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HomeMy WebLinkAboutRES NO 35-91 RESOLUTION NO. 35-91 A RESOLUTION OF THE CO~JNCIL OF THE 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, TR~REFORE, 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. .......... ooo .......... I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the Council of the City of Bakersfield at a regular meeting thereof he].d on M^R 1 3 1991 , by the following vote: AYES; COUNCILMEMBERS: EDWARDS, DeMOND, SMITH, BRIJNNI. PETERSON McDERMOTT. SALVASOIO NOES; COUNCILMEMBERS: ,,/?~:) A,/g ' ' ABSENT COUNCILMEMBERS ABSTAIN' COUNCILMEMBERS CITY CLERK and Ex Officio Clerk of the Council of the City of Bakersfield APPROVED MAR ~ 3 1991 CLARENCE E. MEDDERS MAYOR of the City of Bakersfield APPROVED as to form: LAWRENCE M. LUNARDINI CITY ATTORNEY of the City of Bakersfield WD/meg/lg INVEST1.RES 3/05/91 - 2 - CITY OF BAKERSFIELD Investment Policy Page i 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 pro- ceeds 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 effi- ciency of the City's cash management system. The ultimate goal is to enhance the economic status of the City while protectinq 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 oppor- tunities as lonq as the investment is deemed prudent and is allowable under current legislation of the State of California (Government Code Section 53600 et seq.) and other imposed legal restrictions. following instruments: Securities of the U.S. Government, or Investments may be made in the 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 Mutu~] Fuqds m~etinq criteria prescribed in Government (lode S536uz ana related legislation Exhibit "A" 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. Safekeeping. Securities purchased from brokers/dealers shall be held in third party safekeeping by the trust department of the City's bank or other desig- nated third party trusl, 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 Payroll 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 philos- ophy is, and will continue to be, to insure that the money is always safe and available when needed.