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HomeMy WebLinkAbout48-City Treasurer C.Y OF SAN IIERNAR.O - RI!Q~T FOR COUNCIIQ *ION From: CRAIG A. GRAVES, City Treasurer Su~~: Filing of City's Investment Policy Dept: CITY TREASURER'S OFFICE Date: March 24, 1986 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 - Mayor and Common Council receipted and filed Statement of Investment Policy. Recommended motion: Adopt the Resolution. m i:: US n I ~ N .. en CJ !5 ~ iE e 0 "" :" ,f::-. (.0 Contact person: C-rr.lig ~ ~r;:!vp1=:. Phone: "", Supporting data attached: VP..P. Ward: ('if-y-winp FUNDING REQUIREMENTS: Amount: N'nnp Source: 1iI/1l. Finance: iii / A Council Notes: 75-0262 Agenda Item No. ~ ~ CITeOF SAN BERNARDI. -IIEQU" FOR COUNCIL AC'FN STAFF REPORT Two years ago the California Legislature adopted legi- slation which requires the City Treasurer to file an annual investment policy each calender year with the legislative body. Attached is the investment policy that was reviewed by the Ways and Means Committee last year and then was received and filed by the Mayor and Common Council. There are no changes in the investment policy being filed for 1986. 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. 75-0264 , . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ...... . . . RESOLUTION NO. RESOLUTION OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING THE RECEIPT AND FILING OF THE ANNUAL STATEMENT OF INVESTMENT POLICY FOR THE YEAR 1986. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. Recitals. A. The California State Legislature passed legislation during the 1984 session requiring the filing of an annual Statement of Investment Policy by local public agencies. B. The Governor of the State of California signed such legislation into law effective January 1, 1985 (Chapter 1226). C. The City Treasurer of the City of San Bernardino declares the annual Statement of Investment Policy is as set forth in Exhibit -A-, attached hereto and incorporated herein by reference as though fully set forth at length. SECTION 2. Implementation. An annual Statement of Investment Policy for the City of San Bernardino has been filed by the City Treasurer for calendar year 1986 in compliance with Section 53646(a) of the Government Code of the State of California. 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 , 1986, by the following vote, to day of wit: / / / / / / / / / / . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . . . AYES: Council Members NAYS: ABSENT: of City Clerk The foregoing resolution is hereby approved this , 1986. day Mayor of the City of San Bernardino Approved as to form: L ,--\ . j:/ CJ ~.. tf,~ kfr A#~// ( ity A orney 2 , . . . . . CI'i'Y OF SAN BERt:l\.ROH:O Statement .,of '.Investment Policy PURPOSE This statement is intended to provi~e 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 manage~ent 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 anpLrevenues, 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 safety 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' cashmanagernent and investment transactions are.the responsi- bility of the City Treasurer. Investments are made under the terms and conditions of Sections 53600-536C3 of the Government Code of California. Criteria for selecting investments and the order of priority are: EXHIBIT A . . . . l 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 qualrfy , 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 ter~ 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-I Moody's and P-I'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 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. .. .- I . : - L .. ~ ..: . . . . . . . CIVIL CODE f 2261. [Investment or funds] (1) In investing. reinvesting. purchasing. acquiring. exchanging. $tiling and managing propeny for the benefit of another, a trustee shall exercise the judgment and care, under the circumstances .then prevail. ing. which men of prudence, discretion and intelligence exercise in the management of their own IIlfairs, not in regard to speculation, but in regard to the permanent 4isposition of their funds, considering tbl;" ,_ probable income, as well as the probable safet)' of their capita1.' Within the limitations of the foregoing standard, and subject to any express provisions' or limitations contained in any panicular trust instrument, a trustee is aut~orized to acquire eveI)' kind of prop:;rty, real, personal or mixed, apd every kind of investment, specifically including. but not by way of limitation, comorate obligations of eveI)' kind, and stocks, preferre4 or common, which men of prudtTIce, discretion and intelligence ac::quire for their own account. ~ Resolution No. 4041 Attachment .