Page 156 - Yucaipa Valley Water District

Director Memorandum No. 18-003 Page 5 of 9

$1,000 above that, with a maximum of $30 million for any agency. The
LAIF offers high liquidity because deposits can be converted to cash in 24
hours and no interest is lost. All interest is distributed to those agencies
participating on a proportionate share.

2. Passbook Savings Accounts and Demand Deposit Accounts - For
purposes of this policy, passbook savings accounts and demand deposit
accounts and bank money-market accounts shall be considered
appropriate investments. The District may earn interest on idle funds in
such accounts at a federally-insured institution.

3. United States Government Securities - U.S. Treasury Bills, Notes, Bonds
and Certificates of Indebtedness, or those for which the full faith and credit
of the United States are pledged for payment of principal and interest and
are not subject to any limitations. Since this investment category is
considered to be extremely safe and liquid, there is no limitation as to the
percentage of the District’s portfolio that can be invested in these types of
investments.

B. As to the District’s bond proceeds, and subject to the Board’s approval, such
proceeds may be invested by the District Investment Officer in the following
investments authorized under California Government Code, Sections 53601,
53635 and 53635.2:

1. United States Treasury notes, bonds, bills or certificates of indebtedness
or other obligations for which the full faith and credit of the United States
are pledged for the payment of principal and interest;

2. Federal agency 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. Certain short-term obligations
of agencies or instrumentalities of the United States Government may be
backed only by the issuing agency or instrumentality and may not be
backed by the full faith and credit of the United States Government. For
example, securities issued by the Federal Home Loan Banks and the
Freddie Mac are supported only by the credit of the agency or
instrumentality that issued them, and not by the United States Government,
and securities issued by the Federal Farm Credit System and the Fannie
Mae are supported by the agency’s or instrumentality’s right to borrow
money from the U.S. Treasury under certain circumstances;

3. 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 this state or by a department,
board, agency, or authority of this state.

4. 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.

Yucaipa Valley Water District - January 16, 2018 - Page 154 of 287