Page 11 - City of Moreno Valley Invstment and Cash Management Program
P. 11

Pooled
        CASH






                Cash balances are tracked and maintained individually for each fund in the City’s general ledger
                but the City’s pooled cash balances are utilized to purchase securities. Likewise each fund gets
                a pro rata share of the investment earnings. This “pool” methodology makes the investment
                process more efficient.





                                  Captial                                           Asset
                                 Project                                          Replacement
                                 Funds                                               Funds

                                                        Pooled Cash
                                                       & Investments


                                 Internal                                           Reserves
                                 Service
                                  Funds







        ONE PORTFOLIO, TWO FOCUSES


        The City maintains one portfolio but manages it with two focuses:


        Liquidity Focus

        The Liquidity or Core portion of the portfolio focuses on the City’s ability to meet day-to-
        day cash flow requirements. Since the primary inflows of the City’s revenues are
        received in January and May there are many months where the outflow or
        expenditure of funds exceeds the inflow or receipt of funds. Because of this
        the City must maintain an adequate liquidity portfolio to accommodate
                                                                                  Safety parameters, Maturity Term: 1 to 5 years
        daily  cash  flow  needs.  In  recognition  of  this,  the  City  Council
        adopted the Fund Balance and Financial Reserves Policy; which
        includes the establishment of a Cash Flow Reserve, to account
        for the disparity in timing between expenditures and cash            Long-Term Portion, Primary Objective: Improving Yields within
        receipts. To accomplish this goal of daily liquidity the City
                                                                                              Maturity Term: Overnight
        participates in the Local Agency Investment Fund (LAIF),
        which is managed by the State of California Treasurer’s                           Portfolio Core, Primary Objective: Liquidity
        Office. Balances in this account are generally between
        $25 million and $40 million and these funds are utilized
        to account  for the liquidity  needs  so that securities
        that comprise the longer portion of the portfolio do not
        need to be sold prematurely.

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