Investments - General Financial Provisions - Public Utilities - CA

Section § 101230

This section outlines the ways a district in California can invest any surplus money, including funds in a sinking fund. The district can invest in its own bonds, various federal securities like U.S. Treasury notes and bonds, obligations under the Federal Home Loan Bank Act or the National Housing Act, and state or local government bonds legally accepted for securing public funds.

The district may invest any surplus money in its treasury, including money in any sinking fund, in any of the following:

(a) Its own bonds.

(b) Treasury notes, certificates of indebtedness, bills, bonds of the United States, or any other evidence of indebtedness secured by the full faith and credit of the United States.

(d) Treasury notes or bonds of this state, or of any public corporation, municipal corporation, public district, or political subdivision within this state which are legal as security for the deposit of public funds.

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Section § 101231

This section allows investments to be made through the direct purchase of bonds, treasury notes, or similar debt instruments. You can buy them either when they are first issued or later, through a secondary market purchase.

Such investment may be made by direct purchase of any issue of such bonds, treasury notes, or obligations, or part thereof, at the original sale or by the subsequent purchase of the bonds, treasury notes, or obligations.

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Section § 101232

This law allows the district to sell bonds, treasury notes, or other obligations it holds and reinvest the proceeds into new bonds, treasury notes, or obligations, as outlined in the relevant guidelines.

Any bonds, treasury notes, or obligations purchased and held as investments by the district may, from time to time, be sold and the proceeds reinvested in bonds, treasury notes, or obligations as provided in this article.

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Section § 101233

The law requires that any bonds, treasury notes, or obligations that a district buys and holds must be sold at appropriate times. The money from these sales should then be used for the original purposes for which the district's funds were allocated.

Sales of any bonds, treasury notes, or obligations purchased and held by the district shall, from time to time, be made in season so that the proceeds may be applied to the purposes for which the money with which the bonds, treasury notes, or obligations were originally purchased was placed in the treasury of the district.

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Section § 101234

This section allows the general manager, with board approval, to have a state or national bank's trust department, or a qualified trust company, handle the district's securities. This includes receiving deposits and keeping them secure. The bank or trust company must have at least $1 million in paid-in capital. They will give a receipt for the securities, but they are only responsible for following the general manager's instructions regarding these securities.

Once the securities are in the bank or trust company's care, the general manager and the district are not responsible for them until they are taken out. The bank or trust company must comply strictly with the general manager's written instructions, and the securities can be ordered by the general manager at any time.

With the consent of the board, the general manager may:

(a) Authorize the trust department of any state or national bank in this state, or a trust company authorized to act as such in this state, to receive as his agent deposits of any securities acquired by the district.

(b) Place and maintain for safekeeping as a trust deposit with the trust department of any state or national banks in this state, or a trust company authorized to act as such in this state, any securities owned by the district.

The bank or trust company selected shall have a total paid-in capital of at least one million dollars ($1,000,000). The general manager shall take from the trust department or trust company a receipt for the securities, and neither the general manager nor the district is responsible for the custody and safe return of the securities until they are withdrawn from the trust department or trust company by the general manager. Any trust department or trust company to which securities are delivered, either as agent or depository for the district, shall make such disposition of the securities as the general manager directs and is responsible only for the strict compliance with written instructions given to it by the general manager. All such securities are at all times subject to the order of the general manager.

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