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2004-10 r RESOLUTION NO. 2004-10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE, CALIFORNIA, ADOPTING AN INVESTMENT POLICY FOR THE CITY WHEREAS, California Government Code 53646 (2) requires that the Treasurer or Chief Fiscal Officer shall annually render to the governing legislative body a Statement of Investment Policy,which the governing body shall consider at a public meeting; NOW,THEREFORE,The Board of Directors of the Community Redevelopment Agency does hereby resolve, declare, determine, and order as follows: Section 1. The Council has reviewed and considered the Statement of Investment Policy in a public meeting. Section 2. That the Statement of Investment Policy attached hereto and incorporated herein by reference is the adopted Investment Policy for the City. Section 3. The appropriate officers, agents and employees of the Agency are hereby authorized and directed, on behalf of the Agency, to invest available funds, from time to time, in accordance with the Statement of Investment Policy. PASSED,APPROVED AND ADOPTED this 24"'day of June, 2004 ATTEST: City Clerk of the City of Grggd Terrace and Mhor o he City ofGrand Terrace and of the of the City Council thereof. City Cd6ncil thereof. RESOLUTION NO. 2004-10 PAGE 2 I,BRENDA STANFILL, City Clerk of the City of Grand Terrace, do hereby certify that the foregoing Resolution was introduced and adopted at a regular meeting of the Grand Terrace City Council held on the 24t''day of June, 2004,by the following vote: AYES: Councilmembers Garcia and Larkin and Mayor Pro Tem Ferre' NOES: None ABSENT: Councilmember Cortes and Mayor Hilkey ABSTAIN: None Approved as to form: City Attoy Secretary CITY OF GRAND TERRACE INVESTMENT POLICY 1. 0 POLICY It is the policy of the City of Grand Terrace to invest funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the City and conforming to all statutes governing the investment of City funds . 2 . 0 SCOPE This investment policy applies to all financial assets of the City. These funds are audited annually and accounted for in the Comprehensive Annual Report . Funds include the General Fund, Special Revenue Funds, Trust Funds, Debt Service Funds and any other City funds . 3 . 0 PRUDENCE Investments shall be made with judgment and care, under circumstances then prevailing which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. The standard of prudence to be used shall be the "prudent person" standard and shall be applied in the context of 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 and/or liability for an individual security' s credit risk or market price changes . 4 . 0 OBJECTIVE The primary objectives, in order of priority, of the investment activities shall be : 1 . SAFETY: Safety of principal is the foremost objective of the investment program. Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses in individual securities do not exceed the income generated from the remainder of the portfolio. � -1- CITY OF GRAND TERRACE INVESTMENT POLICY 2 . LIQUIDITY: The investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. 3 . YIELD: The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, , taking into account the investment risk constraints and the cash flow characteristics of the portfolio. 5 . 0 DELEGATION OF AUTHORITY Authority to manage the investment of surplus funds is derived from California Government Code Section 53600, et seq. , and this policy. Management of Bond Funds is controlled be Government Code 5922 (d) and such investments must conform to the requirements of the bond indenture . In some cases, it may be appropriate for investment of bond proceeds to cover a longer duration than those limits established for surplus (operating) funds . Management responsibility for the investment program is hereby delegated to the Treasurer, who shall establish procedures and operate the investment program consistent with this investment policy. Procedures may include, but not be limited to, references to: safekeeping, PSA repurchase agreements, wire transfer agreements, collateral/depository agreements and banking services contracts, as appropriate. Treasurer may delegate authority to subordinates for day to day investment transactions . No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Treasurer. 6 . 0 ETHICS AND CONFLICTS OF INTEREST Officers and employees involved in the investment process shall refrain from personal business that could conflict with the proper execution of the investment program, or which could impair their ability to make impartial investment decisions . -2- CITY OF GRAND TERRACE INVESTMENT POLICY 7 . 0 AUTHORIZED FINANCIAL INSTITUTIONS AND DEALERS The City will prohibit the utilization of outside investment advisors . The Treasurer may select any financial institution/ broker/dealer, selected by credit worthiness, who are authorized to provide investment services in the State of California. No public deposit shall be made except in a qualified public depository as established by State laws . For broker/dealers of government securities and other investments, the Treasurer shall select only broker/dealers who are licensed and in good standing with the California Department of Securities, the Securities and Exchange Commission and the National Association of Securities Dealers . 8 . 0 AUTHORIZED INVESTMENTS: The City of Grand Terrace is empowered by statute and _- authorized by Council to invest in the following: A. U.S. TREASURY OBLIGATIONS (TREASURY BILLS, TREASURY NOTES) . B. REPURCHASE AGREEMENTS. C. CERTIFICATES OF DEPOSIT WITH STATE BANKS, NATIONAL BANKS, STATE OR FEDERAL SAVINGS ASSOCIATIONS, STATE AND FEDERAL CREDIT UNIONS IN CALIFORNIA, that are fully insured by federal or state deposit insurance. The Treasurer may waive collateralization in lieu of deposit insurance. D. NEGOTIABLE CERTIFICATES OF DEPOSIT, COLLATERALIZED WITH U.S. TREASURY OBLIGATIONS HAVING A MARKET VALUE OF 110%. The Treasurer may, at his discretion, waive security for that portion of a deposit that already is covered by federal or State deposit insurance . E. PASSBOOK SAVINGS ACCOUNTS PLACED WITH FEDERAL OR STATE BANKS OR CREDIT UNIONS, that are fully insured by -3- CITY OF GRAND TERRACE INVESTMENT POLICY federal or State deposit insurance . The Treasurer may waive collateralization in lieu of deposit insurance . F. SECURITIES ISSUED BY FEDERAL AGENCIES. G. LOCAL AGENCY INVESTMENT FUND (LAIF) , Special Fund of the State Treasury in which local .agencies are allowed to pool their funds for investment purposes up to a maximum of $40 Million. LAIF will have its own investment policy that will differ from the City- H. MUTUAL FUNDS, issued by diversified management companies as defined by Section 23701m of the Revenue and Taxation Code, provided that the portfolio of such investment company or investment trust is limited to U. S . government obligations or agencies of the federal government and repurchase agreements fully collateralized by such securities . -- I . POOLS AND OTHER INVESTMENT STRUCTURES INCORPORATING INVESTMENTS PERMITTED IN CALIFORNIA GOVERNMENT CODE SECTIONS 53601 AND 53635, such as local government investment pools sponsored by counties and joint powers authorities . These entities may have their own investment policy that will differ' from that of the City of Grand Terrace . 9 . 0 COLLATERALIZATION: All certificates of deposit must be collateralized by U. S . Treasury obligations held by a third party. The Treasurer may waive this requirement up to the amount already insured by federal or State deposit insurance . 10 . SAFEKEEPING. AND CUSTODY: All securities purchased from broker/dealers shall be conducted on a delivery VS . payment (DVP) basis and shall be held by a third party custodian designated by the Treasurer and evidenced by safekeeping receipts . This would not apply to any book-entry direct purchases from the U. S . Government . -4- CITY OF GRAND TERRACE INVESTMENT POLICY 11. DIVERSIFICATION: The City will diversify its investments by security type and institution. 12 . INVESTMENT POLICY ADOPTION: The Investment Policy shall be approved by Council and adopted by resolution of the City. This policy has been reviewed and amended by the City Council on June 24 , 2004 . - 5 - CITY OF GRAND TERRACE INVESTMENT POLICY Adopted by Council 5/08/97 Amended 6/26/97 Amended 8/27/98 Adopted 9/10/98 Amended 1/27/00 Adopted 1125101 Adopted 2/14/02 Adopted 2/13/03 - 6 -