HomeMy WebLinkAboutCity Council - 6030 RESOLUTION NO. 6030
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH ACKNOWLEDGING THE RECEIPT AND
FILING OF THE ANNUAL STATEMENT OF INVESTMENT
POLICY FOR THE YEAR 1989
WHEREAS, in 1984 California Government Code S53646 was
amended to require the treasurer of a local agency to render an
annual statement of investment policy to the legislative body, and a
monthly report containing specified information regarding
investments and deposits to the chief executive officer and
legislative body; and
Such statute is mandatory for all local agencies; and
Pursuant to Title 5, Division 2, Chapter 4, Article 1,
commencing with California Government Code S53600 et. seq. , the City
Treasurer declares the annual statement of investment policy for the
City of Huntington Beach to be as follows :
1. Practices and Policy Statement - The investment
practices and policies of the City of Huntington Beach are based
upon state law and prudent money management. The primary goals of
these practices are:
A. To assure compliance with all Federal, State and
local laws governing the investment of monies
under the control of the City Treasurer.
B. To protect the principal monies entrusted to this
office.
C. To generate the maximum amount of investment
income within the parameters of prudent risk
management.
The City of Huntington Beach operates its pooled idle cash
investments under the Prudent Man Rule (California Civil Code S2261
et. seq. ) which states that "investments shall be made with judgment
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and care, under circumstances then prevailing, which persons of
prudence, discretion, and intelligence exercise in the management of
their own affairs, not for speculation, but for investment,
considering the probable safety of their capital as well as the
probable income to be derived. " This affords a broad spectrum of
investment opportunities as long as the investment is deemed prudent
and is permissible under currently effective state legislation and
other imposed legal restrictions. The City Treasurer will strive to
maintain the level of investment of idle funds as close as possible
to 100 percent. Consistent with this aim, investments are made
under the terms and conditions of California Government Code §53600
et. seq. Criteria for selecting investments and the absolute order
of priority are:
A. Safety;
B. Liquidity; and
C. Yield
2. Types of Instruments - Under the provisions of the
City' s investment policy and in accordance with the California
Government Code §53601.
The legislative body of a local agency having
money in a sinking fund of, or surplus money in,
its treasury not required for the immediate
necessities of the local agency may invest any
portion of the money which it deems wise or
expedient in the following; provided, however,
that where this section does not specify a
limitation on the term or remaining maturity at
the time of the investment, no investment shall be
made in any security, other than a security
underlying a repurchase or reverse repurchase
agreement authorized by this section, which at the
time of the investment has a term remaining to
maturity in excess of five years, unless the
legislative body has granted express authority to
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make that investment either specifically or as a
part of an investment program approved by the
legislative body no less than three months prior
to the investment.
The City may invest in the following:
A. Bankers acceptances, maximum 40% of portfolio.
Maximum term 270 days.
B. Negotiable certificates of deposit, maximum 30%
of portfolio. Maximum term five (5) years .
C. Commercial paper, maximum 15% of portfolio.
Maximum term 180 days; plus additional 15% of
portfolio if the dollar-weighted average maturity
of the entire amount does not exceed 31 days .
D. Bonds issued by the City.
E. Obligations of the United States Treasury.
F. Federal Agency Obligations of:
Federal Intermediate Credit Bank (FICB' s)
Federal Land Bank (FLB' s)
Federal Home Loan Bank (FHLB' s)
Federal National Mortgage Association
(FNMA' s)
Small Business Administration (SBA' s)
Government National Mortgage Association
(GNMA's)
Tennessee Valley Authorities (TVA' s)
Student Loan Association Notes (Sallie
Mae' s)
G. Obligations of the State of California or of any
x
local agency within the State of California:
The Local Agency Investment Fund (LAIF) is a
special fund of the California State Treasury
through which any local government may pool
investments. The City may invest up to
$5, 000,000 per agency in this fund. Currently
the City has established two (2) agency funds:
The City of Huntington Beach General Funds, and
the City of Huntington Beach Redevelopment Agency
Funds . Investments in LAIF are highly liquid and
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may be converted to cash within 24 hours .
Investments with LAIF are secured by the full
faith and credit of the State of California.
H. Repurchase Agreements
I . Reverse-Repurchase Agreements shall be utilized
only with specific council approval on each
transaction.
J. Medium-Term Corporate Notes, maximum 30% of
portfolio. Maximum term five (5) years .
K. Mutual Funds, maximum 15% of portfolio.
L. Time Deposits (non-negotiable certificates of
deposit) .
3 . Collateral for Deposits - Under provisions of the
California Government Code, California banks and savings and loan
associations are required to secure a city' s deposits by pledging
government securities with a value of 110 percent of a City' s
deposit. California law also allows financial institutions to
secure City deposits by pledging first trust deed mortgage notes
having a value of 150% of City' s total deposits .
The City Treasurer, at his discretion, may waive the
collateral requirement for deposits which are fully insured up to
$100, 000 by the Federal Deposit Insurance Corporation or the Federal
Savings and Loan Insurance Corporation.
4 . Unauthorized Investments - Investments not described
herein, including but not limited to, common stock, purchasing on
margin or other speculative issues deemed imprudent are prohibited
from use in this portfolio.
5. Swapping of Securities - A swap is the movement from
one security to another and may be done for a variety of reasons,
such as to increase yield, lengthen or shorten maturities, to take a
profit, or to increase investment quality.
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6 . Portfolio Adjustments - Should an investment
percentage-of-portfolio limitation be exceeded due to an incident
such as fluctuation in portfolio size, the affected securities may
be held to maturity to avoid losses. When no loss is indicated, the
Treasurer shall consider reconstructing the portfolio basing his
decision in part on the expected length of time the portfolio will
be unbalanced.
7. Qualified Dealers - The City shall transact business
only with banks and savings and loans, and with registered
investment securities dealers. Investment staff shall investigate
dealers which wish to do business with the City in order to
determine if they are adequately capitalized and make markets in
securities appropriate to the City' s needs.
8 . Delegation of Authority - Within the City Treasurer ' s
office, the responsibility for the day to day investment of the City
funds is delegated to the Senior Deputy City Treasurer in the
absence of the City Treasurer.
9 . Policy Review - This investment policy shall be
reviewed at least annually to ensure its consistency with the
overall objectives of preservation of principal, liquidity, and
return, and its relevance to current law and financial and economic
trends.
In accordance with this resolution of the City Council
of the City of Huntington Beach, the City Treasurer is responsible
for investing the unexpended cash in the City Treasury, except for
the employee' s retirement funds, which are administered separately
and those funds which are managed separately by trustees appointed
under indenture agreements. All financial assets of all other funds
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shall be administered in accordance with the provisions of this
policy.
The monies entrusted to the City Treasurer will be an
actively managed portfolio. That is, the City Treasurer and staff
will observe, review, and react to changing conditions that affect
the portfolio. This shall be viewed as a full-time responsibility
by the City Treasurer and staff.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Huntington Beach that the foregoing annual statement of
investment policy, as required by California Government Code
§5364(a) , and submitted by the Huntington Beach City Treasurer, is
accepted and approved.
PASSED AND ADOPTED by the City Council of the City of
adjourned
Huntington Beach at a /regular meeting thereof held one 26thday of
June, 1989 .
Mayor
ATTEST: APPROVED AS TO FORM:
�� A� ` x� �
City Clerk City Attorney
REVIEWED AND APPROVED:
City Treasurer
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Res. No. 6030
STATE OF CALIFORNIA
COUNTY OF ORANGE ss:
CITY Of HUNTINGTON BEACH
I, CONNIE BROCKWAY, the duly elected, qualified City
Clerk of the City of Huntington Beach, and ex-officio Clerk of the
City Council of said City, do hereby certify that the whole number of
members of the City Council of the City of Huntington Beach is seven;
that the foregoing resolution was passed and adopted by the affirmative
vote of at least a majority of all the members of said City Council-
at a regular meeting thereof held on the 26th day
of June 19 89 , by the following vote:
AYES: Councilmembers:
MacAllister, Green, Winchell, Bannister, Silva
NOES: Councilmembers:
None
ABSENT: Councilmembers:
Mays, Erskine
i y Clerk and ex-officio er
of the.City Council of the City
of Huntington Beach, California