HomeMy WebLinkAbout4.3 Investment Policy FY 91-92 Oil
CITY OF DUBLIN
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: June 10, 1991
SUBJECT: City of Dublin Investment Policy for Fiscal Year
1991-92
EXHIBITS ATTACHED: Resolution setting forth Investment Policy
RECOMMENDATION IC dopt Resolution
FINANCIAL STATEMENT: None
DESCRIPTION: California Government Code Section 53646 (a)
requires that the City Treasurer annually provide the City Council
with an Investment Policy. The Investment Policy for Fiscal Year
1991-92 establishes the guidelines that the Treasurer will use during
the new fiscal year.
The City Treasurer invests amounts of temporary idle cash in the
City's bank accounts for purposes of both generating investment
revenues and to maintain the purchasing power of funds in the City's
cash accounts. The Council establishes the acceptable levels of risk,
defines the authorized types of investment instruments, and
establishes the maximum amount of time beyond the purchase date that
each instrument can mature through this Investment Policy.
This year, the Treasurer is making no changes to the Investment Policy
that the City Council established for Fiscal Year 1990-91. This means
that the Treasurer can continue in 1991-92 to choose from the same
type of investment instruments as was available in 1990-91, including:
Certificates of Deposit
United States Treasury Notes
U. S. Bonds
U. S. Bills
Certificates of Indebtedness of a Federal Agency
Registered State Warrants
Local Agency Long Term Debt
Bankers Acceptance
Repurchase Agreements
Commercial Paper and Medium Term Corporate Notes
Local Agency Investment Fund (LAIF)
Staff recommends that the City Council adopt the attached Resolution
establishing Dublin's Investment Policy for Fiscal Year 1991-92 .
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COPIES TO:
ITEM NO. &z-& `32(9 `J 0
RESOLUTION NO. - 91
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
SETTING FORTH THE INVESTMENT POLICY FOR THE
CITY OF DUBLIN FOR FISCAL YEAR 1991-92
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 a 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 Fiscal Year
1991-92 .
PASSED, APPROVED, AND ADOPTED this day of , 1991, by
the following vote:
AYES:
NOES:
ABSENT:
Mayor
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 sources. The investment �r �
subject to the fo �oing p arameterspresentedntheioder 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 1i uidity.
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 considered dollars
s
and an `A' rating or higher shall be
a safe investment . Only money market account that
have 100% their Federal
consideredsafe.
Notes, and
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 liquiditill the
higher ra term
investments.
Basic considerations for liquidity shall included:
Most of the investment listed in Paragraph #1 are
highly liquid (there is a ood 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 srnrescribed byvStaten LawoforClocalogovernment
the limits
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.