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
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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.