55C - RESO - STATEMENT OF INVESTMENT

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^ Sources: Sections 16340, 16429.1, 53601, 53601.8, 53635, 53635.2, 53635.8, and 53638. e Municipal Utilities Districts have the author- ity under the Public Utilities Code Section 12871 to invest in certain securities not ad- dressedhere. Section 53601 provides that the maximum term of any investment authorized under this section, unless otherwise stated, is five years. However, the legislative body may grant express authority to make investments either specifically or as a part of an invest- ment program approved by the legislative body that exceeds this five year maturity limit. Such approval must be issued no less than three months prior to the purchase of any se- curity exceeding the five -year maturity limit. ° Percentages apply to all portfolio Invest- ments regardless of source of funds. For instance, cash from a reverse is or- chase agreement would be subject to the restrictions. ` No more than 30 percent of the agency's money may be in bankers' acceptances of any one commercial bank. "Select Agencies" are defined as a "city, a district, or otherlocal agency that doles) not pool money in deposits or Investment with other local agencies, other than local agen- cies that have the same governing body." Local agencies, other than counties are city and county, may purchase no more than 10 percent of the outstanding commercial pa- per of any single issuer. Issuing corporation must be organized and operating within the U.S., have assets in ex- cess of $500 million, and debt other than commercial paper must be rated "A" or the issuing corporation must be organized within the U.S. as a special purpose corporation, trust, or LLC, has program wide credit en- hancements, and has commercial paper that is rated'A - i "or higher, or the equivalent, by a nationally recognized rating agency. "Other Agencies" are counties, a city and county, or other local agency "that pools money in deposits or investments with other local agencies, replacing local agencies that have the same governing body." Local agencies that pool exclusively with other lo- cal agencies that have the same governing body must adhere to the limits set for "Se- lect Agencies," above, ' No more than 30 percent of the agency's money may be in negotiable certificates of deposit that are authorized under Section 53601(1). " No more than 30 percent of the agency's moneymaybe invested in deposits, including certificates of deposit, through a placement service (excludes negotiable certificates o/ deposit authorized under Section 53601(1)). Reverse repurchase agreements or secud- ties lending agreements may exceed the 92 -day term it the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period be- tween the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity dates of the same security. Reverse repurchase agreements must be made with primary dealers of the Federal Re- serve Bank of New York or with a nationally or state chartered bank that has a significant relationship with the local agency. The local agency must have held the securities used for the agreements for at least 30 days. " "Medium -term notes" are defined in Section 53601 as "all corporate and depository in- stitution debt securities with a maximum re- maining maturity of five years or less, issued by corporations organized and operating within the United States or by depository in- stitutions licensed by the United States or any state and operating within the United States" ° No more than 10 percent Invested in any one mutual fund. ° A mutual fund must receive the highest rank- ing by not less than two nationally recog- nized rating agencies or the fund must retain an investment advisor who is registered with the SEC (or exempt from registration), has as- sets under management in excess of $500 million, and has at least five years experience investing in instruments authorized by Sec- tions 53601 and 53635. ° A money market mutual fund must receive the highest ranking by not less than two nationally recognized statistical rating or- ganizations or retain an investment advisor registered with the SEC or exempt from registration and who has not less than five years experience investing in money market instruments with assets under management in excess of $500 million. a Issuer must be rated "A" or higher as provid- ed bya nation,ally recognized rating agency. s A joint powers authority pool must retain an investment advisor who is registered with the SEC (or exempt from registration), has as- sets under management in excess of $500 million, and has at least five years experience investing in instruments authorized by Sec- tion 53601, subdivisions (a) to (o). ' Local entitles can deposit between $200 million and $10 billion into the Voluntary Investment Program Fund, upon approval by their governing bodies. Deposits in the fund will be invested in the Pooled Money Investment Account. ° Only those obligations issued or uncondition- ally guaranteed by the International Bank for Reconstruction and Development USED), International Finance Corporation fIFC), and Inter- American Development Bank (IADB). LOCAL AGE55lCE4aT GUIDELINES ii.