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HomeMy WebLinkAbout23-City Treasurer '1['11 CJTY OF SAN RER_RDINO - REQUEST WR COUNCIL ACTION From: DAVID KENNEDY, CITY TREASURER Subject: RECEIPT AND FILING OF THE ANNUAL STATEMENT OF INVESTMENT POLICY Dept: CITY TREASURER'S DEPARTMENT Date: FEBRUARY 6, 1992 Synopsis of Previous Council action: RESOLUTION ADOPTED ON 1/25/91 RESOLUTION No. 91-22 Recommended motion: ADOPT RESOLUTION ~y,- Signature Contact person: EDY ROSE. ASSISTANT CITY TREASURER Phone: 384-5221 Supporting data attached: Ward: FUNDING REQUIREMENTS: Amount: Source: (Acct. No.1 (Acct. Descriotion) Finance: Council Notes: 75-0262 Agenda Item No 2_1 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 T 1111 . . RESOLUTION NO. RESOLUTION OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING THE RECEIPT AND FILING OF THE ANNUAL STATEMENT OF INVESTMENT POLICY FOR THE YEAR 1992. NOW, THEREFORE, 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 this 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 1991 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 day of , 1992, by the following vote, to 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 . RESOLUTION OF RECEIPT AND FILING FOR THE YEAR 1992. COUNCIL MEMBERS ESTRADA REILLY HERNANDEZ MAUDSLEY MINOR POPE-LUDLAM MILLER . THE CITY OF SAN BERNARDINO ACKNOWLEDGING THE OF THE ANNUAL STATEMENT OF INVESTMENT POLICY AYES NAYS ABSTAIN ABSENT City Clerk The foregoing resolution is hereby approved this of . 1992. Approved as to form and legal content: JAMES F. PENMAN City Attorney day W.R. Holcomb, Mayor City of San Bernardino By: <'J . E X BIB I T "A" . INVESTMENT POLICY I. Introduction: The purpose of this document is to identify various policies and procedures that enhance opportunities for a prudent and systematic investment policy and to organize and formalize investment-related activities. II. Scope: It is intended that this policy cover all funds and investment activities under the direct authority of the City of San Bernardino. III. Objectives: A. Safety: It is the primary duty and responsibility of the Treasurer to protect, preserve and maintain cash and investments placed in his/her trust on behalf of the citizens of the community. B. Liquidity: An adequate percentage of the portfolio should be maintained in liquid short-term securities which can be converted to cash if necessary to meet disbursement requirements. Since all cash require- ments cannot be anticipated, investments in securities with active secondary or resale markets is highly recommended. Emphasis should be on marketable securi- ties with low sensitivity to market risk. C. Yield: Yield should become a consideration only after the basic requirements of safety and liquidity have been met. D. Market-Average Rate of Return: The investment port- folio shall be designed to attain a market-average rate of return throughout budgetary and economic cycles, taking into account the City's risk con- straints, the cash flow characteristics of the portfolio, and State and Local laws, ordinances or resolutions that restrict investments. E. Diversification: The investment portfolio will be diversified to avoid incurring unreasonable and avoidable risks regarding specific security types or individual financial institutions. 1 II III . . D. Prudence: The City adheres to the guidance provided by the "prudent man rule," which obligates a fiduciary to insure that: "...investment shall be made with the exercise of that degree of judgment and care, under circum- stances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation but for investment considering the probable safety of their capital as well as the probable income to be derived." G. Public Trust: All participants in the investment process shall act as custodians of the public trust. Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. The overall program shall be designed and managed with a degree of professionalism that is worthy of the public trust. In a diversified portfolio it must be recognized that occasional measured losses are inevitable, and must be con- sidered within the context of the overall portfolio's investment return, provided that adequate diversifi- cation has been implemented. IV. Reporting: The Treasurer shall submit a monthly investment report to the City. Required elements of the monthly report: a) Type of investment b) Institution c) Date of maturity d) Amount of deposit or cost of the security e) Current market value of securities with maturity in excess of 12 months f) Rate of interest g) statement relating the report to the statement of Investment Policy h) statement that there are sufficient funds to meet the next 30 days' obligations V. Investment Instruments: Authorized investment instruments include: 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 2 VI. VII. VIII. IX. . . banks and savings and loans; Bankers Accept- ances; 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 accept- able instruments. Internal Controls: A system of internal control shall be established and documented in writing. The controls shall be designed to prevent losses of public funds arising from fraud, employee error, misrepresentation of third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the City. Controls deemed most impor- tant include: control of collusion, separation of duties, separating transaction authority from account- ing and recordkeeping, custodial safekeeping, clear delegation of authority, specific limitations regard- ing securities losses and remedial action, written confirmation of telephone transactions, minimizing the number of authorized Investment Officials, docu- mentation of transactions and strategies, and code of ethics standards. Maturities: Investments will be chosen with appropriate maturities so that funds will be available to meet the City's cash flow requirements. No investment will be made with a maturity over five years. Banks and Securities Dealers: In selecting financial institutions for the deposit or investment of City funds, the Treasurer shall consider the creditworthiness of institutions. The Treasurer shall continue to monitor financial insti- tutions' credit characteristics and financial history throughout the period in which agency funds are deposited or invested. Risk Tolerance: The City recognizes that investment risks can result from issuer defaults, market price changes, or various 3 ~l . . technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk. Investment Managers are expected to display prudence in the selection of securities, as a way to minimize default risk. No individual investment transac- tion shall be undertaken which jeopardizes the total capital position of the overall portfolio. The Treasurer shall periodically establish guide- lines and strategies to control risks of default, market price changes and illiquidity. In addition to these general policy considerations, the following specific policies will be strictly observed. A. All transactions will be executed on a delivery versus payment basis. B. A competitive bid process, when practical, will be used to place all investment purchases. X. Safekeeping and Custody: Securities will be delivered to the Bank Trust Depart- ment and kept in the City's name. XI. Statement of Investment Policy: The Statement of Investment Policy shall be reviewed and submitted annually to the City. 4 / 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 II III . . RESOLUTION NO. 91-22 RESOLUTION OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING THE RECEIPT AND FILING OF THE ~~UAL STATE~ffiNT OF INVEST~ffiNT ?OLICY FOR THE YEAR 1991. .' NOW, THEREFORE, BE IT RESOLVED BY THE HAYOR AND cormoN 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 ~he City of San Bernardino declares the annual Statement of Investment Policy is as set forth in Exhibit "An, attached hereto and incorporated herein by this 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 f6r calendar year 1991 in compliance with Section 53646(a) of the Govern~ent Code of the State of California. / / / / / / / / / / / / / / / / / / / / / / / / ICAG Receipt. res anuary 3, 1991 .' , . 1 "