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

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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