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HomeMy WebLinkAboutResolution 089-87 RESOLUTION 89-87 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ATASCADERO ADOPTING AN INVESTMENT POLICY WHEREAS, the City of Atascadero is required by State law to adopt a city investment policy for idle funds; and WHEREAS, it is the responsibility of the City Treasurer to propose such a policy; NOW, THEREFORE, BE IT RESOLVED that the City Council does adopt the attached investment policy to be used as a guideline by the City Treasurer for investing idle city funds. On motion by Councilmember Bourbeau and seconded by Councilmember Borgeson , the foregoing resolution is hereby adopted in its entirety, including attachment, by the following roll call vote: AYES: Councilmembers Bourbeau, Handshy, Borgeson, Mackey, and Mayor Norris NOES: None ABSENT: None ADOPTED: August 25, 1987 ATTEST: By: ° BARBARA NORR S, Mayor City of Atascadero, California 0 Resolution No. 89-87 Page Two BOY C. ARITZ, Ci Clerk APPROVED AS TO CONTENT: MICHAEL SHELTON, City Manager APPROVED AS TO FORM: F EY RG EN, City Attorney PREPARED4 DA D G. O ENSEN, Finance Director Attachment CITY OF ATASCADERO STATEMENT OF INVESTMENT POLICY PURPOSE This Statement is intended to provide guidelines for the prudent investment of the City's temporary idle cash, and outline the policies for maximizing the efficiency of the City' s cash manage- ment system. The ultimate goal is to enhance the economic status of the City while protecting its pooled cash. OBJECTIVE The City's cash management system is designed to accurately monitor and forecast expenditures and revenues, thus enabling the City to invest funds to the fullest extent possible. The City attempts to obtain the highest yield obtainable as long as investments meet the criteria established for safety and liquidity. POLICY The City of Atascadero operates its temporary pooled idle cash invest- ments under the prudent man rule (Civil Code Sect. 2261,et.seq. ) * This affords the City a broad spectrum of investment opportunities as long as the investment is deemed prudent and is allowable under current legislation of the State of California (Government Code Section 53600 et seq. ) Investments may be made in the following media: - Securities of the U.S. Government, or its agencies Small Business Administration Loans - Certificates of Deposit (or Time Deposits) placed with commercial banks and/or savings and loan companies Negotiable Certificates of Deposit - Bankers Acceptances - Commercial PaPer - Local Agency Investment Fund (State Pool) Demand Deposits Repurchase Agreements (Repos) -_ Passbook Savings Account Demand Deposits Reverse Repurchase Agreements Criteria for selecting investments and the order of priority are: 1. Safety. The safety and risk associated with an investment refers to the potential loss of principal, interest or a combination of these amounts. The City only operates in those investments that are considered very safe. 0 0 2. Liquidity. This refers to the ability to "cash in" at any moment in time with a minimal chance of losing some portion of principal or interest. Liquidity is an important investment quality especially when the need for unexpected funds occurs occasionally. 3. Yield. Yield is the potential dollar earnings an investment can provide, and sometimes is described as the rate of return. Safekeeping. Securities purchased from brokers/dealers shall be held in third party safekeeping by the trust department of the local agency's bank or other designated third party trust, in local agency' s name and control, whenever possible. Investment Objective. The cash management system of the City of Atascadero is designed to accurately monitor and forecast expenditures and revenues, thus insuring the investment of monies to the fullest extent possible. Attempts to obtain highest interest yields possible as long as investments meet the criteria required for safety and liquidity are also part of this objective. City Constraints. The City of Atascadexo operates its pooled idle cash investments under the Prudent Man Rule. This affords a broad spectrum of investment opportunities so long as the investment is deemed prudent and is permissible under currently effective legislation of the State of California and other imposed legal restrictions. The City Treasurer may utilize brokers or investment advisors, as may be required. Reasonable fees for such services may be paid by the City or may be deducted from the net investment earnings realized. The City strives to maintain the level of investment of all funds as near 100% as possible, through daily and projected cash flow determinations. Idle cash management and investment transactions are the responsibility of the City Treasurer . The basic premise underlying the City' s investment philosophy is, and will continue to be, to insure that money is always safe and available when needed. t--- GERE W. SIBBACH City Treasurer CITY OF ATASCADERO 0 9 * The prudent man rule states, in essence, that "in investing . . . property for the benefit of another, a trustee shall exercise the judgment and care, under the circumstances then prevailing, which men of prudence, discretion and intelligence exercise in the manage- ment of their own affairs . . . ."