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CI' ~ OF SAN BERNARDI~ .> - REQUE~ ~ FOR COUNCIL ACT )N
From: CRAIG A. GRAVES, City Treasurer
Subject: LOCAL Ar'ENCY INVESTMENT FUND
Dep~ Office of the City Treasurer
Da~: August 19, 1988
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Synopsis of Previous Council action:
None
Note - It has been included as an investment option in previous investment
policies filed annually with the Mayor and COMmon Council
It was approved for recommendation to the Community Development
Commission by the Redevelopment Committee on August 18, 1988.
Recommen<:led motion:
MOTION:
Adopt the Resolution
That the City Treasurer and Assistant City Treasurer ! ~
be designated as the City's representatives authorized~ .
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to deposit funds in the State Local Agency Investment .
Fund. ~ Q
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Phone:
384-5021
Contact person:
CRAIG A. GRAVES
Supporting data attached:
Yes
Ward: ci tv-wide
FUNDING REQUIREMENTS:
Amount:
none
Source:
Finance:
Council Notes:
7'1_0262
Agenda Item NO.~ /
CIT i OF SAN BERNARDI....O - REQUE~ I FOR COUNCIL AC1 ~ IN
STAFF REPORT
The Local Agency Investment Fund is a special fund in the State
Treasury created by law. The law permits a local government official,
with the consent of the governing body of that agency, to remit money
in its treasury not required for immediate need, to the state Treasurer
for deposit in this special fund for the purpose of investment. The
City has had it as an option in its annual investment policy. However,
a seperate resolution is needed to enact this option.
The proposal was reviewed by the Redevelopment Committee and
recommended favorably on August 18, 1988. The resolution is similiar
to the Agency, except the executing officials would be different.
The Local Agency Investment Fund (LAIF) is under the control and
safekeeping of the Office of the State Treasurer. At the end of each
calender quarter, all interest earned and other increment derived
from the investments shall be distributed by the State Controller,
to the participating agencies. Prior to the distribution, an amount
equal to the reasonable costs of making investments shall be deducted,
but not to exceed one-quarter of one per cent of the earnings. It
should be noted that the operations cost of LAIF have never exceeded
1/8 of 1 per cent. The State Treasurer shall prepare a monthly report
of investments made during the preceding month.
There are several advantages to the program.
1. A voluntary program
The local government has the opportunity to vo1unari1y
invest temporarily idle money and determines both
the amounts up to $5 million and the length of investments.
2. Higher Interest Rates
The pooling of surplus cash balances of the state with
that of other local agencies (deposited for the purpose of
investments) creates a mu1t-bi11ion money pool and enables
investments in diversified investments. Higher yields can
be obtained because larger amounts and different maturity
dates maybe gotten.
3. More Liquity .
The City will be able to convert their deposits to cash in
twenty-four hours or less depending on the time of notice.
No interest is lost because of withdrawels.
4. Investment Expertise and Access
The State Treasurer's Office is in constant touch with
investment markets and currently has average daily investment
transactions of approximately three hundred million dollars
($300,000,0001 a day.
5. Lower Investment Cost
By pooling cash balances and buying instruments in large
amounts the costs generally placed on small lot individual
purchases are eliminated
75-0264
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LOCAL AGENCY INVESTMENT FUND STAFF REPORT
6. No Minimum Investment Period
There is no minimum investment period. Funds maybe withdrawn
at anytime.
Money in the fund shall be invested by the State Treasurer to achieve
the objective of the fund which is to realize the maximum return consis-
tent with safe and prudent treasury management.
The local governmental unit has the exclusive determination of the
length of time its money will be on deposit with the State Treasurer.
The City will be limited to no more than $5 million dollars. Eight
transactions are allowed per month with the minimum transaction being
$5,000. The interest rate as of August 12, 1988 was 8.11%
In providing the City with another option in which to invest its funds,
LAIF offers three major advantages to the City and its cash management
program.
1. Security of investments
2. Liquity to meet the City's various cash flow needs
3. A competitive interest rate
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING
INVESTMENT OF CITY OF SAN BERNARDINO MONIES IN LOCAL AGENCY
INVESTMENT FUND.
WHEREAS, pursuant to Chapter 730 of the Statutes of 1976
Section 16429.1 was added to the California Government Code to
create a Local Agency Investment Fund in the State Treasury for
the deposit of money of a local agency for purposes of investment
by the State Treasurer; and
WHEREAS, the Mayor and Common Council do hereby find that
the deposit and withdrawal of money in the Local Agency
Investment Fund in accordance with the provisions of Section
16429.1 of the Government Code for the purposes of investment as
stated therein as in the best interests of the City of San
Bernardino.
NOW, THEREFORE, BE IT RESOLVED that the Mayor and Common
Council of the City of San Bernardino do hereby authorize the
deposit and withdrawal of the City of San Bernardino monies in
the Local Agency Investment Fund in the State Treasury in
accordance with the provisions of Section 16429.1 of the
Government Code for the purpose of investment as stated therein.
BE IT FURTHER RESOLVED that the following San Bernardino
City officers or their successors in office shall be authorized
to order the deposit or withdrawal of monies in the Local Agency
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Investment Fund:
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7-11-88
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(Name)
(Title)
(Name)
( Title)
(Name)
(Title)
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a
meeting thereof, held on
the
day of
, 1988, by the following
vote, to wit:
AYES:
Council Members
NAYS:
ABSENT:
City Clerk
7-11-88
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The foregoing resolution is hereby approved this
of
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6 Approved as to form
7 a~~ legal content:
: '.(...., I 1,---
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City Attorney
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, 1988.
day
Evlyn Wilcox, Mayor
City of San Bernardino