Loading...
HomeMy WebLinkAboutRES 89-52RESOLUTION NO. 89-52 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, ADOPTING THE STATEMENT OF INVESTMENT POLICY WHEREAS, the City of Diamond Bar was incorporated on April 18, 1989, and WHEREAS, it is necessary to annually adopt the city investment policy as provided for in Government Code Section 53636, and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Diamond Bar that the attached Statement of Investment Policy (Administrative Instruction 89-1) be adopted as presented herein. PASSED, APPROVED AND ADOPTED by the City Council of the City of Diamond Bar on this 20th day of Iiinp , 1989. I, ROBERT L. VAN NORT , City Clerk of the City of Diamond Bar, do hereby certify that the foregoing Resolution was introduced at a regular meeting of the City Council of the City of Diamond Bar held on the ?nth day of lune , 1989, and was finally passed at a regular meeting of the City Council of the City of Diamond Bar held on the 20th day of June , 1989, by the following vote: AYES: COUNCIL MEMBERS: FORBING, Mayor Pro Tem HORCHER, and Mayor PAPEN NOES: COUNCIL MEMBERS: NONE ABSENT: COUNCIL MEMBERS: MILLER and WERNER ABSTAINED: COUNCIL MEMBERS: NONE �t ATTEST: ' City Clerk of the City of Diamond Bar CITY OF DIAMOND BAR, CALIFORNIA Number Effective Date ADMINISTRATIVE INSTRUCTION 89-1 Issued: Revised: Subject: STATEMENT OF INVESTMENT POLICY Page 1 of 2 As a General Law City, Diamond Bar operates its pooled idle cash investments under the prudent man rule. This affords the City a broad spectrum of investment opportunities so long as the investment is deemed prudent and is allowable under current legislation of the State of California and the General Law of the City of Diamond Bar. Diamond Bar strives to maintain the level of investment of all idle funds as near 100% as possible, through daily and projected cash flow determinations. Idle cash management and investment transactions are the responsibility of the Treasurer and investments are made in the following media: Securities of the U. S. Government, or its agencies (and the 'when issued' market) Certificates of Deposit (or Time Deposits), placed with commercial banks and savings and loan companies Bankers Acceptances Negotiable Certificates of Deposit Commercial Paper Local Agency Investment Fund demand deposits Repurchase Agreements and Reverse Repurchase Agreements Passbook Savings Account demand deposits Money market funds comprised of investments rated in the highest category by Moody's Investors Service, Inc., or by Standard & Poor's Corporation or money market funds comprised of obligations described in clause (a) of the definition; Investment agreements or contracts representing the unconditional obligations of entities (1) the secured long-term debt obligations of which are rated in the top three categories by Moody's Investors Service, Inc. or by Standard & Poor's Corporation or (2) the short-term debt obligation of which is rated in the highest category or either of such rating agencies; Tax-exempt obligations rated in either of the two highest rating categories by Standard & Poor's Corporation or Moody's Investor's Service, Inc., including money market funds comprised solely of such obligations. CITY OF DIAMOND BAR, CALIFORNIA Number Effective Date ADMINISTRATIVE INSTRUCTION 89-1 Issued: Revised: Subject: STATEMENT OF INVESTMENT POLICY Page 2 of 2 Government and agency paper are the highest quality investments available in terms of safety and liquidity. Certificates of deposit, savings, accounts, repurchase agreements, and bankers acceptances are insured or collateralized. Only commercial paper, with A-1 Moody's and P-1 Standard & Poor's ratings, is purchased. Most investments are highly liquid, with the exception of collateralized and insured certificates of deposit held by banks and savings and loans. Maturities are selected to anticipate cash needs, thereby obviating the need for forced liquidation. Diamond Bar attempts to obtain the highest yield obtainable when selecting investments, provided that criteria for safety and liquidity are met. Ordinarily, through a positive yield curve, (i.e., longer term investment rates are higher than those of shorter maturities), the City attempts to ladder its maturities to meet anticipated cash needs in such a way that new investment money can be placed in maturities that carry a higher rate than is available in the extremely short market of 30 days or under. The City operates its investment pool with many State and self-imposed constraints. It does not buy stocks or deal in futures or options. Longer-term investments (over one year) are generally limited to maturities of five years or less. The City lengthens its maturities when rates are falling and shortens maturities when rates are rising. The City attempts to take advantage of imperfections in the market where a security's price is out of line with other investments, and tries to improve yields during contracyclincal changes in interest rates and through the purchase of occasional odd lots which are offered at bargain prices. All net profits earned from investing in the 'when issued' market and resulting from 'Pair offs' are allocated solely to the General Fund. The basic premise underlying to insure that money is always l Robert L. Van Nort City Manager RLVN:sg Diamond Bar's investment philosophy is available when needed.