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Resolution No. 6098 . , .. ..., 1 2 3 4 RESOLUTION NO. 6098 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON AMENDING RESOLUTION NO. 5895 WHICH APPROVED THE CITY INVESTMENT POLICY WHEREAS, pursuant to Resolution No. 4810, the City 5 6 Treasurer has been delegated investment authority by the City Council; and 7 8 WHEREAS, the City Council approved the City Investment Policy, as amended, dated February 28, 1989; and WHEREAS, the City Council desires to amend said City Investment Policy so that it comports with recent changes in the 9 IO 11 12 13 14 California Government Code concerning statements of investment policy and monthly reporting requirements. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: 15 16 17 18 19 SECTION 1: The City Council of the city of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The city Council of the City of Vernon hereby adopts the . amended City Investment Policy, attached hereto and 20 21 22 23 24 25 26 27 incorporated herein as Exhibit "A" to this resolution. SECTION 3: The City Council of the City of Vernon hereby delegates to the City Treasurer the authority to implement said city Investment Policy and select the instruments for the. city's investment portfolio in accordance with said city Investment Policy. SECTION 4: The City Clerk of the city of Vernon.shall certify to the passage of this resolution, and thereupon. .and 28 ... 1 2 3 4 5 thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 19th day of May, 1992. :ATr~ /P~ BRUCE V. MALKENHORST, City Clerk 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- ~a~ HOMAS A. YB' , Mayor Pro Tem CITY .INVESTMENT POLICY INTRODUcnON Monies not required for immediate expenditure by the City of Vernon shall be invested in compliance with governing provisions of law and this policy. The City will maintain adequate cash availability and strive for maximum yield on invested idle funds while insuring that principal invested is protected from . loss. This Investment Policy shall be in compliance with Sections 53601 and 53635 of the Government Code of the State of California, relating to local agency. finances. I. DELEGATION OF. AUTHORITY Pursuant to Resolutton No. 4810, the City Treasurer has been delegated investment authority by.the City Council. II. INVESTMENT CRITERIA The. criteria for. selecting investments are, in order of priority: - Safety .of principal - Liquidity - Maximization of total return on overall portfolio In general,.the City intends to manage its investments in such a way to ensure meeting these criteria, Investments will be made in a range of instruments to lessen risk by diversifying the City's portfolio, Investments purchased with the intent to be traded are to be held in the trading account portion of the City's portfolio. III. POLICIES AND OBJECfIVES The basic premise underlying the City's investment policy is to ensure that money is always available when needed. It shall also be the policy of the City to diversify its investment portfolio to ensure the maximum safety of City assets. Staff actively manages the City's portfolio in order to take advantage of changing economic conditions, Through daily projected cash flow analysis, the City will attempt to fully invest all idle cash. 1 EXHIBIT "A" IV. ACCEPTABLE INVESTMENT · VEHICLES The City's investment. portfolio may include the following instruments: a. Bonds issued by a local agency as defined in Section 53630 of the Government Code. b. United States Treasury notes, bonds, bills, certificates of indebtedness, zero coupon bonds, stripped treasury bonds or similar or related instruments, or those securities for which the faith and credit of the United States are pledged for the payment of principal and interest. c. Registered state warrants or treasury notes or bonds of the State of California. d. Bonds, notes, warrants, or other evidences of indebtedness of any local agency as defined in Section 53630 of the Government Code within the State of California, e, Obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank Board, the Tennessee Valley Authority, or in obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association; or in the guaranteed portions of Small Business Administration notes; or in the obligations, participations, or other instruments of, or issued by, a federal agency or a United States government-sponsored enterprise. f. Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, which are eligible for purchase by the Federal Reserve System. g. Commercial paper of "prime" quality of the highest ranking or of the highest letter and numerical rating as provided for by Moody's Investors Service, Inc. or Standard and Poor's Corporation. h. Negotiable certificates of deposits issued by a nationally or state- chartered bank or a state or federal association (as defined by Section 5102 of the Financial Code) or by a state-licensed branch of a foreign bank. 1. Investments in repurchase agreements or reverse repurchase agreements of any securities authorized by Section 53601 of the Government Code. j. Medium-term notes of a maximum of five years maturity issued by corporations organized and operating within the United States or by depository institutions 2 EXHIBIT "A" licensed by the United States or any state and operating within the United States. k. Shares of beneficial interest issued by diversified management companies, as defined in Section 23701m of the Revenue and Taxation Code. 1. All other permitted instruments as authorized by Sections 53601 and 53635 of the Government Code. These securities, at the time of investment, may have a term remaining to maturity in excess of five years. Most of the City's short-term investments will be in securities which pay principal and interest upon maturity, while most of its long-term investments will be. in securities which pay interest monthly, quarterly or on coupons semi-annually, V. TRADING ACCOUNT All investments meeting the following definitions shall be maintained in the trading account portion of the City's portfolio. a. Investments purchased with the intent to be sold prior to maturity. b. Pair-Off transactions, c. In-Out transactions d, Government National Mortgage Association (GNMA) forward transactions. e. When issued securities with a known interest rate where the days from trade to issuance exceeds 15 calendar days, except for municipal obligations where the number of calendar days will be 30 days. Investments in the trading account portion of the City's portfolio will generally consist of: a. United States Treasury notes, bonds, bills, certificates of indebtedness, zero coupon bonds, stripped treasury bonds or similar or related instruments, or those securities for which the faith and credit of the United States are pledged for the payment of principal and interest. b. Obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank Board, the Tennessee Valley Authority, or in obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association; or in guaranteed portions of Small Business Administration notes; or in 3 EXHIBIT "A" '. obligations, participation, or other instruments of, or issued by, a federal agency or a United States government-sponsored enterprise. In no event shall investments be purchased for trading which do notmeet the Acceptable Investment Vehicles described elsewhere in the Policy, In the event that. a decision is made to hold a security originally purchased for trading, it may be transferred to the non-trading portion of the investment portfolio account at cost; however, the difference between the market value, exclusive of interest, at the time of transfer and the purchase price, exclusive .of interest, will be computed and posted to the unrealized trading profits. and loss summary. At no time shall. the cost value of the trading account portion of the investment portfolio exceed $25 million without approval of the Finance Committee. The trading account investments will be considered in the overall maturity limit guidelines. Long- term trading account investments will be included within maturity limits addressed in Section IV, VI. REPORTS OF INVESTMENT ACTIVITIES The City Treasurer shall.fIle statements of investment activity with the City Council and the City Administrator as the City Council shall in its discretion require. 4 EXHIBIT "A"