HomeMy WebLinkAboutTC Res 2018-09-05 (3) RESOLUTION NO. 39-2018
A RESOLUTION OF THE TOWN COUNCIL OF THE
TOWN OF TIBURON APPROVING THE INVESTMENT POLICY
FOR FISCAL YEAR 2018-19
WHEREAS, the Town's Investment Policy sets forth investment guidelines for the
prudent management of all surplus fields of the Town and was last revised in 2008, and
WHEREAS, the Policy delegates authority for investing the Town's funds to the Town
Manager and Director of Administrative Services; and
WHEREAS; the Town Manager, Director of Administrative Services and Town Council
Budget Committee has reviewed the policy and recommends the Town Council approve the
attached policy for FY 2018-19.
NOW, THEREFORE. BE IT RESOLVED that the Town Council of the Town of
Tiburon hereby approves the Investment Policy for FY 2018-19 attached hereto as Exhibit A.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of
Tiburon on September 5, 2018 by the following vote:
AYES: COUNCILMEMBERS: Fraser, Fredericks, Kulik, Thier, Welner
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
JIM Fg/AqEA,MkYbR
ATTEST:
LEA STEFA I, TOWN CLERK
Page 1 o/1
Town Council Resolution No. 39-2018 09/05/2018
INVESTMENT POLICY - September 5, 2018
I. PURPOSE objectives 1 and 2.
4. Diversification. Tiburon shall diversify
This Annual Investment Policy ("Policy") sets its portfolio to avoid incurring unreasonable
forth the investment guidelines for the prudent market risks and remain consistent with
management of all surplus funds of the Town of Objectives 1 -3.
Tiburon and the Tiburon Public Facilities
Financing Authority (together "Tiburon"). It is III. PRUDENCE
the goal of this Policy to establish investment
objectives in accordance with the provisions of Tiburon Town Council Members, the Town
the State of California Government Code Manager, Director of Administrative Services
("Code") Sections 53600 et seq., and and the Town Treasurer, and any persons
investment policy guidelines to ensure that authorized to make investment decisions on
funds under its purview are prudently invested behalf of Tiburon, are trustees and fiduciaries
to preserve capital, provide necessary liquidity subject to the Prudent Investor Standard.
and to achieve a rate of return consistent with "When investing, reinvesting, acquiring, selling
Tiburon's needs and objectives. Investments and managing Tiburon funds, a trustee shall act
may only be made as authorized by this Annual with care, skill, prudence and diligence under
Investment Policy and subsequent revisions. the circumstances then prevailing, that a
Irrespective of these Policy provisions, should prudent person acting in a like capacity and
the provisions of the Code be or become more familiarity with those matters would use in the
restrictive than those contained herein, such conduct of funds of a like character and with
provisions will be considered immediately like aims to safeguard the principal and to
incorporated into this Policy. maintain the liquidity needs of the [Town]
(Government Code Section 53600.3)
II. OBJECTIVES
The Prudent Investor Standard shall be applied
Surplus funds, including available reserve funds in managing an overall portfolio. Persons
not required for expenditures within the next authorized to make investments for Tiburon
six months, shall be invested to the fullest and acting in accordance with written
extent possible in accordance with sound procedures and this Investment Policy and
treasury management principles, State of exercising due diligence shall be relieved of
California Government Code Sections 53600 et. personal responsibility for a particular security's
seq. and this Policy. credit risk or market price changes, provided
deviations from expectations are reported in a
The objective of this Policy is to ensure that timely fashion and appropriate action is taken
Tiburon's funds not required for the immediate to control developments.
needs of Tiburon are prudently invested to
ensure in order of priority: It is the intention of Tiburon's investment
strategy to buy and hold investments to
1. Preservation of Capital. The primary maturity. However, there may be exceptions
objective shall be to safeguard the principal of which may dictate exchanging one security for
the funds. another or selling a security before maturity.
2. Maintenance of sufficient liquidity. The This fine tuning of the investment portfolio is
secondary objective shall be to meet the considered part of prudent investment
liquidity and operating requirements of management.
Tiburon.
3. A market-average rate of return Investment in securities other than those
through economic cycles consistent with the permitted by this Policy, but permitted under
INVESTMENT POLICY -September 5, 2018
Section 53601, shall first be considered and brokers, dealers, bankers, or other persons with
authorized by the Council prior to investment. whom Tiburon conducts business.
The Policy will be amended to reflect this
authorization upon approval. VI. INVESTMENT GUIDELINES
IV. DELEGATION OF AUTHORITY Investments are to be made in high quality
securities or instruments as permitted by the
The Town Council is responsible for establishing Government Code Section 53630 and subject to
this Policy and the authority to manage the limitations of this Investment Policy.
Tiburon's investment program. This Policy shall Purchasing certain allowable securities with a
be reviewed annually and approve any changes maturity of greater than five years requires the
to the Policy at a public meeting. The day-to- approval of the Town Council which shall have
day managing, reporting and oversight of the been apprised of the risk and possible volatility
Tiburon's investment program is delegated to associated with longer-term investments.
the Town Manager and Director of
Administrative Services. No person may engage A. Eligible securities for investment shall
in an investment transaction except as provided include the following:
under the terms of this Investment Policy and
procedures established by the Town Council. 1. U.S. Treasury Securities
The Finance Committee of the Town Council will United States Treasury notes, bonds, strips, bills
be responsible for reviewing and monitoring or certificates of indebtedness, or obligations
Tiburon's investment activities and report to for which the full faith and credit of the U.S.
the full Council on a quarterly basis. A report of Government are pledged for the timely
investment activity will be presented to the payment of principle and interest.
Town Council on a monthly basis.
2. Federal Agencies and U.S. Government
V. ETHICS AND CONFLICTS OF INTEREST Sponsored Enterprises
Obligations, participations, or other instruments
The Town's Council, and those authorized to act of or issued by a federal agency or federal
on Tiburon's behalf for the investment of government sponsored enterprise. This
Tiburon's surplus funds shall refrain from includes, and is not restricted to, obligations of
personal and professional business activities the: Federal Home Loan Bank (FHLB), Federal
that could conflict with the proper execution of Home Loan Mortgage Corporation (FHLMC),
the investment program, or which could impair Federal National Mortgage Association (FNMA),
their ability to make impartial investment Federal Farm Credit Bank (FFCB), Government
decisions. Those authorized to act on Tiburon's National Mortgage Association (GNMA), Small
behalf are not permitted to have any material Business Administration (SBA), Export-Import
financial interests in financial institutions, Bank of the United States, and the U.S.
including state or federal credit unions, that Department of Housing and Urban
conduct business with Tiburon, and they are not Development.
permitted to have any personal financial or
investment holdings that could be materially 3. State of California and Local Agency
related to the performance of Tiburon's Obligations
investments. Registered State warrants, Treasury notes, or
bonds of the State of California, and bonds,
Council members and authorized staff shall not notes, warrants or other evidence of
accept honoraria, gifts, and/or gratuities, which indebtedness of any local agency of the State
are in violation of state law, from advisors, (including bonds payable solely out of revenues
INVESTMENT POLICY -September 5, 2018
from a revenue producing property or asset powers authority pool organized pursuant to
owned, controlled, or operated by the State or Section 6509.7 that invests in the securities and
local agency, or by a department, board, agency obligations authorized in Section 53601
or authority of the State or local agency.) Such subdivisions (a) to (o) inclusive, and meets the
obligations must be rated Al, SP-1, its following criteria: 1) the adviser is registered
equivalent or higher short term, or AA or higher with the Securities and Exchange Commission;
long term, by a nationally recognized rating 2) the adviser has not less than five years of
agency. experience investing in the securities and
obligations authorized in said subdivisions; and
4. Commercial Paper (3) the adviser has assets under management in
Commercial paper of "prime" quality rated excess of$500 million.
A1/P1 or higher by Moody's Investor Services,
Inc. or Standard & Poor's Corporation. Eligible B. Diversity and Maturity Guidelines:
paper is further limited to issuing corporations
that: (a) are organized within the United States, Maximum Maximum
b have total assets in excess of five hundred Maximum
( ) Type of Investment %of %of one Maturity
million dollars ($500,000,000), and have a long- Portfolio issuer
term debt rating of AA or higher. Purchases of
U.S.Treasury 100 100 5 years
eligible commercial paper may not exceed 270
Securities
days in maturity, may not exceed 15% of the
Town's eligible investment funds and no more Federal Agencies 65 20 5 years
that 5% invested in any one issuer. and U.S. GSEs
Commercial Paper 15 5 270 days
5. Negotiable Certificates of Deposit
Negotiable certificates of deposit issued by a Negotiable z5 5 3 years
Certificates of
nationally or state-chartered bank or savings Deposit
association, or federal association, or a state or
federal credit union, or by a state-licensed Money Market 15 15 N/A
branch of a foreign bank carrying an individual Funds
rating of at least B/C by the Thompson Bank State LAIF 100 N/A
Watch or IBCA rating services, a short- term
debt rating of A1/P1 or higher, and a long-term Joint Powers
debt rating of AA or higher. Authority Pool 100 N/A N/A
6. Money Market Funds VII. REPORTING
Shares of beneficial interest issued by
diversified management companies as Within thirty (30) days following the end of
authorized by California Government Code each quarter, Staff shall render a report to the
Section 53635(j). Town Council, which shall include the following
information:
7. California Local Agency Investment
Fund (LAIF) operated by the Office of the State 1. A portfolio appraisal that includes the
Treasurer. Tiburon may invest all or a portion type of investment, issuer, date of maturity, par
of its investments, up to the State-mandated and dollar amount invested for all securities and
maximum, in LAIF pursuant to California investments of the Town, and shall additionally
Government Section 16429.1. include a description of any Town monies that
are under the management of any outside
8. Shares of beneficial interest in a joint
INVESTMENT POLICY -September 5, 2018
parties. eligible investments definition of the specific
trust indenture.
2. The current market value, as of the
report date, of all investments, as well as the X. PENSION FUNDS
source of this same valuation.
This Policy does not apply to the investment of
3. A statement of the status of the the Town's pension funds.
compliance (or non-compliance) of the portfolio
to this Investment Policy Statement.
4. A statement denoting the ability of
Tiburon to meet its expenditure requirements
for the next six (6) months.
For investments placed in LAIF, a bank, or
savings and loan association, the most recent
statements received by the Town from the
institution may suffice in lieu of the
requirements listed above.
VIII. SAFEKEEPING AND DELIVERY OF
SECURITIES
All transactions shall be executed on a Deliver
versus Payment (DVP) basis. To protect against
potential fraud or embezzlement, the assets of
the Tiburon shall be held in safekeeping by
Tiburon's safe keeping agent, or secured
through third-party custody and safekeeping
procedures pursuant to the limitations set forth
in Government Code Section 53608. No security
shall be held in safekeeping by the
broker/dealer from whom it was purchased.
Settlement payment in a securities transaction
will be against delivery only, and a Due Bill or
other substitution will not be acceptable.
These procedures will be reviewed annually by
an external auditor. All investments are to be
held in the name of the Town of Tiburon.
IX. BOND PROCEEDS
Bond proceeds resulting from the Town's
capital project debt financing programs will be
invested in accordance with the provisions of
their specific trust indenture. Debt service
reserve funds of bond issues will be invested in
accordance with the maturity provision and