HomeMy WebLinkAboutRES NO 80-92RESOLUTION NO. 80-92
A RESOLUTION OF THE COUNCIL OF
CITY OF BAKERSFIELD ADOPTING
INVESTMENT POLICY.
WHEREAS, Section 53646 of the California Government Code
was amended to require the Treasurer or Chief Fiscal Officer to
render an annual statement of Investment Policy to the legislative
body of the local agency; and
WHEREAS, the City of Bakersfield desires to adopt
Investment Policy in conformance with California Government Code.
NOW, THerEFORE, BE IT RESOLVED that the Council of the
City of Bakersfield does hereby adopt the Investment Policy as
contained in Exhibit "A" attached hereto and made a part hereof.
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OR;GI~,IAL
CITY OF BAKERSFIELD
Investment Policy
Page 1 of 2
SCOPE
This investment policy applies to the investment activities of the
City of Bakersfield except for its Firemen's Disability and
Retirement Fund which is administered separately under Municipal
Code Section 2.92. The idle cash in all other funds is pooled for
investment purposes except tax exempt bond proceeds which are
separated for arbitrage record keeping as required by federal tax
law.
PURPOSE
This policy is intended to provide guidelines for the prudent
investment of the City's temporary idle cash, and outline the
policies for maximizing the efficiency of the City's cash
management system. The ultimate goal is to enhance the economic
status of the City while protecting its pooled cash.
POLICY
The City of Bakersfield operates its temporary pooled idle cash
investments under the prudent man rule Civil Code Section 2261, et
seq. states in part "in investing property for the benefit of
another, a trustee shall exercise the judgment and care, under the
circumstances then prevailing, which men of prudence, discretion
and intelligence exercise in the management of their own affairs .
." This affords the City a broad spectrum of investment
opportunities as long as the investment is deemed prudent and is
the State of California
and other imposed legal
made in the following
allowable under current legislation of
(Government Code Section 53600 et seq.)
restrictions. Investments may be
instruments:
Securities of the U.S. Government, or its agencies
Certificates of Deposit (Time Deposits) placed with
commercial banks, savings and loan companies and federal
savings banks.
Bankers Acceptances
Commercial Paper
Local Agency Investment Fund (State Pool) Demand Deposits
Repurchase Agreements (Repos)
Passbook Savings Account Demand Deposits
Mutual Funds meeting criteria prescribed in Government
Code S53601 and related legislation
Exhibit "A" ~ %~
OR;GINAL
Page 2 of 2
Criteria for selecting investments and the order of priority are:
1. Safety. The safety and risk associated with an investment
refers to the potential loss of principal, interest or a
combination of these amounts. The City only operates in those
investments that are considered very safe.
2. Liquidity. This refers to the "ability to easily sell" at any
moment in time with a minimal risk of losing some portion of
principal and interest. Liquidity is an important investment
quality especially when the need for unexpected funds occurs
occasionally.
3. Yield. Yield is the potential dollar earnings an investment
can provide, and sometimes is described as the rate of return.
SafekeeDinq. Securities purchased from brokers/dealers shall be
held in third party safekeeping by the trust department of the
City's bank or other designated third party trust, in the City's
name and control, whenever possible.
Investment Objective. The Cash Management system of the City of
Bakersfield is designed to accurately monitor and forecast
expenditures and revenues, thus insuring the investment of monies
to the fullest extent possible, including the estimated float for
the Active Account and Payr011 Account. The City attempts to
obtain the highest interest yields possible as long as investments
meet the criteria required for safety and liquidity and do not
exceed a term of five years.
The City strives to maintain the level of investment of all funds
as near 100% as possible, through daily and projected cash flow
determinations. Cash management and investment transactions are
the responsibility of the City Treasurer. The City holds its
Treasurer and his designees harmless for responsible investment
transactions undertaken in accordance with the Investment Policy.
The basic premise underlying the City's investment philosophy is,
and will continue to be, to insure that the money is always safe
and available when needed.
DBD. 1