HomeMy WebLinkAboutCC Res 2929 1979-11-12
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RESOLUTION NUr4BER c:( '1.;2./1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SEAL BEACH, CALIFORNIA, ESTABLISHING AN
INVESTMENT POLICY FOR THE CITY AND REDEVELOPMENT
AGENCY
WHEREAS, there are certain funds of the City of Seal Beach and its
Redevelopment Agency on deposit with certain banks as
authorized by City Council; and
WHEREAS, it is desirable to invest all sums on deposit not required
for current operations; and
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WHEREAS, such investments should be made so as to maximize earnings,
commensurate with the safety of such sums; and
WHEREAS, it has been determined that maximum investment yield is
obtained by pooling City funds with those of the City's
Redevelopment Agency; and
WHEREAS, it is recognized that investment of public funds is regu-
lated by California Statutes,
NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby
establish an investment policy which encourages the continued growth
of City resources by investment of public funds in accordance with
State law and by careful stewardship.
BE IT FURTHER RESOLVED, 'that the City Council adopts and approves
as part of its investment policy, the procedures articulated in the
attached memorandum from the City Manager.
PASSED, APPROVED AND ADOPT D by the City Council of the City of
Seal Be~sh, Californi; a regula meeting thereof held on the
/<:>?'C!: day of . 1979, by the following
vote:
AYES:
NOES:
Councilmen
Councilmen
ABSENT:
Councilmen
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Resolution Number
October 26. 1979
MEt~ORANDUM
TO: Honorable Mayor and City Council
FROM: City Manager
SUBJECT: City Investment Policy
The attached resolution expresses the underlying thought which.
over the years, has contributed to the formulation of the current
investment policy in the City of Seal Beach. It is recognized the
resolution offered for City Council consideration may not include
every investment technique available. and for this reason should be
revised from time to time. A periodic statement of investment policy
appears desirable to the extent that it is helpful in dealing with
the investment community, the taxpayers and the press.
The City of Seal Beach operates its pooled investments under the
"prudent man rule". This affords the Investment Officer a broad
range of investment opportunities so long as the investment is deemed
prudent. Criteria for selecting investments can therefore be ranked
thus:
1. Safety
2. Liquidity
3. Yield
The City of Seal Beach attempts to obtain the highest yield
available when choosing investments provided the above criteria are
met. Maturities are selected to anticipate cash requirements of the
City, obviating the need for forced or untimely liquidation. Since
longer term yields tend to be higher than shorter investments. we
try to ladder budgeted cash needs so that new investment money can be
placed with maturities which take advantage of the foregoing tendency.
City investments include U. S. Securities and Agencies. certificates
of deposit, bankers' acceptances and repurchase agreements. and LAIF.
The investment program is operated so as to comply with constraints
imposed by the California Statutes. notably Sections 53630, 53651;
53654, 53655 and 53659 of the Government Code. For example, we do not
invest in stocks; we do not speculate in real estate of commodities; we
do not deal in futures or other options. Long term investments are
limited to five years or less, since it would be presumptuous to pre-
dict the City's needs for a longer time. We do not invest overseas
because of the danger of blocked currencies; and finally we do not
invest more than 5% of our total portfolio with anyone issuer.
Securities of the U. S. Government and its agencies are the exception
to this last rule.
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Resolution Number
MEMORANDUM
October 26. 1979
Page 2
One final advantage in having a written statement of investment
policy is that it provides a record of the knowledge gained by the
Investment Officer over the years which can be passed on to his suc-
cessor and thus retained within the organization. In the event the
City COuncil agrees with the ideas and sentiments embodied in the
attached resolution, it may wish to adopt the resolution as written.
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Dennis Courtemarche
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