Title
Staff Report for Resolution Approving the City of San Leandro's Investment Policy for Fiscal Year 2013-14
Staffreport
SUMMARY AND RECOMMENDATION
Staff recommends City Council approval of the City of San Leandro Investment Policy for fiscal year 2013-14. The policy is approved annually and there are proposed updates for the policy for 2013-14.
BACKGROUND
California Government Code Section 53600 et seq. and Section VIII Reporting of the San Leandro Investment Policy requires the City Council to annually review and approve the City's Investment Policy. This policy was last adopted on July 16, 2012.
The City of San Leandro Investment Policy (Investment Policy) provides specific guidelines for the City's investment management functions and remains in compliance with the model policy approved by the Association of Public Treasurers of the United States and Canada and California Government Code Section 53601. The Investment Policy serves as a guide for setting and achieving investment objectives, defines rules and established benchmarks, prohibits and/or restricts investment instruments and reduces exposure to liability of both staff and Council. Compliance with the policy is an element of fiscal discipline considered by the auditors and rating agencies during their respective reviews.
Staff has reviewed the current policy and has five recommended changes for 2013-14. In addition, state legislation has been reviewed to determine if there have been any updates or changes to state law that should be reflected in the City's policy and there are none. Should the legislature take such action in 2013-14, then staff will return to Council with the necessary recommended changes.
- Page 2, I. Policy Statement - Delete the last sentence, As a rule, the City invests in securities having maturities no greater than five (5) years and are typically held to maturity until they are called prior to their scheduled maturity dates by the issuing entity. This language is no longer applicable due to investments in the corporate sector, where the City should be prepared to not hold a security to maturity due to changing market circumstances.
- Page 3, IV. Investment Objectives - City Council requested a social justice objective be added to the Investment Policy and staff recommends the following as the fourth Objective:
- Other: Investments are to be made that will bear in mind the responsibility of city government to its citizens. Alternative investments which enhance the quality life will be given full consideration.
- Page 8, Performance Standards clarified and streamlined the performance standards with regard to rates of return and risk using market benchmarks. Benchmark yield comparisons remain the same as last year.
- Page 8, Reporting last sentence of last paragraph, staff strengthened the monthly reporting requirement to comply with Government Section 53607, to read as follows: The Finance Director will submit a monthly transactions report on the portfolio's activity to the City Manager and City Council consistent with the requirements of the State Code.
- Page 9, Appendix A
- Medium Term Corporate Notes - Other Requirements changed the word and to or.
Previous City Council Action(s)
The Investment Policy is reviewed annually and was last reviewed by the City Council on July 16, 2012 by Resolution No. 2012-093.
ATTACHMENTS
None.
PREPARED BY: David Baum, Finance Director, Finance Department