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HomeMy WebLinkAboutTC Res 2002-03-06 (5) , ,...... RESOLUTION NO. 10-2002 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON ADOPTING A STATEMENT OF INVESTMENT POLICY FOR FISCAL YEAR 2000-2001 WHEREAS, State of California Assembly Bill 1073, Chapter 1226 amended Government Code Section 53646 (a) to require that "The treasurer or chief fiscal officer shall annually render to the legislative body of the local agency a statement of investment policy," WHEREAS, State of California Assembly Bill I 073 also requires monthly reporting of local agency investments, Government Code Section 53646 (b) provides that, "The treasurer or chief fiscal officer shall render a monthly report to the chief executive officer and legislative body of the local agency showing the type of investment, institution, date of maturity, amount of deposit, rate of interest, and such data as may be required by the local agency." NOW, THEREFORE, BE IT RESOLVED that the Town Council of the Town of Tiburon does hereby adopt a Statement of Investment Policy (attached), and the Finance Director is directed to continue to submit a monthly investment summary statement of the Town Council. ~ PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Tiburon on March 6, 2002, by the following vote: AYES: COUNCILMEMBERS: Fredericks, Gram, Matthews, Slavitz, Thompson NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None ~~~YOR Town of Tiburon r" Town Council Statement of Investment Policy FY 2000-01 - Replaces Res. No. 3344 adopted 7/7/99 , Town of Tiburon, Investment Policy Statement FY 2000-01 ,-... ~ I, PURPOSE 11ris Policy sets forth the investment guidelines for the prudent management of all surplus funds of the Town of Tiburon, Tiburon Redevelopment Agency and Tiburon Public Facilities Financing Authority. It is the goal of this Policy to establish investment objectives in accordance with the provisions of the State of California Government Code Sections 53600 et seq., and investment policy guidelines to ensure that funds under its purview are prudently invested to preserve capital, provide necessary liquidity and to achieve a rate of return consistent with the Town's needs and objectives. Investments may be made as authorized by this Investment Policy and subsequent revisions. 11ris Statement ofInvestment Policy shall be reviewed annually by the Tiburon Town Council. The Town is therefore afforded a broad range of investment opportunities if the investment is deemed prudent and is allowable under current legislation ofthe State of California. ~ II, OBJECTIVES The Town's cash management system is designed to accurately monitor and forecast revenues and expenditures, thus enabling the Town to invest these surplus funds to the fullest extent possible. Surplus funds shall be invested in accordance with ~ sound treasury management principles, State of California Government Code Sections 53600 et. seq, and this Policy. When investing, reinvesting, acquiring, selling and managing Town funds, objectives for selecting investments, in priority of order, are I. Safety. The primary objective shall be to safeguard the principal of the funds. The Town shall invest only in those investments considered safe. Investment in instnunents and with institutions pennitted under Section 5. Investment Guidelines, are deemed to constitute safe investments within the meaning of this Policy. 2. LiQuiditv. The secondary objective shall be to meet the liquidity needs of the Town. It is important that the portfolio contain investments that provide flexibility and may easily be sold with minimal risk ofloss of principal or interest. 3. Yield. The third objective shall be to achieve a reasonable rate of return on the portfolio. The investment portfolio shall be designed to attain safety and liquidity of principal first, and thereafter attain a market rate of return that is consistent with portfolio desigu and Policy principles. ~ III, PRUDENCE ,-... Town Council Members, The Town Manager, Finance Director and Town Treasurer, and any persons authorized to make investment decisions on behalf of the Town, are trustees and therefore fiduciaries subject to the Prudent Investor Standard. When investing, reinvesting, acqumng, selling and managing Town funds, a trustee shall act with care, skill, prudence and diligence under the circumstances then prevailing, 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 to maintain the liquidity needs of the Town (Government Code Section 53600.3) The Prudent Investor Standard shall be applied in managing an overall portfolio. Investment officers acting in accordance with written procedures and the Investment Policy and exercising due diligence shall be relieved of personal responsibility for a particular security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control developments. ~ IV, DELEGATION OF AUTHORITY Authority to manage the Town's investment program is derived from approval of Town Council. Management responsibility for the Town's cash management systems and investments are delegated to the Town Manager and Finance Director. No person may engage in an investment transaction except as provided under the terms of this Investment Policy Statement and procedures established by the Town Council. ~v, INVESTMENT GUIDELINES Investments are to be made in high quality securities or instruments as pennitted by the Government Code and subject to the Limitations of this Investment Policy. A. Eligible securities for investment shall include the following: I. U.s. Treasurv Securities. United States Treasury notes, bonds, strips, bills or certificates of indebtedness, or obligations for which the full faith and credit of the U.S. Government are pledged for the timely payment of principle and interest. 2. Federal Agencies and U.S. Government Soonsored Enterorises. Obligations, participations, or other instruments of or issued by a federal agency or federal government sponsored enterprise. This includes, and is not restricted to, obligations of the: Federal Home Loan Bank (FHLB), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA), Federal Farm Credit Bank (FFCB), Government National Mortgage Association (GNMA), Small Business Administration (SBA), Export-Import Bank of the United States, and the U.S. Department of Housing and Urban Development. , Town of Tiburon, Investment Policy Statement FY 2000-01 --- 3. State of California and Local A~encv Obli~ations. Registered State warrants, Treasury notes, or bonds of the State of California, and bonds, notes, warrants or other evidence of indebtedness of any local agency of the State (including bonds payable solely out of revenues from a revenue producing property or asset owned, controlled, or operated by the State or local agency, or by a department, board, agency or authority of the State or local agency.) Such obligations must be rated AI, SP-I, its equivalent or higher short tenn, or "A" or higher long tenn, by a nationally recognized rating agency. 4. Commercial Paner. Commercial paper of "prime" quality rated Al/PI or higher by Moody's Investor Services, Inc. Or Standard & Poor's Corporation. Eligible paper is further limited to issuing corporations that: ( a) are organized within the United States, (b) have total assets in excess of five hundred million dollars ($500,000,000), and have a long term debt rating of "A" or higher. ~ 5. Ne~otiable Certificates of Deoosit. Negotiable certificates of deposit issued by a nationally or state-chartered bank or savings association, or federal association, or a state or federal credit union, or by a state-licensed branch of a foreign bank carrying an individual rating of at least B/C by the Thompson Bank Watch or IBCA rating services, a short term debt rating of AI/PI or higher, and a long term debt rating of " A" or higher. 6 Monev Market Funds. Shares of beneficial interest issued by diversified management companies as authorized by California Government Code Section 53635(j). B. State Local Agency Investment Fund (LAIF). The Town may invest all or a portion of its investments, up to the State-mandated maximum, in LAIF pursuant to California Government Section 16429.1. C. Diversity and Maturity Guidelines: ,...... Maximum Maximum Maximum Type ofInvestment %of % of one Maturity Portfolio issuer U.S. Treasury 100 100 5 years Securities Federal Agencies and 65 20 5 years U.S. GSEs Commercial Paper IS 5 180 days Negotiable Certificates 25 5 3 years of Deposit Money Market Funds 15 15 N/A State LAIF 100 100 N/A ~ VI, REPORTING Within thirty (30) days following the end of each quarter Staff shall render a report to the Town Council, which shall include the following information I. A portfolio appraisal that includes the type of investment, issuer, date of maturity, par and dollar amount invested for all securities and investments of the Town, and shall additionally include a description of any Town monies that are under the management of any outside parties. 2. The current market value, as of the report date, of all investments, as well as the source of this same valuation. 3. A statement of the status of the compliance (ornon- compliance) of the portfolio to this Investment Policy Statement. 4. A statement denoting the ability (or inability)ofthe Town 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. ~ VII, 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 Town shall be held in safekeeping by the Town's safe keeping agent, or secured through third-party custody and safekeeping procedures pursuant to the limitations set fortb in Government Code Section 53608. These procedures will be reviewed annually by an external auditor. All investments are to be held in the name of the Town ofTiburon. 2