HomeMy WebLinkAboutReso 079-93 InvestmentPolicyRESOLUTION NO. 79 - 93
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
ESTABLISHING A POLICY FOR CITY INVESTMENTS AND DESIGNATING THE CITY
TREASURER AS AUTHORIZED OFFICIAL TO INVEST CITY MONIES
WHEREAS, it is prudent for the City to place investments of
public funds in accordance with adopted policy; and
WHEREAS, State Law prior to 1991 required the City to adopt
annual investment policies; and
WHEREAS, the provisions for an annual policy have been rescinded;
and
WHEREAS, the most recent investment policy was adopted by the
City Council on June 14, 1991 by Resolution 47-91; and
WHEREAS, California Government Code Section 53607 authorizes the
City Treasurer to undertake investments of City monies; and
WHEREAS, California Government Code Section 41006 authorizes the
City Treasurer to appoint Deputy City Treasurers; and
WHEREAS, City Staff have prepared an updated investment policy
based upon recommendations presented by the California Municipal
Treasurers Association.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City
of Dublin does hereby adopt the Statement of Investment Policy,
attached hereto as Exhibit A, and by reference made a part hereof.
BE IT FURTHER RESOLVED that this action shall supercede the
content of Resolution 47-91, which previously set forth an investment
policy.
PASSED, APPROVED AND ADOPTED this 14th day of June, 1993.
AYES:
Councilmembers Burton, Houston, Howard, and Mayor
Snyder
NOES: None
ABSENT: Councilmember Moffat~~
ABSTAIN: None
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EXHIBIT A
STATEMENT OF INVESTMENT POLICY FOR THE
CITY OF DUBLIN
I. INTRODUCTION
The purpose of this document is to identify various policies and
procedures that enhance opportunities for a prudent and
systematic investment policy. This document also serves to
organize and formalize investment related activities.
I I. SCOPE
It is intended that this policy cover all funds and investment
activities under the direct authority of the City of Dublin.
I I I. OBJECTIVES
General: The overall obligation of the City Treasurer is to
maintain sufficient cash to pay existing debts. It shall be the
policy of the City to invest the maximum amount of idle cash
available to the City in order to generate interest earnings,
which supplement other City revenue sources. The investment
program shall be subject to the following parameters, which are
presented in their order of importance:
(i)
Safety: The first priority for the investment program shall
be the safety of the principal amount invested. Speculation
or risky investment media will be avoided, even though high
interest rates might be offered. Protection and
preservation of municipal investments on behalf of the
citizens of the community is of primary importance. The
following list provides examples of investments which
demonstrate safety.
Treasury and Federal agency paper, and repurchase
agreements are the highest quality investment available
in terms of safety and liquidity. Certificates of
deposit (negotiable and nonnegotiable) and savings
accounts must be insured by FDIC, SAIF, or
collateralized. Bankers acceptances must be secured by
the irrevocable primary obligation of the accepting
domestic bank. The Local Agency Investment Fund (LAIF)
shall be considered as a proper investment for safety
inasmuch as the State Treasurer of California is the
State Elected Officer responsible for that investment
portfolio. Commercial paper of "prime" quality from a
domestic corporation having total assets in excess of
five hundred million dollars and an "A" rating or
higher shall be considered as a safe investment. Only
money market accounts that have 100% of their assets
invested in Treasury Federal agency paper shall be
considered safe. This list has been presented for
descriptive purposes only and actual investments shall
be in accordance with authorized Sections of the
Government Code.
IV.
(2)
Liquidity: An adequate percentage of the portfolio should
be maintained in liquid short-term investments which can be
converted to cash if necessary to meet disbursement
requirements. Since all cash requirements must be
anticipated, investments in securities with active secondary
or resale markets is highly recommended. Emphasis should be
on marketable securities with low sensitivity to market
risk. Maturities of investments for which there is limited
opportunity for resale (i.e. certificates of deposit held by
banks and savings and loans) shall be staggered to maximize
liquidity.
Many of the investment examples identified in paragraph
#1 above demonstrate the type of investments which
demonstrate liquidity.
(3)
Yield: Yield should become a consideration only after the
basic requirements of safety and liquidity have been met.
Diversification: The investment portfolio will be
diversified to avoid incurring unreasonable and avoidable
risks regarding specific security types or individual
financial institutions° This shall also conform with
applicable sections of the Government Code.
(5) Prudence: The agency adheres to the guidance provided by
California Civil Code Section 2261 related to the "prudent
person rule." The exercise of investment decisions in
accordance with this policy shall consider the probable
safety of the invested capital as well as the probable
income to be derived.
(6)
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 considered
within the context of' the overall portfolio's investment
return, provided that adequate diversification .has been
implemented.
DESIGNATION OF CITY TREASURER TO CARRY OUT INVESTMENT DUTIES
As authorized in Government Code Section 53607, the City
Treasurer and/or any duly appointed Deputy City Treasurer is/are
hereby authorized to invest, reinvest, sell, or exchange monies
within the City Treasury. Monthly reports of said transactions,
if any, shall be provided to the City Council.
INVESTMENT INSTRUMENTS
The authorized investments to be made by the City Treasurer shall
be in accordance with Sections 53601 and 53635 of the California
Government Code as they may be amended. Reporting of all
transactions shall occur as noted in Section IV above.
VI. TERN OF INVESTMENTS
As specified in Government Code Section 53601, the City Council
must expressly authorize the investment of funds which mature in
excess of five years. Placement of such investments cannot occur
until three months has lapsed from the date of authorization.
As identified in this policy, it is important to retain
availability of cash in the event of immediate disbursement
requirements. It shall be the policy of the City of Dublin that
no investment shall have a maturity which exceeds 10 years. The
total amount of investments with maturities between 5 years and
10 years shall not exceed 10 per cent of the total portfolio, as
measured against the portfolio value on the date the specific
investment is made. Placement of any investment maturing beyond
5 years shall not occur until 3 months following the approval of
this policy by the City Council.
VII. INTERNAL CONTROLS
City Treasurer and City Staff shall develop and implement such
administrative procedures and internal controls which are
considered prudent, given the size of the organization and the
complexity of investments.
VIII. BELECTION OF INSTITUTIONS
In selecting the financial institutions for the deposit or
investment of City of Dublin funds, the City Treasurer shall
consider the credit worthiness of institutions which are
utilized. Efforts shall be made to monitor the credit
characteristics and financial history throughout the period in
which agency funds are deposited or invested.
IX. RISK TOLERANCE
As noted, diversification shall be utilized to control risk. No
individual investment transaction shall be undertaken which
jeopardizes the total capital position of the overall portfolio.
All transactions will be executed on a delivery versus payment
basis. When practical, a competitive bid process will be used
to place all investment purchases.
X. REVIEW OF INVESTMENT POLICY
This policy shall be subject to review by City Staff on an annual
basis. Any recommended modifications or amendments shall be
presented to the City Council for their consideration and
adoption.
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