BACKGROUND:
Each fiscal year, staff presents the investment policy to Council for review and approval.
It is the policy of the City to invest public funds safely and in compliance with the requirements of the California Government Code to meet the daily cash flow needs while achieving a market rate of return minimizing the potential for losses arising from market changes or issuer default. This Statement of Investment Policy is intended to provide guidelines for the prudent investment of the City’s cash and to identify the City’s policies regarding the investment process. Investments of public funds shall be made in accordance with this Investment Policy. All participants in the City’s investment process shall seek to act responsibly as custodians of the public trust. Any investment transaction shall be avoided that might impair public confidence in the City’s ability to manage its assets or to govern effectively. Our primary investment strategy continues to be the safety of principal and the guideline to keep all investments made in accordance with the California Government Code.
DISCUSSION:
In accordance with updates made to Government Code Section 16429.1 and Local Agency Investment Fund (LAIF) procedures, the City of Cathedral City’s Investment Policy is required to be reviewed and updated, where applicable, on an annual basis.
Our policy incorporates the key investment policy components of the League of California Cities, the California Society of Municipal Finance Officers, the California Municipal Treasurers Association, the Government Finance Officers Association and the Government Accounting Standards Board ("GASB") Statement No. 40, Deposit and Investment Risk Disclosures. In addition, at Council’s direction, staff presents and reviews the City’s Investment Policy and current investments with the Finance Advisory Committee during its annual meeting to which the committee concurred with the policy and City Treasurer’s investments. This policy positions the City of Cathedral City to continue to provide the conservative stewardship of our funds, while maximizing earnings and maintaining liquidity of funds.
At this time, there is only one change proposed to the investment policy. The State Treasurer has raised the Local Agency Investment Fund (LAIF) maximum investment for each account from $50 million to $75 million. The Local Agency Investment Fund (LAIF), a program created by statute, began in 1977 as an investment alternative for California's local governments and special districts. This program offers local agencies the opportunity to participate in a major portfolio, which invests hundreds of millions of dollars, using the investment expertise of the State Treasurer's Office professional investment staff at no additional cost to the taxpayer, while at the same time maintaining liquidity.
FISCAL IMPACT:
None