2006-07 RESOLUTION NO. 2006- 07
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)states that the Treasurer or ChiefFiscal
Officer may 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 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 22°d day of June, 2006.
ATTEST:
City Clerk of the City of Grand Terrace �MKayor e City ofGrand Terrace
Terrace and of the City Council thereof e City Council thereof
III
RESOLUTION NO. 2006-07
Page 2
I BRENDA MESA, City Clerk of the City of Grand Terrace, California, do hereby certify
that the foregoing resolution was introduced and adopted at a regular meeting of the City Council
of the City of Grand Terrace held on the 22nd day of June, 2006 by the following vote:
AYES: Councilmembers Hilkey, Garcia, and Miller; Mayor Pro Tem Cortes
and Mayor Ferre
NOES: None
ABSENT: None
ABSTAIN: None
Approved as to form:
�� } City Attorney U City Clerk
CITY OF GRAND TERRACE
INVESTMENT POLICY
l.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 .
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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 by 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 .
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i 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 Gr.and' 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
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� 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.
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CITY OF GRAND TERRACE
INVESTMENT POLICY
11. DIVERSIFICATION:
The City will diversify its investments by security type
and institution.
12 INVESTMENT POLICY ADOPTION:
The InvestmentPolicy shall be approved by Council and
adopted by resolution of the City.
This policy. has .been reviewed and approved by the City
Council on June 22 , 2006 .
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 1/25/01
Adopted 2/14/02
Adopted 2/13/03
Amended 6/24/04
Adopted 6/9/05
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