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HomeMy WebLinkAboutReso 1985-12176 RESOLUTION NO. 12176 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE CITY OF CHULA VISTA INVESTMENT POLICY AND GUIDELINES The City Council of the City of Chula Vista does hereby resolve as follows: WHEREAS, the Director of Finance has prepared an Investment Policy and Guidelines, attached hereto as Exhibit A and incorporated herein by reference as if set forth in full, and WHEREAS, said 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, and WHEREAS, the investment goal is to enhance the economic condition of the City while insuring the safety of funds invested, and WHEREAS, at its meeting of August 20, 1985, Council requested staff to prepare additional language indicating a local preference regarding the investment of City funds. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby approve the Investment Policy and Guidelines attached hereto as Exhibit A. Presented by Approved as to form by y~an Christopher, Director of Charles-R. Gill; Assistant Finance City Attorney 0700a ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, this 24th day Of-- September 19. 85 , by the following vote, to--wit: AYES; Councilmembers Cox, Moore, Scott, M¢Candliss NAYES: Councilmembers . None ABSTAIN; Counci lmembers None ABSENT: Councilmembers Malcolm Oty of Chu a vista City C, le~. /' STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) I, JENNIE M. FULASZ, CMO, CITY CLERK of the City of Chulo Vista, California, )O HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 12176 ,and that the same has not been amended or repealed. ,ATED (seal) City Clerk C-660 EXHIBIT A CITY OF CHULA VISTA INVESTMENT POLICY AND GUIDELINES . 1. 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 investment goal is to enhance the economic condition of the City while insuring the safety of funds invested. 2. 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 on its investments consistent with the criteria established for safety and liquidity. 3. POLICY The Finance Director is responsible for investing the surplus funds in the City Treasury in accordance with the California Government Code, Sections 53600 et seq. and 53635 et seq. The City operates its temporary idle cash investments under the prudent man rule (Civil Code Sect. 2261, et seq.) which states, in essence, that "in investing.., property for the benefit of another, a trustee shall exercise the judgment and care, under the circumstances then prevailing, which men of prudence, discretion and intelligence exercise in the management of their own affairs..." The three principle factors of safety, liquidity and yield are to be taken into consideration when making investment decisions. A) Saf_~. Safety and the minimizing of risk associated with investing reters to attempts to reduce the potential for loss of principal, interest or a combination of the two. The City invests only in those instruments that are considered very safe. B) ~. Liquidity refers to the ability to convert an investment to cash promptly with minimum risk of losing some portion of principal or interest. A portion of the portfolio should be maintained in liquid short-term securities which can be converted to cash if necessary to meet disbursement requirements. C) Yield. Yield is the average annual return on an investment based on ~nterest rate, price, and length of time to maturity. The City attempts to obtain the highest yield possible, provided that the basic criteria of safety and liquidity have been met. INVESTMENT INSTRUMENTS ? ~ ~(.~ The City of Chula Vista may invest in the following instruments under the guidelines as provided herein: A) Certificates of Deposit. Time Certificates of Deposit will be made only in FDIC or FSLIC insured accounts. For deposits in excess of the insured maximum of $100,000, approved collateral shall be required in accordance with California Government Code Section 53652 and/or 53651 (m) B) Securities of the U.S. Government or its A~encieq. Includes obligations issued by ~edera! Home Loan Banks, Government National Mortgage Association, Farm Credit System, the Federal Home Loan Bank, Federal Home Loan Mortgage Association, Federal National Mortgage Association, or obligations or other instruments of or issued by a federal agency or a United States Government sponsored enterprise. C) Treasury Bills and Notes. U.S. Treasury Bills, Notes, Bonds or Certificates of Indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest. D) Local A~ency Investment Fund (LAIF). Investment of funds in the 'California LAIF which allows the State Treasurer to invest through the Pooled Money Investment Account. Maximum investment is subject to state regulation. E) Bankers Acceptances. Bills of Exchange or Time Drafts drawn on and accepted by a commercial bank, otherwise known as Bankers Acceptances, both domestic and foreign, which are eligible for purchase by the Federal Reserve System. Purchases of Bankers Acceptances may not exceed 270 days maturity or 40% of the City's surplus money which may be invested. F) Commercial Paper. Paper of the highest rating as provided by Moody's Investors Service, Inc., or Standard and Poor's Corporation (A-l: P-l). Purchases of eligible commercial paper may not exceed 180 days maturity or 15% of the City's surplus money which may be invested. Eligible paper is further limited to issuing corporations that are organized and operating within the United States and having total assets in excess of five hundred million dollars ($500,000,000). G) Negotiable Certificates of Deposit. Issued by a nationally or state-chartered bank or a state or federal savings and loan association or by a state-licensed branch of a foreign bank. Purchases of Negotiable Certificates of Deposit may not exceed 30% of the City's surplus money which may be invested. -2- H) Repurchase Agreements. A purchase of securities by the City pursuant to an agreement by which the seller will repurchase such securities on or before a specified date, or on demand of either party, and for a specified amount. Investments in repos will be used solely as short term investments not to exceed 90 days. II Other. Other investments that are, or may become, legal investments ~gh the State of California Government Code and with prior approval of the City Council. 5. DIVERSIFICATION Investments shall be diversified among institutions, types of securities and maturities to maximize safety and yield with changing market conditions. Local financial institutions will be given preferential consideration for investment of City funds consistent with the City's objective of attaining market rates of return, and consistent with constraints imposed by its safety objectives, cash flow considerations and State laws. 6. SAFEKEEPING All investments of the City shall have the City of Chula Vista as registered owner or shall be kept in the custody of the City or by a qualified safekeeping institution. 7. INVESTMENT REPORTS A) The Director of Finance shall submit a monthly investment report to the City Manager and City Council containing the following information: Financial institution Type of investment ~mount of deposit - Rate of interest - Purchase date - Maturity date - Current market value for securities with a maturity of more than 12 months - Other data as required by the City B) The Director of Finance shall annually render a Statement of Investment Policy to the City Council. WPC 0299G