IOWA PUBLIC AGENCY INVESTMENT TRUST
Interim Financial Report
December 31, 1995
<PAGE>
TRUSTEES' REPORT
- - ----------------
To Iowa Public Agency Investment Trust Participants:
The Iowa Public Agency Investment Trust (IPAIT) is pleased to present this
semi-annual report of Trust operations for the period ended December 31, 1995.
During 1995, market rates for short-term securities remained remarkably
constant. Through responsible, conservative money management practices, IPAIT
continued to provide an effective investment alternative to participants for
both the Diversified and Direct Government Obligation Portfolios. The
complementary operation of the Fixed Term Automated (FTA) Investment Program
also provided program participants with the opportunity to realize higher rates
of return by investing, when appropriate, in longer-term securities consistent
with their anticipated disbursement requirements.
Included in this report is a summary of liquid rates for the calendar year 1995.
Rates earned by IPAIT participants were reflective of the general trend in
interest rates throughout the year.
As always, IPAIT's investment policies and practices focused upon the
preservation of capital and maintenance of liquidity throughout 1995. These
policies and practices are designed to provide participants with a safe,
effective investment alternative for all invested funds.
Participation in IPAIT's investment programs continues to grow and serve
additional participants. As of December 31, 1995, a total of 139 cities, 74
counties, 107 municipal utilities and 23 28E organizations were program
participants. During the period, total assets invested within the liquid funds
ranged from a low of $207,004,197 to a high of $264,849,855. When fixed term
securities are included, the respective figures range from a low of $251,611,349
to a high of $306,473,895.
The Board of Trustees is very pleased with the success of the IPAIT cash
management program. The level of participation in IPAIT underscores the
desirability of the program.
The Board of Trustees welcomes your comments and suggestions regarding any
method of improving IPAIT performance or desirable expanded services. Thanks to
your participation and support IPAIT CONTINUES TO GROW . . . TO MEET YOUR NEEDS.
Respectfully,
K.D. Alberts, Chair
Board of Trustees
<PAGE>
MANAGEMENT DISCUSSION
- - ---------------------
During the first six-months of the fiscal year, the pace of economic growth
slowed, inflation was mild, and the Federal Reserve lowered short-term interest
rates slightly. The Federal Reserve lowered the federal funds rate 0.25 percent
in July and by another 0.25 percent in December.
The economy continues to show signs of weakening. The Index of Leading
Indicators, a forward looking gauge of the economy, has declined in seven of the
last ten months. New jobs are growing at only one-third the rate of 1994.
Retailers had their worst Christmas season since 1990. Demand for both consumer
and business loans has slowed.
The inflation outlook remains quite good. Industrial prices actually fell during
the last year. Consumer prices rose at an annual rate of 2.6 percent in 1995,
the same as 1994. Wage inflation is being reigned in as corporations continue to
layoff workers. The GDP deflator index, the broadest measure of U.S. inflation,
has risen only 1.4 percent over the last year.
We expect the Federal Reserve to continue to gradually lower short-term interest
rates in 1996, due to the combination of a slowing economy and mild inflation.
The rate declines will most likely be in 0.25 to 0.50 percent increments over
the course of the year. Since we expect short-term interest rates to decline,
the average maturity of the portfolio has been extended to 70- to 80-days.
The IPAIT program emphasizes three key elements: safety, liquidity, and
competitive rates in that order. The safety and security of participant moneys
is our first priority. The second priority is to assure daily liquidity. Only
after the first two elements are satisfied, do we examine the rates of different
investments.
IPAIT continues to provide a competitive rate. Over the last six-months, the
yield of the diversified portfolio was 0.23 percent greater than the Donoghue
Index of national money market funds.
We appreciate your support of IPAIT over the first six-months of the fiscal year
and look forward to serving you in 1996.
Sincerely,
Kathryn D. Beyer, CFA
Managing Director
Investors Management Group
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS
December 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
<TABLE>
<CAPTION>
Yield at
Par Time of Amortized
Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------- -------- -------- ---------
<S> <C> <C> <C> <C>
DISCOUNTED GOVERNMENT SECURITIES -- 7.92%
$ 2,500,000 Federal Home Loan Bank-Disc. Note 6.32% 01/29/96 $ 2,488,294
2,500,000 Federal Home Loan Bank-Disc. Note 5.79% 02/05/96 2,486,535
2,500,000 Federal Home Loan Mortgage Corp.-Disc. Note 5.81% 02/08/96 2,485,275
2,500,000 Federal Natl. Mortgage Assoc.-Disc. Note 5.72% 02/20/96 2,480,903
5,000,000 World Bank-Discount Notes 5.81% 05/17/96 4,895,347
------------
TOTAL (cost-- $14,836,354) $ 14,836,354
------------
COUPON SECURITIES -- 35.94%
$ 1,050,000 Federal Home Loan Bank, 9.75% 5.95% 02/09/96 $ 1,054,058
3,000,000 Federal Natl. Mortgage Assoc., 9.35% 5.80% 02/12/96 3,011,682
2,200,000 Federal Natl. Mortgage Assoc., 6.86% 5.87% 02/28/96 2,203,289
400,000 Federal Natl. Mortgage Assoc.. 4.55% 6.09% 03/01/96 399,018
1,000,000 Tennesee Valley Authority, 4.375% 5.65% 03/04/96 997,717
2,000,000 Tennesee Valley Authority, 4.375% 5.79% 03/04/96 1,995,255
1,000,000 Tennesee Valley Authority, 4.375% 6.20% 03/04/96 996,963
5,000,000 Federal Home Loan Bank, Variable Rate 5.82% 03/08/96 4,998,938
2,000,000 Federal Home Loan Bank, 9.80% 6.16% 03/25/96 2,015,964
5,000,000 Federal Natl. Mortgage Assoc., 6.46% 6.15% 03/27/96 5,003,349
2,500,000 Federal Natl. Mortgage Assoc., 6.46% 6.38% 03/27/96 2,500,357
950,000 Federal Home Loan Bank, 6.23% 5.94% 04/24/96 950,793
2,000,000 Federal Home Loan Bank, 7.75% 5.87% 04/25/96 2,011,272
500,000 Federal Home Loan Mortgage Corp., 5.72% 6.18% 04/25/96 499,292
2,000,000 Fed. Farm Credit Bank, 6.38% 5.79% 05/01/96 2,003,628
2,000,000 Fed. Farm Credit Bank, 6.38% 5.72% 05/01/96 2,004,139
1,000,000 Fed. Farm Credit Bank, Variable Rate 5.88% 05/06/96 1,000,455
2,000,000 Federal Home Loan Bank, 6.01% 5.80% 05/15/96 2,001,381
7,500,000 Fed. Farm Credit Bank, Variable Rate 5.98% 05/24/96 7,499,704
2,500,000 Federal Natl. Mortgage Assoc., 5.63% 5.69% 06/28/96 2,499,017
2,500,000 Fed. Farm Credit Bank, 5.60% 5.86% 07/01/96 2,496,768
2,500,000 Federal Home Loan Bank, 5.10% 5.68% 07/08/96 2,492,506
1,000,000 Federal Natl. Mortgage Assoc., 8.00% 5.77% 07/10/96 1,011,125
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS, continued
December 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
Yield at
Par Time of Amortized
Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------- -------- -------- ---------
$ 2,000,000 Federal Natl. Mortgage Assoc., 8.00% 5.77% 07/10/96 $ 2,022,279
2,000,000 U.S. Treasury Note, 7.875% 5.74% 07/15/96 2,021,875
2,000,000 U.S. Treasury Note, 7.875% 5.63% 07/15/96 2,023,024
1,500,000 Federal Home Loan Bank, 5.00% 5.83% 07/16/96 1,493,513
2,000,000 Federal Home Loan Bank, 8.00% 5.58% 07/25/96 2,026,262
1,500,000 Fed. Farm Credit Bank, 5.75% 5.71% 08/01/96 1,500,173
2,000,000 Federal Natl. Mortgage Assoc., 8.15% 5.83% 08/12/96 2,027,111
1,000,000 Fed. Farm Credit Bank, 9.00% 5.77% 08/26/96 1,020,150
1,000,000 Federal Home Loan Mortgage Corp., 5.68% 5.74% 09/11/96 999,536
505,000 Federal Home Loan Bank, 8.25% 5.74% 09/25/96 513,876
------------
TOTAL (cost-- $67,294,469) $ 67,294,469
------------
CERTIFICATES OF DEPOSIT -- 18.79%
$ 1,000,000 Valley State Bank, Rock Valley 5.80% 01/02/96 $ 1,000,000
500,000 LeClaire State Bank, LeClaire 5.77% 01/09/96 500,000
250,000 LeClaire State Bank, LeClaire 5.80% 01/09/96 250,000
1,000,000 Decorah State Bank, Decorah 5.80% 01/10/96 1,000,000
1,000,000 Valley State Bank, Rock Valley 5.80% 01/16/96 1,000,000
400,000 Exchange Bank, Collins 6.10% 01/17/96 400,000
1,000,000 Valley State Bank, Rock Valley 5.80% 01/23/96 1,000,000
1,000,000 Union State Bank, Monona 5.55% 01/25/96 1,000,000
1,500,000 Hawkeye Bank, Mt. Pleasant 5.85% 01/25/96 1,500,000
500,000 Nevada National Bank, Nevada 5.85% 01/26/96 500,000
500,000 Heritage Bank, Holstein 6.00% 02/14/96 500,000
2,000,000 Firstier Bank, Council Bluffs 5.75% 02/15/96 2,000,000
500,000 Citizens Bank, Sac City 6.00% 02/20/96 500,000
250,000 Ft. Madison Bank & Trust, Ft. Madison 5.90% 02/20/96 250,000
125,000 Farmers State Bank, Hawarden 6.00% 02/26/96 125,000
500,000 Union State Bank, Winterset 7.50% 02/27/96 500,000
5,000,000 Firstar Bank, Des Moines 5.75% 02/28/96 5,000,000
200,000 Northwestern State Bank, Orange City 5.90% 03/01/96 200,000
500,000 Peoples Bank & Trust, Rock Valley 6.00% 03/07/96 500,000
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS, continued
December 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
Yield at
Par Time of Amortized
Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------- -------- -------- ----------
$ 1,000,000 Nevada National Bank, Nevada 6.00% 03/11/96 $ 1,000,000
500,000 Peoples T&S, Grand Junction 5.75% 03/11/96 500,000
500,000 Peoples State Bank, Elkader 5.75% 03/12/96 500,000
5,000,000 Norwest Bank, Clive 5.65% 03/21/96 5,000,000
1,000,000 Peoples State Bank, Elma 5.65% 03/25/96 1,000,000
250,000 Security State Bank, Sheldon 5.90% 03/25/96 250,000
1,000,000 St. Ansgar State Bank, St. Ansgar 5.90% 03/25/96 1,000,000
500,000 Peoples State Bank, Elkader 5.65% 03/28/96 500,000
1,000,000 Nevada National Bank, Nevada 5.90% 04/15/96 1,000,000
250,000 Citizens Bank, Sac City 5.90% 04/15/96 250,000
1,000,000 Nevada National Bank, Nevada 5.90% 04/22/96 1,000,000
1,500,000 Hawkeye Bank, Des Moines 5.77% 06/11/96 1,500,000
350,000 Producers Savings Bank, Green Mountain 6.10% 07/31/96 350,000
500,000 Heritage Bank, Holstein 6.15% 08/16/96 500,000
500,000 Citizens, Sac City 6.15% 08/21/96 500,000
250,000 Ft. Madison Bank & Trust, Ft. Madison 6.10% 08/21/96 250,000
500,000 First State Bank, Nora Springs 6.05% 08/30/96 500,000
1,000,000 St. Ansgar State Bank, St. Ansgar 6.15% 09/19/96 1,000,000
250,000 Citizens Bank, Sac City 6.00% 10/11/96 250,000
300,000 Miles Savings Bank, Miles 6.00% 10/18/96 300,000
300,000 First State Bank, Ida Grove 5.80% 12/06/96 300,000
------------
TOTAL (cost-- $35,175,000) $ 35,175,000
------------
REPURCHASE AGREEMENTS (collateralized by U.S. Govt. Securities) -- 36.92%
$69,137,000 Cantor Fitzgerald, Repo 5.78% 01/02/96 $ 69,137,000
------------
TOTAL (cost-- $69,137,000) $ 69,137,000
------------
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS, continued
December 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
Yield at
Par Time of Amortized
Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------- -------- -------- ---------
TOTAL INVESTMENTS-- 99.57% (cost-- $186,442,823) $186,442,823
EXCESS OF OTHER ASSETS OVER TOTAL LIABILITIES -- 0.43%
(Includes $50,849 payable to IMG and $827,876
dividends payable to unitholders) $ 804,425
------------
NET ASSETS-- 100% $187,247,248
============
Applicable to 187,247,248 outstanding units
NET ASSET VALUE: $ 1.00
Offering and redemption price per unit ($187,247,248 ============
divided by 187,247,248 units outstanding)
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIRECT GOVERNMENT OBLIGATION PORTFOLIO
STATEMENT OF NET ASSETS
December 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
Yield at
Par Time of Amortized
Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------- -------- -------- ---------
DISCOUNTED GOVERNMENT SECURITIES -- 9.79%
$ 1,500,000 U.S. Treasury Bill 5.95% 02/08/96 $ 1,491,006
1,500,000 U.S. Treasury Bill 6.24% 04/04/96 1,476,892
1,500,000 U.S. Treasury Bill 5.69% 05/02/96 1,472,550
------------
TOTAL (cost-- $4,440,448) $ 4,440,448
------------
COUPON SECURITIES -- 43.10%
$ 2,500,000 U.S. Treasury-Note, 7.750% 5.69% 03/31/96 $ 2,512,191
1,000,000 U.S. Treasury-Note, 7.625% 5.73% 04/30/96 1,005,923
2,000,000 U.S. Treasury-Note, 7.625% 5.70% 04/30/96 2,012,071
1,000,000 U.S. Treasury-Note, 7.625% 5.67% 04/30/96 1,006,130
1,000,000 U.S. Treasury-Note, 7.625% 5.76% 04/30/96 1,005,821
1,000,000 U.S. Treasury-Note, 4.250% 5.56% 05/15/96 995,242
1,000,000 U.S. Treasury-Note, 4.250% 5.85% 05/15/96 994,240
3,000,000 U.S. Treasury-Note, 4.250% 5.68% 05/15/96 2,984,623
1,000,000 U.S. Treasury-Note, 4.250% 5.83% 05/15/96 994,371
1,000,000 U.S. Treasury-Note, 5.875% 5.52% 05/31/96 1,001,411
1,000,000 U.S. Treasury-Note, 5.875% 5.51% 05/31/96 1,001,421
1,000,000 U.S. Treasury-Note, 7.875% 5.65% 06/30/96 1,010,541
1,000,000 U.S. Treasury-Note, 7.875% 5.72% 07/15/96 1,011,027
1,000,000 U.S. Treasury-Note, 7.875% 5.67% 07/15/96 1,011,318
1,000,000 U.S. Treasury-Note, 7.875% 5.56% 07/31/96 1,012,905
------------
TOTAL (cost-- $19,559,235) $ 19,559,235
------------
REPURCHASE AGREEMENTS (collateralized by U.S. Govt. Securities) -- 46.91%
$ 21,290,000 Cantor Fitzgerald, Repo 5.78% 01/02/96 $ 21,290,000
------------
TOTAL (cost-- $21,290,000) $ 21,290,000
------------
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIRECT GOVERNMENT OBLIGATION PORTFOLIO
STATEMENT OF NET ASSETS, continued
December 31, 1995
(Showing Percentage of Net Assets)
- - ----------------------------------
Yield at
Par Time of Amortized
Value Description Purchase Due Date Cost
- - ---------- ------------------------------------------- -------- -------- ---------
TOTAL INVESTMENTS-- 99.80% (cost-- $45,289,683) $ 45,289,683
------------
EXCESS OF OTHER ASSETS OVER TOTAL LIABILITIES-- 0.20% $ 89,215
(Includes $12,923 payable to IMG and $202,524
dividends payable to unitholders)
NET ASSETS-- 100% $ 45,378,898
Applicable to 45,378,898 outstanding units ============
NET ASSET VALUE: $ 1.00
Offering and redemption price per unit ($45,378,898 ============
divided by 45,378,898 units outstanding)
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
STATEMENT OF OPERATIONS
For the six months ended December 31, 1995
- - ------------------------------------------
Direct Government
Diversified Portfolio Obligation Portfolio
INVESTMENT INCOME:
Interest $ 5,307,912 $ 1,488,403
----------- -----------
EXPENSES:
Investment advisory, administrative,
and program support fees 291,624 84,748
Custody and bank trust services fees 112,242 32,101
Distribution fees 90,384 25,681
Other fees and expenses 22,596 6,420
------ -----
Total Expenses 516,846 148,950
------- -------
NET INVESTMENT INCOME $ 4,791,066 $ 1,339,453
=========== ===========
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended December 31, 1995 and 1994
- - ---------------------------------------------------
<TABLE>
<CAPTION>
Direct Government
Diversified Portfolio Obligation Portfolio
1995 1994 1995 1994
--------------------------- ---------------------------
<S> <C> <C> <C> <C>
From Investment Activities:
Net investment income
distributed to unitholders $ 4,791,066 $ 3,427,452 $ 1,339,453 $ 505,117
============ ============ ============ ============
From Unit Transactions:
(at constant net asset
value of $1per unit)
Units sold $369,066,441 $285,594,188 $ 1,692,604 $ 12,610,683
Units issued in reinvest-
ment of dividends from
net investment income 4,791,066 3,427,452 1,339,453 505,117
Units redeemed (370,979,693) (289,326,030) (13,731,532) (16,255,496)
------------ ------------ ----------- -----------
Net increase/(decrease)
in net assets derived
from unit transactions 2,877,814 (304,390) (10,699,475) (3,139,696)
Net assets at
beginning of period 184,369,434 164,149,228 56,078,373 31,152,444
----------- ----------- ---------- ----------
Net assets
at end of period $187,247,248 $163,844,838 $ 45,378,898 $ 28,012,748
============ ============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
Selected Data for A Unit of Each Portfolio
Outstanding Through Each Six Month Period
- - -----------------------------------------
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990 1989 1988
-------------------------------------------------------------------------------------
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning
of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net Investment
Income .053 .043 .027 .033 .052 .073 .080 .074
Dividends
Distributed (.053) (.043) (.027) (.033) (.052) (.073) (.080) (.074)
--------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======================================================================================
Total Return 5.30% 4.33% 2.66% 3.29% 5.24% 7.30% 7.96% 7.42%
Ratio of Expenses
to Average
Net Assets 0.57% 0.58% 0.57% 0.58% 0.66% 0.67% 0.67% 0.62%
Ratio of Net
Income to
Average
Net Assets 5.30% 4.33% 2.66% 3.29% 5.24% 7.30% 7.96% 7.42%
Net Assets,
End of Period
(000 Omitted) $187,247 $163,845 $181,420 $183,291 $191,626 $177,410 $136,074 $ 91,423
See Accompanying Notes to Financial Statements.
<PAGE>
Selected Data for A Unit of Each Portfolio
Outstanding Through Each Six Month Period
- - -----------------------------------------
<CAPTION>
1995 1994 1993 1992 1991 1990 1989 1988*
--------------------------------------------------------------------------------------
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIRECT GOVERNMENT OBLIGATION PORTFOLIO
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning
of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net Investment
Income .052 .043 .026 .030 .049 .073 .080 .081
--------------------------------------------------------------------------------------
Dividends
Distributed (.052) (.043) (.026) (.030) (.049) (.073) (.080) (.081)
Net Asset Value,
End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======================================================================================
Total Return 5.21% 4.25% 2.58% 3.00% 4.85% 7.35% 7.98% 8.11%
Ratio of Expenses
to Average
Net Assets 0.58% 0.58% 0.58% 0.58% 0.67% 0.65% 0.65% 0.69%
Ratio of Net
Income to
Average
Net Assets 5.21% 4.25% 2.58% 3.00% 4.85% 7.35% 7.98% 8.11%
Net Assets,
End of Period
(000 Omitted) $ 45,379 $ 28,013 $ 44,601 $ 12,861 $ 18,193 $ 11,109 $ 20,726 $ 600
*From Commencement of Operations (September 1, 1988).
See Accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
- - -----------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Iowa Public Agency Investment Trust (IPAIT) is a common law trust
established under Iowa law pursuant to Chapter 28E and Sections 331.555 and
384.21, Iowa Code (1987), as amended, which authorized Iowa public agencies
to jointly invest moneys pursuant to a joint investment agreement. IPAIT is
registered under the Investment Company Act of 1940. IPAIT was established
by the adoption of a Joint Powers Agreement and Declaration of Trust as of
October 1, 1987, and commenced operations on November 13, 1987. The Joint
Powers Agreement and Declaration of Trust was amended September 1, 1988,
and again on May 1, 1993. As amended, IPAIT is authorized to operate and
now operates three investment programs: 1) the Diversified Portfolio, 2)
the Direct Government Obligation Portfolio, and 3) the Fixed Term Automated
(FTA) Investment Program. The objective of the portfolios is to maintain a
high degree of liquidity and safety of principal through investment in
short-term securities as permitted for Iowa public agencies under Iowa law.
The objective of the FTA Investment Program is to provide individual public
agency ownership of investments in legally permissible individual
securities which offer fixed rates of return and fixed maturities. Norwest
Bank Iowa, N.A., serves as the Custodian and Bank Trust Services Provider,
and Investors Management Group serves as the Investment Advisor and
Administrator.
INVESTMENTS IN SECURITIES
The Diversified and Direct Government Obligation Portfolios consist of cash
and short-term investments valued at amortized cost pursuant to Rule 2a-7
under the Investment Company Act of 1940. This involves valuing a portfolio
security at its original cost on the date of purchase, and thereafter
amortizing any premium or discount on a straight-line basis to maturity.
The amount of premium or discount amortized to income under the
straight-line method does not differ materially from the amount which would
be amortized to income under the interest method. Procedures are followed
to maintain a constant net asset value of $1.00 per unit for each
portfolio.
Security transactions are accounted for on the trade date. Interest income,
including the accretion of discount and amortization of premium, is
recorded on the accrual basis.
Under Governmental Accounting Standards as to custodial credit risk,
IPAIT's investments in securities are classified as category one. Category
one is the most secure investment category description.
Certificates of deposit amounts in excess of the $100,000 federal deposit
insurance are collateralized as required by Iowa law, including the
security provided by the State of Iowa's sinking fund for public deposits.
In connection with transactions in repurchase agreements, it is IPAIT's
policy that its Custodian take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the
repurchase transaction, including accrued interest at all times. If the
seller defaults, and the value of the collateral declines, realization of
the collateral by IPAIT may be delayed or limited. At December 31, 1995,
the securities purchased under overnight agreements to resell were
collateralized by government agency securities with market values of
$71,323,000 and $22,008,000 for the Diversified Portfolio and the Direct
Government Obligation Portfolio, respectively.
UNIT ISSUES, REDEMPTIONS AND DISTRIBUTIONS
IPAIT determines the net asset value of each portfolio daily. Units are
issued and redeemed daily at the daily net asset value. Net investment
income for each portfolio is declared daily and distributed monthly.
INCOME TAXES
IPAIT is exempt from federal and state income tax.
FEES AND EXPENSES
Under separate agreements with IPAIT, Investors Management Group (IMG), the
Investment Advisor, Administrator and Program Support Provider, and Norwest
Bank, Iowa, N.A. (Norwest), the Custodian and Bank Trust Services Provider,
are paid an annual fee for operating the investment programs. For each of
the portfolios, IMG receives .230 percent of the average daily net asset
value up to $150 million, .185 percent from $150 to $300 million, and .140
percent exceeding $300 million for investment advisor and administrative
fees. In addition, IMG receives .10 percent of the average daily net asset
value up to $250 million for program support fees. For the six months ended
December 31, 1995, the Diversified Portfolio and the Direct Government
Obligation Portfolio paid $291,624 and $84,748, respectively to IMG for
services provided. For each of the portfolios, Norwest receives .050
percent of $150 million, .045 percent from $150 to $300 million, and .040
percent exceeding $300 million for custodial services. Norwest also
receives .075 percent of the average daily net asset value for bank trust
services. For the six months ended December 31, 1995, the Diversified
Portfolio and the Direct Government Obligation Portfolio paid $112,242 and
$32,101, respectively to Norwest for services provided. Under a
distribution plan the public agency associations collectively receive an
annual fee of .10 percent of the daily net asset value of the portfolios.
For the six months ended December 31, 1995, the Diversified Portfolio and
the Direct Government Obligation Portfolio paid $49,187 and $20,796,
respectively to the Iowa League of Cities, $10,526 and $4,705, respectively
to the Iowa Association of Municipal Utilities. For the six months ended
December 31, 1995, the Diversified Portfolio paid $30,672 to the Iowa State
Association of Counties. IPAIT is responsible for other expenses incurred
directly by IPAIT. All fees are computed daily and paid monthly.
(2) SECURITIES TRANSACTIONS
Purchases of portfolio securities for the Diversified Portfolio and Direct
Government Obligation Portfolio aggregated $6,937,182,000 and
$2,274,178,000 respectively for the six months ended December 31, 1995.
Proceeds from maturities of securities for the Diversified Portfolio and
Direct Government Obligation Portfolio aggregated $6,884,739,173 and
$2,264,254,000, respectively for the six months ended December 31, 1995.
<PAGE>
BOARD OF TRUSTEES
KEN ALBERTS, General Manager
Cedar Falls Utilities, CHAIR JODY E. SMITH, Director of
ROBERT HAGEY, Treasurer Administrative Services
Sioux County, VICE CHAIR West Des Moines, TRUSTEE
TOM HANAFAN, Mayor BOB HAUG, Executive Director
Council Bluffs, Iowa Association of
SECOND VICE CHAIR Municipal Utilities, EX-OFFICIO
ROBERT RASMUSSEN, Mayor MEMBER AND SECRETARY
Fairfield, TRUSTEE THOMAS BREDEWEG,
JIM AHRENHOLTZ, Office Manager Executive Director
Denison Municipal Utility, Iowa League of Cities,
TRUSTEE EX-OFFICIO MEMBER AND
FLOYD MAGNUSSON, Supervisor TREASURER
Webster County, TRUSTEE WILLIAM PETERSON,
NORMAN KEHRBERG, Treasurer Executive Director
Plymouth County, TRUSTEE Iowa State Association
PAUL OLDHAM, Office Manager of Counties, EX-OFFICIO
Algona Municipal Utilities, MEMBER AND ASSISTANT SECRETARY
TRUSTEE
SERVICE PROVIDERS
ADMINISTRATOR-INVESTMENT LEGAL COUNSEL:
ADVISOR: Ahlers, Cooney, Dorweiler,
Investors Management Group Haynie, Smith & Allbee, P.C.
2203 Grand Avenue 100 Court Avenue
Des Moines, IA 50312-5338 Des Moines, IA 50309
CUSTODIAN AND BANK TRUST INDEPENDENT AUDITORS:
SERVICES PROVIDER: KPMG Peat Marwick LLP
Norwest Bank Iowa, N.A. 2500 Ruan Center
666 Walnut, P.O. Box 837 Des Moines, IA 50309
Des Moines, IA 50304
IOWA PUBLIC AGENCY INVESTMENT TRUST
666 Walnut, P.O. Box 837
Des Moines, IA 50304
(800) 872-4024 or (515) 245-3245
