Res 84-118RESOLUTION NO. 84-118
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF POWAY, CALIFORNIA
ADOPTING INVESTMENT POLICY
FOR PUBLIC FUNDS
BE IT RESOLVED by the City Council of the City of Poway,
California that Investment Policy as described in Exhibit A,
attached hereto and incorporated herein by reference as though
fully set forth, is hereby adopted as the Investment Policy of
the City of Poway.
PASSED, ADOPTED AND APPROVED by the City Council of the
City of Poway, California, at a regular meeting thereof this
18th day of December, 1984.
Robert C. Emery~
ATTEST:
Marjorie K. Wahlsten, City Clerk
EXHIBIT "A"
The City of Poway has a fiduciary responsibility to maximize the productive use
of assets entrusted to its care and to invest and manage those public funds
wisely and prudently. The City of Poway operates its pooled idle cash to afford
a broad spectrum of investment opportunities tb~t are deemed prudent and are
legally allowable under both state legislation and local ordinances. These
investment decisions shall be made using the trust principles and general
prudent man theory as outlined below:
"In acquiring, investing, reinvesting, exchanging, selling and managing
property for the benefit of another, a fiduciary shall exercise the
judgment and care under the circumstances then prevailing, which men of
prudence, discretion and intelligence exercise in the management of
their own affairs, not in regard to speculation but in regard to the
permanent disposition of their funds, considering the probable inccme
as well as the probable safety of their capital. Within the limita-
tions of the foregoing standard, and subject to any express provisions
or limitations contained in any particular trust instrument, a fidu-
ciary is authorized to acquire and retain every kind of property, real,
personal or mixed, and every kind of investment specifically including
but not by way of limitation, debentures and other corporate obliga-
tions, and stocks, preferred or common, which men of prudence, discre-
tion and intelligence acquire for their own account."
In addition, the City recognizes that it has an equal obligation to be aware of
the social and political impacts of its investments, and subsequently to act
responsibly in making its financial decisions.
The City shall not knowingly make any investments in any institution, ccmpany,
corporation, subsidiary or affiliate that practices or supports directly or
indirectly through its actions discrimination on the basis of race, religion,
color, crc~, national or ethnic origin, age, sex, sexual preference, or
physical disability.
The City shall strive to maintain the level of investment of all idle funds as
near 100% as possible, through daily and projected cash flow determinations.
Idle cash management and investment transactions are the joint responsibility of
the City Treasurer and Administrative Services Department. The eligible
deposits and investments are referred to in Government Cede Sections 53601.1 and
53602, and 53635 and are as follows:
Securities of the U.S. Goverr~aent or its agencies
Certificates of Deposits (or Time Deposits), placed
with coawaercial banks and savings and loan cc~0anies
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Investment Policy
Bankers Acceptances
Negotiable certificates of deposits
Local Agency Investment Fund demand deposits
C~¥L~rcial Paper
Repurchase Agrcc~ents and Reverse Repurchase Agreements
Passbook Savings Account demand deposits
Criteria for selecting investments, and the order of priority, are:
1. Safety
2. Liquidity
3. Yield
Goverrm~=-~nt and agency paper, and repurchase agreements, are the highest quality
investment available in terms of safety and liquidity. Certificates of
deposits, savings accounts and bankers acceptances are insured or collatera-
lized. Only commercial paper, with both A-1 Moody's and P-1 Standard & Poor's
ratings, is purchased.
The City shall deposit funds only with financial institutions which operate in
the State. These banks and savings and loans must be insured by the Federal
Deposit Insurance Corporation, the Federal Savings and Loan Insurance
Corporation or other federal goverr~ent insurance banking systems.
The City's policy shall be to waive security for the amount insured. Deposits
in excess of the insured amount shall be secured with eligible securities spe-
cified in Government Cede Section 53651. The City sb~ll comply with and act to
secure c~liance with the security (collateralization) system specified in the
Goverrm~nt Code Section 53649 and 56652.
Most investments are highly liquid, with the exception of collateralized
certificates of deposits held by banks and savings and loans. Maturities shall
be selected to anticipate cash needs, thereby avoiding the need for forced
liquidation.
The City shall attempt to obtain the highest yield obtainable when selecting
investments, provided that criteria for safety and liquidity are met.
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Investment Policy
The City shall attempt to ladder its maturities to w~ct anticipated cash needs
in such a way that new investment money can be placed in maturities that carry a
higher rate than is available in the extremely short market of thirty days or
under.
The basic premise underlying the City's investment philosophy is to ensure that
money is always available when needed and at the same time reaping the highest
and best return. In order to maintain liquidity, no mere than 10 percent of the
portfolio shall be held in securities with a maturity in excess of two years.
Investments with a maturity in excess of one year may not be purchased at a pre-
mien nor sold at a loss unless the loss is provided for in the City's budget.
Investment I~ shall be shared by the General Fund, the Water Fund, the Sewer
Fund and other funds as budgeted or required by legislation. This income shall
be a proportionate ratio of balances to total pooled cash and investment incc~e
credited accordingly on a monthly basis.
Additionally, the investment responsibility carries with it the added duties of
insuring that investments placed are done so without the appearance of improper
influence. The personnel in Administrative Services or the Treasurer's Office
involved in the investment function shall adhere to the State's Code of EconGnic
Interest and to the following:
1)
All persons authorized to place or approve investments shall not personally
nor through a close relative maintain any accounts, interest, or private
dealings with any firm with which the City places investments, except for
regular savings accounts, checking accounts, money market accounts, or other
similar transactions which are offered on a non-negotiable basis to the
general public. Such accounts shall be disclosed annually to the City Clerk
in conjunction with annual disclosure statements of econcmic interest.
2)
All persons authorized to place or approve investments shall report to the
City Clerk kinship relations with principal employees of firms that the City
places investments with.
3)
All persons authorized to place or approve investments shall report quar-
terly to the City Clerk any meals, entertair~ent, gifts, or other items of
monetary value in excess of $50.00 received from any person employed by a
firm with which the City places investments