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Home My WebLink About31-City Treasurer ~ - - -- - -- CI'h' OF SAN BERNARDCO - REQUQT FOR COU I: ~,jON From: CRAIG A. GRAVES, City Treasurer Subject: Filing of City I S Investment Policy Dept: CITY TREASURER'S OFFICE Daa: September 26, 1985 Synopsis of Previous Council action: June 10, 1985 - During the Budget Hearings, Mayor and Common Council requested the City Treasurer and City Administrator submit the City's Investment Policy to the Ways and Means Committee for review. September 19, 1985 - The City's Investment Policy as submitted by the City Treasurer and City Administrator is reviewed by the Ways and Means Committee and approved. It was forwarded to the Mayor and Common Council for filing. Recommen-:led motion: Adopt the Resolution. Contact person: Craiq A. Graves. City Treasurer Phone: 5221 Supporting data attached: Yes Ward: Ci ty-wide FUNDING REQUIREMENTS: Amount: None Source: N/A Finance: N I A Council Notes: 75.0262 I Agenda Item No. ~/, - 4._ - CI~ OF SAN BERNARD6.b - REQU~T FOR COUNCIL AC....ON STAFF REPORT The attached investment policy sets forth the parameters being used in the investment of City Funds. It includes the priorities used for determining investments and the types. It also states the purpose and objectives of the City's investment program. The California Legislature adopted legislation during the past year which requires City Treasurers to file an investment policy with the legislative body annually. During the spring, the City Treasurer was developing a written policy for presentation to the Mayor and Common Council. The Mayor and Common Council referred the policy to the Ways and Means Committee for review. The Ways and Means Committee reviewed the Investment Policy and have referred it back to the Mayor and Common Council for formal filing. 75.0264 J _ r , ,~ ,~ 1 RESOLUTION NO. 2 RESOLUTION OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING THE RECEIPT AND FILING OF THE ANNUAL STATEMENT OF INVESTMENT POLICY 3 FOR THE YEAR 1985. 4 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF 5 SAN BERNARDINO AS FOLLOWS: 6 SECTION 1. Recitals. 7 A. The California State Legislature passed legislation 8 during the 1984 session requiring the filing of an annual 9 Statement of Investment policy by local public agencies. 10 B. The Governor of the State of California signed such 11 legislation into law effective January 1, 19a5 (Chapter 1226). 12 C. The City Treasurer of the City of San Bernardino declares 13 the annual Statement of Investment Policy is as set forth in 14 Exhibit "A", attached hereto and incorporated herein by reference 15 as fully as though set forth at length. 16 SECTION 2. Implementation. An annual Statement of 17 Investment policy for the City of San Bernardino has been filed by 18 the City Treasurer for calendar year 1985 in compliance with 19 Section 53646 (A) of the Government Code of the State of 20 California. 21 I HEREBY CERTIFY that the foregoing resolution was duly 22 adopted by the Mayor and Common Council of the City of San meeting thereof, held on , 1985, by the following vote, 23 Bernardino a~ a 24 the day of 25 to wit: 26 I I I I I 27 28 I I I I I " J ,",,,# ,....... 1 2 Council Members AYES: 3 NAYS: 4 ABSENT: 5 6 City Clerk 7 The foregoing resolution is hereby approved this day 8 of ,1985. 9 10 Mayor of the City of San Bernardino 11 Approved as to form: ~.. '/~/J 0 ... "P{)~#U- 13 City torney 12 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 .. J_ - - ." ~. "-' .....-' . CI':i'Y OF SAN BER~:lI.RDn:O Statement of Investment Policy PURPOSE This statement is intended to provice guidelines for the prudent investment of the City's temporary idle cash, and outline the policies for maximizing the efficiency of the City's cash management system. The ultimate "oal is to enhance the economic status of the City while protecting its pooled cash. . "':" OBJECTIVE The City's cash management system is designed to accurately monitor and forecast expenditures an9Lrevenues, thus enabling the City to invest funds to the fullest extent possible. The City attempts to obtain the highest yield obtainable as lona as investmenfs meet the criteria established for s~fety and liquidity. POLICY The City of San Bernardino orerates its temporary pooled idle cash investments under the prudent man rule (Civil Code Section 2261, et sequl) (copy attached). This affords a broad spectrum of investment opportunities so long as the investment is deemed prudent and is allowable under current legislation of the State of California and other imposed legal restrictions. , . The City of San Bernardino strives to maintain the level of investment of idle funds as near to 100% as possible, through daily and projected cash flow determination. Idle cash managerne~t and investment transactions are the responsi- bility of the City Treasurer. Investments are made under the terms and conditions of Sections 53600-536e3 of the Government Code of California. Criteria for selecting investments and the order of priority are: EXHIBIT A y 4 - - - - ",...,,,, ~.__....,. '-' ....., 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 certain investment instruments. The second level of risk control is the investment in instru- ments that 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 disburse- ment. San Bernardino only invests in those instruments that are considered very safe. 2) LIQUIDITY Liquidity is the ability to easily sell at any time with the minimal risk of losing some portion of principal. or " interest. Liquidity is an extremely important qua1xfy . as the City may have an unexpected need for funds to be disbursed occasionally. 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 earning an investment can provide or "rate of return". San Bernardino 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 guideline and strategy are adherred to. Investments are made in the following: Securities of the U. s. Government'and obligations of its agencies; Registered treasury notes, bonds, or legal .obligations of the State of California; bonds, notes, warrants or legal obligations of any local agency with 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 Investment Fund Demand Deposits; Passbook Savings Account Demand Deposits. Government and agency securities are the 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 commerical paper with both A-l Moody's and P-l'Standard and Poor's ratings are purchased. . .I .. \ ...'-, ..." -.....I The City of San Bernardino operates its investment program with many Federal and State, and self-imposed constraints. It does not buy stocks, or deal in futures, options, or security loan agreements. To maximize investment income, the City of San Bernardino uses all available economically feasible investment aids. Economic conditions and various money markets are monitored in order to assess the probable course of interest rates. The final basic premise underlying the City of San Bernardino's investment philosophy is to insure the safety of existing funds and insure that they are always readily available when needed. ,.<<, .... .. - ~ , 1 __ ( ............ ."\ - / - . CIV~L CODE i 2261. [Investment of Cunds] (I) In investing, reinvesting. purchasing, acquiring, exchanging, $elling and managing propeny for the benefit of another, a trustee shall exercise the judgment and care, under the circumstances then preyail. ing, which men of prudence, discretion and intelligence exercise in the management of tbeir own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering tb~' ,_ probable income, as well as the probable safet)' of their capital" Within the limitations of the foregoing standard, and subject to any express provisions" or limitations contained in any panicular trust instrument, a trustee is authorized to acquire eveI")' kind of prop:rty, real, personal or mixed, and every kind of investment, specifically including, but not by way of limitation, co~rate obligations of eveI")' kind, and stocks, preferred or common, which men of prudence, discretion and intelligence acquire for their own account. ~ Resolution No. 4041 Attachment