HomeMy WebLinkAboutMINUTES - 03201990 - 1.53 1-053 /4
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TO: BOARD OF SUPERVISORS _ L
.% f Contra
CostaFROM:
Phil Batchelor, County Administrator County
V
DATE: March 14, 1990 co
SUBJECT:
c°v"`' r
SUBJECT: REPORT OF TREASURER-TAX COLLECTOR ON COUNTY' S INVESTMENTS
SPECIFIC REOUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOrIlEENIDATION
Acknowledge receipt of the attached annual report from the
Treasurer-Tax Collector pursuant to Government Code Section 53646
(a) on a statement of investment policy and of the attached
monthly report required by Government Code Section 53646 (b) on
the investment of County funds under the control of the
Treasurer-Tax Collector for the month of January, 1990.
BACKGROUND:
In 1985 , SB 115 was enacted which amended Section 53601, 53635
and 53646 of the Government Code to require that the Treasurer of
every local government agency file an annual report with the
governing board of the local agency (Board of Supervisors)
setting forth the Treasurer-Tax Collector ' s investment policy.
This legislation also required that the Treasurer-Tax Collector
provide a monthly report to the governing board showing the type
of investment, institution, date of maturity, amount of deposit,
current market value for all securities with a maturity of more
than 12 months, rate of interest and such data as may be required
by the local agency.
The attached reports fulfill both of these requirements. The
first is the annual report on investment policy and the second is
the monthly report from the Treasurer-Tax Collector on
investments held as of January 31, 1990 .
No
CONTINUED ON ATTACHMENT: YES SIGNATURE: &t1a,
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S): �/�/I
ACTION OF BOARD ON March 20, 1990 APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
1 HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
CC: County Administrator ATTESTED
MAR 2 0 1990
Treasurer-Tax Collector PHIL BATCHELOR,CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
M382 (10/88) BY �� DEPUTY
Contra Cos-',-a Couiiii!/
R E C
Office of F E B 19 0
COUNTY TAX COLLECTOR TREASURER
Contra Costa County officoo*
Room 100-101 Finance Building County Adrnin-i�4U-ator
Martinez, CA 94553
DATE: February 21 , 1990
TO: Phil Batchelor, County Administrator
FROM: Alfred P. Lomeli, Treasurer-Tax Collector
SUBJECT: GOVERNMENT CODE 53601 AND 53635 AS AMENDED IN JANUARY, 1990
AND COUNTY INVESTMENT POLICY
The attached investment information is intended to comply with
the above Government Code as amended January, 1990.
My investment policy is intended to keep Contra Costa County
invested within the spirit and requirements of Government Code
53600, and it is my opinion that the investments listed
.accomplish our investment purpose within the meaning of my
attached investment policy.
APL:DED:gm
Attachments
1 1
TNVESTME:NT POLICY
AI,F'RE:D P - LOMEE I
COUN'T'Y TREASURER
CONTRA COS'T'A COUNTY
JANUARY 1990
TABLE OF CON'T'ENTS
Treasury Cash Management Policy . . . . . . . . . . . . 1
Authorized Investments. . . . . . . . . . . . . . . 2
Restrictions Set By the Government Code . . . . . . . . 3
and Treasurer ' s Policy . . . . . . . . . . . . . . . 4
Glossary. . . . . . . . . . . . . . . . . . . . . . . . 5 & 6
TREASURY CASH MANAGEMENT POLICY
(BE A SLY INVESTOR)
Public funds are to be invested in the following manner :
1 . LEGALITY
The cash management program must conform to the laws set
forth commencing with Section 53600 of the California
Government Code.
S 2. SAFETY OF PRINCIPAL
The duty of the Treasurer is to hold safely all public
funds under his control.
L. 3 . LIQUIDITY
The Treasury must maintain sufficient funds to redeem
warrants and checks as presented by the banks .
Y. 4. YIELD
Prudence must be used in maximizing yield consistent with
the first three priorities.
AUTHORIZED INVESTMENTS
Commencing with Section 53601 of Article 1 , Chapter 4 of the
Government Code of the State of California, surplus money may be
invested in the following:
A. Bonds issued by local agency.
B. United States Treasury Notes, bonds, bills or certificate
of indebtedness or those for which the faith and credit
of the United States are pledged for the principal and
interest.
C. Registered state warrants or treasury notes or bonds of
this state.
D. Bonds, notes, warrants or other evidence of indebtedness
of any local agency of the State of California.
E. Obligations of the United States Government issued by the
Bank for Cooperatives, Farm Credits, Federal Home Loan
Bank ( "FHLB" ) , Federal National Mortgage Association,
( "FNMA" ) , Government National Mortgage Association
( "GNMA" ) , Small Business Administration Notes ( "SBA" ) .
F. Bills of Exchange or time drafts drawn (Bankers
Acceptance) on and accepted by a commercial bank which
are eligible for purchase by the Federal Reserve System.
G. Commercial Paper of "Prime" quality: Al - (Moody) and P1
- ( S&P) , ratings limited to corporations with assets over
$500 , 000 , 000 .
H. Negotiable Certificates of Deposit issued by a nationally
or state chartered bank or a state or federal savings and
loan association.
I . Investment in repurchase agreements or reverse repurchase
agreements.
J. Medium term corporate notes of a maximum of five years
maturity issued by corporations operating within the
United States .
K. Shares of beneficial interest issued by diversified
management companies as defined in Section 23701m of the
Revenue and Taxation Code, investing in the securities
and obligations as authorized by subdivisions (a) to (k) ,
inclusive, of this policy and which comply with the
investment and deposit restrictions of this policy.
-2-
Mr
I. RESTRICTIONS SET BY GOVERNMENT CODE
A. Bankers Acceptance (Bills of Exchange or Time Draft) ,
1 . Required to be eligible for purchase by the Federal
Reserve System.
2. Must not exceed 270 day maturity.
3 . Must not exceed 400 of the County' s surplus funds. No
more than 300 of the County' s surplus funds can be
invested in the Bankers Acceptance of any one
commercial bank.
B. Commercial Paper
1. Must be "Prime" quality of the highest ranking as
provided by Moody' s Investment Service, Inc. or
Standard and Poor ' s Corporation - (Al - Pl) .
2 . Limited to issuing corporations that are organized and
operating within the United States with total assets in
excess of five hundred million dollars ( $500,000,000) .
3 . Must not exceed 18,0 day maturity.
4 . Must not represent more than 100 of the outstanding
paper of an issuing corporation.
5. Must not exceed 150 of the County's surplus funds.
6. May invest an additional 15% if the dollar-weighted
average maturity of the entire amount does not exceed
31 days.
C. Negotiable Certificate of Deposit
1 . Must not exceed 300 of the County's surplus funds.
2. Limited to issuing national or state chartered banks or
state or federal savings and loan associations or
state-licensed branches of foreign banks.
D. Reverse Repurchase Agreements
1 . Require approval of County' s Board of Supervisors.
E. Medium Term Corporate Notes
1 . Securities eligible for investments under this
subdivision shall be rated in the top three note rating
categories by two of the three largest nationally
recognized rating services. Purchase of medium term
corporate notes may not exceed 30% of the agency' s
surplus money.
-3-
RESTRICTIONS SET BY TREASURER' S POLICY
A. Reverse repurchase agreements will be used strictly for the
purpose of supplementing income, limit of three ( 3 )
outstanding without prior Approval of the Treasurer.
B. Swaps and Trades will each be approved on a per trade basis
by Treasurer or Chief Investment Officer.
C. Futures and options require prior approval of the Treasurer
on every transaction.
D. Total SBA loans will be limited to one million dollars
( $1 , 000, 000) with original notes held in Treasury.
E. Repurchase Agreements will generally be limited to Wells
Fargo Bank, Bank of America, First Interstate Bank or
Merrill Lynch. Collateral will be held by a third party to
the transaction which may include the trust department of
particular banks.
F. Securities purchased through brokers will be held in
safekeeping at Security Pacific National Bank Custodial
Services clearance office in New York or as designated for
Government Securities.
G. Bank C.D. ' s will be collateralized at 100% by Government
securities or 150% by current mortgages. There will be no
waiver of the first $100, 000. 00 collateral except by special
arrangement with the Treasurer.
H. Negotiable C.D. ' s from S & L' s will be limited to 100 thrift
institutions in the United States as listed in order net
income for 1988 or a supplementary list approved by the
Treasurer.
-4-
GLOSSARY
BANKERS ACCEPTANCES
Bankers Acceptance is a time bill of exchange drawn on and accepted by
a commercial bank to finance the exchange of goods. When a bank
"accepts" such a bill, the time draft becomes, in effect, a predated,
certified check payable to the bearer at some future specified date.
Little risk is involved for the investor because the commercial bank
assumes primary liability once the draft is accepted.
CERTIFICATES OF DEPOSIT (C/D' s)
C/D' s are certificates issued against funds deposited in a commercial
bank for a definite period of time and earning a specified rate of
return. They are issued in two forms - negotiable and non-negotiable .
A. NEGOTIABLE CERTIFICATES OF DEPOSIT.
May be sold by one holder to another prior to maturity. This is
possible because the issuing bank agrees to pay the amount of the
deposit plus interest earned to the BEARER of the certificate at
maturity.
B. NON-NEGOTIABLE CERTIFICATES OF DEPOSIT
These certificates are collateralized and are not money market
instruments since they cannot be traded in the secondary market.
They are issued on a fixed maturity basis and often pay higher
interest rates than are permissible on other savings or time
deposit accounts.
FUTURES
Futures contracts are the units of trading at a commodity exchange.
They are legally binding agreements made within the confines of an
exchange trading area. All futures contracts call for the purchase or
sale of a physical commodity or financial instrument on dates from one
month to more than two years in the future.
Hedging is the initiation of a position in the futures market that is
intended as a temporary substitute for the sale or purchase of the
actual instrument.
Futures may be purchased in anticipation of future cash purchases as a
protection against the possibility of increasing cost .
OPTIONS
The buyer of a call option has the right to buy the underlying
security at a fixed price. The option seller is obligated to sell the
security if the buyer chooses to exercise the option.
-5-
SURPLUS FUNDS
Since tax collections are twice a year and the County spends the
revenue over a period of twelve months for this policy statement, all
funds which are not required to meet the banks' demands on the
treasury to redeem warrants on any given day are considered "surplus
funds" for investments.
REPURCHASE AGREEMENTS
A repurchase agreement is an investment transaction which permits
temporary funds to be invested for a period of time, (usually under 30
days) , exactly suited to an investor ' s money requirements. It assures
him a specific rate of return. This transaction usually involves the
sale of marketable securities and a simultaneous commitment by the
seller to repurchase the securities at the same price on a specified
later date at the time the agreement is negotiated.
REVERSE REPURCHASE AGREEMENTS
Repurchase agreements allow the banks/dealers to buy temporary idle
funds from the County by selling to the County U.S. Government or
other securities.
A reverse repurchase agreement is the opposite. The dealer buys
securities with a contractual agreement to sell them back at a
prearranged date. The County pays him interest for the use of his
funds.
The money "borrowed" on a "reverse repo" can then be reinvested in
more rewarding investments.
- 6-
• Contr.-t Costzi
R V E D
Office of FEB 2) :; 1990
COUNTY TAX COLLECTOR - TREASURER Office 0.,
Contra Costa County
Room 100-101 Finance Building County Adniinistr&.,-_)f
Martinez, CA 94553
DATE: February 21 , 1990
TO: Phil Batchelor, County Administrator
Attn: Claude Van Marter, Assistant County Administrator
FROM: Alfred P. Lomeli, Treasurer-Tax Collector
SUBJECT: SENATE BILL 4115, CHAPTER 1526 (COUNTY INVESTMENT POLICY)
The attached investment information is intended to comply with
the above Senate Bill #115 (Amends Government Code 53601, 53635,
and 53646) and covers the period of time 1/1/90 through 1/31/90.
APL:gm
Attachments
Phil Batchelor, County Administrator
Page 2
February 21, 1990
Senate Bill #115, Continued
Please be advised that Contra Costa County has no Reverse
Repurchase Agreement investments made pursuant to Government Code
Sections 53601 (subdivision i) or 53635 (subdivision i) and no
investments made pursuant to Government Code 53601. 1 ( financial
futures and/or options) .
Contra Costa County' s projected disbursements for February 1990
are $39 ,498,000. This expenditure total will be met through
projected cash receipts of $40,247,000.
The L.A.I .F. is a pool type investment administered by the
State. The County has always maintained an investment in
this fund because it has certain inherent advantages to us,
the most important being the ability to make an investment
without declaring the maturity date.
County L.A.I .F. $5,911 ,996
Current Market Value is 1000 of par, or $5, 911, 996
Phil Batchelor, County Administrator
Page 3
February 21, 1990
Senate Bill #115 , Continued
INVESTMENTS OF MORE THAN ONE YEAR MATURITY
Date: January 31, 1990
SMALL BUSINESS ADMINISTRATION LOAN
GOVERNMENT GUARANTEED LOAN
Applicable
Name Loan Amount Earnings Rate Prime Rate 10 . 500
Guilley Trucking, Inc. $120 , 129 . 62 prime
Market value of the above is 1000 of loan amount.
The above investment was made for the purpose of increasing overall
County investment yield. County cash flow has changed to the extent
that a small portfolio of this type of long term investment is not
really practical or significant with respect to the overall portfolio
yield. We are, therefore, phasing out investments of this type.
RPT: TDIO CONTRA COSTA COUNTY PAGE: 18
RUN: 02/03/90 00 :31 TREASURER' S OFFICE
MONEYMAX TIME DEPOSIT INVESTMENTS OUTSTANDING
AS OF 01 /31 /90
ALL FUNDS
---PURCHIASEMATURITY -CI1VE--- BANFr D:- -0:---- -INT- ------
----
DATE DATE NO. CODE NO. RATE PRINCIPAL
FUND NO. 8177: GENERAL COUNTY INVESTMENTS
08/16/89 02/13/90 30293 38 0 8. 5500 500, 000. 00
12/06/89 02/26/90 31757 22 74375 8. 4000 54, 900. 00
01 /26/90 02/26/90 32641 22 74395 B. 4000 2, 500. 00
-_.09/ 1818'3 --_ -23/20 9@ --- - 3063�
- -- - 40 -- -- - 0 8. 5000 - 500, 000. 0i
09/26/89 03/26/90 30761 29 0 8. 6500 500. 000. 00
01/11/90 04/04/90 32493 26 68776 8. 0500 236, 000. 00
_..0.1.-/22/9W...__ 05/22/90-- 32597- " ---- 26--- -377E3 -- 8; 1000- - 17, O00; 00 - --
12/05/89 06/04/90 31790 29 0 8. 1500 500, 000. 00
01 /04/90 07/06/?0 32106 38 0 8. 1500 400, 000. 00
FUND NO. 8177 TOTAL 2, 710, 400. 00
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'coDE covERNMMrr:COMP` § 53601
aer with statement, offering circular, or other disclosure document describing the bonds, or any related
ng other maw.if the opinion is rendered as bond counsel and not as counsel to the underwriter or purchaser.
(Added by Stats.1985, c- 10,3% § 21, eff. Sept. 27, 1985.)
ation, or Historical NOW
account M9 Tegidatim
Another§ 53593,added by Stats.1985,G 511, § 3,rdat-
commis- ing to similar subject matter,was repealed by Stats.1989,c.
1360, § 62.
§ 53594. Injunction of violations
Injunctive relief shall be available, subject to judicial discretion, to prohibit or enjoin any violation
its.1989,
§ 3, of this article, but no violation shall affect the authority, validity, or enforceability of bonds.
CC.
.
(Added by Stats.1985, c- 1033, § 21, eff. Sept. 27, 1985.)
Historical Note
advisory 1989
Another§ 53594,added by Stats.1985,a 511, § 3, relat-
ing to similar subject matter,was repealed by Stats.1989,c.
to a new 1360, § 62.
�r similar
ll or any
:ontrolled CHAPTER 4. FINANCIAL AFFAIRS
issuer at
,quisition Article Section
y to any 3.6. Public Ubrary Special Taxes ......................................................53717
in having 3.7. Voters Approval of Taxes........................................................ 53720
preclude 3.8. Hospital Districts: Special Taxes .......................... 53730.01
of bonds 17. Community Facilities Plan........................................................53980
int or for - 18. Local Tax Allocation Agreements to Implement Community Facll'M* Plan ......... 53990
Lvene the 19. Obligation of Contract .......................................................... 53995
ARTICLE 1. INVESTMENT OF SURPLUS
Section
53601.1. Investment in financial futures or financial option contracts.
53601:5. Investments; qualified purchase agent.
Gass References
Community colleges, investment of surplus moneys, see
Education Code§ 84035.
1 prior to,
after the § 53600. Local agency, definition
.t the time
on for the As used in this article, "local agency" means county, city, city and county, including a chartered
1, 1988, to city or county, school district, community college district, public district, county board of education,
ige of the county superintendent of schools or any Public or municipal corporation.
(Amended by Stats.1984, c. 124, § 2; Stats. 1984, c. 1226, § 1; Stats.1987, c. 887, § 2.)
i
§ 53601. Circumstances authorizing investments; authorized investments
The legislative body of a local agency having money in a sinking fund of, or surplus money in, its
treasury not required for the immediate necessities of the local agency may invest any portion of the
money which it deems wise or expedient in the following; provided, however, that where this section
does not specify a limitation on the term or remaining maturity at the time of the investment, no
investment shall be made in any security, other than a security underlying a repurchase or reverse
ect to that repurchase agreement authorized by this section, which at the time of the investment has a term
in does not remaining to maturity in excess of five years, unless the legislative body has granted express
:baser with authority to make that investment either specifically or as a part of an investment program approved
the official i by the legislative body no less than three months prior to the investment:
Additions In text are indicated by underline; deletions by asterisks
95
53601 Of GOVERNMENT CODE
(a) Bonds issued by the local agency, including bonds payable solely out of the revenues from a
revenue-producing property owned,--controlled; ot'operated by the local agency or by a department,
board, agency,or`authority of the local agency:
(b) United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which
t the faith and credit of the United States are pledged for the payment of principal and interest.
(c) Registered state warrants or treasury notes or bonds of this state, including bonds payable
solely out of the revenues from a revenue-producing property owned, controlled, or operated by the
state or by a department, board, agency, or authority of the state.
(d) Bonds, notes, warrants, or other evidences of indebtedness of any local agency within this
state, including bonds payable solely out of the revenues from a revenue-producing property owned,
controlled, or operated by the local agency, or by a department, board, agency, or authority of the
local agency.
(e) Obligations issued by banks for cooperatives, federal land banks, federal intermediate credit
i., banks, federal home loan banks, the Federal Home Loan Bank Board, the Tennessee Valley
Authority, or in obligations,, participations, or other instruments of,or issued by,or fully guaranteed
as to principal and interest by, the Federal National Mortgage Association; or in guaranteed portions
of Small Business Administration notes; or in obligations, participations, or other instruments of, or
issued by, a federal agency or a United Slates government-sponsored enterprise.
(f) Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known
as bankers acceptances, which are eligible for purchase by the Federal Reserve System. Purchases
of bankers acceptances may not exceed 270 days maturity or 40 percent of the agency's surplus
money which may be invested pursuant to this section. However, no more than 30 percent of the
agency's surplus funds may be invested in the bankers acceptances of any one commercial bank
pursuant to this section.
This subdivision does not preclude a municipal utility district from investing any surplus money in
its treasury in any manner authorized by the Municipal Utility District Act, Division 6 (commencing
with Section 11501) of the Public Utilities Code.
(g) Commercial paper of "prime" quality of the highest ranking or of the highest letter and
numerical rating as provided for by Moody's Investors Service, Inc., or Standard and Poor's
Corporation. Eligible paper is further limited to issuing corporations that are organized and
operating within the United States and having total assets in excess of five hundred million dollars
($500,000,000)and having an "A" or higher rating for the issuer's debt, other than commercial paper,
if any, as provided for by Moody's Investors Service, Inc., or Standard and Poor's Corporation.
Purchases of eligible commercial paper may not exceed 180 days maturity nor represent more than
10 percent of the outstanding paper of an issuing corporation. Purchases of commercial paper may
not exceed 15 percent of the agency's surplus money which may be invested pursuant to this section.
An additional 15 percent, or a total of 30 percent of the agency's surplus money, may be invested
pursuant to this subdivision. The additional 15 percent may be so invested only if the dollar-weight-
ed average maturity of the entire amount does not exceed 31 days. "Dollar-weighted average
maturity" means the sum of the amount of each outstanding commercial paper investment multiplied
by the number of days to maturity, divided by the total amount of outstanding commercial paper.
(h) Negotiable certificates of deposits issued by a nationally or state-chartered bank or a state or
federal association (as defined by Section 5102 of the Financial Code)or by a state-licensed branch of
a foreign bank. Purchases of negotiable certificates of deposit may not exceed 30 percent of the
agency's surplus money which may be invested pursuant to this section. For purposes of this
section, negotiable certificates of deposits do not come within Article 2 (commencing with Section
53630) of Chapter 4 of Part 1 of Division 2 of Title 5, except that the amount so invested shall be
subject to the limitations of Section 53638.
(i) Investments in repurchase agreements or reverse repurchase agreements of any securities
authorized by this section, so long as the proceeds of the reverse repurchase agreement are invested
solely to supplement the income normally received from these securities. Investment in a reverse
repurchase agreement shall be made only upon prior approval of the legislaLdve body of the local
agency. For purposes of this section, the term "repurchase agreement" means a purchase of
securities by the local agency pursuant to an agreement by which the seller will repurchase the
securities on or before a specified date and for a specified amount and will deliver the underlying
securities to the local agency by book entry, physical delivery, or by third-party custodial agreement.
The transfer of underlying securities to the counterparty bank's customer book-entry account may be
used for book-entry delivery. The term "counterparty" for the purposes of this subdivision, means
the other party to the transaction. A counterparty bank's trust department or safekeeping
department may be used for physical delivery of the underlying security. The term of repurchase
Additions In text are indicated by underline; deletions by asterisks «
96
DE` GOVERNMENT,CODE 4 § 53601
CO ,
agreements shall be for one year or less. The term "securities," for purpose of repurchase under
from a this subdivision, means securities..of the same issuer, description, issue date,and maturity.
rtment,
The term"reverse repurchase agreement" means a sale of securities by the local agency pursuant
which to an agreement by.which`the-local agency.will repurchase such securities on or before.a specified
iterest.
date and for a specified amount.
)a able (]� Medium-term notes of a maximum of five years maturity issued by corporations organized and
y operating within the United States or by depository institutions licensed by the United States or any
by the state and operating within the United States. Notes eligible for investment under this subdivision.
shall be rated in a rating category of"A"or its equivalent or better by a nationally recognized rating
iin this service. Purchases of medium-term.notes may not exceed 30 percent of the agency's surplus money
owned, which may be invested pursuant to this section.
of the (k) Shares of beneficial interest issued by diversified management companies,as defined in Section
23701m of the Revenue and Taxation Code, investing in the securities and obligations as authorized
credit by subdivisions (a)to (1), inclusive, of this section and which comply with the investment restrictions
Valley of this article and Article 2(commencing with Section 53630). To be eligible for investment pursuant
ranteed to this subdivision, these companies shall either. (1) attain the highest ranking or the highest letter
)ortions and numerical rating provided by not less than two of the three largest nationally recognized rating
s of, or services, or (2) have an investment adviser registered with the Securities and Exchange Commission
with not less than five years' experience investing in the securities and obligations as authorized by
known subdivisions (a) to(m), inclusive, of this section and with assets under management in excess of five
rchases hundred million dollars ($500,000,000). The purchase price of shares of beneficial interest purchased
pursuant to this subdivision shall not include any commission that these companies may charge and
surplus shall not exceed 15 percent of the agency's surplus money which may be invested pursuant to this
of the section.
al bank
(1) Notwithstanding anything to the contrary contained in this section, Section 53635 or any other
provision of law, moneys held by a trustee or fiscal agent and pledged to the payment or security of
Loney in bonds or other indebtedness, or obligations under a lease, installment sale, or other agreement of a
nencmg local agency,or certificates of participation in those bonds, indebtedness,or lease installment sale,or
other agreements, may be invested in accordance with the statutory provisions governing the
ter and issuance of those bonds, indebtedness, or lease installment sale,or other agreement, or to the extent
. Poor's not inconsistent therewith or if.there are no specific statutory provisions, in accordance with the
;ed and ordinance, resolution, indenture, or agreement of the local agency providing for the issuance.
dollars (m) Notes, bonds, or other obligations which are at all times secured by a valid first priority
�l paper, security interest in securities of the types listed by Section 53651 as eligible securities for the
oration. purpose se of securing local agency deposits having a market value at least equal to that required by
ire than
Section 53652 for the purpose of securing local agency deposits. The securities serving as collateral
per may shall be placed by delivery or book entry into the custody of a trust company or the trust department
section. of a bank which is not affiliated with the issuer of the secured obligation, and the security interest
invested shall be perfected inaccordance with the requirements of the Uniform Commercial Code or federal
weight- regulations applicable to the types of securities in which the security interest is granted.
average
.ultiplied (Amended by Stats.1983, c. 550, § 1; Stats.1983, c. 567, § 1.5; Stats.1984, c. 659, § 2; Stats.1984,"c.
it paper. 741, § 1; Stats.1985, c. 983, § 14, eff. Sept. 26, 1985; Stats.1985, c. 983, § 15, eff. Sept. 26, 1985,
operative Jan. 1, 1988; Stats.1985, c. 1526, § 1; Stats.1985, c. 1526, § 1.5, operative Jan. 1, 1988;
state or Stats.1986, c. 784, § 1; Stats.1986, c. 784, § 2, operative Jan. 1, 1988; Stats.1986, c. 853, § 1, eff.
ranch of Sept. 17, 1986; Stats.1986, c. 853, § 2,operative Jan. 1, 1987; Stats.1986, c. 853, § 1.5; Stats.1986, c.
!t of the 853, § 2.5, operative Jan. 1, 1988; Stats.1987, c. 446, § 1; Stats.1987, c. 887, § 3.5; Stats.1988, c. 294,
of this § 1, eff. July 7, 1988; Stats.1988, c. 491, § 1.)
Section
shall be Historical Note operative when A.C.A. No. 21 (1984) was approved at the
1983 Legislation. primary election held June 3, 1985.
eeurities Amendment of this section by § 1.5 of Stats.1983,c. 550, Section 12 of Stats.1984, c. 659, provided:
invested failed to become operative under the provisions of § 3 of
that Act. "Sections 2 to 9, inclusive, of this act shall become
reverse Amendment of this section by § 1 of Stats.1983, c. 567, operative upon the amendment of subdivision(b)of Section
the local failed to become operative under the provisions of § 3 of 11 of Article 11 of the California Constitution [A.C.A. No.
zhase of that Act. 21 (1984) not voted upon in 1984] authorizing the Le&la-
hase the Effect of amendment of section by two or more acts at the ture to provide for the deposit of public moneys in any
tderl in federal or state credit union in this state."
Y g same session of the legislature, see Government Code
reetnent. § 9605. 1985 Legislation
t may be 1984lotion
❑, means Leg's Amendment of this section by § 14.5 of Stats.1985, c.
Amendment of this section by Stats.1984, c. 659, § 2, 983,failed to become operative under the provisions of§ 27
ekeeping contingent upon approval of A.C.A. No. 21 (1984), became of that Act.
purchase
Additions In text are Indicated by underline; deietions by asterisks
97
§ 5360Y= GOVERNMENT CODE
Amendment of this section by § 15.5 of Stats.1985, c. 1987 Legislation
983,failed to become operative under the provisions of§ 28 Under the provisions of:§ 6 of Stats.1987, c. 887, the
of that.Act .:....:......:-. : 4......, :. . .1987•.ameadments-of this section by c.446 and o. 887.were
r;. gives effad.aad incorporated in the form set forth in§ 3.5
1986 Legislatlon. of c. 887. An amendment of this section by § 3.of Stats.
Amendment of this section by§ 1.5 of Stats.1986,c. 784, 1987,c.887,failed to become operative under the provisions
failed to become operative under the provisions of§ 5 of of§ 6 of that Act.
' that Act. Amendment of this section by Stats.1984, c. 741, § 1;
Amendment of this section by§ 2.5 of Stats.1986,c.784, Stats.1985, c. 983, § 14; Stats.1985, c. 1526, § 1; Stats.
failed to become operative under the provisions of§ 5 of 1986, c. 784, § 1; Stats.1986, c. 853, § 1; Stats.1986, c.
that Act 853,§ 1.5,was a temporary provision and,by its own terms
Section 5 of Stats 1986,c. 853, provides: was repealed on Jan. 1, 1988,at which time the text of this
p section as amended by Stats.1983,c. 567, § 1.5,and further
"Sections 1.5 and 2.5 of this bill incorporate amendments amended by Stats.1984, c. 659, § 2; Stats.1985, c. 983,
to Section 53601 of the Government Code proposed by both § 15; Stats.1985, c. 1526, § 1.5; Stats.1986, c. 784, § 2;
this bill and AB 2595(Stats.1986,c.784). Sections 3.5 and Stats.1986, c. 853, § 2; Stats.1986, c. 853, § 2.5; Stats.
4.5 of this bill incorporate amendments to Section 53635 of 1987, c. 446, § 1; and Stats.1987, c. 887, § 3.5 became
the Government Code proposed by both this bill and AB operative.
2595. Those sections shall only become operative if (1) 1988 Legislation
both bills are enacted and become effective on or before
January 1, 1987, but this bill becomes operative first, (2) of amendment of section by two or more acts at the
each bill amends Sections 53601 and 53635 of the Govern- same session of We legislature, see Government Code
ment Code, and (3) this bill is enacted after AB 2595, in § 9605.
which case Section 53601 of the Government Code, as Code of Regulations References
amended by Sections 1 and 2 of this bill,and Section 53635 Contract periods, see 2 Cal. Code of Regs. 599.943.
of the Government Code,as amended by Sections 3 and 4 of Investments,see 2 Cal. Code of Regs. 599.942.
this bill,shall remain operative only until the operative date
of AB 2595,at which time Sections 1.5, 2.5, 3.5, and 4.5 of Library References
this bill shall become operative." Words and Phrases(Perm. Ed.)
§ 53601.1. Investment in financial futures or financial option contracts
The authority of a local agency to invest funds pursuant to Section 53601 includes, in addition
thereto, authority to invest in financial futures or financial option contracts in any of the investment
categories enumerated in that.section.
(Added by Stats.1983, c. 534, § 3.)
Library References
Counties 4�-154'/z.
C.J.S. Counties § 229.
§ 53601.5. Investments; qualified purchase agent
The purchase by a local agency of any investment authorized pursuant to Section 53601 or 53601.1,
not purchased directly from the issuer, shall be purchased either from an institution licensed by the
sate as a broker-dealer, as defined in Section 25004 of the Corporations Code, or from a member of a
federally regulated securities exchange, from a national or state-chartered bank, from a federal or
state association (as defined by Section 5102 of the Financial Code) or from a brokerage firm
designated as a primary government dealer by the Federal Reserve bank.
(Added by Stats.1984,' c. 929, § 1. Amended by Stats.1985, c. 983, § 16, eff. Sept. 26, 1985.)
§ 53602. Investment in legal investments for savings banks; securities of public districts
Code of Regulations References
Contract periods, see 2 Cal. Code of Regs. 599.943.
Investments, see 2 Cal. Code of Regs. 599.942.
§ 53602.1. Repealed by Stats.1987, c. 1028, § 1, operative Jan. 1, 1989
Historical Note
Prior to repeal, § 53602.1 was amended by Stats.1986, c.
803, § 1; Stats.1987, c. 1028, § 1, and repealed by its own
terms Jan. 1, 1989.
Additions In text are Indicated by underline; deletions by asterisks °
98
°� 5363.0_:
. GOVERNMEN CODE a rs�- . a �...- i.
,ODE' T`
§ 53608. Deposit of securities; receipt; delegation of authority
17, the The legislative body of a local agency may deposit for!safekeeping with a federal or state .
97.were association(as defined bv-Section°5102 of the Financial Code;a trust company or a state or:national-
,n j 3.5 bank located within th s.state or with the-Federal,Reserve:Bank of San Francisco or any`branch
if stats.. thereof within this state, or with any Federal Reserve bank or with any state or national bank
ovisions located in any city designated as a reserve city by the Board of Governors of the Federal Reserve
Gl, § 1, System, the bonds, notes, bills, debentures, obligations, certificates of indebtedness, warrants, or
Stats. other evidences of indebtedness in which the money of the local agency is invested pursuant to this
1986, c. article or pursuant to other legislative authority. The local agency shall take from such financial
'n teams institution a receipt for securities so deposited. The authority of the legislative body to deposit for
t of this safekeeping may be delegated by the legislative body to the treasurer of the local agency; the
further treasurer shall not be responsible for securities delivered to and receipted for by a financial
c. 983, institution until they are withdrawn from the financial institution by the treasurer.
' Z'
Stats. (Amended by Stats.1985, c. 983; § 17, eff. Sept. 26, 1985.)
became
ARTICLE 2. DEPOSIT OF FUNDS
is at the
Lt Code Section
53632.5. Classes of security for deposits.
53635.5. Investments; qualified purchase agent.
599.943. 53635.6. Inoperative.
53648.5. Termination of agreement with depository.
53651.2. Eligible security.
53651.4. Report of independent certified public accountant; depository using eligible securities;
state bank; national bank; fee.
53651.6. Letter of credit; terms.
53652. Value required to secure active or inactive deposits; market value.
53653. Waiver of security; federally insured deposits; interest.
ddition 53657. Authorization to act as agent of depository; application; agents eligible on December 31,
stment 1986.
53661. Administrator.
53684. Local agencies; excess funds; investment by county treasurer.
Cross References
Community colleges, investment of surplus moneys, see .
Education Code § 84035.
§ 53630. Definitions
As used in this article:
3601.1, (a) "Local agency" means county, city, city and county, including a chartered city or county, a
by the community college district, or other public agency or corporation in this state.
ier of a
feral or (b) "Treasurer" means treasurer of the local agency.
;e firm (c) "Depository" means a state or national bank, savings association or federal association, ' ' ' a
state or federal credit union, or a federally insured industrial loan company, in this state in which the
1985.) moneys of a local agency are deposited.
(d) "Agent of depository" means a trust company or trust department of a state or national bank
located in this state, including the trust department of a depository where authorized, and the
istricts Federal Home Loan Bank of San Francisco, which is authorized to act as an agent of depository for
the purposes of this article pursuant to Section 53657.
(e) "Security" means any of the eligible securities or obligations listed in Section 53651.
(f) "Pooled securities" means eligible securities held by an agent of depository for a depository and
securing deposits of one or more local agencies.
(g) "Administrator" means the Administrator of Local Agency Security of the State of California.
(h) Savings association or federal association" means a savings association, savings and loan
association, or savings bank as defined by Section 5102 of the Financial Code.
(i) "Federally insured industrial loan company" means an industrial loan company licensed under
Division 7 (commencing with Section 18000) of the Financial Code, the investment certificates of
which are insured by the Federal Deposit Insurance Corporation.
Additions In text are Indicated by underline; deletions by asterisks
99
§'53630 GOVERNMENT CODE
For purposes of being a depository of moneys belonging to or being in the custody of a local
agency, the.phrases "state or national bank located in this state," "state or national bank," "state or
national bank in this state,"and"state or national banks in the state"include a foreign bank licensed
under Article 3(commencing with Section.1750)of Chapter 13.5 of Division 1 of the Financial Code to
maintain a branch office in this state or authorized under federal law to maintain a federal branch in .
this state.
(Amended by Stats.1984, c. 659, § 3; Stats.1984, c. 868, § 18; Stats.1984, c. 1226, § 2; Stats.1985, c.
983, § 18, eff. Sept. 26, 1985; Stats.1986, c. 1132, § 1; Stats.1987, c. 887, § 4; Stats.1988, c. 1004,
i. Historical Note 1988 Legislation
1984 Legislation. The 1988 amendment inserted "or a federally insured
1 Amendment of this section by Stats.1984, c. 659, § 3, industrial loan company"in subd.(c)defining"depository";
contingent upon approval of A.C.A. No. 21 (1984),became inserted subd. (i)defining"federally insured industrial loan
operative upon approval of A.C.A. No. 21 (1984) at the company'; and made nonsubstantive changes.
primary elation held June 3, 1986. Section 8 of Stats.1988, c. 1004, provides:
i. Effect of amendment of section by two or more acts at the
same session of the legislature, sec Government Code "Sections 1 to 7, inclusive, of this act shall become
§ 9605 operative only if Assembly Constitutional Amendment No.
63 of the 1987-88 Regular Session [Proposition 88, 11/8/88
1986 Legislation. election] is adopted by the people, in which case Sections 1
Section 33 of Stats.1986, c. 1132, provides: to 7,inclusive,of this act shall become operative at the same
' '"The amendment of subdivision (a) of Section 53630 of time as the constitutional amendment or January 1, 1989,
the Government Code made by Section 1 of this act does whichever is later."
not constitute a change in,but is declaratory of,the existing 1988 amendment became operative upon adoption of
law." ACA No.63[Prop. 88]at the general election Nov.8, 1988.
i' § 53632. Classes of deposits
There are three classes of deposits:
(a) Inactive deposits.
(b) Active deposits.
(c) Interest-bearing active deposits.
(Amended by Stats.1983, c. 105, § 1.5.)
§ 53632.5. Classes of security for deposits
There are three classes of security for deposits:
(a) Securities described in subdivision (m) of Section 53651.
(b) Securities described in subdivision (p) of Section 53651.
(c) Securities enumerated in Section 53651, except for those described in subdivisions(m)and of
that section.
(Added by Stats.1983, c. 105, § 2. Amended by Stats.1986, c. 1132, § 2.)
§ 53633. Determination of amounts to be deposited in each class
The treasurer shall determine the amounts of money to be deposited as inactive, active, and
interest-bearing active deposits, except as otherwise provided in Section 53679.
(Amended by Stats.1983, c. 105, § 3.)
§ 53635. Funds of local agency; deposit or investment
As far as possible, all money belonging to, or in the custody of, a local agency, including money
paid to the treasurer or other official to pay the principal, interest, or penalties of bonds, shall be
deposited for safekeeping in state or national banks, savings associations or federal associations,
credit unions, or federally insured industrial loan companies in this state selected by the treasurer or
other official having the legal custody of the money; or, unless otherwise directed by the legislative
body pursuant to Section 53601, may be invested in the foliowing:
(a) Bonds issued by the local agency, including bonds payable solely out of she revenues from a
revenue-producing property owned, controlled, or operated by the local agency or by a department,
board, agency, or authority of the local agency.
Additions In text are indicated by underline; deletions by asterisks `
100
.CODE'- GOVERNMENT °CODE'i § 53635
a local (b) United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which
state or the faith and credit of the United States are pledged for the payment of principal and interest.
lio de to { (c) Registered state..warrants.or treasury notes or bonds of this state, including bonds payable
Code to ` solely out of the revenues from a revenue-producing property owned, controlled, or operated by the
ranch in state or by a department, board, agency, or authority of the state.
(d) Bonds, notes, warrants, or other evidences of indebtedness of any local agency within this
.1985, c. state, including bonds payable solely out of the revenues from a revenue-producing property owned,
c. 1004, controlled, or operated by the local agency, or by a department, board, agency, or authority of the
local agency.
(e) Obligations issued by banks for cooperatives, federal land banks, federal intermediate credit
y insured banks, federal home loan banks, the Federal Home Loan Bank, the Tennessee Valley Authority, or in
pository"; obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal
;trial loan, and interest by, the Federal National Mortgage Association; or in guaranteed portions of Small
Business Administration notes; or in obligations, participations, or other instruments of, or issued
by, federal agency or a United States government-sponsored enterprise.
I become (f) Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known
meat No. as bankers acceptances, which are eligible for purchase by the Federal Reserve System. Purchases
, 11/8/88 of bankers acceptances may not exceed 270 days maturity or 40 percent of the agency's surplus
iections 1 funds which may be invested pursuant to this section. However, no more than 30 percent of the
the same agency's surplus funds may be invested in the bankers acceptances of any one commercial bank
1, 1989, pursuant to this section.
option of This subdivision does not preclude a municipal utility district from investing any surplus money in
8, 1988. its treasury in any manner authorized by the Municipal Utility District Act, Division 6 (commencing
with Section 11501) of the Public Utilities Code.
(g) Commercial paper of "prime" quality of the highest ranking or of the highest letter and
numerical rating as provided for by Moody's Investors Service, Inc., or Standard and Poor's
Corporation. Eligible paper is further limited to issuing corporations that are organized and
1 operating within the United States and having total assets in excess of five hundred million dollars
($500,000,000)and having an "A" or higher rating for the issuer's debt,other than commercial paper,
if any, as provided for by Moody's Investors Service, Inc., or Standard and Poor's Corporation.
Purchases of eligible commercial paper may not exceed 180 days maturity nor represent more than
10 percent of the outstanding paper of an issuing corporation. Purchases of commercial paper may
not exceed 15 percent of the agency's surplus money which may be invested pursuant to this section.
An additional 15 percent, or a total of 30 percent of the agency's money or money in its custody, may
be invested pursuant to this subdivision. The additional 15,percent may be so invested only if the
dollar-weighted average maturity of the entire amount does not exceed 31 days. "Dollar-weighted
average maturity" means the sum of the amount of each outstanding commercial paper investment
multiplied by the number of days to maturity, divided by the total amount of outstanding commercial
paper.
nd(p)of (h) Negotiable certificates of deposit issued by a nationally or state-chartered bank or a savings
association or federal association or a state or federal credit union or by a state-licensed branch of a
foreign bank. Purchases of negotiable certificates of deposit may not exceed 30 percent of the
agency's surplus money which may be invested pursuant to this section. For purposes of this
section, negotiable certificates of deposit do not come within Article 2 (commencing with Section
53630) of Chapter 4 of Part 1 of Division 2 of Title 5, except that the amount so invested shall be
subject to the limitations of Section 53638. For purposes of this section, the legislative body of a
i et and local agency and the treasurer or other official of the local agency having legal custody of the money
are prohibited from depositing or investing local agency funds, or funds in the custody of the local
agency, in negotiable certificates of deposit issued by a state or federal credit union if a member of
the legislative body of the local agency, or an employee of the administrative officer, manager's
office, budget office, auditor-controller's office, or treasurer's office of the local agency also serves
on the board of directors, or any committee appointed by the board of directors, or the credit
money committee or supervisory committee of the state or federal credit union issuing the negotiable
shall be certificates of deposit.
ciations, (i) Investments in repurchase agreements or reverse repurchase agreements of any securities
.surer or authorized by this section, so long as the proceeds of the reverse repurchase agreement are invested
gislative solely to supplement the income normaily received from these securities. Investment in a reverse
repurchase agreement shall be made only upon prior approval of the legislative body of the local
from a agency. For purposes of this section, the term "repurchase agreement" means a purchase of
artment, securities by the local agency pursuant to an agreement by which the seller will repurchase the
securities on or before a specified date and for a specified amount and will deliver the underlying
Additions in text are indicated by underline; deletions by asterisks "
101
-§.43635 ;y GOVERNMENT CODE:
securities to the local agency by book entry, physical delivery, or by third-party custodial agreement. 1�
The transfer of underlying securities to the counterparty bank's customer book entry account may be U
used for book entry delivery. . The term "counterparty" for the purposes of this subdivision, means ;' 198•
the other party to the transaction. A. counterparty bank's trust department or safekeeping >' eve
department may be used for physical delivery of the underlying security. The term of repurchase of c
t' agreements shall be for one year or less. The term "securities," for purpose of repurchase under 198'
this subdivision, shall mean securities of the same issuer, description, issue date, and maturity, of E
The term "reverse repurchase agreement' means a sale of securities by the local agency pursuant P
stat
to an agreement by which the local agency will repurchase such securities on or before a specified ; 198
date and for a specified amount. 853
Medium-term notes of a maximum of five years' maturity issued by corporations organized and ten
J operating within the United States or by depository institutions licensed by the United States or any Of I�
state and operating within the United States. Notes eligible for investment under this subdivision 98'.
shall be rated in a rating category of"A"or its equivalent or better by a nationally recognized rating § a
service. Purchases of medium-term notes may not exceed 30 percent of the agency's surplus money
which may be invested pursuant to this section.
(k) Shares of beneficial interest issued by diversified management companies, as defined in Section
23701m of the Revenue and Taxation Code, investing in the securities and obligations as authorized
by subdivisions (a) to (k), inclusive, of this section and which comply with the investment restrictions PU
of this article and Article 1 (commencing with Section 53600). To be eligible for investment pursuant i as
j to this subdivision, these companies shall either: (1) attain the highest ranking or the highest letter fe
and numerical rating provided by not less than two of the three largest nationally recognized rating as
services, or(2)-have an investment adviser registered with the Securities and Exchange Commission gt
with not less than five years' experience investing in the securities and obligations as authorized by ([�
subdivisions (a) to (m), inclusive, of this section and with assets under management in excess of five Si
hundred million dollars ($500,000,000). The purchase price of shares of beneficial interest purchased i
pursuant to this subdivision shall not include any commission that these companies may charge and
shall not exceed 15 percent of the agency's surplus money which may be invested pursuant to this
section.
(1) Notes, bonds, or other obligations which are at all times secured by a valid first priority ! re
security interest in securities of the types listed by Section 53651 as eligible securities for the
purpose of securing local agency deposits having a market value at least equal to that required by §
Section 53652 for the purpose of securing local agency deposits. The securities serving as collateral
shall be placed by delivery or book entry into the custody of a trust company or the trust department
of a bank which is not affiliated with the issuer of the secured obligation, and the security interest
shall be perfected in accordance with the requirements of the Uniform Commercial Code or federal s
regulations applicable to the types of securities in which the security interest is granted. >
1 (Amended by Stats.1983 c. 550 § 2• Stats.1983, c. 567 § 2.5• Stats.1984 c. 659 § 4; Stats.1984, c.
741, § 2• Stats.1985 c. 983 § 19 eff. Sept 26 1985• Stats.1985 c. 983 20 operative Jan. 1 1988• f
Stats.1985, c. 1526, § 2; Stats.1985, c. 1526, § 2.5, operative Jan. 1, 1988; Stats.1986, c. 784, § 3;
Stats.1986, c. 784, § 4, operative Jan. 1, 1988; Stats.1986, c. 853, § 3, eff. Sept. 17, 1986; Stats.1986,
c.853, § 4,operative Jan. 1, 1987; Stats.1986,c.853, § 3.5; Stats.1986, c. 853, § 4.5, operative Jan. 1,
k 1988; Stats.1987, c. 446, § 2; Stats.1987, c. 887, § 5.5; Stats.1988, e. 294, § 2, eff. July 7, 1988;
Stats.1988, c. 491, § 2; Stats.1988, c. 1004, § 2.)
Historical Note 1985 Legislation
1983lation.
s Amendment of this section by § 19.5 of Stats.1985, c.
Amendment of this section by § 2.5 of Stats.1983,c. 550, 983,failed to become operative under the provisions of§ 29 i
failed to become operative under the provisions of § 4 of of that Act.
that Act. Amendment of this section by § 20.5 of Stats.1985, c.
Amendment of this section by § 2 of Stats.1983, c. 567, 983, failed to become operative under the provisions of§ 30
failed to become operative under the provisions of § 4 of of that Act.
that Act. 1986 Legislation.
Effect of amendment of section by two or more acts at the Amendment of this section by § 3.5 of Stats.1986,c. 784,
same session of the legislature, see Government Code, failed to become operative under the provisions of § 5 of
§ 9605. that Act.
1984 Legislation Amendment of this section by § 4.5 of Stats.1986,c. 784,
Amendment of this section by Stats.1984, c. 659, § 4, failed to become operative under ti!e provisions of § 5 of
contingent upon approval of A.C.A. No. 21 (1984), became that Act.
operative upon the approval of A.C.A. No. 21 (1984)at the Operative effect of 1986 amendments, see Historical Note
primary election held June 3, 1986. following § 53601.
Additions In text are Indicated by underline; deletions by asterisks
102
:CODE..
CODE § 53638
,reement. 1987 Legislation Stats.1987, c. 446, § 2; Stats.1987, c. 887, § 5.5, became
it may be Under the provisions of § 6 of Stats.1987, c. 887; the operative.
n, means 1987 amendments of this section by c.446 and x.887 were
ekeeping given effect and incorporated.in the form set forth in § :5.5 1988 Legislation
purchase of c. 887. An amendment of this section by § 5 of Stats. 1988 amendment became operative upon adoption of
,se under 1987,c.887,failed to become operative under the provisions ACA No.63[Prop.88]at the general election Nov.8, 1988.
maturity, of§ 6 of that Act. Effect of amendment of section by two or more am at the
Amendment of this section by Stats.1984, c. 741, § 2; same session of the legislature, see Government Code
pursuant Stats.1985, c. 983, § 19; Stats.1985, c. 1526, § 2; Stats § 9605.
specified 1986, c. 784, § 3; Stats.1986, c. 853, § 3; Stats.1986, c'
853, § 3.5, was a temporary provision and, by its own Cross References
,iized and i terms, was repealed on Jan. 1, 1988,at which time the text Water districts, defeasance or call for redemption of
of this section as amended by Stats.1983,c. 567, J 2.5, and refunding bonds, requirements, see Water Code § 36064.
!s or any further amended by Stats.1984, c. 659, § 4; Stats.1985, c.
�bdivision 983, § 20; Stats.1985, c. 1526, § 2.5; Stats.1986, c. 784, Library References
ed rating § 4; Stats.1986, c. 853, § 4; Stats.1986, c. 853, § 4.5; Words and Phrases (Penn. Ed.)
is money
§ 53635.5. Investments; qualified purchase agent
n Section
uthorized The purchase by a local agency of any investment authorized pursuant to Section 53635' not
strictions purchased directly from the issuer, shall be purchased either from an institution licensed by the state
pursuant i as a broker-dealer, as defined in Section 25004 of the Corporations Code, or from a member of a
est letter federally regulated securities exchange, from a national or state-chartered bank, from a savings
ed rating association or a federal association, or from a brokerage firm designated as a primary
mmission government dealer by the Federal Reserve bank.
Drized by (Added by Stats.1984, c. 929, § 2. Amended by Stats.1985, c. 983, § 21, eff. Sept. 26, 1985;
3s of five i Stats.1986, c. 1132, § 4.)
,urchased
iarge and Historical Note Renumbering of this section by§ 88 of Stats.1986,c.248,
at to this 1986 legislation. failed to become operative under the subordination provi-
Former § 53635.5, added by Stats.1976, c. 506, p. 1527, sions of§ 277 of that Act.
Z and amended by Stats.1981, c. 67, p. 153, § 26, was
t priority repealed by Stats.1986, c. 1132, § 3.
i for the
luired by § 53635.6. Inoperative
Collateral
partment Historical Note
rinterest Renumbering of§ 53635.5 to be this section by § 88 of
it federal Stats.1986, c. 248, failed to become operative under the
provisions of§ 277 of that Act.
s.1984, c.
1. 1, 1988; § 53637. Selection of depositary, interest
784, § 3; The money shall be deposited in any bank, savings association or federal association, state or
tats.1986, federal credit union, or federally insured industrial loan company with the objective of realizing
ve Jan. 1, maximum return, consistent with prudent financial management, except that money shall not be
7, 1988;' deposited in any state or federal credit union if a member of the legislative body of a local agency, or
an employee of the administrative office, manager's office, budget office, auditor-controller's office,
or treasurer's office of the local agency, also serves on the board of directors, or any committee
appointed by the board of directors, or the credit committee or supervisory committee, of the state or
its-1985, c. federal credit union.
ins of§ 29 (Amended by Stats.1984, c. 659, § 5; Stats.1986, c. 1132, § 6; Stats.1988, c. 1004, § 2.5.)
Historical Note Amendment of this section by § 89 of Stats.1986, c. 248,
its.1985, C. 1984 Legislation. failed to become operative under the provisions of§ 277 of
yrs of§ 30 Amendment of this section by Stats_1984, c. 659, § 5, that Act.
contingent upon approval of A.C.A. No. 21 (1984), became
operative upon approval of A.C.A. No. 21 (1984) at the 1988 Legislation
986,c. 794, primary election held June 3, 198C
1988 amendment became operative upon adoption of
of § 5 of 1986 Legislation. ACA No.63 [Prop. 88]at the general election Nov.8, 1988,
Amendment of this section by Stats.1985, c. 983, § 22,
was repealed by Stats.1986, c 1132, § 5.
986,c. 784,
i of § 5 of § 53638. Maximum deposits
orical Note (a) The deposit shall not exceed the shareholder's equity of any depositorV bank. For the purposes
of this subdivision, shareholder's equity shall be determined in accordance with Section 118 of the
Financial Code, but shall be deemed to include capital notes and debentures.
Additions In text are indicated by underline; deletions by asterisks
103
CODE:;• 'A� C; -E § 53647
Note 2
ation or § 53645. Interest, computation
.dollars
the net Interest shall be computed by the depository on the average daily balances of the money on
deposit;paid quarterly and computed on a 360-day basis.
.eed the (Amended by Stats.1986, c. 248, § 95.)
mission-
-unt not
it credit § 53646. Treasurer's reports and statements of investment policy
!ured as
Text of section operative until Jan. 1, 1991.
hall not (a) The treasurer or chief fiscal officer ` ` ' shall annually render to the legislative body of the
)mpany local agency a statement of investment policy.
(b) The treasurer or chief fiscal officer shall render a monthly.report to the chief executive officer
A c. 248, and legislative body of the local agency showing the type of investment, institution, date of maturity,
§ 277 of amount of deposit, current market value for all securities with a maturity of more than 12 months,
rate of interest, and such data as may be required by the local agency. The monthly report shall
specify in detail investments made pursuant to subdivision (i) of Section 53601, Section 53601.1, and
to invest- subdivision (i) of Section 53635.
industrial M The monthly report shall state its relationship to the statement of investment policy.
option of L2) In the monthly report, a subsidiary ledger of investments may be used in accordance with
1. 8, 1988. accepted accounting practices.
(3) The monthly report shall also include any information-which the treasurer or chief fiscal officer
determines would demonstrate that.the local agency's expenditure requirements can be met in the
following month.
:nses of
(4) A school district is not required to render a monthly report on any of its funds in the custody of
the county treasurer.
(c) This section shall remain in effect only until January 1, 1991, and as of that date is repealed,
unless a later enacted statute, which is enacted before January 1, 1991, deletes or extends that date.
If that date is not deleted or extended, then, on and after January 1, 1991, pursuant to Section 9611
pay all of the Government Code, Section 53646 of the Government Code, as amended by Section 8 of Chapter
105 of the Statutes of 1983, shall have the same force and effect as if this temporary provision had
not been enacted.
(Amended by Stats.1983, c. 105, § 8; Stats.1984, c. 1226, § 3; Stats.1985, c. 1526, § 3.)
For text of section operative Jan. 1, 1991, see § 53646, post.
.ake and Historical Note "It is the intent of the Legislature that the provisions of
'equines. 1984 Legislation Section 3 of this act apply to all local agencies, whether
Section 4 of Stats.1984, c. 1226, provides: chartered or not."
§ 53646. Statement by treasurer showing accrued interest
and the Text of section operative Jan. 1, 1991.
The treasurer shall render to the depositary and to the auditor, controller, secretary, or correspond-
ing officer of the local agency, a statement showing the amount of accrued interest for each
depositary for the preceding quarter if so required by the legislative body of the local agency.
(Amended by Stats.1983, c. 105, § 8.)
For text of section operative until Jan. 1, 1991, see. § 53646, ante.
I
of the federal § 53647. Interest; payment into fund
Notes of Decisions county as part of its general fund. Fresno Fire Fighters
2. Disposition of interest payments Local 753 v.Jernagan(App. 5 Dist.1986)222 Cal.Rptr. 886,
Interest earned on monies deposited in civil actions is to 177 C.A.3d 403.
be returned to owner of monies, rather than retained by
Additions In text are indicated by underline; deletions by asterisks
11nc