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CITY OF COLTON
<br />SCHEDULE A
<br />SUMMARY OF INVESTMENT ACTIVITY -
<br />PRUDENTIAL-BACHE SECURITIES
<br />March 1, 1986 through December 31, 1988
<br />Reverse repurchases, a U.S. Treasury
<br />bond and note
<br />U.S. Treasury trades
<br />Repurchase transactions
<br />Mutual funds:
<br />MacKenzie Government
<br />Securities Trust
<br />Continental U.S. Government Plus
<br />Fund
<br />Government Securities Trust
<br />Intermediate Fund
<br />Money market account
<br />Total
<br />Findings related to the above summary:
<br />Interest
<br />Principal and
<br />Gain Dividend Interest Net
<br />(Loss) Income Expgnsg Total
<br />$ (361,700) $ 384,000 $ (319,300) $ (297,000)
<br />13,300 14,700
<br />4,600
<br />(223,200) 226,000
<br />(38,300) 20,400
<br />(22,800) 38,800
<br />•11
<br />28,000
<br />4,600
<br />2,800
<br />(17,900)
<br />16,000
<br />$ 6( 32,700) $ 716,400 $ (319,300) $ (235,600)
<br />1. Included in the net total is $385,500 of unrealized losses on a U.S. Treasury bond and note
<br />as of December 16, 1988 which the City elected not to liquidate at the time it ended its
<br />relationship with Prudential-Bache Securities. As of September 6, 1989, the market value
<br />had increased for the U.S. Treasury bond and note and the loss of $385,500 was reduced to
<br />an unrealized loss of $184,600.
<br />2. The net rate of return to the City under the investment advice of Prudential-Bache Securities
<br />for the period March 1, 1986 through December 31, 1988 was negative 2.7% on an average
<br />daily investment in excess of $3,100,000. For comparison purposes, the average yield on a
<br />sample of one (1) year certificates of deposit owned by the City of Colton for the period
<br />March 1, 1986 through December 31, 1988 was 8.13%.
<br />3. Investment activity carried out by Prudential-Bache Securities appears to have been
<br />allowable under agreements with the City. However, correspondence from the City
<br />Treasurer to Prudential-Bache Securities, dated February 8, 1988, indicates that the City
<br />desired to terminate its relationship with Prudential and to have the City's funds returned to
<br />the City. Letters dated May 16, 1988 and September 15, 1988 from the City Treasurer to
<br />Prudential repeated the February 8, 1988 request. Prudential retained the City's investments
<br />until the current City Treasurer instructed Prudential to terminate the reverse repurchase
<br />agreements on December 16, 1988 and to liquidate all other accounts on
<br />December 22, 1988. From February 8, 1988 until December 28, 1988, when activity with
<br />Prudential ceased, the portfolio value of City investments handled by Prudential decreased
<br />$150,000.
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