1998-24 RESOLUTION NO. 98-24
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE ADOPTING 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 City Council of the City of Grand Terrace 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 Invetment Policy for the City.
Section 3. The appropriate officers, agents and employees of the City are hereby authorized
and directed, on behalf of the City, to invest available funds, from time to time, in accordance with
the statement of Investment Policy.
PASSED,APPROVED AND ADOPTED this loth day of September, 1998.
ATTEST:
City Clerk of the City of brand Terrace and Ma of the City of Grand Terrace and of the
of the City Council thereof. City Council thereof.
RESOLUTION NO. 98-24
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 Community
Redevelopment Agency of the City of Grand Terrace held on the loth day of September, 1998, by
the following vote:
AYES: Councilmembers Hilkey and Garcia; Mayor Pro Tem Buchanan; Mayor
Matteson
NOES: None
ABSENT: Councilmember Singley
ABSTAIN: None
Approved as to form:
City Clerk
City Attorney
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
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 53601, et seq.
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 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 .
7.0 AUTHORIZED FINANCIAL INSTITUTIONS AND DEALERS
The Agency will prohibit the utilization of outside
investment advisors.
-2-
CITY OF GRAND TERRACE
INVESTMENT POLICY
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
federal or state deposit insurance. The Treasurer may
waive collateralization in lieu of deposit insurance.
F. SECURITIES ISSUED BY FEDERAL AGENCIES.
� , -3
CITY OF GRAND TERRACE
INVESTMENT POLICY
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 $20 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
�j 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 my
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 approved by the City
Council on September 10, 1998
r
- 5 -