Loading...
HomeMy WebLinkAboutR02-RDA Item o o (0 o o. DBVBLOl'IIIft DBPAIlDIU1' 01' DB CIn' 01' SAIl _AIPnIllO RBOtIBST lOR COMIIlSSI611/COOl1CIL AcrIOIl From: ICBluu;fh J. BBNDBRSON Executive Director Subject: I1IVBSnunrr POLICY Date: December 13. 1990 8Jnopsls of Previ01l8 Ccmmisslon/COlDlCil/ec-lttee Action: 02-06-89 Community Development Commission adopted the annual Statement of Investment POlicy for the year 1989. 01-22-90 Community Development Commission adopted the annual Statement of Investment Policy for the year 1990. Recommended Motion: (COMMIJRITY DEVELOPMENT COMMISSION) mAr DB COII_tuTY DBVBLOl'IIIft COIIIUSSI~ .lPPROVB .lIID .lDOn DB DBVBLOl'IIIft DBP.lKDum1:'S ADUAL SrAbilmnJ: 01' I1IVBSbmat-J: POLICY lOR DB !BAR 1991. Contact Person: Barbara Lindseth Phone: 5081 Project Area: All Ward(s): All Supporting Data Attached: Statement of Investment Policy FlJRDING RBQUIIlBMBl'lTS: Amount: RA Budget Authority: Source: Commission/Council 1I0tea: 1388.1 Agenda It811 110: ~ o () (0 - !. L - jj o o DEVELOPIIDr DBPAlulI"'" S1'AI'F kli;l-Ou Inveabl_t Poliev Government Code Section 53646 requires that the COlDlllunity Development COIDIIIission annually approve a Statement of Investment Policy for the Development Department. Attached is the Development Department's "Statement of Investment Policy" for the year 19.91. The proposed policy is identical to the policy the City of San Bernardino is currently using, and is the same policy adopted by the COlDlllission for the years 1989 and 1990. This policy is used as a auideline for the efficient placl!IIIent and monitoring of investments by outlining the types of investments the Development Department may purchase, while stressing the importance of mu:imizing the yield earned on all investments and minimizing the risk on same. The criteria for selecting investments, and the order of priority are (i) safety; (ii) liquidity, and; (iii) yield. . On Decl!IIIber 13, 1990, the Redevelopment COIDIIIittee considered this matter and recolDlllended to the COIDIIIUI1ity Development Co_ission approval of same. ___~. -.un _..... DeveloIaent Departilellt COMMISSIOB ~~.. lIeetlng Date: DeC8lber 17, 1990 p ~ (0 -. -1 1 ~ 1] o o DBVELOPIIIIIr DEP.lxumau: or DB crrr or SAIl -ummo .Stat_t of lDYeatatmt PollC)"" A. ParDose This Statement is intended to provide guidelines for the prudent investment of the Development Department's temporary idle cash, and outline the pOlicies for maximizing the efficiency of the Development Department's cash management system. The ultimate goal is to enhance the economic status of the Development Department while protecting its pooled cash. B. Obiectivl! The Development Department's cash manasement system is designed to accurately monitor and forecast expenditures and revenues, thus enabling the DeVelopment Department to invest funds to the fullest extent possible. The Department attempts to obtain the highest yield obtainable as long as investments meet the criteria established for safety and liquidity. c. Polley The Development Department operates its temporary pooled idle cash investments under the prudent ID&D rule (Civil Code Section 2261, et seq). This affords the Department a broad spectrum of investment opportunities, so lons as the investment is deemed prudent and is allowable under current legislation of the State of California and other imposed legal restrictions. 1) Safety: Safety and the minimizing of risks associated with investments refers to attempts to reduce the potential loss of principal, interest, or a combination of the two. The first level of control is in state law, whiCh restricts municipalities to certsin investment instruments. The second level of risk control is the investment in instruments Which appear on examination to be the most credit worthy. The third level of control is in the reduction of market risk by investing in sufficient instruments that have maturities coinCiding with dates of disbursement. The Development Department only invests in those instruments that are considered very safe. 2) Liauidity: Liquidity is the ability to easily sell investment instruments at any time with the minimal risk of losing some portion of principal or interest. Liquidity is an extremely important quality as the Development Department lIay have an unexpected need for funds to be disbursed. o () - - . () o DB'IBLOPIIIIIr DBPA&um... Stat_ent of IllTeIItaent Polit:)" Page - 2 - Most investments are highly liquid, with the exception of collateralized or insured term certificates of deposit issued by banks and savings and loans. Certificate maturities are selected to anticipate cash needs, thereby eliminating the need for forced liquidation. 3) Yield: Yield is the potential dollar earnings an investment can provide, or "rate of return". The Development Department attempts to obtain the highest yield possible when selecting an investment, provided that the criteria stated in the Investment Policy for safety and liquidity are met and the investment auide1ine and strateS7 are sdhered to. D. Investments I 0988A (0 Investmenta are made in the following manner: Securities of the United States Government and obligations of its agencies; registered treasury notes, bonds, or legal obligations of the State of California; certificates of deposit placed with commercial banks and savings and loans; bankers acceptances; repurchase agreements; commercial paper; negotiable certificates of deposit; Local Agency Investments Fund demand deposits; passbook savings account demand deposits; interest bearing demand deposits, and; money-market accounts of acceptable instruments. Government and sgency securities are th~ highest quality investments available in terms of safety and liquidity. Certificates of deposit, savings accounts, repurchase agreements and bankers acceptances are insured or collateralized. Only commercial paper with both A-1 Moody's and P-1 Standard and Poor's ratings are purchased. The Development Department operates its investment program with many federal, state and self-imposed constraints. It does not buy stock, or deal in futures, options, or security loan agreements. To maximize investment income, the Development Department uses all svai1ab1e economically feasible investment tools. Economic conditions and various money markets are monitored in order to assess the probable course of interest rates. The final basic premise underlying the Development Department' s investment philosophy is to insure the safety of existing funds and ensure consistent availability of same.