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HomeMy WebLinkAboutItem 4.03 Annual Investment Policy 1 ;�-2-D-30 CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: June 11 , 1990 SUBJECT: Annual Statement of Investment Policy (Prepared by: Phil Molina, City Treasurer) EXHIBITS ATTACHED: R solution and Policy RECOMMENDATION: Adopt Resolution of Investment Policy for the 1990/91 Fiscal Year. FINANCIAL STATEMENT: None DESCRIPTION: Section 53646 of the Government Code requires that the City Treasurer submit to the City Council a Statement of Investment Policy each year. The City Council adopted the City's fifth investment policy on January 9, 1989. For Fiscal Year 1990-91 , the Treasurer is presenting the investment policy in the form of a resolution. Each type of investment instrument that will be used is identified in the policy statement. The areas of emphasis are safety, liquidity, and earnings. There are no new investment mechanisms being introduced this year, and the policy is identical to the policy adopted by the City Council last year. Staff recommends that the Council adopt the attached Resolution approving the Investment Policy for Fiscal Year 1990-91 . ---------------------------------------------------------------------- COPIES TO: ITEM NO. ! • RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN SETTING FORTH THE INVESTMENT POLICY FOR THE CITY OF DUBLIN FOR 1990/91 FISCAL YEAR WHEREAS, the city has a fiduciary responsibility to maximize the productive use of assets entrusted to its care and to invest and manage those public funds prudently; and WHEREAS, the General Law City of Dublin operates its pooled idle cash under the prudent man's rule; and WHEREAS, the City shall strive to make investments that benefit the local area; and WHEREAS, Exhibit `A' sets forth the details of the Investment Policy for the City of Dublin and is incorporated as part of this resolution. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby adopt the Investment Policy for 1990/91 fiscal year. PASSED, APPROVED AND ADOPTED this June 11 , 1990. AYES: NOES: ABSENT: Mayor's signature ATTEST: City Clerk EXHIBIT `A' CITY OF DUBLIN STATEMENT OF INVESTMENT POLICY AND STRATEGY CITY OF DUBLIN STATEMENT OF INVESTMENT POLICY INTRODUCTION: The availability of cash on a short term basis in the City of Dublin treasury offers an opportunity for an amount of revenue to be generated by a prudent investment program. A growing number of investment instruments makes it imperative that the City establish a policy for managing its investment portfolio. Understanding that the first concern of any of this City's investments must be the safety of principal and the second is to provide additional earnings, the following investment policy is hereby authorized: POLICY: Realizing that the Treasurer's first obligation is to retain sufficient cash to pay existing debts , it is the policy of the City of Dublin to invest the maximum amount of idle cash available to the City in order to generate interest earnings to supplement other City revenue sources. The investment program is subject to the following parameters presented in their order of importance. 1 . 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. Basic consideration for safety shall include: Government and agency paper, and repurchase agreements , are the highest quality investment available in terms of safety and liquidity. Certificates of deposit (negotiable and non-negotiable) , 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 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 account that have 100% of their assets invested in Federal Notes, and Federal Bills shall be considered safe. 2 . Liquidity - Spacing Maturity. Investments must be carefully coordinated with the City's periodic cash needs. It is urgent that current available cash not be assigned to an investment with a time commitment which will result in the shortage of cash for either operations or capital purposes at some future time. The need for liquidity will take precedence over the higher rates of interest often offered with longer term investments. Basic considerations for liquidity shall included: Most of the investment listed in Paragraph #1 are highly liquid (there is a good secondary market for selling the investments) , with the exception of certificates of deposits held by banks and savings and loans. Maturities of Certificates of Deposits shall be selected to anticipate cash needs, thereby avoiding the need for forced liquidation. 3 . Maximum Earnings. After exercising maximum safety in investment instruments and responsible spacing of maturity, every effort shall then be made to obtain the highest earnings from investments of City money within the limits prescribed by State Law for local government investments. Basic considerations for earnings maximization: The City shall lengthen its maturities when rates are falling and shorten maturities when rate are rising. The City shall attempt to take advantage of imperfections in the market where a security's price is out of line with other similar investment always keeping an eye toward safety. The Treasurer shall comply with the reporting procedures and format as provided by AB 1071 enacted into law September 17 , 1984 . Though the investment policy will be reviewed annually, unless changes are required the policy will continue as written into future years.