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Page ii ^ Sources: Sections 16340, 16429.1, 53601, 53601.8, 53635, 53635.2, 53635.6, and 53638. a 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 tens of any investment authorized under this section, unless otherwise slated, 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 maluntylimit. Such approval must be issued no less than three months prior to the purchase of any se- curity exceeding the rive -year maturity limit ° Percentages apply to all portfolio Invest- ments regardless of source of funds. For Instance, cash from a reverse repur- chase agreement would be subject to the restrictions. Reverse repurchase agreements or securi- 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 live years or less, Issued by corporations organized and operating within the United Stales or by depository in- stitutions licensed by the United States orany state and operating within the United States" ' No more than 30 percent of the agency's money may be in bankers' acceptances of No more than f0 percent invested in any anyone commercial bank. one mutual fund. ` "Select Agencies" are defined as a "city, a district, or other local agency that dolesl 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 or a city and county, may purchase no more than 10 percent of the outstanding commercial pa- per o1 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, andhas commercialpaper that is rated "A-1" 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, including local agencies that have the same governing body." Local agencies that pool exclusively with other to - cat 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 ate authorized under Section 53601(0. " No more than 30 percent of the agency's moneymaybe irwestedin deposits, including certificates of deposft through a placement service (excludes negotiable certificates of deposit authorized underSeclion 53601(1)). ' 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 of 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. " Issuer must be rated 'A' or higher as provid- so by nationally recognized rating agency. ' 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 of least five years experience investing in Instruments authorized by Sec- tion 53601, subdivisions (a) to (o). T Local entities 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. ° Ontythoseobligationsissuedorunwndition- ally guaranteed by the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), and Infer -American Development Bank (IADB). LOCAL AGEN&SDSTA iaT GUIDELINES