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HomeMy WebLinkAboutCity Council - 6423 RESOLUTION NO. 6423 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 1992 WHEREAS, in 1984 California Government Code Sec. 53646 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 Sec. 53600 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 Sec. 1261 et seq. ) which states that "investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and 1 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 Sec. 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 Sec. 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 -2- 6423 to 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 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 -3- 6423 $15,000,000 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 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. The County of Orange Local Agency Investment Pool (COLAIF) is a special fund of the County of Orange through which any local city or agency may, with approval of their governing body and the County Treasurer, deposit excess funds in the County Treasury for reinvestment by the Treasurer. Investments with COLAIF are secured by the full faith and credit of the County of Orange and all investments are made in accordance with Government Code Sec. 53635. I. Repurchase Agreement J. Reverse-Repurchase Agreements shall be utilized only with specific council approval on each transaction. K. Medium-Term Corporate Notes, maximum 30W0 of portfolio. Maximum term five (5) years. L. Mutual Funds, maximum 15% of portfolio. M. 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. -4- 6423 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. 5. 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 -5- 6423 least annually to ensure its consistency with the overall objective 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 shall be administered in accordance with the provisions of this policy. The monies entrusted to the City Treasurer will be an actively managed portfolio. This 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 Sec. 53646(a), and submitted by the Huntington Beach City Treasurer, is accepted and approved. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 8th day of Sew mtp_r , 1992. Mayor ATTEST: APPROVED AS TO FORM: City Clerk City Attorney p L REVIEWED AND APPROVED: INITIATED AND APPROVED: ity Administra or City Treasurer -G- 6423 Res. No. 6423 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 sth day of Lef t m r 19_a _, by the following vote: AYES: Councilmembers: Robitaille, Moulton-Patterson, Winchell, Silva, Green, MacAllister, Kelly NOES: Councilmembers: None ABSENT: Councilmembers: None a Ecl y er and ex-officiVClerk of the City Council of the City of Huntington Beach, California