HomeMy WebLinkAboutResolution - 3401 STATE OF CALIFORNIA) RESOLUTION NO. 3401
COUNTY OF RIVERSIDE)ss
CITY OF SAN JACINTO)
A RESOLUTION OF THE CITY OF SAN JACINTO, CALIFORNIA, AMENDING
THE STATEMENT OF INVESTMENT POLICY
WHEREAS, Section 53646 of the Government Code of the State of California
requires that the Treasurer or Chief Fiscal Officer shall annually render to the legislative
body of his/her agency for review and/or amendment, a Statement of Investment Policy,-
and
WHEREAS, any changes to the City's Statement of Investment must be
considered in public session of legislative body; and
WHEREAS, the City's Statement of Investment Policy was last reviewed on
March 1 , 2011 , with changes; and
WHEREAS, the City's Statement of Investment Policy is now amended in the
following sections:
Section I Purpose — to formally include the Redevelopment Agency of the City of
San Jacinto;
Section IV Delegation of Investment Authority & Allowable Investments — to move
the allowable investments to "Exhibit A";
Section VI FDIC Insurance & Collateralization — section added;
Section VII Use of Brokers and Dealers — to require Council approval and a
conflict of interest statement;
Section Vill Prudent Man Rule — to align policy with California Government Code;
Section IX Ethics and Conflict of Interest — to clarify as certain words were
previously missing;
Section X Performance Standards — section added;
Section XI Investment Strategy & Market Yield (Benchmark) — section added;
Section XII Monthly Reporting — added certain elements;
Section XIII Public Trust — section added;
Section XIV Government Code Order— to correct actual name of RDA; and
Section XV Investment Policy Adoption — section added.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San
Jacinto hereby rescinds previous investment policy resolutions and approves the
Statement of Investment Policy, as attached hereto in Exhibit "A
PASSED, APPROVED AND ADOPTED this 20th day of September 2011, by the
..r
following vote.-
Ayes: Bartel, Di Memmo, Kotyuk, Miller
Nays: None
Abstain: None
Absent: None
tty Ff San Jacinto
Scott Miller, Mayor
ATTEST:
_._z/ �11 "' -
Richard Miller, City Clerk
APPROVED AS TO FORM:
BEST BEST" & KRIEGER, LLP
G
Jeffre . Balling ity Attorney
EXHIBIT "A"
CITY OF SAN JACINTO
REDEVELOPMENT AGENCY OF THE CITY OF SAN
JACINTO
STATEMENT OF INVESTMENT POLICY
I
PURPOSE
The purpose of this Policy Statement is to identify policies and procedures to organize and
formalize investment related activities. It is intended that this policy statement pertain to all
investment activities and ail funds under the direct authority of the City of San Jacinto and the
Redevelopment Agency of the City of San Jacinto,
II
OBJECTIVES
The objectives of this policy statement are:
A. Safety: It is the primary duty and responsibility of the Treasurer to protect,
preserve and maintain cash and investments placed in his/her trust on behalf of the citizens
of the City of San Jacinto. Investments in marketable securities should be those with low
sensitivity to market risk.
B. Liquidity: An adequate percentage of the investment portfolio shall be
maintained in liquid short-term securities, which can be converted to cash if necessary to
meet disbursement requirements of the City. Since all cash requirements cannot be
anticipated, investments in securities shall be those with active secondary or resale markets.
C. Return on Investment: The investment portfolio shall be designed to attain a
market-average rate of return throughout budgetary and economic cycles, taking into
account the City's risk constraints. Yields should become a consideration only after the
basic requirements of safety and liquidity have been met.
III
DIVERSIFICATION
It is the policy of the City to diversify its investment portfolio. Assets shall be diversified to
eliminate the risk of loss resulting from over concentration of assets in a specific maturity, a
specific issuer or a specific class of security. In establishing specific diversification strategies,
.� the following general policies shalt apply:
A. Portfolio Maturities shall be matched versus liabilities to avoid undue
concentration to a specific maturity sector.
B. Maturities selected shall provide for stability of income and liquidity.
IV
DELEGATION OF INVESTMENT AUTHORITY & ALLOWABLE INVESTMENTS
Authority to manage the City of San Jacinto's investment program is derived from the City
Council. Management responsibility for the investment program is hereby delegated to the City
Treasurer and the Finance Director. "Exhibit A" is a detail of allowable investments (with a
maximum percentage of portfolio) per this Investment Policy compared to the California
Government Code. Level one investments can only be made by joint approval of the City
Treasurer and Finance Director. The Finance Director or his designee can make level two
investments.
The City Treasurer and Finance Director are allowed to invest in allowable securities as detailed
in this investment policy within durations to not affect cash flow.
V
SAFEKEEPING AND CUSTODY
A third party custodian designated by the Treasurer and Finance Director will hold all brokered
securities. Alf transactions entered into shall be conducted on a delivery versus payment basis
evidenced by safekeeping receipts.
VI
FDIC INSURANCE & COLLATERALIZATION
The City of San Jacinto shall require collateralization from state or federal chartered banks as
specified in the California Government Code Section 53652 and pursuant to Sections 53656
and 53658. These sections define the requirements of a financial depository in order to accept
"public funds", by maintaining eligible securities totaling between 105% and 150% of the deposit
amount, and the entity that maintains custody of the securities.
The Treasurer may, at his or her discretion, waive collateralization for that portion of a deposit
which is insured pursuant to federal law. Currently, the first $25C,000 of a deposit is federally
insured.
The preferred method of"coverage" under this section is FDIC insurance. If FDIC insurance is
not an option due to a limited number of financial institutions, then col lateral ization at those
,... same financial institutions should be considered the secondary method. Financial institutions
that do not offer FDIC insurance will not be invested in. This ranking should in no way limit the
investment options of the City.
A written contract of deposit of public funds must be obtained from the financial institution,
indicating the institution's policy and process of FDIC insurance and collateralization.
Vill
USE OF BROKERS AND DEALERS
The Treasurer and Finance Director must utilize brokers and dealers of government securities
and other investments in making investments. Only brokers/dealers who are licensed and in
good standing with the California Department of Securities, the Securities and exchange
Commission, the National Association of Securities Dealers or other applicable self-regulatory
bodies may be used to provide this service. Before engaging in investment transactions with a
broker/dealer, the Treasurer and Finance Director shall receive from the firm a signed form
certifying that the individual responsible for the City's investments with the firm has reviewed the
Investment Policy and that the firm agrees to undertake reasonable efforts to prevent imprudent
transactions involving the Qty's funds. In addition, all brokers/dealers used must be approved
by the City Council and supply a conflict of interest statement.
Vill
PRUDENT MAN RULE
The City of San Jacinto adheres to the guidance provided by the "prudent investment standard"
set down in Government Code Section 53600.3, This section states; "When investing,
reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall
act with care, skill, prudence, and diligence under the circumstances then prevailing, including,
but not limited to, the general economic conditions and the anticipated needs of the agency, that
a prudent person acting in a like capacity and familiarity with those matters would use in the
conduct of funds of a like character and with like aims, to safeguard the principal and maintain
the liquidity needs of the agency."
IX
ETHICS AND CONFLICT OF INTEREST
Officers and employees involved in the investment process are prohibited from personal
business activity that could conflict with the proper execution of the investment program, or
which could impair their ability to make impartial investment decisions.
X
PERFORMANCE STANDARDS
The investment porifolio shall be designed with the objective of obtaining a market rate of return
throughout budgetary and economic cycles, commensurate with investment risk constralnts and
cash flow needs.
XI
INVESTMENT STRATEGY & MARKET YIELD BENCHMARK
The City's investment strategy is usually conservative and is reflected in its "hold to maturity"
philosophy, An active investment strategy is allowed in all mutual fund investments, and
individual investments purchased below par value (at a discount) and sold at a profit (or
premium) before maturity.
Given these strategies, the benchmark for investment considerations shall be of similar duration
and style.
XI1
MONTHLY REPORTING
The Treasurer shall submit a monthly investment report to the City Council. This report shall
describe a!! investment transactions during the month, as well as all required elements of the
monthly report as prescribed below:
A. Type of Investment
B. Financial institution involved
C. Date of maturity
D. Amount of deposit or cost of the security
E. Current market value of securities with maturity in excess of twelve (12) months
F. Rate of interest and yield
G. Statement relating the report to the Statement of Investment Policy
H. Statement that there are sufficient funds to meet the City's obligations for the
next 6 months
I. Amount of accrued interest
J. Purchase dates
K. Percentage distribution to each investment type
L. Rating of investment, as applicable
M. Duration of investment, as applicable
XIII
PUBLIC TRUST
All participants in the investment process shall act as custodians of the public trust. Investment
officials shall recognize that the investment portfolio is subject to public review and evaluation.
The overall program shall be designed and managed with a degree of professionalism that is
worthy of the public trust. In a diversified portfolio, it must be recognized that occasional
GOVERNMENT CODE ORDER
The City of San Jacinto and Redevelopment Agency of the City of San Jacinto are governed by
the California Government Code Section §53600 Et. Seq., and the City's Statement of
Investment Policy for all investment activities. If any section of the City's Investment policy
conflicts with the Government Code Section, the Government Code Section shall supersede the
City's Statement of Investment Policy. Any information not covered by the Statement of
Investment Policy is covered in Government Code Section §53600 Et. Seq., and said code
section should be referred to.
XV
INVESTMENT POLICY ADOPTION
The Statement of Investment Policy is to be submitted to the City Council of the City of San
Jacinto annually for review and approval of any modifications to the Policy.
Previous Review Dates
November 3, 1993
February 3, 2000, amended
April 5, 2001, amended
August 1, 2002, reviewed; no changes
April 1, 2004, amended
�•• July 21, 2005; amended by {resolution 2767
April 6, 2006, no changes
January 4, 2007, no changes
February 7, 2008, no changes
February 5, 2009, no changes
February 18, 2010, no changes
March 1, 2011, amended by Resolution 3372
September 20, 2011, amended by Resolution 3401