HomeMy WebLinkAboutRES NO 180-85 RESOLUTION NO. 180-85
A RESOLUTION OF THE COUNCIL OF THE CITY OF BAKERSFIELD
ADOPTING AN 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.
WHEREAS, the City of Bakersfield desires to adopt an 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.
.......... 000 ..........
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
the 11fh day of D~mber , 1985, by the following vote:
CITY CLERK and Ex Officio Clerk of the
Council of the City of Bakersfield
APPROVED this iltl~day of Decerct~er
HAYOR of the City of'Bakersfield
, 1985
APPROVED as to form:
ATTOR y of Bakersfield
CITY OF BAKERSFIELD
Investment Policy
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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 admi-
nistered 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 efficiency
of the City's cash management system. The ultimate goal is to enhance the eco-
nomic 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, discre-
tion 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 allowable under current legislation of the
State of California (Government Code Section 53600 et seq.). 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
and/or savings and loan companies.
- Bankers Acceptances
- Commercial Paper
- Local Agency Investment Fund (State Pool) Demand Deposits
- Repurchase Agreements (Repos)
- Passbook Savings Account Demand Deposits
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.
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 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 insur-
ing the investment of monies to the fullest extent possible. The City attempts to
obtain the highest interest yields possible as long as investments meet the crite-
ria required for safety and liquidity.
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 manage-
ment 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 prem-
ise underlying the City's investment philosophy is, and will continue to be, to
insure that money is always safe and available when needed.