Page 58 - Yucaipa Valley Water District

Director Memorandum No. 19-003 Page 6 of 9

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.
5. Bankers acceptances (otherwise known as bills of exchange or time drafts)
that are drawn on and accepted by a commercial bank which are eligible
for purchase by the Federal Reserve System. Such banker’s acceptances
may not exceed 180 days maturity. No more than forty percent (40%) of
the District’s money may be invested in such banker’s acceptances. No
more than thirty percent (30%) of the District’s money may be invested in
the banker’s acceptances of any one commercial bank. The commercial
bank shall have the highest short-term letter and numerical rating as
provided by Moody’s Investors Service, Inc. (“Moody’s”) or Standard &
Poor’s Rating Agency (“Standard & Poor’s”);

6. Commercial paper of “prime” quality of the highest ranking or of the highest
letter and number rating as provided for by a nationally recognized
statistical-rating organization (NRSRO). The entity that issues the
commercial paper shall meet all of the following conditions in either
paragraph (a) or paragraph (b):

(a) The entity is organized and operating in the United States as a
general corporation, and has total assets in excess of $500 million,
and has debt other than commercial paper, if any, that is rated “A”
or higher by a NRSRO.

(b) The entity is organized within the United States as a special
purpose corporation, trust, or limited liability company, has a
program wide credit enhancements including, but not limited to,
over collateralization, letters of credit or surety bond, and has
commercial paper that is rated “A-1” or higher, or the equivalent by
an NRSRO.

Commercial paper shall have a maximum maturity of 270 days or less. The
District may invest no more than twenty-five percent (25%) of its money in
such commercial paper. The District may purchase no more than ten
percent (10%) of the outstanding commercial paper of any single issuer;

7. Repurchase agreements with respect to securities described in paragraphs
(i) and (ii) above provided that the term of any such repurchase agreement
shall be one year or less. A repurchase agreement means a purchase of
securities by the District pursuant to an agreement by which the seller will
repurchase the securities on or before a specific date at an agreed upon
price, thereby establishing the yield during the District’s holding period.
The yield established for the repurchase agreement is determined by
current short-term rates and may be more or less than the interest rate on
the underlying securities. The securities underlying a repurchase
agreement is, in effect, collateral under the agreement and the securities
shall be (otherwise known as bills of exchange or time drafts) delivered to

Yucaipa Valley Water District - January 15, 2019 - Page 56 of 184