HomeMy WebLinkAboutRES NO 39-89RESOLUTION NO. 39-89
A RESOLUTION OF THE COUNCIL OF THE CITY
OF BAKERSFIELD ADOPTING REVISED 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 revise
adopted Investment Policy in conformance with California
Government Code.
its
NOW, THEREFORE, BE IT RESOLVED that the Council of the
City of Bakersfield does hereby adopt the revised Investment
Policy as contained in Exhibit "A" attached hereto and made a part
hereof.
.......... o0o ..........
I HEREBY CERTIFY that the foregoing Resolution was
passed and adopted by the Council of the City of Bakersfield at a
regular meeting thereof held on ..... ~ar~_~ 1989 , by
the following vote::
AYT~$: COUNCILMEMBERS: CHILDS, QitM~INO. SMITH, RPI[Y, P~,F~SON. McDERMOTt ~ALYAGGtO
NOES: COUNCILMEMBERS: ~one
~ENT: COUNCILMEMBERS: None
ABSTAINING: COUNCII.MEMeERS: None - ~- ,
~ITY CLERK and Ex Officio Clerk of the
Council of the City of Bakersfield
APPROVED March 15~ 1989
MAYOR of the ~zty of Bakersfield
APPROVED as to forin:
!
ARTHUR 3~- SAALF-~ES~
CITY ATTORNEY of the City of Bakersfield
AJS/meg
Attachment
ExhiDit "A"
R RES 5
INVEST1
3/7/89
- 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.
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 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 oppor-
tunities as long 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. Investments may be made in the
following 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"
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 trust, in the City's name and control, whenever possible.
Investment 0bjective. 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 contilnue to be, to insure that the money is always safe and
available when needed.