HomeMy WebLinkAboutCC RES 86-005RESOLUTION NO. 86-5
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A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM DESERT, CALIFORNIA, ADOPTING
A POLICY FOR THE INVESTMENT OF CITY OF
PALM DESERT FUNDS.
WHEREAS, Section 53646 of the State of California Government
Code has been amended to require the ann�al revtew and adoption ��f
an investment poiicy statement; and
WHEREAS, said investment policy has been written in
compliance with all applicable laws and 1n accordance witr�
guidelines provided by the California Municipai Treasurers
Associatton; and
WHEREAS, the City of Palm Desert Finance Committee, comprised
of the Mayor, City Manager and Finance Dlrector, has reviewed the
proposed policy;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City'of Palm Desert, California, as follows:
1. That the policy statement attached hereto as Exhibit
'"A" is adopted; and
2. That the policy will be examined and considered for
readoption each January.
, PASSED, APPROVED, and ADOPTED at a regular meeting of the
Pa 1 m Desert C i ty Counc i t he 1 d on th i s 23rd day of January ,
1986, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
BENSON, SNYDER, WILSON, KELLY
NONE
JACKSON
NQNE
TTEST: ,
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.' SHEILA R. LLIGAN
CITY C�ERK
att
RICHARO 5. KELLY, MAY
Exhibit A '
CITY OF PALM OESERT
�,NVESTMENT POLICY
1. ��
This Statement 1s lntended to provide direction for the
investment of the City's temporary idle cash. The City's
ultimate investment goal is to enhance the economic condition
of the City while insuring the safety of funds invested and
assuring that money is always avetlable when �eeded.
2. OBJECTIVES
The City strives to maintatn the levet of investment of all
idle funds as near 100� as possible, through the optimum
ope�ation of its cash management system which is designeted to
accurately monitor and forecast expenditures and revenue. The
Ctty attempts to obtain the highest yield on its' investments
consistant with preservatton of principal and tiquidity.
3. OELEGATION OF AUTHORITY
The City invests tn the spectrum of instruments ailowable under
the Government Code Section 53600 et seq. of the State of
l California. The City Council delegated the authority to tnvest
( to the Ctty Treasurer, or his delegate, in Chapter 3.08 sectlon
_ .010 of the Palm Desert Municipal Code.
4. ?�lIVESTMENT INSTRUMENTS
The City invests in the following investment instruments as
approved by the California Government Code:
- Securities of the U.S. Government or its' Agencies
- Local Agency Investment Fund (L.A.I.F.)
- Certificates of Deposlt (Time Deposits, C.D.'s)
- Negottable Certificates of Deposit
- Other investments that are, or may become, legal
investments through the State of Celifornia Goverrvnent
Code and with prior approval of the City Council.
5. POLICY CRITERIA FOR SELECTING INVESTMENTS� IN OROER OF PRIORITY
A) SAFETY
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Sefety end the minimizing of risk aasociated with investing
refers to attempts to reduce the potenttal for loss of
principel, interest or a combination of the two. The first
level of risk cont�ol is found in state lew whtch �estrfcts
-� the particular tYPe of inve3tments per�isa�ble for
� municipaitties. The second lev�l of risk control is
reduction of defauit risk by investing in tnstruments that
appear upon examin�tion to be the most credit wo�thy. The
third level of rlsk control is reductton of market �isk by
lnvesttng in instruments that have maturities coinciding
with dates of disbursement, thereby eliminating risk of loss
from a forced sale. The City only lnvests in those
instruments thet are considered very safe.
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The City utitizes Local Agency Investment Fund for such
purposes whereby the City mey liquidate all or any por�tion
of the funds invested within 24 hours wlth no penalty. The
City invests tn Time Certificates of Deposits issued by
banks and savtngs and loan companies, whose maturities ere
selected in anticipation of disbursment needs, thereby
obviattng the need for forced liquidation or lost interest
penalties.
C) YIELD
Yield is the potential dollar earnings an investment can
provide, and also 1s �ometimes described es the rate of
return. The City attempts to obtain the highest yeild
possible when selecting an lnveatment.
6. 5€LECTION OF INVESTMENT CONTACTS
The City malntains a"Bid L1st" which contafns variou� banks.
savings and loans and brokers. When the City has funds
available, letters are sent requesting bids from institutions
on the Ltst, each biddi�g instltution is reviewed by the
Treasurer for their relative strength and safety features.
7. INVESTMENT CONTROLS
The C1ty Treasurer oversees all the City's lnvestments.
6. INVESTMENT REP�ORTS
A) The Treasurer annually renders a Statement of Investment
Policy to the City Council fo� their approvai.
B) The Treasurer renders a monthly investment report to the
Ctty Manager and City Council showing the type of invest-
ment, lnstitution, date of maturity, amount of deposit and
interest earnable.
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9. INVESTMENT AUDI7'S
� Annually, the�e is en external audit of the City's investment
j activity to assure compltance with all apPlicable laws and
� polictes.
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The Ctty uttlizes a Finance Committee. comprised of the Mayor,
City Manager and Flnance Director, to insure stability end
constant information flow as it relates to investments and
other flnance �ctivities.
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