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HomeMy WebLinkAbout4.11 Annual Investment Policy a --0 r3 V CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: January 13 , 1986 SUBJECT Annual Statement of Investment Policy EXHIBITS ATTACHED Policy RECOMMENDATION Adopt Statement of Investment Policy for 1956 FINANCIAL STATEMENT: None DESCRIPTION Section 5364.6 of the Government Code requires that the Chief Fiscal Officer annually render to the City Council a Statement of- Investment Policy. In January, 1955 , the City Council adopted the City' s first Statement of Investment Policy which was required by State Law. No changes are proposed to the City' s Statement of Investment Policy for 1956. During calendar year 1955 , investments were made on behalf of the City in instruments which provided not only security but a competitive return on investment . ---------------------------------------------------------------------------- COPIES TO: ITEM NO. .W CITY OF DUBLIN - STATEMENT OF INVESTMENT POLICY AND STRATEGY C..i:�.erc.�'ua�+axn:�'eu'xecunsw'au,.. uu.._..'�.,i...:u•..mu._.:.:nvv.:c.a .,,....yL,,,...,...w.,, .,.....4...............,,.W..,o..« .....W.....a ,.......,,...,....,.a.... ... ,_.».� .. ,.—---_....... 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 a substantial amount of revenue to be generated by a prudent investment program. A growing number of investmen; ,.struments and an ever fluctuating money market makes it imperative that the City establish a policy for managing its investment portfolio. To maximize earnings and at the same time provide reasonable safety to the City's money, the following investment policy is hereby authorized: Policy = It is the policy of the City of Dublin to invest the maximum amount of cash available to the City in order to generate interest earnings to supplement other City revenue sources. The investment program will be subject to the following principles presented in the order of importance. 1. Safety. The first priority for the investment program shall be the safety of principal investment. Specualation or risky investment media will be avoided even though high interest rates might be offered. Basic consideration for safety shall include: A. Review and comply with the legal requirements set forth under sections of the Government Code of the State, as well as local laws or policies. B. Understand the types of investment instruments which are available and use those instruments which best meet the City's needs. C. Klatch the complexity of the investment program to the availability of staff time and resources. D. Maintain adequate records and controls. E. When appropriate, obtain the assistance of a reputable financial advisor who is familiar with investment procedures and municipal requirements. 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 include: A. Maintain an analysis of City cash flow reflecting historical experience of receipts, disbursements and interfund transfers. B. Maintain an estimate of future cash flow needs. C. Schedule maturity for investments so that cash will be returned to the treasury when required and on regular intervals when possible. 3. Maximum Earnings. After exercising maximum safety in investment instru- ments 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 maximum earnings shall include: A. Establishing a regular schedule for verifying current interest rates and projected trends for the future. B. Arrange for periodic quotations from selected banks, savings and loan companies, and investment firms. C. Regularly comanu iicate with city treasurers and other financial and investment advisors and, when practical, obtain information from investment seminars. Various seminars are held in the State sponsored by the League of California Cities, various banks and the California Treasurer's Association. Management of the investment program is the responsibility of the City Treasurer, and investments may be made in the following media: Securities of the U. S. Government, or its agencies Certificates of Deposit (or Time Deposits) placed with commercial banks and savings and loans Bankers Acceptances Negotiable Certificates of Deposit Commercial Paper (minimum rating: Moody's, A-1, Standard and Poor's, P-1) Repurchase. Agreements and Reverse Repurchase Agreements Passbook Savings Account Demand Deposits Other investments that are or may become legal investments through the State of California Government Code The Treasurer shall comply with the reporting procedures and format as provided by Assembly Bill No. 1073 enacted into law September 17, 1954. As required by this legislation, the City's investment policy shall be reviewed annually by the City Council.