0.03% Aaa/AAA 0.79

1.16% 41,684.35 10.03% 21.49 (77.69) NA 0.04
89238LAC4 TLOT 2022-A A3 1.96 02/20/2025 222,872.36 02/23/2022 222,837.28 99.65 222,095.81 0.18% NA/AAA 0.89

1.96% 222,863.26 6.93% 133.48 (767.45) AAA 0.11
36265MAC9 GMALT 2022-1 A3 1.9 03/20/2025 99,155.27 02/15/2022 99,154.42 99.76 98,914.17 0.08% Aaa/NA 0.97

1.91% 99,155.12 7.67% 57.57 (240.95) AAA 0.07
89240BAC2 TAOT 2021-A A3 0.26 05/15/2025 67,671.22 02/02/2021 67,658.66 99.49 67,326.29 0.05% Aaa/NA 1.12

0.27% 67,669.00 5.97% 7.82 (342.71) AAA 0.14
02582JJT8 AMXCA 2022-2 A 05/17/2027 940,000.00 05/17/2022 939,792.07 97.93 920,580.35 0.73% NA/AAA 1.12

3.42% 939,889.02 5.33% 1,416.27 (19,308.67) AAA 1.60
02582JJV3 AMXCA 2022-3 A 3.75 08/15/2025 1,000,000.00 11/03/2022 960,000.00 98.07 980,727.30 0.78% Aaa/NA 1.38

5.41% 972,704.44 5.26% 1,666.67 8,022.86 AAA 1.82
44933LAC7 HART 2021-A A3 0.38 09/15/2025 71,746.98 04/20/2021 71,739.44 99.18 71,159.03 0.06% NA/AAA 1.46

0.39% 71,745.22 4.94% 12.12 (586.18) AAA 0.24
43815GAC3 HAROT 2021-4 A3 0.88 01/21/2026 190,171.95 11/16/2021 190,131.86 97.56 185,537.40 0.15% Aaa/NA 1.81

0.89% 190,156.50 4.99% 46.49 (4,619.09) AAA 0.67
47789QAC4 JDOT 2021-B A3 0.52 03/16/2026 197,099.73 07/13/2021 197,082.14 97.64 192,457.59 0.15% Aaa/NA 1.96

0.52% 197,093.34 5.45% 45.55 (4,635.74) AAA 0.53
89238JAC9 TAOT 2021-D A3 0.71 04/15/2026 181,632.10 11/09/2021 181,628.23 97.44 176,982.32 0.14% NA/AAA 2.04

0.95% 181,630.98 4.51% 57.32 (4,648.66) AAA 0.72
44935FAD6 HART 2021-C A3 0.74 05/15/2026 133,049.62 11/09/2021 133,019.92 97.77 130,081.48 0.10% NA/AAA 2.12

0.75% 133,037.77 4.53% 43.76 (2,956.29) AAA 0.66
43815BAC4 HAROT 2022-1 A3 1.88 05/15/2026 444,398.88 02/15/2022 444,332.04 97.68 434,070.96 0.34% Aaa/AAA 2.12

1.89% 444,368.31 4.97% 371.32 (10,297.35) NA 0.81
05602RAD3 BMWOT 2022-A A3 3.21 285,931.89 05/10/2022 285,917.02 98.48 281,596.87 0.22% Aaa/AAA 2.40 08/25/2026 3.63% 285,925.45 4.87% 152.97 (4,328.57) NA 0.93 47787JAC2 JDOT 2022 A3 0.36 09/15/2026 298,570.37 03/10/2022 298,504.33 97.90 292,301.17 0.23% Aaa/NA 2.46

2.34% 298,536.84 5.26% 307.86 (6,235.67) AAA 0.77
362554AC1 GMCAR 2021-4 A3 0.68 09/16/2026 154,816.52 10/13/2021 154,812.57 97.10 150,332.26 0.12% Aaa/AAA 2.46

0.68% 154,815.28 4.44% 43.86 (4,483.03) NA 0.85
448977AD0 HART 2022-A A3 2.22 10/15/2026 612,705.62 03/09/2022 612,682.04 97.85 599,534.96 0.47% NA/AAA 2.54

2.23% 612,693.84 4.81% 604.54 (13,158.87) AAA 0.91
380146AC4 GMCAR 2022-1 A3 1.23 11/16/2026 154,490.03 01/11/2022 154,476.61 97.54 150,692.14 0.12% NA/AAA 2.63

1.27% 154,483.63 4.53% 81.11 (3,791.49) AAA 0.90
28 596

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
47800AAC4 JDOT 2022-B A3 3.74 02/16/2027 445,000.00 07/12/2022 444,957.50 98.54 438,484.40 0.35% Aaa/NA 2.88

3.77% 444,974.28 5.32% 739.69 (6,489.88) AAA 1.04
47800BAC2 JDOT 2022-C A3 5.09 06/15/2027 715,000.00 10/12/2022 714,944.52 99.65 712,478.34 0.56% Aaa/NA 3.21

3.29% 714,964.82 5.44% 1,617.49 (2,486.48) AAA 1.33
161571HT4 CHAIT 2023-1 A 5.16 09/15/2028 1,350,000.00 09/07/2023 1,349,625.78 100.51 1,356,880.82 1.07% NR/AAA 4.46

5.17% 1,349,666.54 5.00% 3,096.00 7,214.27 AAA 2.26
7,564,979.99 98.67 7,503,840.33 5.94% Aaa/AAA 2.46
Total ABS 7,605,997.03 3.32% 7,578,057.96 5.22% 10,523.35 (74,217.64) AAA 1.32 AGENCY
3135G0W66 FEDERAL NATIONAL MORTGAGE 1,945,000.00 -- 1,935,854.05 98.11 1,908,173.97 1.51% Aaa/AA+ 0.54 ASSOCIATION 1.625 10/15/2024 1.72% 1,943,985.27 5.90% 14,573.99 (35,811.29) AA+ 0.52 3130AQF40 FEDERAL HOME LOAN BANKS 1.0 650,000.00 12/21/2021 649,577.50 97.04 630,738.09 0.50% Aaa/AA+ 0.72 12/20/2024 1.02% 649,898.43 5.69% 1,823.61 (19,160.34) AA+ 0.70 3135G0X24 FEDERAL NATIONAL MORTGAGE 2,170,000.00 -- 2,216,515.70 97.36 2,112,719.62 1.67% Aaa/AA+ 0.77 ASSOCIATION 1.625 01/07/2025 1.18% 2,177,405.03 5.48% 8,227.92 (64,685.42) AA+ 0.75 3137EAEP0 FEDERAL HOME LOAN MORTGAGE 2,280,000.00 02/13/2020 2,278,244.40 96.91 2,209,565.53 1.75% Aaa/AA+ 0.87 CORP 1.5 02/12/2025 1.52% 2,279,695.06 5.48% 4,655.00 (70,129.52) AA+ 0.84 3135G03U5 FEDERAL NATIONAL MORTGAGE 1,795,000.00 04/22/2020 1,791,302.30 95.48 1,713,886.61 1.36% Aaa/AA+ 1.06 ASSOCIATION 0.625 04/22/2025 0.67% 1,794,217.48 5.38% 4,954.95 (80,330.87) AA+ 1.03 3135G04Z3 FEDERAL NATIONAL MORTGAGE 2,100,000.00 -- 2,098,880.25 94.84 1,991,535.84 1.58% Aaa/AA+ 1.21 ASSOCIATION 0.5 06/17/2025 0.51% 2,099,766.16 5.21% 3,033.33 (108,230.32) AA+ 1.18 3137EAEU9 FEDERAL HOME LOAN MORTGAGE 1,200,000.00 07/21/2020 1,194,024.00 94.34 1,132,062.94 0.90% Aaa/AA+ 1.31 CORP 0.375 07/21/2025 0.48% 1,198,440.47 5.23% 875.00 (66,377.54) AA+ 1.27 3135G05X7 FEDERAL NATIONAL MORTGAGE 2,150,000.00 -- 2,136,456.52 93.93 2,019,559.50 1.60% Aaa/AA+ 1.40 ASSOCIATION 0.375 08/25/2025 0.51% 2,145,944.47 5.17% 806.25 (126,384.97) AA+ 1.37 3137EAEX3 FEDERAL HOME LOAN MORTGAGE 1,800,000.00 -- 1,794,640.80 93.67 1,686,057.86 1.33% Aaa/AA+ 1.48 CORP 0.375 09/23/2025 0.44% 1,798,393.41 5.11% 150.00 (112,335.56) AA+ 1.44 3135G06G3 FEDERAL NATIONAL MORTGAGE 2,200,000.00 -- 2,193,135.20 93.47 2,056,402.50 1.63% Aaa/AA+ 1.61 ASSOCIATION 0.5 11/07/2025 0.56% 2,197,793.17 4.98% 4,400.00 (141,390.67) AA+ 1.56 880591EZ1 TENNESSEE VALLEY AUTHORITY 1,200,000.00 05/01/2023 1,203,612.00 98.26 1,179,093.23 0.93% Aaa/AA+ 3.96

3.875 03/15/2028 3.81% 1,202,931.83 4.34% 2,066.67 (23,838.60) AA+ 3.62 3133EPME2 FEDERAL FARM CREDIT BANKS 2,000,000.00 06/07/2023 1,992,080.00 98.36 1,967,168.08 1.56% Aaa/AA+ 4.19 FUNDING CORP 3.875 06/08/2028 3.96% 1,993,371.82 4.42% 24,326.39 (26,203.74) AA+ 3.78 21,484,322.72 95.93 20,606,963.76 16.31% Aaa/AA+ 1.57
Total Agency 21,490,000.00 1.34% 21,481,842.62 5.20% 69,893.11 (874,878.86) AA+ 1.48 29 597

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration

AGENCY CMBS
3137BSP72 FHMS K-058 A2 2.653 08/25/2026 500,000.00 11/12/2021 528,808.59 95.21 476,046.30 0.38% Aaa/AA+ 2.40

1.36% 514,286.91 4.94% 1,105.42 (38,240.61) AAA 2.24
3137BSRE5 FHMS K-059 A2 3.12 09/25/2026 1,000,000.00 02/18/2022 1,042,812.50 96.17 961,722.60 0.76% Aaa/AAA 2.49

2.08% 1,022,911.18 4.92% 2,600.00 (61,188.58) AAA 2.25
3137BTAC5 FHMS K-060 A2 3.3 10/25/2026 1,000,000.00 10/31/2022 946,875.00 96.44 964,436.80 0.76% Aaa/AA+ 2.57

4.74% 966,034.22 4.88% 2,750.00 (1,597.42) AAA 2.39
3137FBBX3 FHMS K-068 A2 3.244 08/25/2027 2,000,000.00 -- 1,887,460.94 95.60 1,911,922.00 1.51% Aaa/AA+ 3.40

4.54% 1,921,533.32 4.80% 5,406.67 (9,611.32) AA+ 3.08
3137FBU79 FHMS K-069 A2 3.187 09/25/2027 1,500,000.00 04/13/2023 1,446,093.75 95.40 1,430,954.40 1.13% Aaa/AAA 3.49

4.08% 1,457,874.14 4.81% 3,983.75 (26,919.74) AA+ 3.11
3137F4D41 FHMS K-074 A2 3.6 01/25/2028 1,000,000.00 03/14/2023 966,757.81 96.46 964,576.60 0.76% Aaa/AA+ 3.82

4.36% 973,990.98 4.79% 3,000.00 (9,414.38) AAA 3.42
3137FJEH8 FHMS K-081 A2 3.9 08/25/2028 3,530,000.00 -- 3,369,780.09 97.02 3,424,684.22 2.71% Aaa/AA+ 4.40

4.94% 3,387,085.82 4.78% 11,472.50 37,598.39 AAA 3.92
3137FJKE8 FHMS K-082 A2 3.92 09/25/2028 1,000,000.00 11/28/2023 964,531.25 97.05 970,487.30 0.77% Aaa/AA+ 4.49

4.74% 967,023.87 4.77% 3,266.67 3,463.43 AAA 3.95
3137H5YC5 FHMS K-748 A2 2.26 01/25/2029 2,237,000.00 03/25/2024 2,014,523.35 89.90 2,011,042.64 1.59% Aaa/AA+ 4.82

4.61% 2,015,034.79 4.61% 4,213.02 (3,992.15) AAA 4.37
3137FLMV3 FHMS K-090 A2 3.422 02/25/2029 1,520,000.00 03/18/2024 1,434,975.00 94.93 1,442,908.79 1.14% Aaa/AAA 4.91

4.70% 1,435,501.03 4.78% 4,334.53 7,407.77 AA+ 4.35
Total Agency 14,602,618.28 95.29 14,558,781.65 11.53% Aaa/AA+ 3.94 CMBS 15,287,000.00 4.36% 14,661,276.26 4.78% 42,132.55 (102,494.61) AAA 3.54 CASH
CCYUSD Receivable 11,589.66 -- 11,589.66 1.00 11,589.66 0.01% Aaa/AAA 0.00

0.00% 11,589.66 0.00% 0.00 0.00 AAA 0.00
11,589.66 1.00 11,589.66 0.01% Aaa/AAA 0.00
Total Cash 11,589.66 0.00% 11,589.66 0.00% 0.00 0.00 AAA 0.00

CORPORATE
74153WCQ0 PRICOA GLOBAL FUNDING I 1.15 670,000.00 12/01/2021 669,309.90 97.11 650,647.58 0.52% Aa3/AA- 0.68 12/06/2024 1.18% 669,842.93 6.01% 2,461.32 (19,195.35) AA- 0.66 89236TJT3 TOYOTA MOTOR CREDIT CORP 1.45 920,000.00 01/10/2022 918,767.20 97.05 892,880.16 0.71% A1/A+ 0.79 01/13/2025 1.50% 919,677.18 5.70% 2,890.33 (26,797.02) A+ 0.76 30 598

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
64952WEK5 NEW YORK LIFE GLOBAL FUNDING

1.45 01/14/2025 1,270,000.00 01/11/20221.49%
1,268,628.40
1,269,639.58

97.06 5.85%
1,232,715.07
3,938.76

0.98%
(36,924.51)
Aaa/AA+
AAA

0.79 0.77
90331HPL1 US BANK NA 2.05 01/21/2025 1,285,000.00 01/16/2020

2.09%
1,282,262.95
1,284,558.06

97.34 5.73%
1,250,772.56
5,122.15

0.99%
(33,785.50)
A2/A+
A+

0.81 0.78
78016EZ59 ROYAL BANK OF CANADA 3.375
04/14/2025 540,000.00 04/07/20223.39%
539,800.20
539,931.09

98.04 5.44%
529,411.21
8,454.38

0.42%
(10,519.88)
A1/A
AA1.040.99
06367WB85 BANK OF MONTREAL 1.85
05/01/2025 939,000.00 07/23/20210.86%
973,573.98
948,939.39

96.30 5.62%
904,269.45
7,238.12

0.72%
(44,669.94)
A2/AAA1.08

1.05 637432NG6

NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORP 3.25
11/01/2025
700,000.00
04/06/2022

3.20%
701,015.00
700,417.63

97.05 5.34%
679,384.26
9,479.17

0.54%
(21,033.36)
A1/AA+1.59

1.50 40139LBC6 GUARDIAN LIFE GLOBAL FUNDING

0.875 12/10/2025 1,100,000.00 --1.12%
1,088,890.00
1,095,504.41

92.96 5.64%
1,022,579.00
2,967.71

0.81%
(72,925.41)
Aa1/AA+
NA

1.70 1.64
66815L2A6 NORTHWESTERNMUTUAL GLOBAL
FUNDING 0.8 01/14/2026 650,000.00 12/06/20211.46%
632,755.50
642,482.87

92.78 5.35%
603,087.50
1,112.22

0.48%
(39,395.37)
Aaa/AA+
AAA

1.79 1.73
46647PBK1 JPMORGAN CHASE & CO 2.083
04/22/2026 334,000.00 05/20/20210.97%
346,468.22
337,890.06

96.36 6.49%
321,829.79
3,072.77

0.25%
(16,060.27)
A1/AAA2.06

1.02 023135BX3 AMAZON.COM INC 1.0 05/12/2026 1,655,000.00 05/10/2021

1.09%
1,647,850.40
1,651,981.19

92.34 4.96%
1,528,281.43
6,390.14

1.21%
(123,699.76)
A1/AA
AA2.112.04
91324PEC2 UNITEDHEALTH GROUP INC 1.15
05/15/2026 275,000.00 --1.08%
275,889.15
275,378.28

92.49 5.03%
254,360.93
1,194.72

0.20%
(21,017.34)
A2/A+
A

2.12 2.05
89236TJK2 TOYOTA MOTOR CREDIT CORP 1.125
06/18/2026 1,130,000.00 06/15/20211.13%
1,129,502.80
1,129,779.99

92.04 5.09%
1,040,083.53
3,637.19

0.82%
(89,696.46)
A1/A+
A+

2.22 2.14
06051GJD2 BANK OF AMERICA CORP 1.319
06/19/2026 1,000,000.00 --1.24%
1,002,640.00
1,000,917.63

95.06 6.16%
950,560.60
3,737.17

0.75%
(50,357.03)
A1/AAA2.22

1.18 57629WDE7 MASSMUTUAL GLOBAL FUNDING II

1.2 07/16/2026 772,000.00 08/10/20211.21%
771,785.72
771,900.42

91.55 5.42%
706,775.17
1,930.00

0.56%
(65,125.25)
Aa3/AA+
AA+

2.29 2.21
58989V2D5 MET TOWER GLOBAL FUNDING 1.25
09/14/2026 585,000.00 09/07/20211.27%
584,461.80
584,735.91

91.04 5.42%
532,555.96
345.31

0.42%
(52,179.96)
Aa3/AAAA2.46

2.36 931142ER0 WALMART INC 1.05 09/17/2026 265,000.00 09/08/2021

1.09%
264,499.15
264,753.41

91.68 4.82%
242,939.16
108.21

0.19%
(21,814.25)
Aa2/AA
AA

2.47 2.38
26442CAS3 DUKE ENERGY CAROLINAS LLC 2.95
12/01/2026 1,355,000.00 10/28/20224.88%
1,258,727.25
1,292,109.55

95.32 4.86%
1,291,585.36
13,324.17

1.02%
(524.19)
Aa3/A
WR

2.67 2.50
59217GER6 METROPOLITAN LIFE GLOBAL
FUNDING I 1.875 01/11/2027 845,000.00 01/03/20221.90%
844,036.70
844,464.54

91.85 5.30%
776,153.37
3,520.83

0.61%
(68,311.17)
Aa3/AAAA2.78

2.64 31
599

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
61747YEZ4 MORGAN STANLEY 5.05 01/28/2027 610,000.00 01/17/2023

4.99%
611,063.70
610,643.98

99.62 5.67%
607,653.86
5,390.88

0.48%
(2,990.12)
A1/AA+2.83

1.71 808513BY0 CHARLES SCHWAB CORP 2.45
03/03/2027 725,000.00 03/01/20222.46%
724,796.70
724,880.23

93.19 5.16%
675,619.04
1,381.53

0.53%
(49,261.19)
A2/AA2.92

2.76 084664CZ2 BERKSHIRE HATHAWAY FINANCE
CORP 2.3 03/15/2027 1,225,000.00 03/07/20222.30%
1,224,767.25
1,224,862.59

94.16 4.63%
1,153,520.58
1,252.22

0.91%
(71,342.02)
Aa2/AA
A+

2.96 2.81
06051GHT9 BANK OF AMERICA CORP 3.559
04/23/2027 750,000.00 --4.29%
726,688.38
734,863.55

96.49 5.83%
723,692.55
11,715.04

0.57%
(11,171.00)
A1/AAA3.06

1.93 665859AW4 NORTHERN TRUST CORP 4.0
05/10/2027 455,000.00 05/05/20224.03%
454,262.90
454,542.24

97.42 4.92%
443,278.47
7,128.33

0.35%
(11,263.77)
A2/A+
A+

3.11 2.84
91324PEG3 UNITEDHEALTH GROUP INC 3.7
05/15/2027 465,000.00 05/17/20223.69%
465,220.50
465,136.65

96.96 4.74%
450,866.57
6,499.67

0.36%
(14,270.08)
A2/A+
A

3.12 2.87
61747YEC5 MORGAN STANLEY 1.512
07/20/2027 750,000.00 10/28/20225.92%
637,425.00
671,223.65

91.78 5.66%
688,351.46
2,236.50

0.54%
17,127.81
A1/AA+3.30

2.21 14913R3A3 CATERPILLAR FINANCIAL SERVICES
CORP 3.6 08/12/2027 1,000,000.00 11/02/20225.05%
938,730.00
956,808.52

96.37 4.79%
963,719.28
4,900.00

0.76%
6,910.76
A2/A
A+

3.37 3.11
756109BG8 REALTY INCOME CORP 3.95
08/15/2027 1,425,000.00 --5.41%
1,337,997.25
1,363,509.46

96.91 5.02%
1,381,029.33
7,192.29

1.09%
17,519.87
A3/ANA3.38

3.10 57636QAW4 MASTERCARD INC 4.875
03/09/2028 775,000.00 03/06/20234.90%
774,248.25
774,408.31
101.31

4.49%
785,151.71
2,308.85

0.62%
10,743.40
Aa3/A+
NA

3.94 3.48
63743HFG2

NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORP 4.8
03/15/2028
900,000.00
04/10/2023

4.39%
915,975.00
912,770.97

99.88 4.87%
898,959.09
1,920.00

0.71%
(13,811.89)
A2/AA3.96

3.56 74340XCG4 PROLOGIS LP 4.875 06/15/2028 1,600,000.00 --

5.02%
1,589,759.50
1,591,255.77
100.11

4.91%
1,601,719.15
22,966.67

1.27%
10,463.39
A3/A
NA

4.21 3.71
24422EXB0 JOHN DEERE CAPITAL CORP 4.95
07/14/2028 1,000,000.00 09/12/20235.06%
995,310.00
995,841.44
100.75

4.78%
1,007,537.88
10,587.50

0.80%
11,696.44
A1/A
A+

4.29 3.79
89115A2U5 TORONTO-DOMINION BANK 5.523
07/17/2028 1,400,000.00 --5.45%
1,404,594.00
1,403,985.46
102.13

4.95%
1,429,784.85
15,893.97

1.13%
25,799.38
A1/A
AA4.303.76
78016HZS2 ROYAL BANK OF CANADA 5.2
08/01/2028 1,000,000.00 08/07/20235.31%
995,280.00
995,892.38
101.00

4.98%
1,009,957.57
8,666.67

0.80%
14,065.19
A1/A
AA4.343.82
74456QBX3 PUBLIC SERVICE ELECTRICAND GAS
CO 3.65 09/01/2028 1,000,000.00 12/07/20234.77%
953,250.00
956,283.60

95.62 4.86%
956,155.70
3,041.67

0.76%
(127.90)
A1/A
WR

4.42 4.01
91324PDP4 UNITEDHEALTH GROUP INC 3.875
12/15/2028 1,000,000.00 12/12/20234.77%
960,560.00
962,891.43

96.45 4.77%
964,476.08
11,409.72

0.76%
1,584.65
A2/A+
A

4.71 4.19
32 600

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
66815L2Q1 NORTHWESTERNMUTUAL GLOBAL
FUNDING 4.71 01/10/2029 800,000.00 --4.67%
801,507.56
801,439.90

98.90 5.03%
791,182.50
8,478.00

0.63%
(10,257.40)
Aaa/AA+
AAA

4.78 4.18
57629W5B2 MASSMUTUAL GLOBAL FUNDING II

4.85 01/17/2029 800,000.00 01/09/20244.85%
799,896.00
799,900.27

99.38 5.08%
795,043.66
7,975.56

0.63%
(4,856.61)
Aa3/AA+
AA+

4.80 4.19
46647PAM8 JPMORGAN CHASE & CO 3.509
01/23/2029 1,300,000.00 01/18/20245.07%
1,227,577.00
1,230,997.39

94.59 5.43%
1,229,712.20
8,616.54

0.97%
(1,285.19)
A1/AAA4.82

3.48 17275RBR2 CISCO SYSTEMS INC 4.85
02/26/2029 685,000.00 02/21/20244.86%
684,760.25
684,764.84
100.74

4.81%
690,056.29
3,229.97

0.55%
5,291.44
A1/AANA4.91

4.30 Total Corporate 35,955,000.00 3.41%
35,424,533.56
35,541,806.76

96.49 5.21%
34,658,339.90
233,716.24

27.44%
(883,466.86)
A1/A
AA2.962.59

MONEY MARKET
FUND
X9USDDGCM DREYFUS GVT CSH MGT INST 167,185.65
--

5.18%
167,185.65
167,185.65

1.00 5.18%
167,185.65

0.00 0.13%

0.00 Aaa/
AAAm
NA

0.00 0.00
Total Money
Market Fund 167,185.65 5.18%
167,185.65
167,185.65

1.00 5.18%
167,185.65

0.00 0.13%

0.00 Aaa/
AAAm
NA

0.00 0.00

MUNICIPAL
BONDS
13063DRK6 CALIFORNIA ST 2.4 10/01/2024 730,000.00 10/16/2019

1.93%
746,768.10
731,700.98

98.53 5.33%
719,269.00
8,760.00

0.57%
(12,431.98)
Aa2/AAAA0.50

0.49 Total Municipal
Bonds 730,000.00
10/16/2019

1.93%
746,768.10
731,700.98

98.53 5.33%
719,269.00
8,760.00

0.57%
(12,431.98)
Aa2/AAAA0.50

0.49 SUPRANATIONAL
459058JL8

INTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPM

0.5 10/28/2025
2,150,000.00
--

0.60%
2,140,429.05
2,146,797.13

93.53 5.14%
2,010,968.16
4,568.75

1.59%
(135,828.96)
Aaa/AAA
NA

1.58 1.53
4581X0DV7 INTER-AMERICAN DEVELOPMENT
BANK 0.875 04/20/2026 2,175,000.00 04/13/20210.97%
2,165,038.50
2,170,913.93

92.58 4.87%
2,013,704.91
8,511.20

1.59%
(157,209.02)
Aaa/AAA
NA

2.05 1.99
459058KT9

INTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPM

3.5 07/12/2028
2,450,000.00
08/25/2023

4.56%
2,337,814.50
2,351,435.67

96.64 4.46%
2,367,587.44
18,817.36

1.87%
16,151.77
Aaa/AAA
NA

4.28 3.89
33 601

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
Total 6,643,282.05 94.38 6,392,260.52 5.06% Aaa/AAA 2.73 Supranational 6,775,000.00 2.18% 6,669,146.73 4.80% 31,897.31 (276,886.22) NA 2.55

US TREASURY
91282CDS7 UNITED STATES TREASURY 1.125 1,000,000.00 02/02/2022 993,125.00 96.94 969,355.47 0.77% Aaa/AA+ 0.79 01/15/2025 1.36% 998,155.18 5.51% 2,379.81 (28,799.71) AA+ 0.77 912828ZC7 UNITED STATES TREASURY 1.125 2,000,000.00 03/18/2020 2,030,859.38 96.49 1,929,863.28 1.53% Aaa/AA+ 0.91 02/28/2025 0.81% 2,005,686.87 5.41% 1,956.52 (75,823.59) AA+ 0.89 912828ZF0 UNITED STATES TREASURY 0.5 2,000,000.00 05/28/2020 2,014,140.63 95.64 1,912,723.14 1.51% Aaa/AA+ 1.00 03/31/2025 0.35% 2,002,912.96 5.37% 27.32 (90,189.82) AA+ 0.98 912828XB1 UNITED STATES TREASURY 2.125 1,000,000.00 04/06/2022 980,742.19 96.91 969,101.56 0.77% Aaa/AA+ 1.12 05/15/2025 2.77% 993,054.28 5.15% 8,056.32 (23,952.72) AA+ 1.09 91282CAB7 UNITED STATES TREASURY 0.25 1,100,000.00 03/12/2021 1,077,828.13 94.08 1,034,859.38 0.82% Aaa/AA+ 1.33 07/31/2025 0.71% 1,093,261.08 5.17% 460.85 (58,401.71) AA+ 1.31 91282CFP1 UNITED STATES TREASURY 4.25 2,000,000.00 10/28/2022 1,993,359.38 99.18 1,983,515.62 1.57% Aaa/AA+ 1.54 10/15/2025 4.37% 1,996,544.42 4.81% 39,248.63 (13,028.80) AA+ 1.45 91282CAT8 UNITED STATES TREASURY 0.25 400,000.00 03/12/2021 390,265.63 93.15 372,593.75 0.29% Aaa/AA+ 1.59 10/31/2025 0.78% 396,672.70 5.04% 420.33 (24,078.94) AA+ 1.55 91282CFW6 UNITED STATES TREASURY 4.5 2,400,000.00 11/10/2022 2,415,656.25 99.55 2,389,218.74 1.89% Aaa/AA+ 1.63 11/15/2025 4.26% 2,408,470.95 4.78% 40,945.05 (19,252.20) AA+ 1.53 91282CAZ4 UNITED STATES TREASURY 0.375 1,250,000.00 03/26/2021 1,227,587.89 93.04 1,162,939.45 0.92% Aaa/AA+ 1.67 11/30/2025 0.76% 1,242,017.24 4.99% 1,575.31 (79,077.79) AA+ 1.63 91282CCW9 UNITED STATES TREASURY 0.75 530,000.00 09/23/2021 526,252.73 91.41 484,473.83 0.38% Aaa/AA+ 2.42 08/31/2026 0.90% 528,165.88 4.67% 345.65 (43,692.05) AA+ 2.35 91282CCZ2 UNITED STATES TREASURY 0.875 1,060,000.00 10/18/2021 1,044,141.41 91.52 970,107.03 0.77% Aaa/AA+ 2.50 09/30/2026 1.18% 1,051,996.11 4.63% 25.34 (81,889.08) AA+ 2.41 91282CDG3 UNITED STATES TREASURY 1.125 1,060,000.00 11/15/2021 1,053,540.63 91.84 973,543.75 0.77% Aaa/AA+ 2.59 10/31/2026 1.25% 1,056,632.84 4.63% 5,012.43 (83,089.09) AA+ 2.49 912828YQ7 UNITED STATES TREASURY 1.625 2,400,000.00 11/02/2022 2,156,250.00 93.08 2,233,968.74 1.77% Aaa/AA+ 2.59 10/31/2026 4.41% 2,242,348.25 4.61% 16,392.86 (8,379.51) AA+ 2.47 91282CET4 UNITED STATES TREASURY 2.625 600,000.00 06/13/2022 578,718.75 94.76 568,570.31 0.45% Aaa/AA+ 3.17 05/31/2027 3.40% 586,434.96 4.48% 5,293.03 (17,864.65) AA+ 2.97 91282CEW7 UNITED STATES TREASURY 3.25 1,500,000.00 -- 1,490,273.44 96.57 1,448,554.68 1.15% Aaa/AA+ 3.25 06/30/2027 3.41% 1,493,157.16 4.44% 12,321.43 (44,602.48) AA+ 3.02 91282CFB2 UNITED STATES TREASURY 2.75 1,180,000.00 -- 1,166,739.07 94.97 1,120,631.25 0.89% Aaa/AA+ 3.33 07/31/2027 2.99% 1,171,086.37 4.45% 5,438.05 (50,455.12) AA+ 3.13 34 602

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
91282CFH9 UNITED STATES TREASURY 3.125
08/31/2027 3,500,000.00 --3.28%
3,474,796.89
3,482,691.75

96.06 4.44%
3,362,187.50
9,510.87

2.66%
(120,504.25)
Aaa/AA+
AA+

3.42 3.19
91282CFU0 UNITED STATES TREASURY 4.125
10/31/2027 2,400,000.00 11/03/20224.41%
2,368,968.75
2,377,722.90

99.21 4.40%
2,380,968.74
41,612.64

1.89%
3,245.84
Aaa/AA+
AA+

3.59 3.24
91282CGC9 UNITED STATES TREASURY 3.875
12/31/2027 700,000.00 01/25/20233.57%
709,679.69
707,361.94

98.39 4.34%
688,707.03
6,855.77

0.55%
(18,654.91)
Aaa/AA+
AA+

3.75 3.42
91282CGH8 UNITED STATES TREASURY 3.5
01/31/2028 1,000,000.00 03/14/20233.90%
982,578.13
986,305.10

97.07 4.39%
970,742.19
5,865.38

0.77%
(15,562.91)
Aaa/AA+
AA+

3.84 3.53
91282CGP0 UNITED STATES TREASURY 4.0
02/29/2028 2,900,000.00 02/23/20234.16%
2,879,269.53
2,883,785.53

98.83 4.37%
2,866,128.90
10,086.96

2.27%
(17,656.63)
Aaa/AA+
AA+

3.92 3.58
91282CHA2 UNITED STATES TREASURY 3.5
04/30/2028 2,100,000.00 --3.55%
2,095,664.07
2,096,386.46

97.00 4.37%
2,037,082.03
30,894.23

1.61%
(59,304.43)
Aaa/AA+
AA+

4.08 3.70
91282CHE4 UNITED STATES TREASURY 3.625
05/31/2028 1,500,000.00 06/14/20234.00%
1,475,214.84
1,479,137.67

97.46 4.35%
1,461,972.66
18,273.57

1.16%
(17,165.01)
Aaa/AA+
AA+

4.17 3.78
91282CHX2 UNITED STATES TREASURY 4.375
08/31/2028 550,000.00 09/25/20234.62%
544,199.22
544,804.74
100.41

4.32%
552,255.86
2,092.39

0.44%
7,451.12
Aaa/AA+
AA+

4.42 3.97
91282CJF9 UNITED STATES TREASURY 4.875
10/31/2028 750,000.00 10/27/20234.79%
752,841.80
752,603.82
102.51

4.30%
768,837.89
15,368.30

0.61%
16,234.08
Aaa/AA+
AA+

4.59 4.01
91282CJN2 UNITED STATES TREASURY 4.375
11/30/2028 900,000.00 12/28/20233.83%
921,937.50
920,790.60
100.53

4.29%
904,746.10
13,232.58

0.72%
(16,044.50)
Aaa/AA+
AA+

4.67 4.13
91282CJR3 UNITED STATES TREASURY 3.75
12/31/2028 2,150,000.00 --3.98%
2,127,462.89
2,128,450.79

97.87 4.31%
2,104,144.54
20,377.75

1.67%
(24,306.25)
Aaa/AA+
AA+

4.75 4.26
91282CJW2 UNITED STATES TREASURY 4.0
01/31/2029 3,100,000.00 --4.30%
3,058,937.50
3,059,780.35

98.97 4.29%
3,068,031.25
20,780.22

2.43%
8,250.90
Aaa/AA+
AA+

4.84 4.33
Total US Treasury 43,030,000.00 3.21%
42,531,031.32
42,686,418.89

96.95 4.62%
41,689,824.67
334,849.60

33.01%
(996,594.22)
Aaa/AA+
AA+

3.01 2.77
Total Portfolio 131,051,772.34 3.04%
129,176,311.33
129,529,025.52

96.31 4.95%
126,308,055.15
731,772.16
100.00%
(3,220,970.38)
Aa2/AAAA2.80

HOLDINGS REPORT
Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
CASH
86723G1$8 Suncrest Bank 1,047,552.65 --

0.02%
1,047,552.65
1,047,552.65

1.00 0.02%
1,047,552.65

0.00 0.90%

0.00 NA/NA
NA

0.00 0.00
CCYUSD Receivable 1,071,801.02 --

0.00%
1,071,801.02
1,071,801.02

1.00 0.00%
1,071,801.02

0.00 0.92%

0.00 Aaa/AAA
AAA

0.00 0.00
90JPMC$04 CASH JP MORGAN CHASE CASH
ACCT 1,402,844.54 03/31/20242.50%
1,402,844.54
1,402,844.54

1.00 2.50%
1,402,844.54

0.00 1.21%

0.00 NA/NA
NA

0.00 0.00
90BOFA$00 Cash BOA 10,579,474.15 01/31/2024

0.00%
10,579,474.15
10,579,474.15

1.00 0.00%
10,579,474.15

0.00 9.12%

0.00 NA/NA
NA

0.00 0.00
Total Cash 14,101,672.36 0.25%
14,101,672.36
14,101,672.36

1.00 0.25%
14,101,672.36

0.00 12.16%

0.00 Aaa/AAA
AAA

0.00 0.00
LAIF
90LAIF$00 State Pool 96,292,714.93 --

4.27%
96,292,714.89
96,292,714.89

1.00 4.27%
96,292,714.93

0.00 83.04%

0.04 NA/NA
NA

0.00 0.00
Total LAIF 96,292,714.93 4.27%
96,292,714.89
96,292,714.89

1.00 4.27%
96,292,714.93

0.00 83.04%

0.04 NA/NA
NA

0.00 0.00

LOCAL GOV

INVESTMENT
POOL
90CAMP$00 CAMP 5,562,740.67 --

5.48%
5,558,740.67
5,558,740.67

1.00 5.48%
5,562,740.67

0.00 4.80%
4,000.00
NA/AAAm
AAA

0.00 0.00
Total Local Gov
Investment Pool 5,562,740.67 5.48%
5,558,740.67
5,558,740.67

1.00 5.48%
5,562,740.67

0.00 4.80%
4,000.00
NA/
AAAm
AAA

0.00 0.00
Total Portfolio 115,957,127.96 3.84%
115,953,127.92
115,953,127.92

1.00 3.84%
115,957,127.96

0.00 100.00%
4,000.04
Aaa/AAA
AAA

HOLDINGS REPORT
Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
ABS
44891WAC3 HALST 2022-A A3 1.16 01/15/2025 41,684.48 01/11/2022

1.16%
41,683.56
41,684.35

99.81 5.65%
41,606.66

21.49 0.01%
(77.69)
Aaa/AAA
NA

0.79 0.04
89238LAC4 TLOT 2022-A A3 1.96 02/20/2025 222,872.36 02/23/2022

1.96%
222,837.28
222,863.26

99.65 4.48%
222,095.81
133.48

0.07%
(767.45)
NA/AAA
AAA

0.89 0.11
36265MAC9 GMALT 2022-1 A3 1.9 03/20/2025 99,155.27 02/15/2022

1.91%
99,154.42
99,155.12

99.76 3.51%
98,914.17

57.57 0.03%
(240.95)
Aaa/NA
AAA

0.97 0.07
89240BAC2 TAOT 2021-A A3 0.26 05/15/2025 67,671.22 02/02/2021

0.27%
67,658.66
67,669.00

99.49 4.63%
67,326.29

7.82 0.02%
(342.71)
Aaa/NA
AAA

1.12 0.14
02582JJT8 AMXCA 2022-2 A 05/17/2027 940,000.00 05/17/2022

3.42%
939,792.07
939,889.02

97.93 5.33%
920,580.35
1,416.27

0.30%
(19,308.67)
NA/AAA
AAA

1.12 1.60
02582JJV3 AMXCA 2022-3 A 3.75 08/15/2025 1,000,000.00 11/03/2022

5.41%
960,000.00
972,704.44

98.07 5.26%
980,727.30
1,666.67

0.32%
8,022.86
Aaa/NA
AAA

1.38 1.82
44933LAC7 HART 2021-A A3 0.38 09/15/2025 71,746.98 04/20/2021

0.39%
71,739.44
71,745.22

99.18 5.26%
71,159.03

12.12 0.02%
(586.18)
NA/AAA
AAA

1.46 0.24
43815GAC3 HAROT 2021-4 A3 0.88 01/21/2026 190,171.95 11/16/2021

0.89%
190,131.86
190,156.50

97.56 5.99%
185,537.40

46.49 0.06%
(4,619.09)
Aaa/NA
AAA

1.81 0.67
47789QAC4 JDOT 2021-B A3 0.52 03/16/2026 197,099.73 07/13/2021

0.52%
197,082.14
197,093.34

97.64 5.58%
192,457.59

45.55 0.06%
(4,635.74)
Aaa/NA
AAA

1.96 0.53
89238JAC9 TAOT 2021-D A3 0.71 04/15/2026 181,632.10 11/09/2021

0.95%
181,628.23
181,630.98

97.44 6.15%
176,982.32

57.32 0.06%
(4,648.66)
NA/AAA
AAA

2.04 0.72
44935FAD6 HART 2021-C A3 0.74 05/15/2026 133,049.62 11/09/2021

0.75%
133,019.92
133,037.77

97.77 6.00%
130,081.48

43.76 0.04%
(2,956.29)
NA/AAA
AAA

2.12 0.66
43815BAC4 HAROT 2022-1 A3 1.88 05/15/2026 444,398.88 02/15/2022

1.89%
444,332.04
444,368.31

97.68 6.04%
434,070.96
371.32

0.14%
(10,297.35)
Aaa/AAA
NA

2.12 0.81
05602RAD3 BMWOT 2022-A A3 3.21
08/25/2026 285,931.89 05/10/20223.63%
285,917.02
285,925.45

98.48 5.71%
281,596.87
152.97

0.09%
(4,328.57)
Aaa/AAA
NA

2.40 0.93
47787JAC2 JDOT 2022 A3 0.36 09/15/2026 298,570.37 03/10/2022

2.34%
298,504.33
298,536.84

97.90 5.74%
292,301.17
307.86

0.10%
(6,235.67)
Aaa/NA
AAA

2.46 0.77
362554AC1 GMCAR 2021-4 A3 0.68 09/16/2026 154,816.52 10/13/2021

0.68%
154,812.57
154,815.28

97.10 6.58%
150,332.26

43.86 0.05%
(4,483.03)
Aaa/AAA
NA

2.46 0.85
448977AD0 HART 2022-A A3 2.22 10/15/2026 612,705.62 03/09/2022

2.23%
612,682.04
612,693.84

97.85 6.00%
599,534.96
604.54

0.20%
(13,158.87)
NA/AAA
AAA

2.54 0.91
380146AC4 GMCAR 2022-1 A3 1.23 11/16/2026 154,490.03 01/11/2022

1.27%
154,476.61
154,483.63

97.54 6.28%
150,692.14

81.11 0.05%
(3,791.49)
NA/AAA
AAA

HOLDINGS REPORT
Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
47800AAC4 JDOT 2022-B A3 3.74 02/16/2027 445,000.00 07/12/2022

3.77%
444,957.50
444,974.28

98.54 5.73%
438,484.40
739.69

0.15%
(6,489.88)
Aaa/NA
AAA

2.88 1.04
47800BAC2 JDOT 2022-C A3 5.09 06/15/2027 715,000.00 10/12/2022

3.29%
714,944.52
714,964.82

99.65 5.67%
712,478.34
1,617.49

0.24%
(2,486.48)
Aaa/NA
AAA

3.21 1.33
161571HT4 CHAIT 2023-1 A 5.16 09/15/2028 1,350,000.00 09/07/2023

5.17%
1,349,625.78
1,349,666.54
100.51

5.33%
1,356,880.82
3,096.00

0.45%
7,214.27
NR/AAA
AAA

4.46 2.26
Total ABS 7,605,997.03 3.32%
7,564,979.99
7,578,057.96

98.67 5.54%
7,503,840.33
10,523.35

2.48%
(74,217.64)
Aaa/AAA
AAA

2.46 1.32
AGENCY
3135G0W66 FEDERAL NATIONAL MORTGAGE
ASSOCIATION 1.625 10/15/2024 1,945,000.00 --1.72%
1,935,854.05
1,943,985.27

98.11 5.23%
1,908,173.97
14,573.99

0.63%
(35,811.29)
Aaa/AA+
AA+

0.54 0.52
3130AQF40 FEDERAL HOME LOAN BANKS 1.0
12/20/2024 650,000.00 12/21/20211.02%
649,577.50
649,898.43

97.04 5.25%
630,738.09
1,823.61

0.21%
(19,160.34)
Aaa/AA+
AA+

0.72 0.70
3135G0X24 FEDERAL NATIONAL MORTGAGE
ASSOCIATION 1.625 01/07/2025 2,170,000.00 --1.18%
2,216,515.70
2,177,405.03

97.36 5.18%
2,112,719.62
8,227.92

0.70%
(64,685.42)
Aaa/AA+
AA+

0.77 0.75
3137EAEP0 FEDERAL HOME LOAN MORTGAGE
CORP 1.5 02/12/2025 2,280,000.00 02/13/20201.52%
2,278,244.40
2,279,695.06

96.91 5.20%
2,209,565.53
4,655.00

0.73%
(70,129.52)
Aaa/AA+
AA+

0.87 0.84
3135G03U5 FEDERAL NATIONAL MORTGAGE
ASSOCIATION 0.625 04/22/2025 1,795,000.00 04/22/2020

0.67%
1,791,302.30
1,794,217.48

95.48 5.06%
1,713,886.61
4,954.95

0.57%
(80,330.87)
Aaa/AA+
AA+

1.06 1.03
3135G04Z3 FEDERAL NATIONAL MORTGAGE
ASSOCIATION 0.5 06/17/2025 2,100,000.00 --

0.51%
2,098,880.25
2,099,766.16

94.84 4.95%
1,991,535.84
3,033.33

0.66%
(108,230.32)
Aaa/AA+
AA+

1.21 1.18
3137EAEU9 FEDERAL HOME LOAN MORTGAGE
CORP 0.375 07/21/2025 1,200,000.00 07/21/20200.48%
1,194,024.00
1,198,440.47

94.34 4.90%
1,132,062.94
875.00

0.37%
(66,377.54)
Aaa/AA+
AA+

1.31 1.27
3135G05X7 FEDERAL NATIONAL MORTGAGE
ASSOCIATION 0.375 08/25/2025 2,150,000.00 --0.51%
2,136,456.52
2,145,944.47

93.93 4.91%
2,019,559.50
806.25

0.67%
(126,384.97)
Aaa/AA+
AA+

1.40 1.37
3137EAEX3 FEDERAL HOME LOAN MORTGAGE
CORP 0.375 09/23/2025 1,800,000.00 --0.44%
1,794,640.80
1,798,393.41

93.67 4.87%
1,686,057.86
150.00

0.56%
(112,335.56)
Aaa/AA+
AA+

1.48 1.44
3135G06G3 FEDERAL NATIONAL MORTGAGE
ASSOCIATION 0.5 11/07/2025 2,200,000.00 --0.56%
2,193,135.20
2,197,793.17

93.47 4.79%
2,056,402.50
4,400.00

0.68%
(141,390.67)
Aaa/AA+
AA+

1.61 1.56
880591EZ1 TENNESSEE VALLEY AUTHORITY

3.875 03/15/2028 1,200,000.00 05/01/20233.81%
1,203,612.00
1,202,931.83

98.26 4.36%
1,179,093.23
2,066.67

0.39%
(23,838.60)
Aaa/AA+
AA+

3.96 3.62
3133EPME2 FEDERAL FARM CREDIT BANKS
FUNDING CORP 3.875 06/08/2028 2,000,000.00 06/07/20233.96% 1,992,080.00
1,993,371.82

98.36 4.31%
1,967,168.08
24,326.39

0.65%
(26,203.74)
Aaa/AA+
AA+

4.19 3.78
Total Agency 21,490,000.00 1.34%
21,484,322.72
21,481,842.62

95.93 4.92%
20,606,963.76
69,893.11

6.82%
(874,878.86)
Aaa/AA+
AA+

HOLDINGS REPORT
Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration

AGENCY CMBS
3137BSP72 FHMS K-058 A2 2.653 08/25/2026 500,000.00 11/12/2021

1.36%
528,808.59
514,286.91

95.21 5.11%
476,046.30
1,105.42

0.16%
(38,240.61)
Aaa/AA+
AAA

2.40 2.24
3137BSRE5 FHMS K-059 A2 3.12 09/25/2026 1,000,000.00 02/18/2022

2.08%
1,042,812.50
1,022,911.18

96.17 5.13%
961,722.60
2,600.00

0.32%
(61,188.58)
Aaa/AAA
AAA

2.49 2.25
3137BTAC5 FHMS K-060 A2 3.3 10/25/2026 1,000,000.00 10/31/2022

4.74%
946,875.00
966,034.22

96.44 5.10%
964,436.80
2,750.00

0.32%
(1,597.42)
Aaa/AA+
AAA

2.57 2.39
3137FBBX3 FHMS K-068 A2 3.244 08/25/2027 2,000,000.00 --

4.54%
1,887,460.94
1,921,533.32

95.60 5.02%
1,911,922.00
5,406.67

0.63%
(9,611.32)
Aaa/AA+
AA+

3.40 3.08
3137FBU79 FHMS K-069 A2 3.187 09/25/2027 1,500,000.00 04/13/2023

4.08%
1,446,093.75
1,457,874.14

95.40 5.02%
1,430,954.40
3,983.75

0.47%
(26,919.74)
Aaa/AAA
AA+

3.49 3.11
3137F4D41 FHMS K-074 A2 3.6 01/25/2028 1,000,000.00 03/14/2023

4.36%
966,757.81
973,990.98

96.46 5.04%
964,576.60
3,000.00

0.32%
(9,414.38)
Aaa/AA+
AAA

3.82 3.42
3137FJEH8 FHMS K-081 A2 3.9 08/25/2028 3,530,000.00 --

4.94%
3,369,780.09
3,387,085.82

97.02 5.04%
3,424,684.22
11,472.50

1.13%
37,598.39
Aaa/AA+
AAA

4.40 3.92
3137FJKE8 FHMS K-082 A2 3.92 09/25/2028 1,000,000.00 11/28/2023

4.74%
964,531.25
967,023.87

97.05 5.04%
970,487.30
3,266.67

0.32%
3,463.43
Aaa/AA+
AAA

4.49 3.95
3137H5YC5 FHMS K-748 A2 2.26 01/25/2029 2,237,000.00 03/25/2024

4.61%
2,014,523.35
2,015,034.79

89.90 5.00%
2,011,042.64
4,213.02

0.67%
(3,992.15)
Aaa/AA+
AAA

4.82 4.37
3137FLMV3 FHMS K-090 A2 3.422 02/25/2029 1,520,000.00 03/18/2024

4.70%
1,434,975.00
1,435,501.03

94.93 5.01%
1,442,908.79
4,334.53

0.48%
7,407.77
Aaa/AAA
AA+

4.91 4.35
Total Agency
CMBS 15,287,000.00 4.36%
14,602,618.28
14,661,276.26

95.29 5.04%
14,558,781.65
42,132.55

4.82%
(102,494.61)
Aaa/AA+
AAA

3.94 3.54
CASH
CCYUSD Receivable 11,590.02 --

0.00%
11,590.02
11,590.02

1.00 0.00%
11,590.02

0.00 0.00%

0.00 Aaa/AAA
AAA

0.00 0.00
CCYUSD Receivable 85,421.37 --

0.00%
85,421.37
85,421.37

1.00 0.00%
85,421.37

0.00 0.03%

0.00 Aaa/AAA
AAA

0.00 0.00
86723G1$8 Suncrest Bank 1,047,552.65 --

0.02%
1,047,552.65
1,047,552.65

1.00 0.02%
1,047,552.65

0.00 0.35%

0.00 NA/NA
NA

0.00 0.00
CCYUSD Receivable 1,071,801.02 --

0.00%
1,071,801.02
1,071,801.02

1.00 0.00%
1,071,801.02

0.00 0.35%

0.00 Aaa/AAA
AAA

0.00 0.00
90JPMC$04 CASH JP MORGAN CHASE CASH
ACCT 1,402,844.54 03/31/2024

2.50%
1,402,844.54
1,402,844.54

1.00 2.50%
1,402,844.54

0.00 0.46%

0.00 NA/NA
NA

HOLDINGS REPORT
Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
90BOFA$00 Cash BOA 10,579,474.15 01/31/2024

0.00%
10,579,474.15
10,579,474.15

1.00 0.00%
10,579,474.15

0.00 3.50%

0.00 NA/NA
NA

0.00 0.00
Total Cash 14,198,683.75 0.25%
14,198,683.75
14,198,683.75

1.00 0.25%
14,198,683.75

0.00 4.70%

0.00 Aaa/AAA
AAA

0.00 0.00

CORPORATE
74153WCQ0 PRICOA GLOBAL FUNDING I 1.15
12/06/2024 670,000.00 12/01/20211.18%
669,309.90
669,842.93

97.11 5.53%
650,647.58
2,461.32

0.22%
(19,195.35)
Aa3/AAAA0.68

0.66 89236TJT3 TOYOTA MOTOR CREDIT CORP 1.45
01/13/2025 920,000.00 01/10/20221.50%
918,767.20
919,677.18

97.05 5.34%
892,880.16
2,890.33

0.30%
(26,797.02)
A1/A+
A+

0.79 0.76
64952WEK5 NEW YORK LIFE GLOBAL FUNDING

1.45 01/14/2025 1,270,000.00 01/11/20221.49%
1,268,628.40
1,269,639.58

97.06 5.29%
1,232,715.07
3,938.76

0.41%
(36,924.51)
Aaa/AA+
AAA

0.79 0.77
90331HPL1 US BANK NA 2.05 01/21/2025 1,285,000.00 01/16/2020

2.09%
1,282,262.95
1,284,558.06

97.34 5.47%
1,250,772.56
5,122.15

0.41%
(33,785.50)
A2/A+
A+

0.81 0.78
78016EZ59 ROYAL BANK OF CANADA 3.375
04/14/2025 540,000.00 04/07/2022

3.39%
539,800.20
539,931.09

98.04 5.34%
529,411.21
8,454.38

0.18%
(10,519.88)
A1/A
AA1.040.99
06367WB85 BANK OF MONTREAL 1.85
05/01/2025 939,000.00 07/23/2021

0.86%
973,573.98
948,939.39

96.30 5.41%
904,269.45
7,238.13

0.30%
(44,669.94)
A2/AAA1.08

1.05 637432NG6

NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORP 3.25
11/01/2025
700,000.00 04/06/2022

3.20%
701,015.00
700,417.63

97.05 5.21%
679,384.27
9,479.17

0.22%
(21,033.36)
A1/AA+1.59

1.50 40139LBC6 GUARDIAN LIFE GLOBAL FUNDING

0.875 12/10/2025 1,100,000.00 --1.12%
1,088,890.00
1,095,504.41

92.96 5.26%
1,022,579.00
2,967.71

0.34%
(72,925.41)
Aa1/AA+
NA

1.70 1.64
66815L2A6 NORTHWESTERN MUTUAL GLOBAL
FUNDING 0.8 01/14/2026 650,000.00 12/06/20211.46%
632,755.50
642,482.87

92.78 5.08%
603,087.50
1,112.22

0.20%
(39,395.37)
Aaa/AA+
AAA

1.79 1.73
46647PBK1 JPMORGAN CHASE & CO 2.083
04/22/2026 334,000.00 05/20/20210.97%
346,468.22
337,890.06

96.36 5.68%
321,829.79
3,072.77

0.11%
(16,060.27)
A1/AAA2.06

1.02 023135BX3 AMAZON.COM INC 1.0 05/12/2026 1,655,000.00 05/10/2021

1.09%
1,647,850.40
1,651,981.19

92.34 4.85%
1,528,281.43
6,390.14

0.51%
(123,699.76)
A1/AA
AA2.112.04
91324PEC2 UNITEDHEALTH GROUP INC 1.15
05/15/2026 275,000.00 --1.08%
275,889.15
275,378.28

92.49 4.92%
254,360.93
1,194.72

0.08%
(21,017.34)
A2/A+
A

2.12 2.05
89236TJK2 TOYOTA MOTOR CREDIT CORP 1.125
06/18/2026 1,130,000.00 06/15/2021

1.13%
1,129,502.80
1,129,779.99

92.04 4.96%
1,040,083.53
3,637.19

0.34%
(89,696.47)
A1/A+
A+

2.22 2.14
06051GJD2 BANK OF AMERICA CORP 1.319
06/19/2026 1,000,000.00 --

1.24%
1,002,640.00
1,000,917.63

95.06 5.58%
950,560.60
3,737.17

0.31%
(50,357.03)
A1/AAA2.22

HOLDINGS REPORT
Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
57629WDE7 MASSMUTUAL GLOBAL FUNDING II

1.2 07/16/2026 772,000.00 08/10/20211.21%
771,785.72
771,900.42

91.55 5.14%
706,775.17
1,930.00

0.23%
(65,125.25)
Aa3/AA+
AA+

2.29 2.21
58989V2D5 MET TOWER GLOBAL FUNDING 1.25
09/14/2026 585,000.00 09/07/20211.27%
584,461.80
584,735.91

91.04 5.19%
532,555.96
345.31

0.18%
(52,179.96)
Aa3/AAAA2.46

2.36 931142ER0 WALMART INC 1.05 09/17/2026 265,000.00 09/08/2021

1.09%
264,499.15
264,753.41

91.68 4.67%
242,939.16
108.21

0.08%
(21,814.25)
Aa2/AA
AA

2.47 2.38
26442CAS3 DUKE ENERGY CAROLINAS LLC 2.95
12/01/2026 1,355,000.00 10/28/20224.88%
1,258,727.25
1,292,109.55

95.32 4.84%
1,291,585.36
13,324.17

0.43%
(524.19)
Aa3/A
WR

2.67 2.50
59217GER6 METROPOLITAN LIFE GLOBAL
FUNDING I 1.875 01/11/2027 845,000.00 01/03/2022

1.90%
844,036.70
844,464.54

91.85 5.05%
776,153.37
3,520.83

0.26%
(68,311.17)
Aa3/AAAA2.78

2.64 61747YEZ4 MORGAN STANLEY 5.05 01/28/2027 610,000.00 01/17/2023

4.99%
611,063.70
610,643.98

99.62 5.27%
607,653.86
5,390.88

0.20%
(2,990.12)
A1/AA+2.83

1.71 808513BY0 CHARLES SCHWAB CORP 2.45
03/03/2027 725,000.00 03/01/20222.46%
724,796.70
724,880.23

93.19 4.98%
675,619.04
1,381.53

0.22%
(49,261.19)
A2/AA2.92

2.76 084664CZ2 BERKSHIRE HATHAWAY FINANCE
CORP 2.3 03/15/2027 1,225,000.00 03/07/20222.30%
1,224,767.25
1,224,862.59

94.16 4.43%
1,153,520.58
1,252.22

0.38%
(71,342.02)
Aa2/AA
A+

2.96 2.81
06051GHT9 BANK OF AMERICA CORP 3.559
04/23/2027 750,000.00 --4.29%
726,688.38
734,863.55

96.49 5.38%
723,692.55
11,715.04

0.24%
(11,171.00)
A1/AAA3.06

1.93 665859AW4 NORTHERN TRUST CORP 4.0
05/10/2027 455,000.00 05/05/20224.03%
454,262.90
454,542.24

97.42 4.90%
443,278.47
7,128.33

0.15%
(11,263.77)
A2/A+
A+

3.11 2.84
91324PEG3 UNITEDHEALTH GROUP INC 3.7
05/15/2027 465,000.00 05/17/20223.69%
465,220.50
465,136.65

96.96 4.76%
450,866.57
6,499.67

0.15%
(14,270.08)
A2/A+
A

3.12 2.87
61747YEC5 MORGAN STANLEY 1.512
07/20/2027 750,000.00 10/28/20225.92%
637,425.00
671,223.65

91.78 5.35%
688,351.46
2,236.50

0.23%
17,127.81
A1/AA+3.30

2.21 14913R3A3 CATERPILLAR FINANCIAL SERVICES
CORP 3.6 08/12/2027 1,000,000.00 11/02/2022

5.05%
938,730.00
956,808.52

96.37 4.78%
963,719.28
4,900.00

0.32%
6,910.76
A2/A
A+

3.37 3.11
756109BG8 REALTY INCOME CORP 3.95
08/15/2027 1,425,000.00 --

5.41%
1,337,997.25
1,363,509.46

96.91 4.95%
1,381,029.33
7,192.29

0.46%
17,519.87
A3/ANA3.38

3.10 57636QAW4 MASTERCARD INC 4.875
03/09/2028 775,000.00 03/06/2023

4.90%
774,248.25
774,408.31
101.31

4.52%
785,151.71
2,308.85

0.26%
10,743.40
Aa3/A+
NA

3.94 3.48
63743HFG2

NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORP 4.8
03/15/2028
900,000.00 04/10/2023

4.39%
915,975.00
912,770.97

99.88 4.83%
898,959.09
1,920.00

0.30%
(13,811.89)
A2/AA3.96

3.56 74340XCG4 PROLOGIS LP 4.875 06/15/2028 1,600,000.00 --

5.02%
1,589,759.50
1,591,255.77
100.11

4.84%
1,601,719.15
22,966.67

0.53%
10,463.39
A3/A
NA

HOLDINGS REPORT
Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
24422EXB0 JOHN DEERE CAPITAL CORP 4.95
07/14/2028 1,000,000.00 09/12/20235.06%
995,310.00
995,841.44
100.75

4.75%
1,007,537.88
10,587.50

0.33%
11,696.44
A1/A
A+

4.29 3.79
89115A2U5 TORONTO-DOMINION BANK 5.523
07/17/2028 1,400,000.00 --5.45%
1,404,594.00
1,403,985.46
102.13

4.96%
1,429,784.85
15,893.97

0.47%
25,799.38
A1/A
AA4.303.76
78016HZS2 ROYAL BANK OF CANADA 5.2
08/01/2028 1,000,000.00 08/07/20235.31%
995,280.00
995,892.38
101.00

4.94%
1,009,957.57
8,666.67

0.33%
14,065.19
A1/A
AA4.343.82
74456QBX3 PUBLIC SERVICE ELECTRIC AND GAS
CO 3.65 09/01/2028 1,000,000.00 12/07/20234.77%
953,250.00
956,283.60

95.62 4.76%
956,155.70
3,041.67

0.32%
(127.90)
A1/A
WR

4.42 4.01
91324PDP4 UNITEDHEALTH GROUP INC 3.875
12/15/2028 1,000,000.00 12/12/2023

4.77%
960,560.00
962,891.43

96.45 4.72%
964,476.08
11,409.72

0.32%
1,584.65
A2/A+
A

4.71 4.19
66815L2Q1 NORTHWESTERN MUTUAL GLOBAL
FUNDING 4.71 01/10/2029 800,000.00 --4.67%
801,507.56
801,439.90

98.90 4.97%
791,182.50
8,478.00

0.26%
(10,257.40)
Aaa/AA+
AAA

4.78 4.18
57629W5B2 MASSMUTUAL GLOBAL FUNDING II

4.85 01/17/2029 800,000.00 01/09/20244.85%
799,896.00
799,900.27

99.38 5.00%
795,043.66
7,975.56

0.26%
(4,856.61)
Aa3/AA+
AA+

4.80 4.19
46647PAM8 JPMORGAN CHASE & CO 3.509
01/23/2029 1,300,000.00 01/18/20245.07%
1,227,577.00
1,230,997.39

94.59 5.09%
1,229,712.20
8,616.54

0.41%
(1,285.19)
A1/AAA4.82

3.48 17275RBR2 CISCO SYSTEMS INC 4.85
02/26/2029 685,000.00 02/21/20244.86%
684,760.25
684,764.84
100.74

4.68%
690,056.29
3,229.97

0.23%
5,291.44
A1/AANA4.91

4.30 Total Corporate 35,955,000.00 3.41%
35,424,533.56
35,541,806.76

96.49 5.02%
34,658,339.90
233,716.24

11.46%
(883,466.86)
A1/A
AA2.962.59
LAIF
90LAIF$00 State Pool 96,292,714.93 --

4.27%
96,292,714.89
96,292,714.89

1.00 4.27%
96,292,714.93

0.00 31.85%

0.04 NA/NA
NA

0.00 0.00
Total LAIF 96,292,714.93 4.27%
96,292,714.89
96,292,714.89

1.00 4.27%
96,292,714.93

0.00 31.85%

0.04 NA/NA
NA

0.00 0.00

LOCAL GOV

INVESTMENT
POOL
90CAMP$00 CAMP 5,562,740.67 --

5.48%
5,558,740.67
5,558,740.67

1.00 5.48%
5,562,740.67

0.00 1.84%
4,000.00
NA/AAAm
AAA

0.00 0.00
Total Local Gov
Investment Pool 5,562,740.67 5.48%
5,558,740.67
5,558,740.67

1.00 5.48%
5,562,740.67

0.00 1.84%
4,000.00
NA/
AAAm
AAA

HOLDINGS REPORT
Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration

MONEY MARKET
FUND
X9USDDGCM DREYFUS GVT CSH MGT INST 167,185.65 --

5.18%
167,185.65
167,185.65

1.00 5.18%
167,185.65

0.00 0.06%

0.00 Aaa/
AAAm
NA

0.00 0.00
X9USDDGCM DREYFUS GVT CSH MGT INST 60,000,000.00 03/22/2024

5.18%
60,000,000.00
60,000,000.00

1.00 5.18%
60,000,000.00

0.00 19.84%

0.00 Aaa/
AAAm
NA

0.00 0.00
Total Money
Market Fund 60,167,185.65 5.18%
60,167,185.65
60,167,185.65

1.00 5.18%
60,167,185.65

0.00 19.90%

0.00 Aaa/
AAAm
NA

0.00 0.00

MUNICIPAL
BONDS
13063DRK6 CALIFORNIA STATE 2.4 10/01/2024 730,000.00 10/16/2019

1.93%
746,768.10
731,700.98

98.53 5.42%
719,269.00
8,760.00

0.24%
(12,431.98)
Aa2/AAAA0.50

0.49 Total Municipal
Bonds 730,000.00
10/16/2019

1.93%
746,768.10
731,700.98

98.53 5.42%
719,269.00
8,760.00

0.24%
(12,431.98)
Aa2/AAAA0.50

0.49 SUPRANATIONAL
459058JL8

INTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPM

0.5 10/28/2025
2,150,000.00 --

0.60%
2,140,429.05
2,146,797.13

93.53 4.81%
2,010,968.16
4,568.75

0.67%
(135,828.96)
Aaa/AAA
NA

1.58 1.53
4581X0DV7 INTER-AMERICAN DEVELOPMENT
BANK 0.875 04/20/2026 2,175,000.00 04/13/20210.97%
2,165,038.50
2,170,913.93

92.58 4.71%
2,013,704.91
8,511.20

0.67%
(157,209.02)
Aaa/AAA
NA

2.05 1.99
459058KT9

INTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPM

3.5 07/12/2028
2,450,000.00 08/25/2023

4.56%
2,337,814.50
2,351,435.67

96.64 4.37%
2,367,587.44
18,817.36

0.78%
16,151.77
Aaa/AAA
NA

4.28 3.89
Total
Supranational 6,775,000.00 2.18%
6,643,282.05
6,669,146.73

94.38 4.61%
6,392,260.52
31,897.31

2.11%
(276,886.22)
Aaa/AAA
NA

2.73 2.55

US TREASURY
91282CDS7 UNITED STATES TREASURY 1.125
01/15/2025 1,000,000.00 02/02/20221.36%
993,125.00
998,155.18

96.94 5.12%
969,355.47
2,379.81

0.32%
(28,799.71)
Aaa/AA+
AA+

0.79 0.77
912828ZC7 UNITED STATES TREASURY 1.125
02/28/2025 2,000,000.00 03/18/20200.81%
2,030,859.38
2,005,686.87

96.49 5.09%
1,929,863.28
1,956.52

0.64%
(75,823.59)
Aaa/AA+
AA+

HOLDINGS REPORT
Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
912828ZF0 UNITED STATES TREASURY 0.5
03/31/2025 2,000,000.00 05/28/20200.35%
2,014,140.63
2,002,912.96

95.64 5.03%
1,912,723.14

27.32 0.63%
(90,189.82)
Aaa/AA+
AA+

1.00 0.98
912828XB1 UNITED STATES TREASURY 2.125
05/15/2025 1,000,000.00 04/06/20222.77%
980,742.19
993,054.28

96.91 4.98%
969,101.56
8,056.32

0.32%
(23,952.72)
Aaa/AA+
AA+

1.12 1.09
91282CAB7 UNITED STATES TREASURY 0.25
07/31/2025 1,100,000.00 03/12/20210.71%
1,077,828.13
1,093,261.08

94.08 4.89%
1,034,859.38
460.85

0.34%
(58,401.71)
Aaa/AA+
AA+

1.33 1.31
91282CFP1 UNITED STATES TREASURY 4.25
10/15/2025 2,000,000.00 10/28/20224.37%
1,993,359.38
1,996,544.42

99.18 4.81%
1,983,515.62
39,248.63

0.66%
(13,028.80)
Aaa/AA+
AA+

1.54 1.45
91282CAT8 UNITED STATES TREASURY 0.25
10/31/2025 400,000.00 03/12/2021

0.78%
390,265.63
396,672.70

93.15 4.80%
372,593.75
420.33

0.12%
(24,078.94)
Aaa/AA+
AA+

1.59 1.55
91282CFW6 UNITED STATES TREASURY 4.5
11/15/2025 2,400,000.00 11/10/20224.26%
2,415,656.25
2,408,470.95

99.55 4.79%
2,389,218.74
40,945.05

0.79%
(19,252.20)
Aaa/AA+
AA+

1.63 1.53
91282CAZ4 UNITED STATES TREASURY 0.375
11/30/2025 1,250,000.00 03/26/20210.76%
1,227,587.89
1,242,017.24

93.04 4.77%
1,162,939.45
1,575.31

0.38%
(79,077.79)
Aaa/AA+
AA+

1.67 1.63
91282CCW9 UNITED STATES TREASURY 0.75
08/31/2026 530,000.00 09/23/20210.90%
526,252.73
528,165.88

91.41 4.54%
484,473.83
345.65

0.16%
(43,692.05)
Aaa/AA+
AA+

2.42 2.35
91282CCZ2 UNITED STATES TREASURY 0.875
09/30/2026 1,060,000.00 10/18/20211.18%
1,044,141.41
1,051,996.11

91.52 4.50%
970,107.03

25.34 0.32%
(81,889.08)
Aaa/AA+
AA+

2.50 2.41
91282CDG3 UNITED STATES TREASURY 1.125
10/31/2026 1,060,000.00 11/15/20211.25%
1,053,540.63
1,056,632.84

91.84 4.51%
973,543.75
5,012.43

0.32%
(83,089.09)
Aaa/AA+
AA+

2.59 2.49
912828YQ7 UNITED STATES TREASURY 1.625
10/31/2026 2,400,000.00 11/02/20224.41%
2,156,250.00
2,242,348.25

93.08 4.49%
2,233,968.74
16,392.86

0.74%
(8,379.51)
Aaa/AA+
AA+

2.59 2.47
91282CET4 UNITED STATES TREASURY 2.625
05/31/2027 600,000.00 06/13/20223.40%
578,718.75
586,434.96

94.76 4.40%
568,570.31
5,293.03

0.19%
(17,864.65)
Aaa/AA+
AA+

3.17 2.97
91282CEW7 UNITED STATES TREASURY 3.25
06/30/2027 1,500,000.00 --

3.41%
1,490,273.44
1,493,157.16

96.57 4.44%
1,448,554.68
12,321.43

0.48%
(44,602.48)
Aaa/AA+
AA+

3.25 3.02
91282CFB2 UNITED STATES TREASURY 2.75
07/31/2027 1,180,000.00 --

2.99%
1,166,739.07
1,171,086.37

94.97 4.39%
1,120,631.25
5,438.05

0.37%
(50,455.12)
Aaa/AA+
AA+

3.33 3.13
91282CFH9 UNITED STATES TREASURY 3.125
08/31/2027 3,500,000.00 --

3.28%
3,474,796.89
3,482,691.75

96.06 4.38%
3,362,187.50
9,510.87

1.11%
(120,504.25)
Aaa/AA+
AA+

3.42 3.19
91282CFU0 UNITED STATES TREASURY 4.125
10/31/2027 2,400,000.00 11/03/2022

4.41%
2,368,968.75
2,377,722.90

99.21 4.37%
2,380,968.74
41,612.64

0.79%
3,245.84
Aaa/AA+
AA+

3.59 3.24
91282CGC9 UNITED STATES TREASURY 3.875
12/31/2027 700,000.00 01/25/2023

3.57%
709,679.69
707,361.94

98.39 4.34%
688,707.03
6,855.77

0.23%
(18,654.91)
Aaa/AA+
AA+

3.75 3.42
91282CGH8 UNITED STATES TREASURY 3.5
01/31/2028 1,000,000.00 03/14/2023

3.90%
982,578.13
986,305.10

97.07 4.34%
970,742.19
5,865.38

0.32%
(15,562.91)
Aaa/AA+
AA+

HOLDINGS REPORT
Cusip Security Description Par Value/
Units
Purchase Date
Purchase Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.

Gain/Loss
Moody's/
S&P
Fitch
Maturity
Duration
91282CGP0 UNITED STATES TREASURY 4.0
02/29/2028 2,900,000.00 02/23/20234.16%
2,879,269.53
2,883,785.53

98.83 4.31%
2,866,128.90
10,086.96

0.95%
(17,656.63)
Aaa/AA+
AA+

3.92 3.58
91282CHA2 UNITED STATES TREASURY 3.5
04/30/2028 2,100,000.00 --3.55%
2,095,664.07
2,096,386.46

97.00 4.31%
2,037,082.03
30,894.23

0.67%
(59,304.43)
Aaa/AA+
AA+

4.08 3.70
91282CHE4 UNITED STATES TREASURY 3.625
05/31/2028 1,500,000.00 06/14/20234.00%
1,475,214.84
1,479,137.67

97.46 4.29%
1,461,972.66
18,273.57

0.48%
(17,165.01)
Aaa/AA+
AA+

4.17 3.78
91282CHX2 UNITED STATES TREASURY 4.375
08/31/2028 550,000.00 09/25/20234.62%
544,199.22
544,804.74
100.41

4.27%
552,255.86
2,092.39

0.18%
7,451.12
Aaa/AA+
AA+

4.42 3.97
91282CJF9 UNITED STATES TREASURY 4.875
10/31/2028 750,000.00 10/27/2023

4.79%
752,841.80
752,603.82
102.51

4.26%
768,837.89
15,368.30

0.25%
16,234.08
Aaa/AA+
AA+

4.59 4.01
91282CJN2 UNITED STATES TREASURY 4.375
11/30/2028 900,000.00 12/28/20233.83%
921,937.50
920,790.60
100.53

4.25%
904,746.10
13,232.58

0.30%
(16,044.50)
Aaa/AA+
AA+

4.67 4.13
91282CJR3 UNITED STATES TREASURY 3.75
12/31/2028 2,150,000.00 --3.98%
2,127,462.89
2,128,450.79

97.87 4.25%
2,104,144.54
20,377.75

0.70%
(24,306.25)
Aaa/AA+
AA+

4.75 4.26
91282CJW2 UNITED STATES TREASURY 4.0
01/31/2029 3,100,000.00 --4.30%
3,058,937.50
3,059,780.35

98.97 4.24%
3,068,031.25
20,780.22

1.01%
8,250.90
Aaa/AA+
AA+

4.84 4.33
Total US Treasury 43,030,000.00 3.21%
42,531,031.32
42,686,418.89

96.95 4.52%
41,689,824.67
334,849.60

13.79%
(996,594.22)
Aaa/AA+
AA+

3.01 2.77
Total Portfolio 307,094,322.03 3.77%
305,214,860.98
305,567,575.17

40.82 4.53%
302,350,604.84
731,772.16
100.00%
(3,216,970.34)
Aa2/AA
AA

1.17 1.04
Total Market
Value + Accrued 303,082,376.99
613
Attachment 2
1 CITY OF WEST SACRAMENTO
ADMINISTRATIVE POLICY NUMBER: IV-C-2
DATE: September 8, 1992
Revised: February 1, 1999
Revised: October 15, 2014
Revised: November 1, 2017
Revised: August 21, 2019
Revised: June 16, 2021
Revised: May 17, 2023
Revised: June 5, 2024
SUBJECT: INVESTMENT POLICY AUTHORITY: City Council

PURPOSE
This policy sets forth the procedural regulations for investing surplus funds. The intent of the Investment Policy of the City of West Sacramento is to define the parameters within which funds are to be managed.

POLICY
In methods, procedures, and practices, the policy formalizes the framework for the City’s investment activities that must be exercised to ensure effective and judicious fiscal and investment management of the City’s funds. The guidelines are intended to be broad enough to allow the investment officer to function properly within the parameters of responsibility and authority, yet specific enough to safeguard the investment assets.

PROCEDURE
A. SCOPE
This policy applies to the investment of surplus operating and capital funds and proceeds from certain bond issues. It conforms to best practices as outlined by Government Finance Officers Association, Association of Public Treasurers of the United States and Canada, and California Municipal Treasurers’ Association.

1. Pooling of Funds: Except for cash in certain restricted and special funds, the City will consolidate cash balances from all funds to maximize investment earnings. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.

B. GENERAL OBJECTIVES
The primary objectives, in priority order, of investment activities shall be safety, liquidity, and return.

1. Safety: Safety of principal is the foremost objective of the investment program.

Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities with independent returns. The objective will be to mitigate credit risk and market risk, further explained below. 614
Administrative Policy IV-C-2
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(continued)
2 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). Furthermore, since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets (dynamic liquidity). A portion of the portfolio also may be placed in money market mutual funds or local government investment pools which offer same-day liquidity for short-term funds.

3. Return: The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments are limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed.

C. STANDARDS OF CARE

1. Prudence: The standard of prudence to be used by investment officials shall be the “prudent investor” standard (California Government Code section 53600.3) and shall be applied in the context of managing an overall portfolio. Pursuant to this section of Code, all persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the Prudent Investor Standard:
“…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the Agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the Agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.” Investment officers acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and the liquidity and the sale of securities are carried out in accordance with the terms of this policy.

2. Ethics and Conflicts of Interest: Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees and investment officials shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial/ investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the City.

3. Delegation of Authority: Authority to manage the investment program is granted to the Director of Finance/City Treasurer, hereinafter referred to as investment officer, and derived from California Government Code, Sections 41006 and 53600 et seq as well as Ordinance 87-12. Responsibility for the operation of the investment program is hereby 615
Administrative Policy IV-C-2
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(continued)
3 delegated to the investment officer, who shall act in accordance with established written procedures and internal controls for the operation of the investment program consistent with this investment policy. Procedures should include references to: safekeeping, delivery vs. payment, investment accounting, repurchase agreements, wire transfer agreements, and collateral/depository agreements. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the investment officer. The investment officer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The City may engage the services of one or more external investment advisers, who are registered under the Investment Advisers Act of 1940, to assist in the management of the City’s investment portfolio in a manner consistent with the City’s objectives. External investment advisers may be granted discretion to purchase and sell investment securities in accordance with this investment policy.

The City’s overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City recognizes that in a diversified portfolio, occasional measured losses may be inevitable and must be considered within the context of the overall portfolio’s return and the cash flow requirements of the City.

D. SAFEKEEPING AND CUSTODY

1. Authorized Financial Dealers and Institutions: To the extent practicable, the investment officer shall endeavor to complete investment transactions using a competitive bid process whenever possible. The investment officer will determine which financial institutions are authorized to provide investment services to the City. It shall be the City’s policy to purchase securities only from authorized institutions and firms. A list will be maintained of financial institutions authorized to provide investment services. In addition, a list also will be maintained of approved security broker/dealers selected by creditworthiness (e.g., a minimum capital requirement of $10,000,000 and at least five years of operation). These may include “primary” dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15C3-1 (uniform net capital rule).

In accordance with Section 53601.5, institutions eligible to transact investment business with the City include:
 Primary government dealers as designated by the Federal Reserve Bank and nonprimary government dealers.  Nationally or state-chartered banks.
 The Federal Reserve Bank.
 Direct issuers of securities eligible for purchase.

Selection of financial institutions and broker/dealers authorized to engage in transactions will be at the sole discretion of the City, except where the City utilizes an external investment adviser in which case the City may rely on the adviser for selection.

All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply the following as appropriate:
 Audited financial statements.
 Proof of National Association of Securities Dealers (NASD) certification.  Proof of state registration.
616
Administrative Policy IV-C-2
Investment Policy
(continued)
4  Completed broker/dealer questionnaire.
 Certification of having read and understood and agreeing to comply with the City’s investment policy.
 Evidence of adequate insurance coverage.

An annual review of the financial condition and registration of qualified financial institutions and broker/dealers will be conducted by the investment officer.

From time to time, the investment officer may choose to invest in instruments offered by minority and community financial institutions. In such instances, a waiver to the criteria under Paragraph 1 may be granted. All terms and relationships will be fully disclosed prior to purchase and will be reported to the appropriate entity on a consistent basis and should be consistent with state or local law. These types of investment purchases should be approved by the appropriate legislative or governing body in advance.

Public deposits will be made only in qualified public depositories as established by State law. Deposits will be insured by the Federal Deposit Insurance Corporation, or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with State law.

Selection of broker/dealers used by an external investment adviser retained by the City will be at the sole discretion of the adviser. Where possible, transactions with broker/dealers shall be selected on a competitive basis and their bid or offering prices shall be recorded. If there is no other readily available competitive offering, best efforts will be made to document quotations for comparable or alternative securities. When purchasing original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities at the same original issue price.

2. Internal Controls: The investment officer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse. Specifics for the internal controls shall be documented in an investment procedures manual that shall be reviewed and updated periodically by the Investment Officer. An example of such a procedure would include the requirement that the Director of Finance approve trades transacted by other authorized personnel. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgments by management.

Accordingly, the investment officer shall establish a process for an annual independent review by an external auditor to assure compliance with policies and procedures. The internal controls shall address the following points:
 Control of collusion.
 Separation of transaction authority from accounting and recordkeeping.  Custodial safekeeping.
 Avoidance of physical delivery securities.
617
Administrative Policy IV-C-2
Investment Policy
(continued)
5  Clear designation of authority to subordinate staff members.  Written confirmation of transactions for investments and wire transfers.  Dual authorizations of wire transfers.
 Staff training.
 Development of a wire transfer agreement with the lead bank and third-party custodian.

3. Delivery vs. Payment: All trades where applicable will be executed by delivery vs. payment (DVP) to ensure that securities are deposited in an eligible financial institution prior to the release of funds. Securities will be held by a third-party custodian as evidenced by safekeeping receipts. The only exception to the foregoing shall be depository accounts and securities purchase made with: Local Agency Investment Fund (LAIF), California Asset Management Program, time certificates of deposit and money market mutual funds, since the purchased securities are not deliverable.

4. Third-Party Safekeeping: Securities will be held by an independent third-party safekeeping institution selected by the City. All securities will be evidenced by safekeeping receipts in the City’s name. The safekeeping institution shall annually provide a copy of its most recent report on internal controls – Service Organization Control Reports (formerly 70, or SAS 70) prepared in accordance with the Statements of Standards for Attestation Engagements (SSAE) No. 16 (effective June 15, 2011).

E. SUITABLE AND AUTHORIZED INVESTMENTS

1. Investment Types: Investments shall be placed to conform to those allowable under the State of California Government Code section 53600 et seq. Within the investments permitted by the Code, the City seeks to further restrict eligible investments to the guidelines listed below. Consistent with the GFOA Policy Statement and Local Laws Concerning Investment Practices, the following investments will be permitted by this policy and are those defined by state and local law where applicable. If additional types of securities are approved for investment by public funds by state statute, they will not be eligible for investment by the City until this Policy has been amended and the amended version adopted by the City Council. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits and minimum credit quality requirements listed in this section apply at the time the security is purchased.

Any investment currently held at the time the policy is adopted which does not meet the new policy guidelines can be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy.

An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and institution to avoid incurring unreasonable and avoidable risks regarding specific security types or individual issuers.

Authorized securities include:
618
Administrative Policy IV-C-2
Investment Policy
(continued)
6 A. Municipal Securities include obligations of the City, the State of California and any local agency within the State of California, provided that:
 The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”).  No more than 5% of the portfolio may be invested in any single issuer.  No more than 30% of the portfolio may be in Municipal Securities.  The maximum maturity does not exceed five (5) years.

B. Municipal Securities (Registered Treasury Notes or Bonds) of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California.
 The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”).  No more than 5% of the portfolio may be invested in any single issuer.  No more than 30% of the portfolio may be in Municipal Securities.  The maximum maturity does not exceed five (5) years.

C. U.S. Treasuries and other government obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest. There are no limits on the dollar amount or percentage that the City may invest in U.S. Treasuries, provided that:
 The maximum maturity is five (5) years.

D. Federal Agencies or United States Government-Sponsored Enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. There are no limits on the dollar amount or percentage that the City may invest in Federal Agency or Government-Sponsored Enterprises (GSEs), provided that:
 No more than 30% of the portfolio may be invested in any single Agency/GSE issuer.
 The maximum maturity does not exceed five (5) years.
 The maximum percent of agency callable securities in the portfolio will be 20%.

E. Banker’s Acceptances, provided that:
 They are issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
 No more than 40% of the portfolio may be invested in Banker’s Acceptances.  No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed 180 days.
619
Administrative Policy IV-C-2
Investment Policy
(continued)
7 F. Commercial Paper, provided that the securities are issued by an entity that meets all of the following conditions in either paragraph (a) or (b) and other requirements specified below:
i. SECURITIES issued by corporations:

1. A corporation organized and operating in the United States with assets more than $500 million.

2. The securities are rated “A-1” or its equivalent or better by at least one NRSRO.

3. If the issuer has other debt obligations, they must be rated in a rating category of “A” or its equivalent or better by at least one NRSRO. ii. SECURITIES issued by other entities:

1. The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company.

2. The securities must have program-wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond.

3. The securities are rated “A-1” or its equivalent or better by at least one NRSRO.  City may purchase no more than 10% of the outstanding commercial paper of any single issuer.
 No more than 25% of the portfolio may be invested in Commercial Paper. Under a provision sunsetting on January 1, 2026, no more than 40% of the portfolio may be invested in Commercial Paper if the Agency’s investment assets under management are greater than $100,000,000.
 No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed 270 days.

G. Negotiable Certificates of Deposit (NCDs), issued by a nationally or state-chartered bank, a savings association or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank, provided that:
 The amount of the NCD insured up to the FDIC limit does not require any credit ratings.
 Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
 No more than 30% of the total portfolio may be invested in NCDs (combined with CDARS).
 No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.

H. Federally Insured Time Deposits (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:
620
Administrative Policy IV-C-2
Investment Policy
(continued)
8  The amount per institution is limited to the maximum covered under federal insurance.
 No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
 The maximum maturity does not exceed five (5) years.

I. Collateralized Time Deposits (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with securities in accordance with California law, provided that:
 No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
 The maximum maturity does not exceed five (5) years.

J. Certificate of Deposit Placement Service (CDARS), provided that:
 No more than 30% of the total portfolio may be invested in a combination of Certificates of Deposit, including CDARS.
 The maximum maturity does not exceed five (5) years.

K. Collateralized Bank Deposits. City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651.

There are no limits on the dollar amount or percentage that the City may invest in collateralized bank deposits.

L. Repurchase Agreements collateralized with securities authorized under California Government Code, maintained at a level of at least 102% of the market value of the Repurchase Agreement. There are no limits on the dollar amount or percentage that the City may invest, provided that:
 Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third-party custodian.
 Repurchase Agreements are subject to a Master Repurchase Agreement between the City and the provider of the repurchase agreement. The Master Repurchase Agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA).
 The maximum maturity does not exceed one (1) year.

M. State of California Local Agency Investment Fund (LAIF), provided that:
 The City may invest up to the maximum amount permitted by LAIF.  LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments, provided LAIF’s reports allow the investment officer to adequately judge the risk inherent in LAIF’s portfolio.

N. Local Government Investment Pools
621
Administrative Policy IV-C-2
Investment Policy
(continued)
9  Other LGIPs permitted by client.
 There is no issuer limitation for Local Government Investment Pools O. Corporate Medium-Term Notes (MTNs), provided that:
 The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
 The securities are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
 No more than 30% of the total portfolio may be invested in MTNs.  No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.

P. Asset-Backed, Mortgage-Backed, Mortgage Pass-Through Securities, and Collateralized Mortgage Obligations from issuers not defined in sections C and D of the Authorized Investments section of this policy, provided that:
 The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
 No more than 20% of the total portfolio may be invested in these securities.  No more than 5% of the portfolio may be invested in any single Asset-Backed or Commercial Mortgage security issuer.
 The maximum legal final maturity does not exceed five (5) years.

Q. Mutual Funds and Money Market Mutual Funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:
a. Mutual Funds that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:
(i) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.
 No more than 10% of the total portfolio may be invested in shares of any one mutual fund.
b. Money Market Mutual Funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:
(i) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
622
Administrative Policy IV-C-2
Investment Policy
(continued)
10 (ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million.
 No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.
c. No more than 20% of the total portfolio may be invested in these securities.

R. Supranationals, provided that:
 Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank.
 The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
 No more than 30% of the total portfolio may be invested in these securities.  No more than 10% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.

2. Prohibited Investment Vehicles and Practices:
 State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options.  In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited.  Investment in any security that could result in a zero-interest accrual if held to maturity is prohibited. Investment in any security that could result in a zero interest accrual if held to maturity is prohibited Under a provision sunsetting on January 1, 2026, securities backed by the U.S. Government that could result in a zero- or negativeinterest accrual if held to maturity are permitted.  Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
 Purchasing or selling securities on margin is prohibited.  The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited.
 The purchase of foreign currency denominated securities is prohibited.  The purchase of securities with trade settlement periods longer than 45 days is prohibited.

3. Investment Pools/Mutual Funds:

The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. The investment officer shall develop a questionnaire which will answer the following general questions:
623
Administrative Policy IV-C-2
Investment Policy
(continued)
11  A description of eligible investment securities, and a written statement of investment policy and objectives.
 A description of interest calculations and how it is distributed, and how gains and losses are treated.
 A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited.  A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.
 A schedule for receiving statements and portfolio listings.  Are reserves, retained earnings, etc. utilized by the pool/fund?  A fee schedule, and when and how is it assessed.
 Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds?

4. Collateralization: Acceptable collateral shall be as follows:

Certificates of Deposit (CDs). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security.

Collateralization of Bank Deposits. This is the process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing repayment of deposited funds. The City shall require any bank or financial institution to comply with the collateralization criteria defined in California Government Code, Section 53651.

Repurchase Agreements. The City requires that Repurchase Agreements be collateralized only by securities authorized in accordance with California Government Code:
 The securities which collateralize the repurchase agreement shall be priced at Market Value, including any Accrued Interest plus a margin. The Market Value of the securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities.
 Financial institutions shall mark the value of the collateral to market at least monthly and increase or decrease the collateral to satisfy the ratio requirement described above.
 The City shall receive monthly statements of collateral.

F. INVESTMENT PARAMETERS

1. Mitigating Credit Risk in the Portfolio: Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
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12  The diversification requirements included in the “Suitable and Authorized Investments” section of this policy are designed to mitigate credit risk in the portfolio.  No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy.  The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences.
 If the credit ratings of any security owned by the City are downgraded to a level below the quality required by this investment policy, making the security ineligible for additional purchases, the following steps will be taken:
 If a security is downgraded, the investment officer will use discretion in determining whether to sell or hold the security based on its current maturity, the economic outlook for the issuer, and other relevant factors. If employing an investment manager, any actions taken related to the downgrade by the investment manager will be communicated to the investment officer in a timely manner.  If a decision is made to retain a downgraded security in the portfolio, its presence in the portfolio will be monitored and reported monthly to the City Council.

2. Mitigating Market Risk in the Portfolio: Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of interest rates. The City recognizes that, over time, longer-term portfolios have the potential to achieve higher returns. Likewise, longer-term portfolios have higher volatility of return. The City will mitigate market risk by providing adequate liquidity for short-term cash needs, and by making longer-term investments only with funds that are not needed for current cash flow purposes.

The City further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The City, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
 The City will maintain a minimum of six months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements.  The maximum stated final maturity of individual securities in the portfolio will be five (5) years as measured from the date of trade settlement, except as otherwise stated in this policy.
 The duration of the portfolio will generally be approximately equal to the duration (typically, plus or minus 20%) of a Market Benchmark, an index selected by the City based on the City’s investment objectives, constraints and risk tolerances.

3. Maximum Maturities: To the extent possible, the City shall attempt to match its investments with anticipated cash flow requirements. The City will not directly invest in securities maturing more than five years from the date of trade settlement or in accordance 625
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13 with state and local statutes and ordinances, unless the City Council has by resolution granted authority to make such an investment either specifically or as part of an investment program approved by the City Council no less than three months prior to the investment.

The City investment officer shall adopt weighted average maturity limitations, consistent with the investment objectives.

Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of the portfolio should be continuously invested in readily available funds such as LGIPs, money market funds, or overnight repurchase agreements to ensure that appropriate liquidity is maintained to meet ongoing obligations.

G. INVESTMENT STRATEGIES:

The investment program shall seek to augment returns consistent with the intent of this policy, identified risk limitations and prudent investment principles. These objectives will be achieved by use of the following strategies:

The source of and purpose for surplus funds determines the goal to be accomplished by the strategy. Bond proceeds, for example, typically have three purposes: reserve funds, project funds, and debt service funds. The goal and corresponding investment strategy is different for each, as follows:
 Reserve Funds. The goal is to have these funds available in case of default while minimizing negative arbitrage. The strategy is to call for competitive bids for long-term investment agreements with a call provision for default or redemption from AAA-rated limitations.
 Project Funds. The goal is to maintain purchasing power. The strategy, assuming a normal yield curve, is to match investment agreement maturities with construction draw schedules. Funds needed within 12 months are currently placed in an AAA-rated mutual fund of U.S. Treasury Securities.
 Debt Service Funds. The goal is to maintain liquidity. Generally, funds are placed in a money market mutual fund related investment category.

Surplus funds in the City pool come from a mixed bag of services for a wide variety of purposes. This blend of funds leads to the general investment goal of earning an appropriate yield consistent with the City’s high standards for safety and liquidity.

H. INVESTMENT PERFORMANCE
The investment portfolio shall be designed to attain a market-average rate of return throughout budgetary and economic cycles, taking into account the City’s risk constraints, the cash flow characteristics of the portfolio, and state and local laws, ordinances or resolutions that restrict investments.

The investment officer shall monitor and evaluate the portfolio’s performance relative to the chosen market benchmark(s), which will be included in the investment officer’s quarterly report. The investment officer shall select an appropriate, readily available index to use as a market benchmark.

I. REPORTING
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14 1. Methods: The investment officer shall prepare an investment report at least quarterly, including a management summary that provides an analysis of the status of the current investment portfolio and the individual transactions executed over the last quarter. This report shall include the type of investment, issuer, date of maturity, and par and dollar amount invested on all securities, investments and moneys held by the City. The report shall also include a current market value as of the date of the report. It shall state compliance of the portfolio to the statement of investment policy or manner in which the portfolio id is not in compliance. Finally, the report shall include a statement denoting the ability of the local agency to meet its pool’s expenditure requirements for the next six months or provide an explanation as to why sufficient money shall, or may, not be available. The report shall be provided within 45 days after the end of the quarter. Once a year, the statement of investment policy shall be included in the report.

2. Performance Standards: The investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a market average rate of return during a market/economic environment of stable interest rates. A series of appropriate benchmarks shall be established against which portfolio performance shall be compared on a regular basis.

3. Marking to Market: The market value of the portfolio shall be calculated at least monthly and a statement of the market value of the portfolio shall be issued at least monthly. This will ensure that review of the investment portfolio, in terms of value and price volatility, has been performed consistent with the GFOA Recommended Practice on “Mark-to-Market Practices for State and Local Government Investment Portfolios and Investment Pools.” In defining market value, considerations should be given to the GASB Statement 31 pronouncement.

4. Annual Reports: The investment policy shall be reviewed at least annually within 120 days of the end of the fiscal year to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends. A comprehensive annual report shall be presented in conjunction with the investment policy review. This report shall include comparisons of City’s return to the City’s benchmark return, shall suggest policies and improvements that might enhance the investment program, and shall include an investment plan for the coming year.

5. Annual Audit: Management shall establish an annual process of independent review by the external auditor to assure compliance with internal controls. Such audit will include tests deemed appropriate by the auditor.

J. PORTFOLIO AND POLICY CONSIDERATIONS

1. Portfolio Review: The investment officer shall periodically, but no less than quarterly, review the portfolio to identify investments that do not comply with this investment policy and establish protocols for reporting major and critical incidences of noncompliance to the City Council.

2. Policy Amendments: This policy shall be reviewed on an annual basis within 120 days of the end of the fiscal year to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends. Any recommended modifications or changes shall be presented by the investment officer to the City Council for their consideration and adoption. 627
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15 K. GLOSSARY OF TERMS
Agencies: Shorthand market terminology for any obligation issued by a government-sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:

FFCB: The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.

FHLB: The Federal Home Loan Bank provides credit and liquidity in the housing market.

FHLB issues discount notes and bonds.

FHLMC: Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “FreddieMac” issues discount notes, bonds and mortgage pass-through securities.

FNMA: Like FHLB and FreddieMac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “FannieMae,” issues discount notes, bonds and mortgage pass-through securities.

GNMA: The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.

PEFCO: The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.

TVA: The Tennessee Valley Authority provides flood control and power and promotes development in portions of the Tennessee, Ohio, and Mississippi River valleys. TVA currently issues discount notes and bonds.

Asset Backed Securities: Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.

Average Life: In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected.

Banker’s Acceptance: A money market instrument created to facilitate international trade transactions. It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor.

Benchmark: A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.

Broker: A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from his own position.

Callable: A callable security gives the issuer the option to call it from the investor prior to its maturity. The main cause of a call is a decline in interest rates. If interest rates decline, the issuer will likely call its current securities and reissue them at a lower rate of interest.

Certificate of Deposit (CD): A time deposit with a specific maturity evidenced by a certificate.

Certificate of Deposit Account Registry SYSTEM (CDARS): A private placement service that allows local agencies to purchase more than $250,000 in CDs from a single financial institution (must be a participating institution of CDARS) while still maintaining FDIC insurance coverage. 628
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16 CDARS is currently the only entity providing this service. CDARS facilitates the trading of deposits between the California institution and other participating institutions in amounts that are less than $250,000 each, so that FDIC coverage is maintained.

Collateral: Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.

Collateralized Bank Deposit: A bank deposit that is collateralized at least 100% (principal plus interest to maturity). The deposit is collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.

Collateralized Mortgage Obligations (CMO): Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities.

Collateralized Time Deposit: Time deposits that are collateralized at least 100% (principal plus interest to maturity). These instruments are collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.

Commercial Paper: The short-term unsecured debt of corporations.

Coupon: The rate of return at which interest is paid on a bond.

Credit Risk: The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.

Dealer: A dealer acts as a principal in security transactions, selling securities from and buying securities for his own position.

Debenture: A bond secured only by the general credit of the issuer.

Delivery vs. Payment (DVP): A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.

Derivative: Any security that has principal and/or interest payments which are subject to uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any security which represents a component of another security which has been separated from other components (“Stripped” coupons and principal). A derivative is also defined as a financial instrument the value of which is totally or partially derived from the value of another instrument, interest rate, or index.

Discount: The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short-term securities, such as T-bills and banker’s acceptances, are known as discount securities. They sell at a discount from par and return the par value to the investor at maturity without additional interest. Other securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.

Diversification: Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk.

Duration: The weighted average time to maturity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a security to changes interest rates.

Federal Deposit Insurance Corporation (FDIC): The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency insuring deposits in U.S. banks and thrifts in the event 629
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17 of bank failures. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.

Federally Insured Time Deposit: A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD). These deposits are limited to funds insured in accordance with FDIC insurance deposit limits.

Leverage: Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.

Liquidity: The speed and ease with which an asset can be converted to cash.

Local Agency Investment Fund (LAIF): A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State Treasurer’s Office.

Local Government Investment Pool: Investment pools that range from the State Treasurer’s Office Local Agency Investment Fund (LAIF) to county pools, to Joint Powers Authorities (JPAs).

These funds are not subject to the same SEC rules applicable to money market mutual funds.

Make Whole Call: A type of call provision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or "made whole." Margin: The difference between the market value of a security and the loan a broker makes using that security as collateral.

Market Risk: The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.

Market Value: The price at which a security can be traded.

Maturity: The final date upon which the principal of a security becomes due and payable.

Medium Term Notes: Unsecured, investment-grade senior debt securities of major corporations which are sold in relatively small amounts on either a continuous or an intermittent basis. MTNs are highly flexible debt instruments that can be structured to respond to market opportunities or to investor preferences.

Modified Duration: The percent change in price for a 100-basis point change in yields. Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.

Money Market: The market in which short-term debt instruments (T-bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded.

Money Market Mutual Fund: A mutual fund that invests exclusively in short-term securities.

Examples of investments in money market funds are certificates of deposit and U.S. Treasury securities. Money market funds attempt to keep their net asset values at $1 per share.

Mortgage Pass-Through Securities: A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.

Municipal Securities: Securities issued by state and local agencies to finance capital and operating expenses.

Mutual Fund: An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs 630
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18 associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.

Nationally Recognized Statistical Rating Organization (NRSRO): A credit rating agency that the Securities and Exchange Commission in the United States uses for regulatory purposes. Credit rating agencies provide assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody's.

Negotiable Certificate of Deposit (CD): A short-term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or state-licensed branch of a foreign bank. Negotiable CDs are traded in a secondary market and are payable upon order to the bearer or initial depositor (investor).

Primary Dealer: A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U.S. Government securities market.

Prudent Person (Prudent Investor) Rule: A standard of responsibility which applies to fiduciaries.

In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.”
Repurchase Agreement: Short-term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.

Safekeeping: A service to bank customers whereby securities are held by the bank in the customer’s name.

Securities and Exchange Commission (SEC): The U.S. Securities and Exchange Commission (SEC) is an independent federal government agency responsible for protecting investors, maintaining fair and orderly functioning of securities markets and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States.

Securities and Exchange Commission (SEC) Rule 15c3-1: An SEC rule setting capital requirements for brokers and dealers. Under Rule 15c3-1, a broker or dealer must have sufficient liquidity in order to cover the most pressing obligations. This is defined as having a certain amount of liquidity as a percentage of the broker/dealer's total obligations. If the percentage falls below a certain point, the broker or dealer may not be allowed to take on new clients and may have restrictions placed on dealings with current client.

Structured Note: A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate. Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.
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19 Supranational: A Supranational is a multi-national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.

Total Rate of Return: A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio.

Treasury Bills: All securities issued with initial maturities of one year or less are issued as discounted instruments and are called Treasury bills. The Treasury currently issues three- and six-month T-bills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows.

Treasury Bonds: All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.

Treasury Notes: All securities issued with initial maturities of two to ten years are called Treasury notes and pay interest semi-annually.

U.S. Treasury Obligations: Securities issued by the U.S. Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.

Yield to Maturity: The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost.
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Attachment 3
1 CITY OF WEST SACRAMENTO
ADMINISTRATIVE POLICY NUMBER: IV-C-2
DATE: September 8, 1992
Revised: February 1, 1999
Revised: October 15, 2014
Revised: November 1, 2017
Revised: August 21, 2019
Revised: June 16, 2021
Revised: May 17, 2023
Revised: June 5, 2024
SUBJECT: INVESTMENT POLICY AUTHORITY: City Council

B. GENERAL OBJECTIVES
The primary objectives, in priority order, of investment activities shall be safety, liquidity, and return.

1. Safety: Safety of principal is the foremost objective of the investment program.

Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities with independent returns. The objective will be to mitigate credit risk and market risk, further explained below. 633
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2 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). Furthermore, since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets (dynamic liquidity). A portion of the portfolio also may be placed in money market mutual funds or local government investment pools which offer same-day liquidity for short-term funds.

C. STANDARDS OF CARE

3. Delegation of Authority: Authority to manage the investment program is granted to the Director of Finance/City Treasurer, hereinafter referred to as investment officer, and derived from California Government Code, Sections 41006 and 53600 et seq as well as Ordinance 87-12. Responsibility for the operation of the investment program is hereby 634
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3 delegated to the investment officer, who shall act in accordance with established written procedures and internal controls for the operation of the investment program consistent with this investment policy. Procedures should include references to: safekeeping, delivery vs. payment, investment accounting, repurchase agreements, wire transfer agreements, and collateral/depository agreements. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the investment officer. The investment officer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The City may engage the services of one or more external investment advisers, who are registered under the Investment Advisers Act of 1940, to assist in the management of the City’s investment portfolio in a manner consistent with the City’s objectives. External investment advisers may be granted discretion to purchase and sell investment securities in accordance with this investment policy.

D. SAFEKEEPING AND CUSTODY

All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply the following as appropriate:
 Audited financial statements.
 Proof of National Association of Securities Dealers (NASD) certification.  Proof of state registration.
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4  Completed broker/dealer questionnaire.
 Certification of having read and understood and agreeing to comply with the City’s investment policy.
 Evidence of adequate insurance coverage.

An annual review of the financial condition and registration of qualified financial institutions and broker/dealers will be conducted by the investment officer.

Accordingly, the investment officer shall establish a process for an annual independent review by an external auditor to assure compliance with policies and procedures. The internal controls shall address the following points:
 Control of collusion.
 Separation of transaction authority from accounting and recordkeeping.  Custodial safekeeping.
 Avoidance of physical delivery securities.
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5  Clear designation of authority to subordinate staff members.  Written confirmation of transactions for investments and wire transfers.  Dual authorizations of wire transfers.
 Staff training.
 Development of a wire transfer agreement with the lead bank and third-party custodian.

E. SUITABLE AND AUTHORIZED INVESTMENTS

Authorized securities include:
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6 A. Municipal Securities include obligations of the City, the State of California and any local agency within the State of California, provided that:
 The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”).  No more than 5% of the portfolio may be invested in any single issuer.  No more than 30% of the portfolio may be in Municipal Securities.  The maximum maturity does not exceed five (5) years.

E. Banker’s Acceptances, provided that:
 They are issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
 No more than 40% of the portfolio may be invested in Banker’s Acceptances.  No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed 180 days.
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7 F. Commercial Paper, provided that the securities are issued by an entity that meets all of the following conditions in either paragraph (a) or (b) and other requirements specified below:
i. SECURITIES issued by corporations:

1. A corporation organized and operating in the United States with assets more than $500 million.

2. The securities are rated “A-1” or its equivalent or better by at least one NRSRO.

3. If the issuer has other debt obligations, they must be rated in a rating category of “A” or its equivalent or better by at least one NRSRO. ii. SECURITIES issued by other entities:

1. The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company.

2. The securities must have program-wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond.

H. Federally Insured Time Deposits (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:
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8  The amount per institution is limited to the maximum covered under federal insurance.
 No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
 The maximum maturity does not exceed five (5) years.

K. Collateralized Bank Deposits. City’s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651.

There are no limits on the dollar amount or percentage that the City may invest in collateralized bank deposits.

N. Local Government Investment Pools
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9  Other LGIPs permitted by client.
 There is no issuer limitation for Local Government Investment Pools O. Corporate Medium-Term Notes (MTNs), provided that:
 The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
 The securities are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
 No more than 30% of the total portfolio may be invested in MTNs.  No more than 5% of the portfolio may be invested in any single issuer.  The maximum maturity does not exceed five (5) years.

Q. Mutual Funds and Money Market Mutual Funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:
a. Mutual Funds that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:
(i) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.
 No more than 10% of the total portfolio may be invested in shares of any one mutual fund.
b. Money Market Mutual Funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:
(i) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
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10 (ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million.
 No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.
c. No more than 20% of the total portfolio may be invested in these securities.

3. Investment Pools/Mutual Funds:

The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. The investment officer shall develop a questionnaire which will answer the following general questions:
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11  A description of eligible investment securities, and a written statement of investment policy and objectives.
 A description of interest calculations and how it is distributed, and how gains and losses are treated.
 A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited.  A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.
 A schedule for receiving statements and portfolio listings.  Are reserves, retained earnings, etc. utilized by the pool/fund?  A fee schedule, and when and how is it assessed.
 Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds?

4. Collateralization: Acceptable collateral shall be as follows:

F. INVESTMENT PARAMETERS

1. Mitigating Credit Risk in the Portfolio: Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
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12  The diversification requirements included in the “Suitable and Authorized Investments” section of this policy are designed to mitigate credit risk in the portfolio.  No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy.  The City may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences.
 If the credit ratings of any security owned by the City are downgraded to a level below the quality required by this investment policy, making the security ineligible for additional purchases, the following steps will be taken:
 If a security is downgraded, the investment officer will use discretion in determining whether to sell or hold the security based on its current maturity, the economic outlook for the issuer, and other relevant factors. If employing an investment manager, any actions taken related to the downgrade by the investment manager will be communicated to the investment officer in a timely manner.  If a decision is made to retain a downgraded security in the portfolio, its presence in the portfolio will be monitored and reported monthly to the City Council.

3. Maximum Maturities: To the extent possible, the City shall attempt to match its investments with anticipated cash flow requirements. The City will not directly invest in securities maturing more than five years from the date of trade settlement or in accordance 644
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13 with state and local statutes and ordinances, unless the City Council has by resolution granted authority to make such an investment either specifically or as part of an investment program approved by the City Council no less than three months prior to the investment.

The City investment officer shall adopt weighted average maturity limitations, consistent with the investment objectives.

G. INVESTMENT STRATEGIES:

I. REPORTING
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14 1. Methods: The investment officer shall prepare an investment report at least quarterly, including a management summary that provides an analysis of the status of the current investment portfolio and the individual transactions executed over the last quarter. This report shall include the type of investment, issuer, date of maturity, and par and dollar amount invested on all securities, investments and moneys held by the City. The report shall also include a current market value as of the date of the report. It shall state compliance of the portfolio to the statement of investment policy or manner in which the portfolio is not in compliance. Finally, the report shall include a statement denoting the ability of the local agency to meet its pool’s expenditure requirements for the next six months or provide an explanation as to why sufficient money shall, or may, not be available. The report shall be provided within 45 days after the end of the quarter. Once a year, the statement of investment policy shall be included in the report.

J. PORTFOLIO AND POLICY CONSIDERATIONS

2. Policy Amendments: This policy shall be reviewed on an annual basis within 120 days of the end of the fiscal year to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends. Any recommended modifications or changes shall be presented by the investment officer to the City Council for their consideration and adoption. 646
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15 K. GLOSSARY OF TERMS
Agencies: Shorthand market terminology for any obligation issued by a government-sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:

FFCB: The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.

FHLB: The Federal Home Loan Bank provides credit and liquidity in the housing market.

FHLB issues discount notes and bonds.

GNMA: The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.

PEFCO: The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.

Asset Backed Securities: Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.

Average Life: In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected.

Benchmark: A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.

Broker: A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from his own position.

Certificate of Deposit (CD): A time deposit with a specific maturity evidenced by a certificate.

Certificate of Deposit Account Registry SYSTEM (CDARS): A private placement service that allows local agencies to purchase more than $250,000 in CDs from a single financial institution (must be a participating institution of CDARS) while still maintaining FDIC insurance coverage. 647
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16 CDARS is currently the only entity providing this service. CDARS facilitates the trading of deposits between the California institution and other participating institutions in amounts that are less than $250,000 each, so that FDIC coverage is maintained.