HomeMy WebLinkAboutCity Council - 6641 RESOLUTION NO. 6641
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 1994/95
WHEREAS, in 1984 California Govemment Code Section 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
Govemment Code Section 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 moneys under the control of the City Treasurer.
B. To protect the principal moneys 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 Section 261, et seq.)which states that "investments
shall be made with judgment and care, under circumstances then prevailing, which persons of
prudence, discretion, and intelligence exercise in the management of their own affairs, not for
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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
Ion as the investment is deemed prudent and is permissible under current) effective state
g p P Y
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 Govemment Code Section
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 Govemment Code Section 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
make that investment either specifically, or as a part of an investment
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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
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may pool investments. The City may invest up to $20,000,000
per agency in this fund. Currently the City has established two
(2) agency funds: The City of Huntington Beach General Fund,
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
security by the full faith and credit of the County of Orange and
all investments are made in accordance with Govemment Code
Section 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 30% 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 Govemment Code,
California banks, and savings and loan associations are required to secure a city's deposits by
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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. Swappinq 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.
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.
S. 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.
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9. Policy Review -This investment policy shall be reviewed at 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 moneys 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.
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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 Section 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 17th day of , 1994. - -
Mayor
ATTEST: APPROVED AS TO FORM:
Ile
City Clerk Ci-ttorney
REVIEWED AND APPROVED: INITIATED AND APPROVED:
i y Administrator City Treasurer
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Res. No. 6641
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 17th day of October, 1994,
by the following vote:
AYES: Councilmembers:
Silva, Bauer, Moulton-Patterson, Winchell, Leipzig, Sullivan
NOES: Councilmembers:
None
ABSENT: Councilmembers:
Robitaille
City Clerk and ex-officio C erk
of the City Council of the City
of Huntington Beach, California