HomeMy WebLinkAboutReso 2011-192 - Investment Policy
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RESOLUTION NO. 2011-192
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF REDDING AMENDING COUNCIL POLICY NO. 408
ENTITLED INVESTMENT POLICY
WHEREAS, on April 2, 1991, the City Council adopted Policy No. 408 to provide
guidelines for the prudent investment of the City's idle funds, which policy has been amended from
time-to-time; and
WHEREAS, the City Council wishes to further amend its Policy No. 408 relating to
investments, as recommended by the City Treasurer and the Investment Advisory Committee;
NOW, THEREFORE, IT IS RESOLVED by the City Council that the Council Policy No.
408 relating to investments be amended as set forth in the attached update, made a part hereofby this
reference.
I HEREBY CERTIFY that the foregoing resolution was introduced, read, and adopted at
a regular meeting ofthe City Council on the 15th day of November, 2011, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
Bosetti, Dickerson, Jones, Sullivan, and McArthur
None
None
None
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APPROVED AS TO FORM:
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Funds must be available in varying amounts to meet the City's daily cash needs. The
City, therefore, shall structure its investments in such a manner as to provide for its daily
cash needs while, at the same time, participating in longer tenn1 higher yield instruments
with cash that is not currently restricted from expenditure or for which there is not an
immediate need.
3. Yield ~ The yield is the earnings an investment provides. It is usually expressed as an
annual rate of return (the percentage annual earnings are of the invested principal). Since
obtaining investment earnings is the motivation for investing, yield is a significant factor
in all investment transactions; however, yield shall become a consideration only after all
other investment criteria is satisfied. Whenever possible, interest is to be paid to the City
Treasurer monthly.
4. LAIF - When a City LAIF account has reached the maximum deposit and/or to
accommodate transfer needs, the City Treasurer, may at his/her discretion, transfer City
funds into an Entity LAIF accountz. In this case, the Treasurer will keep a separate set of
books for City and Entity investments and will allocate the interest earnings
proportionately.
INVESTMENT UMITATIONS
Security purchases and holdings shall be maintained within the statutory limits imposed by
California Government Code ~53600 et seq. In addition, the following restrictions are imposed:
a) Investment securities shall not be purchased by means of leverage; and
b) If an h1v'lO'.3llUent' 5 \,rcdit rMinganv investment in commercial naner. as defined by
California Government Code &53601 (h). downgrades below A2 by Moody's
Investors Service, Inc., A by Standard & Poor's Corporation or A by Fitch, such
commercial naner investment shall be sold within a reasonable amount of time to
minimize the possible loss of principal.
COLLATERAL REQUIREMENTS
Pursuant to Government Code ~53652, collateral requirements to secure the City of Redding's
active or inactive deposits are as follows:
a) 110% if backed by those eligible securities described by Government Code
Government Code ~53601 restricts the term remaining to maturity for any investment to five (5)
years.
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The term "Entity" refers to those public agencies (i.e., Redding Area Bus Authority, Redding
Redevelopment Agency, and Redding Housing Authority) related to the City of Redding but
separate by law, whose bank accounts and investments the City Treasurer reconciles and reports
monthly in the Treasurer's Report provided to City Council. The Director ofFmance is
responsible for the investment of these Entities' idle cash, in accordance with their respective
investment policies.