Resolution No. 7386e
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A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF VERNON DELEGATING
INVESTMENT AUTHORITY TO THE CITY
TREASURER
WHEREAS, pursuant to California Government Code
Section 53646(a)(2), the City Treasurer annually renders to the
City Council an Annual Statement of Investment Policy (the
"Policy"); and
WHEREAS, the City Council adopted Resolution No. 7272,
which approved the Policy which delegated investment authority to
the City Treasurer, and granted the City Treasurer express
authority to make investments of City funds in securities with a
term or term remaining to maturity, at the time of investment, in
excess of five years as part of an investment program; and
WHEREAS, the City Council adopted Resolution No. 7331,
which delegated to the City Treasurer the authority to implement
the Policy and to invest in securities with a term or term
remaining to maturity, at the time of investment, in excess of
five years; and
WHEREAS, the City Council desires to delegate
investment authority to the City Treasurer and direct the City
Treasurer to continue to implement the Policy.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon does
hereby find and determine that the recitals contained hereinabove
are true and correct.
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SECTION 2: The City Council of the City of Vernon
hereby delegates to the City Treasurer the authority to implement
the Annual Statement of Investment Policy and select the
instruments for the City's investment portfolio in accordance
with said Statement of Investment Policy.
SECTION 3: The City Council of the City of Vernon
hereby grants express authority to the City Treasurer, as part of
the City's investment program and pursuant to the Annual
Statement of Investment Policy, to invest in securities with a
term or term remaining to maturity, at the time of investment, in
excess of five years.
SECTION 4: The City Clerk of the City of Vernon shall
certify to thepassageof this Resolution and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 3rd day of August, 1999.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
ONIS C. URG, yor
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1 STATE OF CALIFORNIA )
2 COUNTY OF LOS ANGELES )
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4 I, BRUCE V. MALKENHORST, City Clerk of the City of
5 Vernon, do hereby certify that the foregoing Resolution, being
6 Resolution No. 7386, was duly adopted by the City Council of the
7 City of Vernon at a regular meeting of the City Council duly held
8 on Tuesday, August 3, 1999, and thereafter was duly signed by the
9 Mayor of the City of Vernon.
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BRUCE V. MALKENHORST, City Clerk
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SUPPORTING
DOCUMENTS
OFFICE OF THE CITY ADMINISTRATOR/
CITY CLERK
INTER -OFFICE MEMORANDUM
DATE: August 17, 1999
TO: Sharon Johnson, eputy City Treasurer
FROM: Gloria J. Or s hief Deputy City Clerk
RE: Resolution No. 7386
Enclosed herewith is a copy of the above referenced Resolution
which was approved by City Council on August 3, 1999.
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro-Tem
Wm. "BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL McCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator / City Clerk
FAX (323) 581-7924
�gu
^ �D D B. BREARLEY
City Attorney
j\ AX: (626) 330-5818
KEVIN WILSON
j Ieirector of Community Services & Water
FAX: (323) 588-2761
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
July 29, 1999
City Council
City of Vernon
Honorable Members:
KENNETH J. DeDARIO
Director of Municipal Utilities
FAX: (323) 583-1983
DAVE TELFORD
Fire Chief
FAX: (323) 581-1385
BRUCE W. OLSON
Police Chief
FAX: (323) 583-5236
In concurrence with Resolution No. 7331, adopted on May 18,1999,
it is hereby recommended that the City Council continue to
authorize the City Treasurer to invest City funds in securities
with a term or term remaining to maturity, at the time of
investment, in excess of five years. This has been reviewed by
Eric Fresch, the City's Legal Counsel and the Deputy City
Treasurer.
Very truly yours,
Bruce V. Malkenhorst
City Clerk
BVM:rcm
LAW OFFICES OF
E13IC T. FI3ESCH
CITICORP CENTER, ONE SANSOME STREET
TWENTY-FIRST FLOOR
SAN FRANCISCO, CALIFORNIA 94104
TELEPHONE (415) 951-1035
FAX 1415) 951-4660
July 26, 1999
Mr. Bruce V. Malkenhorst
City Administrator
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Re: Quarterly Investment Report
Dear Bruce:
I have prepared a draft letter to you for the Report of Cash and Investments for the
Quarter Ended June 30, 1999. In it I have recommended that the City's Finance
Department make no further investments in securities with a term or term remaining to
maturity in excess of five years.
I base my recommendation on the City's current portfolio position. All the City's
investments are rock solid sound -- no danger of loss of principal. However, because of
the recent moves of the 30 year United States Treasury Bond above 6.00%, the market
liquidation value of the City's longer term U.S. Treasury investments, which makes up
close to 44% of the total portfolio, is several million dollars less than what the City paid
for the investments.
I expect this situation to correct itself in the next 9 to 12 months. All three of the City's
investment advisors (Everen, Norwest and TDI) positioned the City in longer term
Treasuries at the market's bottom. Norwest recommended its investment at the
beginning of the year and TDI and Everen made their recommendations more toward
the end of the first quarter.
Despite my recommendation above,
I vecommend a
resolution, as 'opposed„ to a minute order or motion, in order to create an evidentiary
record and establish a formal document reflecting the City Council's action in this very
important fiscal matter.
Mr. Bruce V. Malkenhorst
July 26, 1999
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I believe the City Council's approval of your investment authority should be made every
90 days or on a calendar year, quarterly basis. The time period selected coincides with
the quarterly report of cash and investments submitted to the City Council pursuant to
statute. I include with this letter a draft resolution to effectuate this objective.
I will contact you this week to discuss the composition of my report to you concerning
the quarterly investment report and my proposed resolution delegating investment
authority to you, as City Treasurer.
Please call me if you have any questions.
Sincerely,
�f k
Eric Fresch
EF:wg
cc: Sharon Johnson