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HomeMy WebLinkAboutCC RES 88-0040 RESOLUTION NO. 88- 4 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 annual review and adoption of an investment policy statement; and WHEREAS, said investment policy has been written in compliance with all applicable laws and in accardance with guidelines provided by the California Municipal Treasurers Association; and WHEREAS, the City of Palm Desert Finance Committee, comprised of the Mayor, City Manager and Finance Director, has reviewed the proposed policy; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert, California, as follows: 1. 2. That the policy statement attached hereto as Exhibit "A" is adopted; and That the policy will be examined and considered for readoption each January. PASSED, APPROVED, and ADOPTED at a regular meeting of the Palm Desert City Council held on this 14th day of January , 1988, by the following vote, to wit: AYES: NOES: ABSENT: CRITES, KELLY, SNYllER, WILSON, BENSON NUN E NONE ABSTAIN: NONE ATTEST: '� i� � 1/ � ��� ��� �SHEILA R. LLIGAN CITY CLERK ,� _ � r � N M. BENSON, MRYOR att Exhibit A CITY OF PALM DESERT INVESTMENT POLICY 1. PURPOSE This Statement is intended 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 available when needed. 2. OHJECTIVES The City strives to maintain the level of investment of all idle funds as near 100� as possible, through the optimum operation of its cash management system which is designated to accurately monitor and forecast expenditures and revenue. The City attempts to obtain the highest yield on its' investments consistant with preservation of principal and liquidity. 3. DELEGATION OF AUTHORITY The City invests in the spectrum of instruments allowable under the Government Code Section 53600 et seq. of the State of California. The City Council delegated the authority to invest to the City Treasurer, or his delegate, in Chapter 3.08 section .010 of the Palm Desert Municipal Code. 4. INVESTMENT 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 Deposit,(Time Deposits, C.D.'s) - Negotiable Certificates of Deposit - Other investments that are, or may become, legal investments through the State of California Government Code and with prior approval of the City Council. 5. POLICY CRITERIA FOR SELECTING INVESTMENTS. IN ORDER OF PRIORITY A) SAFETY Safety and the minimizing of risk associated with investing refers to attempts to reduce the potential for loss of principal, interest or a combination of the two. The first level of risk control is found in state law which restricts the particular type of investments permissable for municipalities. The second level of risk control is reductio� of def ault risk by investing in instruments that appear upon examination to be the most credit worthy. The third level of risk control is reduction of market risk by investing in instruments that have maturities coinciding with dates of disbursement, thereby eliminating risk of loss from a forced sale. The City only invests in those instruments that are considered very safe. B) LIQUIDITY The City utilizes Local Agency Investment Fund for such purposes whereby the City may liquidate all or any portion of the funds invested within 24 hours with no penalty. The City invests in Time Certificates of Deposits issued by banks and savings and loan companies, whose maturities are selected in anticipation of disbursment needs, thereby obviating the need for forced liquidation or lost interest penalties. • C) YIELD Yield is the potential dollar earnings an investment can provide, and also is sometimes described as the rate of return. The City attempts to obtain the highest yeild possible when selecting an investment. 6. SELECTION OF INVESTMENT CONTACTS The City maintains a"Bid List" which contains various banks, savings and loans and brokers. When the City has funds available, letters are sent requesting bids from institutions on the List, each bidding institution is reviewed by the Treasurer for their relative strength and safety features. 7. INVESTMENT CONTROLS The City Treasurex oversees all the City's investments. 8. INVESTMENT REPORTS A) The Treasurer annually renders a Statement of Investment Policy to the City Council for their approval. B) The Treasurer renders a monthly investment report to the City Manager and City Council showing the type of invest- ment, institution, date of maturity, amount of deposit and interest earnable. � 9. INVESTMENT AUDITS Annually, there is an external audit of the City's investment activity to assure compliance with all applicable laws and policies. 10. INVESTMENT/FINANCE CONII�lITTEE The City utilizes a Finance Committee, comprised of the Mayor, City Manager and Finance Director, to insure stability and constant information flow as it relates to investments and other finance activities.