HomeMy WebLinkAboutReso 2010-045RESOLUTION NO. 2010-045
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING THE EXISTING CITY
INVESTMENT POLICY AND GUIDELINES
WHEREAS, the City is contemplating investing a portion of its idle funds in local
community banks, and in order to do so, the City must amend its existing Investment Policy to
allow for investments in Certificates of Deposit utilizing a deposit placement service; and
WHEREAS, currently the only program that offers a deposit placement service for
Certificates of Deposit, is the Certificate of Deposit Account Registry Service, better known as
CDARS; and
WHEREAS, Negotiable Certificates of Deposit are an investment authorized by State
Government Code and is listed as an authorized investment in the current policy; and
WHEREAS, the City has not invested in Certificates of Deposit in the past because of the
relatively low amount that may be invested to remain within the FDIC insurable limits, but also
because of the administrative burden that would be required to invest in certificates of deposit
outside of the CDARS Program; and
WHEREAS, banks that offer CDARS are members of a special network in which when a
public fund depositor places a large deposit with a network member, that bank uses the CDARS
service to place City funds into Certificates of Deposit issued by other members of the network;
and
WHEREAS, this occurs in increments of less than the standard FDIC insurance
maximum to ensure that both principal and interest are eligible for full FDIC protection; and
WHEREAS, other network members do the same thing with their customers' funds, and
with help from a sophisticated matching system, banks exchange funds with other members of
the Network; and
WHEREAS, these exchanges, which occur on adollar-for-dollar basis, bring the full
amount of the City's original deposit back to each originating bank, and as a result, member
banks can make the full amount of the City's deposit available for community lending purposes
(the money stays local) and the City can access FDIC coverage from many banks while working
with just one institution; and
WHEREAS, Senate Bill 2011 added Sections 53601.8 and 53635.8 to the Government
Code, relating to local agency investments; and
WHEREAS, existing law prescribes the instruments in, and criteria by, which local
agencies, as defined, may invest surplus funds; and
Resolution No. 2010-045
Page 2
WHEREAS, this bill authorized, until January 1, 2012, the investment of up to 30% of
those funds in certificates of deposit at a commercial bank, savings bank, savings and loan
association, or credit union that uses a private sector entity that assists in the placement of
certificates of deposit under specified conditions.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista amends the existing City Investment Policy and Guidelines.
Presented by ~ / / Approved as to form by
Mara Kachadoorian B C. Mies e
Director of Finance/Treasurer rty Attorn
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 2nd day of March 2010 by the following vote:
AYES: Councilmembers: Bensoussan, Castaneda, Ramirez, Thompson and
Cox
NAYS: Councilmembers: None
ABSENT: Councilmembers: None
Y
Cheryl Cox, ayor
ATTEST:
h~
Donna R. Norris, C~City Clerk
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
CITY OF CHULA VISTA
I, Donna R. Norris, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Resolution No. 2010-045 was duly passed, approved, and adopted by the City Council at a
regular meeting of the Chula Vista City Council held on the 2nd day of March 2010.
Executed this 2nd day of March 2010. ~/
Donna R. Norris, CMC, City Clerk