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HomeMy WebLinkAbout1991 thru 1994 City Treasurer Investment Policy Resolutions REQUE` FOR CITY COUNG. _ ACTION Date 10/17/94 HONORABLE MAYOR AND CITY COUNCIL MEMBERS Submitted to: APPROVED BY CITY COUNCIL Submitted by: DONALD L. WATSON, City Treasurer �fi _ 7 qL Prepared by: DONALD L. WATSON, City Treasurer C!'ly CL:R K Subject: CITY TREASURER INVESTMENT POLICY RESOLUTION FOR 1994 Consistent with Council Policy? * ] Yes [ ] New Policy or Exception A" ` b 41 Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: STATEMENT OF ISSUE Pursuant to California Government Code Section 53646, the Treasurer of the local agency shall render an annual statement of investment policy to the legislative body for acceptance. RECOMMENDATION Adopt the attached Resolution as the Investment Policy for the City of Huntington Beach for the year 1994. ANALYSIS The attached Resolution for 1994 is similar to prior Resolution No. 6521 submitted for 1993 adoption. FUNDING SOURCE None. ALTERNATIVE ACTION Do not approve Resolution. ATTACHMENT Copy of Resolution. PIO 5/85 14 "r REQUE., f FO cl/z R CITY COUNCi` AC MN Date August 2, 1993 Submitted to: HONORABLE MAYOR AND CITY COUNCIL MEMBERS Submitted by: DONALD L. WATSON, City Treasurer ��� APPROVED BY CITY COUNCIL Prepared by: PATRICIA LOVELACE, Sr. Deputy City Treasurer 9- 7 I9� Subject: ��� CITY TREASURER INVESTMENT POLICY RESOLUTION FOR t9r � �• CrrYCLERK Consistent with Council Policy? ] Yes [ ] New Policy or Exception 4(10L- S.Z Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions, Attachments: STATEMENT OF ISSUE Pursuant to California Government Code Section 53646, the Treasurer of the local agency shall render an annual statement of investment policy to the legislative body for acceptance. RECOMMENDATION The attached Resolution be adopted as the Investment Policy for the City of Huntington Beach for the year 1993. ANALYSIS The attached Resolution for 1993 is similar to prior Resolution No. 6423 submitted for 1992 adoption. FUNDING SOURCE None ALTERNATIVE ACTION Do not approve Resolution. ATTACHMENT Copy of Resolution. P10 5/85 RESOLUTION NO. 6991 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 1993/94 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. 2261 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. Wipes 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- 6521 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- 6521 $15,000,00� per agency in this fund. Curre.,.ly 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 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 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 -4- 6521 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. 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 objective of -5- 6521 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 Government 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 1 6/kAnvesV10/5/94 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 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 2 6/krinvesUl 015/94 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 3 ftrinvesU10/5/94 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 4 6/krinvest/l0/5/94 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. Th'e 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. 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. 5 6/krinvest/l 0/5/94 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. 6 6/k4nvest/10/5/94 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. r Mayor ATTEST: APPROVED AS TO FORM: i�rlr"ifl.(. City Clerk Ci s o y qC.� REVIEWED AND APPROVED: INITIATED AND APPROVED: ity Administra or City Treasurer 7 6/krinvest/10/5/94 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 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 7th day of September 1993. Mayor ATTEST: APPROVED AS TO FORM: City Clerk City Attorney lua REVIEWED AND APER DVED: INITIATED AND APPROVED: City Administrator- City Treasurer -6- 6521 Res. No. 6521 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 nth day of September , 1993 by the following vote: AYES: Councilmembers: Rohi al i 1 1 r Ramer, Moult-on-Patterson. Win .hp 1 . Silva. TPipzia NOES: Councilmembers: None ABSENT: Councilmembers: Sullivan Li yet,' er and ex-off'i cue c eT k of the City Council of the* City of Huntington Beach, California MCA - ROUTING SHEET/CHECKLIST WHITE - REMAINS WITH RCA GREEN - ADMINISTRATION COPY CANARY - CITY ATTORNEY'S COPY PINK - CITY CLERK'S COPY GOLD - DEPARTMENT COPY INITIATING DEPARTMENT TREASURER'S OFFICE DATE 9/15/94 SUBJECTITY TREASURER INVESTMENT POLICY RESOLUTION FOR 1994/95 /o/5- MEETING DATE 10/17/94 AGENDA DEADLINE . /94 (TO ADMINISTRATION) YES NO PUBLIC NOTICE [ ] [X ] PUBLICATION DATE LEGAL DEPARTMENT(With Exhibits) 9115194 Date In Date Out INITIATING DEPARTMENT REVIEW/CHECKLIST: YES NO N/A [ ] [ X] [ ] ordinance [ X] Exhibit 1 [X ] [ ] [ ] Resolution [ ] Exhibit 2 [ ] [ ] [ ] signed Contract [ ] Exhibit 3 [ ] ( ] [ ] Signed Agreement [ ] Exhibit 4 [ ] [ ] [ ] Neg. Dec/EIR [ ) [ X] [ ] Insurance Required Additional [ ] Exhibits Nbr. [ ] [ X] ( ] Bonds Required [ ] [ X] [ ] Financial Impact Statement (Unbudgeted Items over $1,000) RCA - City Council [ ] [X] [ ] RCA - Redevelopment A n INITIATING DEPARTMENT APPROVAL BY: [ ] ADMINISTRATION REVIEW [ ] CITY CLERK FOR AGENDA COMMENTS: CA - ROUTING SHEET/CHECRLI WHITE - REMAINS WITH RCA GREEN - ADMINISTRATION COPY CANARY - CITY ATTORNEY'S COPY PINK - CITY CLERK'S COPY "GOLD- - DEPARTMENT COPY e� INITIATING DEPARTMENT TREASURER'S OFFICE- DATE 9/15/94 SUBJECT;ITY TREASURER :INVESTMENT POLICY RESOLUTION FOR 1994/95 MEETING DATE 10/1//94 AGENDA DEADLINE 194 (TO ADMINISTRATION) YES NO PUBLIC NOTICE [ ] [X ] PUBLICATION DATE-. LEGAL DEPARTMENT(With Exhibits) Date In Date Out i INITIATING DEPARTMENT REVIEW/CHECKLIST: I i YES NO N/A [ ] [ XI [ ] Ordinance [ X] Exhibit 1 • i [X ] [ ] [ ] Resolution ( ] Exhibit 2 [ ] [ ] [ ] Signed Contract [ ] Exhibit 3 -I i [ ] [ ] [ ] signed Agreement [ ] Exhibit 4 i [ ] [ ] [ J Neg. Dec/EIR i I [ ] [ X] [ ] Insurance Required Additional [ ] Exhibits Nbr. [ ] [ X] [ ] Bonds Required [. ] [ X] [ ] Financial Impact Statement I (Unbudgeted Items over $1,000) - [ X] [ l [ ] RCA - City Council [ ] [ X] [ ] RCA - Redeveilopment AgeFa INITIATING DEPARTMENT APPROVAL BY: [ ] ADMINISTRATION REVIEW [ ] CITY CLERK FOR AGENDA COMMENTS: a i OCA - ROUTING SHEET/CHECKLIS9 WHITE - REMAINS WITH RCA GREEN - ADMINISTRATION COPY CANARY - CITY ATTORNEY'S COPY PINK - CITY CLERK'S COPY "GOLD- - DEPARTMENT COPY INITIATING DEPARTMENT TREASURER'S OFFICE- - - AT `9V15/94 SUBJECT;ITY TREASURER -INVESTMENT POLICY RESOLUTION FOR 1994/95 /a/5' MEETING DATE 10/17/94 AGENDA DEADLINE (TO ADMINISTRATION) YES NO PUBLIC NOTICE [ ] [X ] PUBLICATION DATE , LEGAL DEPARTMENT(with Exhibits) t; Date In Date Out I INITIATING DEPARTMENT REVIEW/CHECKLIST: YES NO N/A [ l [ X] [ ] Ordinance [ )(] Exhibit 1 [X ] [ ] [ ] Resolution [ ] Exhibit 2 [ J [ ] [ ] Signed Contract [ ] Exhibit 3 [ ] [ ] [ ] Signed Agreement [ ] Exhibit 4 [ ] [ ] [ ] Neg. Dec/EIR [ ] [ X] [ ] Insurance Required Additional [ ] Exhibits Nbr. i [ ] [ )t] [ ] Bonds Required ] Financial Impact Statement (Unbudgeted Items Over $1,000) [ X] [ ] [ ] RCA - City Council [ ] [ X] [ ] RCA - RedevAT.opment A e-F7, INITIATING DEPARTMENT APPROVAL BY: [ ] ADMINISTRATION REVIEW [ ] CITY CLERK FOR AGENDA COMMENTS: (ii) /-I.,Xe -a,Gv a� REQUE* FOR CITY COUNCIL ACTION Date August 11, 1992 Submitted to: HONORABLE MAYOR AND CITY COUNCIL MEMBERS — APPROVED BY CITY COUN(; j Submitted by: DONALD L. WATSON, City Treasurer 192A Prepared by: PATRICIA LOVELACE, Sr. Deputy City Treasurer ...-» Subject: CITY TREASURER INVESTMENT POLICY RESOLUTION FOR 1 9 Consistent with Council Policy? [X] Yes [ ] New Policy or Exception Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions, Attachments: STATEMENT OF ISSUE Pursuant to California Government Code Section 53646, the Treasurer of the local agency shall render an annual statement of investment policy to the legislative body for acceptance. RECOMMENDATION The attached Resolution be adopted as the Investment Policy for the City of Huntington Beach for the year 1992. ANALYSIS The attached Resolution for 1992 is similar to prior Resolution No. 6318 submitted for 1991 adoption. FUNDING SOURCE None ALTERNATIVE ACTION Do not approve Resolution. ATTACHMENT Copy of Resolution. V P10 5/85 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. 2261 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 t $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 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 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. 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 -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 September 1992. Mayor ATTEST: APPROVED AS TO FORM: City Clerk City Attorney p L REVIEWED AND APPROVED: INITIATED AND APPROVED: ity Administrator City Treasurer -6- 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 gth day of-Sep tember 19_32 , by the following vote: AYES: Councilmembers Robitaille, Moulton-Patterson, Winchell, Silva, Green, MacAllister, Kelly NOES: Councilmembers: None ABSENT: Councilmembers: None • Mit y Lierk and ex-of ici er of the City Council of the City of Huntington Beach, California REQUE%-j f FOR CITY COUNCIL ACTIO �^ C&) Date September 3, 1991 Submitted to: Mayor and City Council Submitted by: Donald L. Watson, City Treasurer APPhtOVEDBY CITY COUNCII. Prepared by: Patricia Lovelace, Sr. Deputy City Treasurer Subject: City Treasurer Investment Policy Resolution for 1991 4 Consistent with Council Policy? VA Yes [ ] New Policy or Exception /E�') '/'2/s, Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions, Attachments: —45 STATEMENT OF ISSUE Pursuant to California Government Code Section 53646, the Treasurer of the local agency shall render an annual statement of investment policy to the legislative body for acceptance. RECOMMENDATION The attached Resolution be adopted as the Investment Policy for the City of Huntington Beach for the year 1991. ANALYSIS The attached Resolution for 1991 is similar to prior Resolution No.. 6186 submitted for. 1990 adoption. - . FUNDIVG SOURCE None ALTERNATIVE ACTION Do not approve Resolution. ATTACHMENT Resolution V t PIO 5/85 3zfo,io Date December 12, 1990 Submitted to: Honorable Mayor and City Council APPROVED BY CITY COUNCI: Submitted by: Donald L. Watson, City Treasurer � ���� �C— 7 19.7 Prepared by: Donald L. Watson, City Treasurer "OX, X/;60 � V TY Ex Subject: Joint Investment Pool of Excess Funds with the County of Orange Consistent with Council Policy? [X] Yes ( New Policy or Exception &,) � 6� 5,[t�I— 1�Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: In order to join with the County of Orange, Office of the Treasurer-Tax Collector, to have a resolution from the City Council authorizing the investment. RECOMMENDATION: Approve the resolution designating Donald L. Watson, City Treasurer, and Patricia Lovelace, Sr. Deputy City Treasurer, as the city's signature designees for investments and withdrawals. ANALYSIS: A growing number of banks and savings and loan institutions have .marginal financial ratios. This has made it increasingly difficult to find safe places to invest the city's funds at reasonable yields. We frequently have invested the maximum allowed .by the State Local Agency Investment Fund (LAIF) . The Orange County Investment Pool is operated by the Orange County Treasurer-Tax Collector under state law and it is returning a slightly higher yield than LAIF, due to lower administrative costs. It does not have the same restriction on maximum deposits but is more restrictive on withdrawals. The authority to utilize the Orange County investment pool , with our other authorized investments, will allow us to maximize our safety, liquidity and yield. FUNDING SOURCE: None required. ALTERNATIVE ACTIONS: None, except to not participate in the investment pool . DLW:bb 1 i l it 2 RESOLUTION OF THE BOARD OF SUPERVISORS OF � ORANGE COUNTY , . CALIFORNIA 5 February 2 , 1988 6 On the motion of Supervisor Vasquez , duly seconded and carried, 7 the following Resolution was adopted: 8 WHEREAS , the Treasurer-Tax Collector has recommended that this 9 Board adopt a resolution implementing the provisions of Government 10 Code Section 53684 in the County of Orange ; and t1 WHEREAS , upon adoption of such a resolution, the Treasurer or 13 fiscal officer of any local agency in the County may, with the consent t3 -r _-the_LCounty Treasurer-Tax Collector, deposit excess funds or such 14 agency in the County treasury; and r. 1 0o IS WHEREAS, this Board has previously approved the implementation o: vV W 16 : Z Government Code Section. 53684 in Orange County, however, adoption of 00 1. P W � an enabling resolution is necessary in order to effect suchimp__:ne.— 18 tation , and this Board now deems it appropriate to adopt such a 19 resolution; 20 NOW, THEREFORE, BE IT RESOLVED that this Board hereby makes the 21 provisions o-f Government Code Section 53684 operative in the County o 22 Orange . 23 24 / 25 / 2 26 / Resolution No . 88-13 4 2' Investment of Excess Funds C 29 for Local Acences AYES : SUPERVISORS GADDI H. VASQUEZ , DON R. ROTH , THOMAS F. R11EY 2 AND HARRIETT M. WIEDER 3 . NOES : SUPERVISORS NONE 4 ABSENT : SUPERVISORS ROGER R. STANTON S STATE 'OF CALIFORNIA ) ss . G COUNTY OF ORANGE ) 7 I , LINDA D . ROBERTS , Clerk of the Board of Supervisors of Orange J . _County;-'' California; hereby--;:certify -that the above and foregoing Reso— 8 9 lution was duly- and regularly -adopted by the said Board at a regular 10 meeting thereof held on the 2nd day of February, 1988 , and passed by 11 _ unanimous vote. ,of .said Board members present. 12 IN WITNESS :WHEREOF, I .have hereunto set my hand and seal. this < 2nd day - of, February, 1988 : _.. l3 _ 14 - - LINDA D . 'ROBERTS 0 15 Clerk of the Board of Supervisors V 16 of Orange County, California . S oa 17 / v 18 / 19 - 20 / 22 73 / 24 / 25 / 26 N / N O 27 / . G 2s 311 /79 2 . �.. , § 53684• Alternative procedure for investment of excess funds (a) Unless otherwise provided by law, if the treasurer of any local agency, or other official responsible for the funds of the local agency, determines that the local agency has excess funds which are not required for immediate use, the treasurer or other official may, upon the adoption of a resolution by the legislative or governing body of the local agency authorizing the investment of funds pursuant to this - section and with the consent of the county treasurer, deposit the excess funds in the county treasury for the purpose of investment by t the county treasurer pursuant to Section 5360L or 53635. ' -- (b) The county treasurer shall, quarterly, apportion any interest or other increment derived from the investment of funds pursuant to this - section in an amount proportionate to the average daily balance of the amounts deposited by the local agency and district. Prior to distributing that interest or increment, the county treasurer 642 COMMON POWERS AND DUTIES § 53694 -ir. 4 may deduct the actual costs incurred by the county in administering this section in proportion to the average daily balance of the amounts777 _ i:y..,..r deposited by the local agency. (c) In conjunction with the monthly report required to be prepared_ pursuant to subdivision (b) of Section 53646, the county treasurer._ shall provide the information described in that subdivision to the treasurer or other official responsible for the funds of any local agency which has funds on deposit in the county treasury and that informa- tion shall, except as otherwise provided in paragraph (4) of subdivi- sion (b) of Section 53646, be included by the treasurer or other official in a monthly report .to the legislative or governing body of the local agency. (d) The treasurer or other official responsible for the funds of the local agency may withdraw the funds of the local agency at any time but shall give the county treasurer 30 days' written notice of his or her intent to withdraw the funds. - (e) Any moneys deposited in the county treasury for investment— pursuant to this section are not subject to impoundment or seizure by any county official or agency while the .funds are so deposited. (f) This section is not operative in any county until the board of super visors of the county, by majority vote, adopts a resolution making this section operative in the county. (g) It is the intent of the Legislature in enacting this section to provide an alternative procedure to Section 5 130 1 for local agencies to deposit money in the county treasury for investment purposes. Noth- ing in this section shall, therefore, be construed as .a Iimitation on the authority of a county and a city to contract for the county treasure: to perform treasury functions for a city pursuant to Section 5 130 1. Added Stats 1986 ch 582 § 1, effective August 1-6. 1986. Cross References: Contracts with county for performance of city functions: § 51301. Investments authorized: § 53601. Deposits by local agency: § 53635. ` r ' March 1, 1989 Subject: Alternative procedure of investment-of-excess - funds. Policy: Local cities or local agencies may, with approval of their governing bodies and the County Treasurer, deposit excess funds in the ' Al stment by the _ County Treasury for reinve �4 Treasurer. IAR1:"`... f3ii.?i? - - .._ . . _ n r--MZIRW7 nr - _:s:?a•:SYrc Purpose: To provide additional investment opportunities for local agencies. Authority: Government Code sections 53635 and 53684 ; Board of Supervisors resolution #88-134, dated , February 2, 1988 . i G.C. 53684 Investment of local agency funds by County Treasurer A. Initiate Investment Program 1. Local agency contacts Treasurer for approval to deposit funds with County. 2: Legislative or governing body of the local agency ` a • "�: � 4 ' :, must adopt a resolution authorizing investment of d excess funds with the Treasurer. MW r �. _ 3. . Auditor-Controller assigns fund number for the local :; _ agency. B. Deposit of Funds 1. Local agency must provide one day notice of intent to deposit funds. Notice should be made-by telephone to Investment Technician @ 834-2913. : - 2. - Local agency wires funds to Treasurer's account at First Interstate Bank as follows: First Interstate Bank, Los Angeles ABA # 122000218 ;..., FBO Orange County Treasurer � � t2 Account # 362-7510350-000 Control # 250098989 - - r. - tr y _ s�o 3. „IIpon receipt. of funds, Investment Technician a prepares deposit order and cash receipt form. Receipt for .cash is mailed to local agency as a confirmation of funds received. 4. All deposits shall be invested in the County's- commingled investment pool. 5. All investments shall be made in ac--ordance with Government Code section 53635 . C. Minimum Balances 1. Local Agency must maintain a minimum balance of - - ' :..$25, 000 at all times. _ -D. Interest Earnings ,`. 1. Each quarter, the Treasurer shall apportion interest earned on funds deposited by the local agency. Interest shall be determined by the average daily balance of amounts on deposit during each month of -�' the -quarter. h.f k. 2 ---Interest earnings shall be distributed approximately 10 weeks after the end of the quarter. 3 . Unless otherwise requested, net interest earnings shall be re-invested by the County Treasurer. E. Cost of Investments / 1. Prior to distributing interest earnings, the Treasurer shall deduct actual investment costs � eounty ocated .incurred bythC . according to average daily fund balance of amounts on deposit during each month of the quarter. F. Reports 1. Treasurer shall provide a monthly report of in outstanding at .month -end to the local agency. - �i r 2. ' Treasurer shall provide quarterly statements of fund balance to the local agency. G. Withdrawal of Funds 1. Withdrawals up to $25 , 000 can be made with 7 days written notice; withdrawals of $25,000 to $100, 000 with 10 days written notice; withdrawals in excess of $100, 000 may be made with 30 days written notice of intent to withdraw funds. r J 2. Accrued interest shall not be remitted to the local agency at the time of withdrawal, but shall be ti is remitted -10 .weeks after the end of the calendar quarter as specified in article C. 2 . - 3. Upon receipt of notice to withdraw funds, the Treasurer shall prepare a warrant request which shall be submitted to the Auditor-Controller for .processing. - Auditor-Controller shall prepare a warrant and -deliver such-warrant to the Investment Technician. The Investment Technician shall wire requested 'funds to the local agency. . _,.