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LEAGUE SPONSORS CALTRUST, A NEW INVESTMENT POOL FOR LOCAL GOVERNMENTS _ The League of California Cities is excited to ahnounce that its board of directors recently voted to co- sponsor a new investment option for all California cities. A number of California public agencies have created a new Joint Powers Authority —the Invest- ment Trust of California, commonly known as CalTRUST —for the purpose of pooling assets for investment. Membership in the CaITRUST pro- gram is open to any city in California, as well as all other types of local agencies, including redevelop- ment agencies. CaITRUST is governed by a Board of Trust- ees, consisting of experienced local investment officers and finance professionals. As city mem- bership in the program expands, city representa- tion on the Board of Trustees likewise will expand. CalTRUST invests in fixed income securities eligible for local agency investments pursuant to the provisions of the California Government Code. There are three pooled accounts within the pro- gram, with increasing earnings expectations: • Short Term —with a target duration of 1 -2 years; • Medium Term —with a target duration of 1.5- 3.5 years; and • Long Term —with target duration of 5 -7 years. Flexibility a Key Advantage One of the principal advantages of CalTRUST is its flexibility. The Short Term account permits an unlimited number of transactions per month (with prior day notice), with no limit on the amount of funds that may be invested. The Medium and Long Term accounts permit investments, with- drawals and transfers once per month, with five days notice. CaITRUST provides printed state- ments on a monthly basis, as well as information on member accounts via password protected 24- hour online access. MetWest to Serve as Investment Advisor CalTRUST has entered into an Investment Advisory agreement with Metropolitan West Securities, LLC, to serve as investment advisor for the Trust. MetWest is an independent invest- ment advisory, asset management and broker/ dealer firm specializing in short-term fixed- income asset management. MetWest has a national client base, consisting of major institutional funds and corporate portfolios. Senior executives at MetWest bring decades of public agency funds management experience and success in the management of California public sector funds. Existing clients include the California Earthquake Authority, CaIPERS, CaISTRS, the California State University System, and the Los Angeles County Retirement System. As of January 1, 2003, Metropolitan West had more than $50 billion in assets under management. The CalTRUST website, at www.caltrust.ora contains additional information and all required participant documents. We are confident this new investment pool will become an important part of the cash and invest- ment management strategies for many cities throughout California and a valued addition to the League's service program for cities. If you would like more information regarding this exciting new option for the investment of city funds, please contact: Dan Harrison, Director of Administration, League of California Cities, 916- 658 -8267; e-mail hardsodCalcacities.ora or Lyle Defenbaugh, Senior Vice President, Metropolitan West Securities, LLC, 916 -441 -6200; e-mail IdefenbauahCa)mws.com. PAGE 2 /PRIORITY FOCUS Visit the League's Official Web Site -- www.cacities.org