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HomeMy WebLinkAbout1987-01-27; City Council; Resolution 89431 2 3 4 5 6 7 e 9 1c 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A RES OF CA 1"s "9 1985, and revise the Government C as may be necess City Treasurer , "9 policy and has r ability to manag NOW, THERE City of Carlsbad The attac and shall become PASSED, A City Council of of January AYES: NOES: I ABSENT: 'ATTEST: RESOLUTION NO. 8943 LUTION OF THE CITY COUNCIL OF THE CITY LSBAD, CALIFORNIA, REVISING THE CITY'S aNT POLICY. he City adopted an investment policy on January 2, on August 5, 1986, as required by Section 53646 of de, and le City Council may from time to time revise this policy ry to provide proper guidance to City staff and the id ie City Treasurer has reviewed the existing investment zoommended minor modifications which improve the City's inactive funds, and IRE, BE IT RESOLVED by the City Council of the California, as follows: :d investment policy (Exhibit A) is hereby adopted :ffective immediately. ?ROVED AND ADOPTED at a regular meeting of the le City of Carlsbad, California, held on the 27thday , 1987, by the following vote, to wit: icil Members Lewis, Kulchin, Pettine and Mamaux me ?one WZ, City Clerk \ I. INTRODUCTION Section 53646(a) o or Chief Fiscal Of local agency a sta investment policy Investment Policy 1985, and as revis the investment of operation of the C I I. BACKGROUND I CITY OF CARLSBAD A. B. C. 0. OB3ECTIVE - Th utilization of generate a rea recognition of to maintain th hundred percen determinations of Finance. RESPONSIBILITY City funds are the City Counc responsibility specifying lec provisions of DELEGATION OF the Deputy Cit responsibiliti LEGAL INVESTME invest City fc Government COC t3 Ob1 igat ion: i ns t rume n t i Q Registered of Califorr 8 Bonds, not€ California. rATEMENT OF INVESTMENT POLICY the California Government Code requires the Treasurer icer to render annually to the legislative body of the :ment of investment policy. The statement of :t forth herein is a revision of the City of Carlsbad's s approved by the Carlsbad City Council on January 2, 1 on August 5, 1986. It provides policy guidance for L1 City funds not required for the immediate day-to-day tY. primary investment objective is the prudent surplus cash and idle or inactive City funds to mable rate of return with an understanding and the associated risks involved. The City shall strive level of investment of all idle funds as close to one as possible through daily and projected cash flow and forecasts as made available by the City's Director - The management of idle cash and the investment of the responsibility of the City Treasurer as directed by L. The Treasurer will also be guided in this by the Government Code of the State of California I investments, by the prudent man rule and by the 7is policy. ESPONSIBILITY - In the absence of the City Treasurer, Treasurer will assume the Treasurer's duties and S. TS PERMITTED UNDER STATE LAW - The City Treasurer may ds in the following instruments as specified in the , Section 53601 and as further limited in this policy. of the U.S. Government, its agencies and ities. tate warrants or treasury notes or bonds of the State a. or warrants of any local agency within the State of . 0 es of Deposit and negotiable Certificates of Deposit ercial banks and savings and loan institutions. ificates of Deposit are limited to 30% of the cceptances with the following limitations: gible for purchase by the Federal Reserve System. eed 270 days maturity or 25% of the City's n 10% of the City's portfolio may be invested in the eptances of any one commercial bank. 1 Paper of the highest numerical rating of Moody's ices, Inc., or Standard & Poors Corporation. r may not exceed 30% of the total portfolio or 180 olio consists of one or more of the ds in the State of California Local nce with the laws and regulations 111. underlying the City 's investment icient funds are available to meet needed. The investment policy of the ty, liquidity, and security of the management of inactive cash - Acceptable risk, as it relates to this investment ed as that risk which a person is permitted to take in s under the terms and intent of the essence, that "in investing ... er, a trustee shall exercise the mstances then prevailing, which men ligence, exercise in the management -2- C. PREFERENCES - essentially the will be given Carlsbad, and California. D. ETHICS - All to act responsibly Treasurer shall confidence in IV. POLICY STATEMENT #hen two or more investment opportunities offer same maturity, yield, quality and liquidity, priority first to the financial institutions based in the City of second to other financial institutions in the State of participants in the City's investment process shall seek as custodians of the public trust. The City avoid any transaction that might impair public the City's ability to govern effectively. A. INVESTMENT when needed, investment 1. At least maturities 2. No more than maturing 10% of the the current 3. The City T easurer shall maintain an average portfolio investment maturity o 3 years or less. If the average maturity exceeds 3 years at a y time, the Treasurer shall take steps to reduce the average ma urity to three years within 90 days from such time. a LIMITS - To insure that invested funds are always available the City Treasurer will maintain the following policy on matxities: 67% of the portfolio will be invested in instruments with of less than one year from the current date. 33% of the portfolio may be invested in instruments o?e year or more from the current date, with no more than portfolio invested in maturities beyond ten years from date. Investments will actively traded investment institution. of the total to reduce the no loss would €3. INVESTMENT of priority, 1. Safety. It protect, in trust community. 2. Liquidity. maintained to cash if 3- be made only in readily marketable securities, in the secondary market. No more than 10% of the If a decline in the portfolio results in more than 10% being invested with one institution, the funds necessary investment to 10% will be removed upon maturity or when occur. portfolio will be placed with any one financial CRITERIA - The criteria for selecting investments, by order smll be: is the Treasurer's primary duty and responsibility to preserve and maintain intact cash and investments placed with the Treasurer on behalf of the citizens of the An adequate percentage of the portfolio should be in liquid short-term securities which can be converted necessary to meet disbursement requirements. (i is authorized,, in the market 0 Active trading is the buying and selling of securities in an effort to take advantage of short term profits and omes a consideration only after the basic afety and liquidity have been met. obtain the highest available yielding investment The City criteria for safety and liquidity are first Government Code reqires money to be deposited in ed from these banks and savings and loan to pay the highest rate of interest. ain market rates of return on its investments raints imposed by safety, cash flow tate laws that restrict the placement of public gency obligations are the highest quality to the City in terms of investment safety and C. - Investments in commercial bank and savings and certificates of deposit shall be fully insured up deral Deposit Insurance Corporation and the n Insurance Corporation respectively. D. - Investments in certificates of deposit in excess be properly collateralized. Government Code Section the City Treasurer is responsible for entering s with each depository. res that the depository pledge securities with a ast 10% in excess of the City's deposit as ent securities and fifty percent in excess of the Section 53652 of the in mortgage pools. F. SELECTION OF only through securities he1.d FINANCIAL INSTITUTIONS - Investments shall be purchased well established, financially sound institutions. All for safe keeping shall be registered in the City's approved for associations minimum net net worth investment. Commercial banks and savings and loan must be State or Federally chartered and must maintain a worth to asset ratio of three percent. div..ded by total assets equals the net worth to asset ratio. Total regulatory a G. SHORT-TERM meet current cash disburserrents tax exempt anticipation of the cash These funds may repaid at the H. LINE OF CREDIT all times can overdrawn froa authorized to sufficient V. REPORTING AND REVIEW A. REPORTS - The Statement of the City Council institution, all securities interest. This investment B. REVIEW - This investment of committee as of their annual period. Comm rcial banks must have on file in the Treasurer's Office a current FDI call report and savings and loans must have on file in the Office the latest monthly FHLBB report. Brokerage in good standing of a national securities exchange. BOqROWING - The City is permitted by law to borrow money to short-term cash flow needs during periods when projected exceed projected cash receipts through the use of instruments such as revenue anticipation notes and tax rotes. The amount which can be borrowed equals the total be borrowed at the beginning of the fiscal year and deficit plus projected cash disbursements for one month. end of the year. - The effort to maintain idle funds 100% invested at result in the City's cash accounts being temporarily time to time. To guard against this, the City is maintain a line of credit with the City's bank in a amount to cover sums temporarily overdrawn. Treasurer shall annually render to the City Council a Investment Policy. The Treasurer shall also submit to maturity date, amount of deposit, current market value of with a maturity of more than twelve months, and rate of a monthly report showing type of investment, report will show its relationship to the statement of policy. policy and the strategy for and conduct of the City funds will be reviewed by an investment review set forth below and by the City's auditors in the conduct audit of the City. C. INVESTMENT REVIEW established to COMMITTEE - An Investment Review Committee is hereby conduct periodic reviews of the City's investment portfolio, the funds, and the composed of the Finance Director advisor, provided advisor without as necessary or -5- strategy being utilized for the investment of City City's investment policy. This Committee will be as voting members. Additionally, a financial City Treasurer, the Deputy City Treasurer and the City by a recognized auditing firm may be included as an a vote. The Committee will be convened periodically desireable but not less often than quarterly.