IOWA PUBLIC AGENCY INVESTMENT TRUST
INTERIM FINANCIAL REPORT
DECEMBER 31, 1997
SPONSORED BY THE
IOWA ASSOCIATION OF MUNICIPAL UTILITIES
IOWA STATE ASSOCIATION OF COUNTIES
IOWA LEAGUE OF CITIES
<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, 1997.
During 1997, market rates for short-term securities were relatively constant by
historical standards. IPAIT maintained a consistent focus upon its three
complementary investment objectives; protection of invested participant funds,
maintaining the necessary degree of liquidity to accommodate participant needs
and providing participants with an excellent market rate of return.
Included in this report is a summary of liquid rates for 1997 and each preceding
calendar year. Rates earned by IPAIT participants were reflective of the general
trend in interest rates throughout the year.
Participation in IPAIT's investment programs continues to grow and serve
additional participants. As of December 31, 1997, a total of 151 cities, 81
counties, 69 municipal utilities and 34 28E organizations were authorized to
invest in IPAIT. During the period, total assets invested within the liquid
funds ranged from a low of $208,342,491 to a high of $325,733,936. When fixed
term securities are included, the respective figures range from a low of
$257,901,891 to a high of $367,334,573. Average total funds invested in 1997 for
all investment alternatives exceeded average total funds invested in all
previous operating periods.
The Board of Trustees is very pleased with the success of the IPAIT cash
management program and would welcome any comments or suggestions that you might
have. Our goal is to provide a cash management program that is always responsive
to its member's needs.
Respectfully,
Robert Hagey, Chair
Board of Trustees
<PAGE>
MANAGEMENT DISCUSSION
- - ---------------------
During the last half of the fiscal year, short-term interest rates were stable.
The domestic U.S. economy remains strong. The lowest unemployment rate since
1973 and wages rising at the fastest pace in a decade will likely keep consumer
spending vigorous. Home sales are at record levels due to the recent decline in
mortgage rates. Businesses continue to invest in technology to improve
efficiency in a competitive marketplace.
The turmoil in Asia, however, will likely dampen economic growth. The Federal
Reserve is unlikely to raise short-term interest rates until the impact of Asia
on the U.S. economy becomes more clear. Once Asia stabilizes, however, the
strength of the domestic economy will again be the focus of the Federal Reserve
and short-term interest rates may edge higher.
The rate on the IPAIT Diversified Fund exceeded five percent in each of the last
six months. The portfolio consistently provided a rate 0.25 percent greater than
the Donoghue Index of national money market funds.
The average maturity of the IPAIT Diversified Fund was 42 days on December 31,
1997. The average maturity is being maintained at this level, since there is
little yield difference between overnight and six month investments.
The IPAIT program emphasizes three elements: safety, liquidity, and competitive
rates in that order. We look forward to serving you in 1998.
Sincerely,
Kathryn D. Beyer, CFA
Managing Director
Investors Management Group
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
(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 -- 8.21%
$ 5,000,000 Fed. National Mtge. Assoc.-Disc. Note 5.79% 02/11/98 $ 4,967,826
3,381,000 Federal Home Loan Bank-Disc. Note 5.67% 02/12/98 3,359,207
5,000,000 Fed. Home Loan Mtge. Corp.-Disc. Note 5.72% 02/13/98 4,966,675
-------------
TOTAL (cost-- $13,293,708) $ 13,293,708
-------------
COUPON SECURITIES -- 26.67%
$ 3,000,000 Federal Home Loan Mtge. Corp., 5.52% 5.76% 01/02/98 $ 2,999,972
2,500,000 Federal Home Loan Bank, 5.81% 6.11% 01/23/98 2,499,468
1,000,000 Student Loan Marketing Assoc., Variable Rate 5.94% 02/04/98 1,000,262
1,000,000 Federal Home Loan Bank, Variable Rate 5.75% 02/25/98 998,305
1,000,000 Federal Home Loan Bank, Variable Rate 6.02% 02/25/98 998,011
1,500,000 Student Loan Marketing Assoc., 7.00% 6.08% 03/03/98 1,502,191
2,500,000 Federal Farm Credit Bank, 5.45% 6.07% 03/03/98 2,497,503
2,000,000 Federal Home Loan Mtge. Corp., 5.19% 5.86% 03/11/98 1,997,491
1,000,000 Federal Home Loan Mtge. Corp., 5.40% 6.07% 03/16/98 998,695
4,000,000 Student Loan Marketing Assoc., 5.70% 5.70% 03/17/98 3,998,588
1,000,000 Federal National Mtge. Assoc., 5.71% 5.88% 03/18/98 999,667
10,000,000 Fed. National Mtge. Assoc., Variable Rate 5.84% 04/15/98 9,998,879
2,500,000 Federal National Mtge. Assoc., 5.40% 5.90% 05/28/98 2,495,128
2,195,000 Federal Home Loan Mtge. Corp., 5.83% 5.78% 08/11/98 2,195,000
5,000,000 Federal Home Loan Bank, Variable Rate 5.72% 10/23/98 4,998,698
3,000,000 Student Loan Marketing Assoc., Variable Rate 5.75% 11/05/98 3,000,160
-------------
TOTAL (cost-- $43,178,018) $ 43,178,018
-------------
CERTIFICATES OF DEPOSIT -- 26.00%
$ 500,000 Farmers State Bank, Hawarden 5.75% 01/02/98 $ 500,000
250,000 Citizens Bank, Sac City 5.95% 01/05/98 250,000
2,500,000 Bankers Trust, Des Moines 5.70% 01/05/98 2,500,000
2,000,000 Community First State Bank, Decorah 5.70% 01/06/98 2,000,000
500,000 American Bank, LeMars 5.95% 01/08/98 500,000
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS, CONTINUED
DECEMBER 31, 1997
(SHOWING PERCENTAGE OF NET ASSETS)
- - ----------------------------------
YIELD AT
PAR TIME OF AMORTIZED
VALUE DESCRIPTION PURCHASE DUE DATE COST
- - ------------- ------------------------------------------------- ---------- --------- -------------
$ 1,500,000 First State Bank, Conrad 5.68% 01/09/98 $ 1,500,000
150,000 Community Bank, Preston 5.95% 01/20/98 150,000
1,000,000 Union State Bank, Monona 5.95% 01/20/98 1,000,000
500,000 Peoples State Bank, Elkader 5.75% 01/20/98 500,000
500,000 American Bank, LeMars 5.88% 01/21/98 500,000
1,000,000 First State Bank, Conrad 5.85% 01/21/98 1,000,000
1,000,000 Ottumwa Savings Bank, Ottumwa 5.80% 01/23/98 1,000,000
2,000,000 Heritage Bank, Holstein 5.80% 01/26/98 2,000,000
250,000 Farmers State Bank, Hawarden 5.75% 01/30/98 250,000
100,000 Ackley State Bank, Ackley 6.00% 02/06/98 100,000
250,000 Ft. Madison Bank & Trust, Ft. Madison 6.10% 02/18/98 250,000
2,500,000 Norwest Bank, Pleasant Hill 5.90% 02/18/98 2,500,000
3,500,000 Norwest Bank, Pleasant Hill 5.90% 02/25/98 3,500,000
200,000 Northwestern State Bank, Orange City 5.90% 02/27/98 200,000
500,000 Union State Bank, Winterset 5.95% 02/27/98 500,000
500,000 First Bank & Trust, Rock Rapids 5.90% 03/04/98 500,000
250,000 Ackley State Bank, Ackley 6.00% 03/09/98 250,000
100,000 First American Bank, Ft. Dodge 5.92% 03/11/98 100,000
1,000,000 Ottumwa Savings Bank, Ottumwa 5.85% 03/12/98 1,000,000
1,500,000 Mercantile Bank, Mt. Pleasant 5.90% 03/16/98 1,500,000
1,000,000 St. Ansgar State Bank, St. Ansgar 5.80% 03/18/98 1,000,000
2,500,000 Bankers Trust, Des Moines 5.85% 03/23/98 2,500,000
1,000,000 St. Ansgar State Bank, St. Ansgar 6.05% 03/25/98 1,000,000
500,000 Great River Bank, LeClaire 5.85% 03/30/98 500,000
250,000 Citizens Bank, Sac City 6.30% 04/09/98 250,000
1,000,000 Ottumwa Savings Bank, Ottumwa 5.85% 04/10/98 1,000,000
400,000 Exchange Bank, Collins 6.30% 04/15/98 400,000
150,000 Community Bank, Preston 5.90% 04/20/98 150,000
500,000 Mid-Iowa Savings Bank, Newton 5.90% 04/20/98 500,000
200,000 Maxwell State Bank, Maxwell 6.25% 04/22/98 200,000
500,000 Peoples State Bank, Elkader 5.90% 05/18/98 500,000
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS, CONTINUED
DECEMBER 31, 1997
(SHOWING PERCENTAGE OF NET ASSETS)
- - ----------------------------------
YIELD AT
PAR TIME OF AMORTIZED
VALUE DESCRIPTION PURCHASE DUE DATE COST
- - ------------- ------------------------------------------------- ---------- -------- -------------
300,000 First State Bank, Ida Grove 5.90% 06/01/98 $ 300,000
1,000,000 Peoples State Bank, Elma 5.95% 06/22/98 1,000,000
400,000 DeWitt Bank & Trust, DeWitt 6.10% 07/29/98 400,000
400,000 DeWitt Bank & Trust, DeWitt 6.11% 08/05/98 400,000
400,000 DeWitt Bank & Trust, DeWitt 6.13% 08/12/98 400,000
500,000 Citizens Bank, Sac City 6.10% 08/21/98 500,000
250,000 Ft. Madison Bank & Trust, Ft. Madison 6.05% 08/21/98 250,000
500,000 First State Bank, Nora Springs 6.10% 08/28/98 500,000
250,000 Ackley State Bank, Ackley 6.05% 09/10/98 250,000
300,000 State Savings Bank, Baxter 6.05% 09/10/98 300,000
1,000,000 St. Ansgar State Bank, St. Ansgar 6.10% 09/11/98 1,000,000
500,000 Maquoketa State Bank, Maquoketa 6.21% 09/11/98 500,000
200,000 Treynor State Bank, Treynor 6.25% 09/11/98 200,000
500,000 DeWitt Bank & Trust, DeWitt 6.05% 09/11/98 500,000
250,000 First Bank & Trust, Rock Rapids 6.10% 09/16/98 250,000
500,000 First American State Bank, Ames 6.00% 09/18/98 500,000
300,000 Community Bank, Miles 6.10% 10/19/98 300,000
2,500,000 Norwest Bank, Clive 6.10% 11/12/98 2,500,000
-------------
TOTAL (cost-- $42,100,000) $ 42,100,000
-------------
REPURCHASE AGREEMENTS (collateralized by U.S. Govt. Securities) -- 38.67%
$31,308,000 J. P. Morgan, Repurchase Agreement 6.50% 01/02/98 $ 31,307,000
31,307,000 Smith Barney, Repurchase Agreement 6.50% 01/02/98 31,307,000
-------------
TOTAL (cost-- $62,615,000) $ 62,615,000
-------------
TOTAL INVESTMENTS-- 99.55% (cost-- $161,186,726) $ 161,186,726
EXCESS OF OTHER ASSETS OVER TOTAL LIABILITIES -- 0.45% (Includes $45,467 payable
to IMG and $719,998 dividends payable to unitholders) $ 727,772
-------------
See Accompanying Notes to Financial Statements.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIVERSIFIED PORTFOLIO
STATEMENT OF NET ASSETS, CONTINUED
DECEMBER 31, 1997
(SHOWING PERCENTAGE OF NET ASSETS)
YIELD AT
PAR TIME OF AMORTIZED
VALUE DESCRIPTION PURCHASE DUE DATE COST
- - ------------- ------------------------------------------------- ---------- --------- ---------------
NET ASSETS -- 100%
Applicable to 161,914,498 outstanding units $ 161,914,498
=============
NET ASSET VALUE: $ 1.00
Offering and redemption price per unit ($161,914,498 ==============
divided by 161,914,498 units outstanding)
</TABLE>
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIRECT GOVERNMENT OBLIGATION PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
(SHOWING PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
YIELD AT
PAR TIME OF AMORTIZED
VALUE DESCRIPTION PURCHASE DUE DATE COST
- - -------------- -------------------------------------------- ----------- --------- --------------
<S> <C> <C> <C> <C>
COUPON SECURITIES -- 6.72%
$1,500,000 U.S. Treasury-Note, 7.25% 5.75% 02/15/98 $ 1,502,672
1,000,000 U.S. Treasury-Note, 7.25% 5.84% 02/15/98 1,001,727
1,000,000 U.S. Treasury-Note, 6.13% 6.02% 03/31/98 1,000,252
-------------
TOTAL (cost-- $3,504,741) $ 3,504,741
-------------
REPURCHASE AGREEMENTS (collateralized by U.S. Govt. Securities) -- 93.59%
$48,840,000 SBC Warburg, Repurchase Agreement 6.40% 01/02/98 $ 48,840,000
-------------
TOTAL (cost-- $48,840,000) $ 48,840,000
-------------
TOTAL INVESTMENTS-- 100.31% (cost-- $52,344,741) $ 52,344,741
EXCESS OF OTHER ASSETS OVER TOTAL LIABILITIES-- (0.31%) $ (161,978)
(Includes $14,822 payable to IMG and $228,000 -------------
dividends payable to unitholders)
NET ASSETS-- 100% $ 52,182,763
Applicable to 52,182,763 outstanding units =============
NET ASSET VALUE: $ 1.00
Offering and redemption price per unit ($52,182,763 =============
divided by 52,182,763 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, 1997
DIRECT GOVERNMENT
DIVERSIFIED PORTFOLIO OBLIGATION PORTFOLIO
INVESTMENT INCOME:
Interest $ 5,204,608 $ 1,565,040
-------------- -------------
EXPENSES:
Investment advisory, administrative,
and program support fees 295,239 92,340
Custody and bank trust services fees 113,764 34,977
Distribution fees 91,653 27,982
Other fees and expenses 22,913 6,995
-------------- -------------
TOTAL EXPENSES 523,569 162,294
-------------- -------------
NET INVESTMENT INCOME $ 4,681,039 $ 1,402,746
============== =============
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, 1997 AND 1996
<TABLE>
<CAPTION>
DIRECT GOVERNMENT
DIVERSIFIED PORTFOLIO OBLIGATION PORTFOLIO
1997 1996 1997 1996
---------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C>
From Investment Activities:
Net investment income
distributed to unitholders $ 4,681,039 $ 5,005,045 $ 1,402,746 $ 1,448,136
================ ================ ============== ===============
From Unit Transactions:
(at constant net asset
value of $1per unit)
Units sold $ 346,579,072 $ 346,011,628 $ 7,227,589 $ 3,084,641
Units issued in reinvest-
ment of dividends from
net investment income 4,681,039 5,005,045 1,402,746 1,448,136
Units redeemed (388,394,703) (329,024,222) (15,273,252) (14,758,733)
---------------- ---------------- -------------- ---------------
Net increase/(decrease)
in net assets derived
from unit transactions (37,134,592) 21,992,451 (6,642,917) (10,225,956)
Net assets at
beginning of period 199,049,090 192,451,582 58,825,680 65,317,885
---------------- ---------------- -------------- ---------------
Net assets
at end of period $ 161,914,498 $ 214,444,033 $ 52,182,763 $ 55,091,929
================ ================ ============== ===============
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
IOWA PUBLIC AGENCY INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A UNIT PORTFOLIO
OUTSTANDING THROUGH EACH PERIOD
- - -------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
IOWA PUBLIC AGENCY INVESTMENT
TRUST DIVERSIFIED PORTFOLIO
Net Asset Value
Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net Investment Income .051 .049 .053 .043 .027 .033 .052 .073 .080
Dividends Distributed (.051) (.049) (.053) (.043) (.027) (.033) (.052) (.073) (.080)
----------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
=======================================================================================
Total Return 5.11% 4.87% 5.30% 4.33% 2.66% 3.29% 5.24% 7.30% 7.96%
Ratio of Expenses
to Average Net Assets 0.57% 0.57% 0.57% 0.58% 0.57% 0.58% 0.66% 0.67% 0.67%
Ratio of Net Income to
Average Net Assets 5.11% 4.87% 5.30% 4.33% 2.66% 3.29% 5.24% 7.30% 7.96%
Net Assets,
End of Period
(000 Omitted) $161,914 $214,444 $187,247 $163,845 $181,420 $183,291 $191,626 $177,410 $136,074
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
IPAIT PUBLIC AGENCY INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SELECTED DATA FOR A UNIT PORTFOLIO
OUTSTANDING THROUGH EACH PERIOD
1997 1996 1995 1994 1993 1992 1991 1990 1989
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
IOWA PUBLIC AGENCY INVESTMENT TRUST
DIRECT GOVERNMENT OBLIGATION PORTFOLIO
Net Asset Value,
Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net Investment Income .050 .048 .052 .043 .026 .030 .049 .073 .080
Dividends Distributed (.050) (.048) (.052) (.043) (.026) (.030) (.049) (.073) (.080)
---------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
=======================================================================================
Total Return 5.01% 4.81% 5.21% 4.25% 2.58% 3.00% 4.85% 7.35% 7.98%
Ratio of Expenses
to Average Net Assets 0.58% 0.58% 0.58% 0.58% 0.58% 0.58% 0.67% 0.65% 0.65%
Ratio of Net Income to
Average Net Assets 5.01% 4.81% 5.21% 4.25% 2.58% 3.00% 4.85% 7.35% 7.98%
Net Assets,
End of Period
(000 Omitted) $52,182 $55,091 $45,379 $28,013 $44,601 $12,861 $18,193 $11,109 $20,726
</TABLE>
See accompanying Notes to Financial Statements.
<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.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
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.
<PAGE>
IOWA PUBLIC AGENCY INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- - ----------------------------------------
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, 1996,
the securities purchased under overnight agreements to resell were
collateralized by government agency securities with market values of
$63,883,888 and $49,816,800 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. Dividends from 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 period ended
December 31, 1997 the Diversified Portfolio and the Direct Government
Obligation Portfolio paid $295,239 and $92,340, 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 period ended December 31, 1997, the Diversified Portfolio
and the Direct Government Obligation Portfolio paid $113,764 and $34,977,
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 period
ended December 31, 1997, the Diversified Portfolio and the Direct
Government Obligation Portfolio paid $45,784 and $25,347 respectively to
the Iowa League of Cities, $11,540 and $2,605, respectively to the Iowa
Association of Municipal Utilities. For the perdiod ended December 31,
1997, the Diversified Portfolio paid $34,329 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 $7,427,288,936 and
$6,428,079,000 respectively for the period ended December 31, 1997.
Proceeds from maturities of securities for the Diversified Portfolio and
Direct Government Obligation Portfolio aggregated $7,464,040,632 and
$6,434,549,000 respectively for the period ended December 31, 1997.
<PAGE>
BOARD OF TRUSTEES
ROBERT HAGEY, Treasurer JODY E. SMITH, Director of
Sioux County, CHAIR Administrative Services
TOM HANAFAN, Mayor West Des Moines, TRUSTEE
Council Bluffs, BOB HAUG, Executive Director
VICE CHAIR Iowa Association of
KEN ALBERTS, General Manager Municipal Utilities, EX-OFFICIO
Cedar Falls Utilities, MEMBER AND SECRETARY
SECOND VICE CHAIR THOMAS BREDEWEG,
ROBERT RASMUSSEN, Mayor Executive Director
Fairfield, TRUSTEE Iowa League of Cities,
JIM AHRENHOLTZ, Office Manager EX-OFFICIO MEMBER AND
Denison Municipal Utility, TREASURER
TRUSTEE WILLIAM PETERSON,
FLOYD MAGNUSSON, Supervisor Executive Director
Webster County, TRUSTEE Iowa State Association
NORMAN KEHRBERG, Treasurer of Counties, EX-OFFICIO
Plymouth County, TRUSTEE MEMBER AND ASSISTANT SECRETARY
PAUL OLDHAM, Office Manager
Algona Municipal Utilities,
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
