HomeMy WebLinkAbout17- City Treasurer C14 OF SAN BERNARDI�O - REQUEbT FOR COUNCIL ACI iON
From: CRAIG A. GRAVES, CITY TRkk§iitFADtAfN Ct Filing of City' s Investment Policy
for 1988
Dept: OFFICE OF THE CITY TREASU:Rti_'3
Date: February 4 , 1988
Synopsis of Previous Council action:
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.
October 7 , 1985
March 24 , 1986
April 6 , 1987 - Mayor and Common Council receipted and filed Statement
of Investment Policy.
Recommended motion:
Adopt the Resolution.
ig ture
Contact person: Craig A. Graves __ _ _ Phone: 5221
Supporting data attached:_ Yes _Ward: City-wide
FUNDING REQUIREMENTS: Amount: None Source: N/A
Finance: N/A
Council Notes:
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL AC ON
STAFF REPORT
In 1985, the California Legislature adopted legislation which
requires the City Treasurer to file an annual investment policy
each calender year with the legislative body. The attached
investment policy was originally reviewed by the Ways and Means
Committee in 1985 and then was later receipted and filed by
the Mayor and Common Council.
The attached investment policy sets forth the parameters
being used in the investment of City Funds. It includes the
basic investment philosophy and priorities. It also includes
the standards used for determining investments and the types.
It also states the purpose and objectives of the City' s Investment
Program.
RESOLUTION NO.
1 RESOLUTION OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING THE
RECEIPT AND FILING OF THE ANNUAL STATEMENT OF INVESTMENT POLICY
2 FOR THE YEAR 1988.
3 BE IT RESOLVED BY THE MAJOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS :
4
5 SECTION 1. Recitals.
6 A. The California State Legislature passed legislation
7 during the 1984 session requiring the filing of an annual
8 Statement of Investment Policy by local public agencies .
J B. The Governor of the State of California signed such
10 legislation into law effective January 1, 1985 (Chapter 1226) .
11 C. The City Treasurer of the City of San Bernardino
12 declares the annual Statement of Investment Policy is as set
13 forth in Exhibit "A" , attached hereto and incorporated herein by
14 this reference as though fully set forth at length.
15 SECTION 2 . Implementation. An annual Statement of
16 Investment Policy for the City of San Bernardino has been filed
17 by the City Treasurer for calendar year 1988 in compliance with
18 Section 53646 (a) of the Government Code of the State of
19 California.
20 I HEREBY CERTIFY that the foregoing resolution was duly
21 adopted by the Mayor and Common Council of the City of San
22 Bernardino at a regular meeting thereof , held on the
23 day of 1988 , by the following vote, to
24 wit:
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RE: ACKNOWLEDGING THE RECEIPT AND FILING OF
THE ANNUAL ST- FMENT OF INVEF' '4ENT POLICY
FOR THE YEAR x-,88
1 AYES: Council Members
2
3 NAYS:
4
5 ABSENT:
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7
City Clerk
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9 The foregoing resolution is hereby approved this day
10 of 1988 .
11
Mayor of the City of San Bernardino
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13 Approved as to form:
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15 Cif Attorneyr�
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CITY OF SAN BERNARDINO
Statement of Investment Policy
PURPOSE
This statement is intended to provide 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 goal 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 and revenues, thus enabling the City to
invest funds to the fullest extent possible. The City attempts
to obtain the highest yield obtainable as long as investments meet the
criteria established for safety and liquidity.
POLICY
The City of San Bernardino operates 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 management and investment transactions
are the responsibility of the City Treasurer. Investments are made
under the terms and conditions of Sections 53600-53683 of the
Government Code of California. Criteria for selecting investments and
the order of priority are:
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 instruments
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
disbursement. San Bernardino only invests in those instruments that are
considered very safe.
EMMIT "A"
4/6/87
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 quality 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; Certificates of Deposits, 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; Interest Bearing Demand Deposits; Money-Market
Accounts of acceptable instruments.
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 commercial paper with both A-1 Moody's
and P-1 Standard and Poor's ratings are purchased.
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 inorder to assess the probable course of
interest reates.
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.
4/6/87