Investment Policy
Update and
Active Management
Implementation
What are Public Agency Investment
Requirements?
v Investment of Surplus: Government agencies must comply with California Government Code (GC) Section 53600
v Monthly (or quarterly) report to the governing body outlining cash assets invested, investment types, purchases, sales, market conditions, and affirming agency projection of sufficient cash availability to meet operating needs. (GC Section 53607) v Annual Investment Policy update (GC Section 53646)
v Compliance with GC Section 53600.3
v Prudent Investor Standard – Safeguarding of principal and liquidity v Compliance with GC Section 53600.5
v Safety of Principal
v Liquidity
v Yield
*Requirements include but are not limited to other governmental compliance and regulatory provisions.
Investment Policy – Updates Of Existing
Social Considerations
- Provide compliant policy direction
Review of Investment Portfolio
- Require Procedures to Report Materially Adverse Impacts Investment Policy – New Components
New Sections for Controls:
- Investment Pools/Money Market Funds
Steps for Investigation before Investment
- Collateralization
Held by Third Party
110% of Market Value for CD’s
102% for Reverse Repurchase Agreements
- Safekeeping & Custody
Third Party Custodian
- Diversification
No More than 5% in one Issuer (exception for federal/pools) Investment Policy – New Components
New Sections for Controls Continued:
- Maximum Maturities
No More than 5 Years – Consistent with State Law
- Internal Controls
Admin. Services Director Responsible for Maintaining Internal Control - Performance Standards
Sets Benchmark/Objective
Constant Treasury Maturity for Surplus Funds
- Reporting
Quarterly Reporting
- Investment Policy Adoption
Annual Review (Can be supported with Investment Management Team) Policy Procedures for Operation of the Investment Policy Portfolio Management Types
ACTIVE MANAGEMENT
v Cash flow modeling increases funds available to invest while leaving sufficient funds in checking account for
day-to-day operations
v Invest over five-year horizon to guarantee investment returns over time
v Requires some dedicated staff time or
consultant/advisor
v Safe, with increased yields
v Utilize investment types that support the District’s
investment policy
Industry Challenges
Smaller agencies get ignored – Many investment advisors do not provide services to agencies with less than $25 million in liquid assets.
Smaller agencies lack resources – While larger agencies have dedicated staff to support each function, smaller agency staff must wear a lot of hats. Most simply lack the internal resources to manage investment activities.
Investments is a very specialized field – Smaller agencies typically lack the specific education, experience, and technical expertise required to manage investments.
All public agencies would like more revenue – Whether it is new equipment, pay down debt, facility maintenance, or new and enhanced services, the taxpayers would like more for their money.
Next Steps
City Engage Investment Advisory Services (OPI), a Custodial Bank (BNY, US Bank, etc.), and a Broker/Dealer (TVI, Mutual, Piper, etc.)
Investment Advisors recommend initial investments and City execute trade tickets using the Broker Dealer
Investment Advisors provide ongoing investment recommendations based on Cash Flow Modeling
City incorporate quarterly cash flow update and investment reporting based on Investment Advisors reports
Administrative Services Staff add to Fiscal Year 2023/24 Project Create Loan Policy to be Added to Updated Financial Principals and Policy Continue to evaluate investment policy for annual updates Questions?
More about OIP
Contact Us
Website: www.optumip.com
Email: [email protected]
Phone: (619) 324-9510
Our Team
David Bilby, MSBA
President, CEO, & Chief Compliance Officer
David’s work has covered all areas of city finance, including budgeting, municipal debt management, accounting, user fee studies, fiscal impact analysis, asset management,
public/private partnerships, and procurement. He has
completed dozens of public financings, together totaling over $1 billion, including CFDs, ADs, COPs, RDA, POBs, and LRBs. As an integral part of a team, he helped complete two successful sales tax measures. The municipal investment portfolios he has directly managed ranged from $50M to $400M.
Credentials:
M.S., Business Administration, Finance concentration, San Diego State University
B.S., Business Administration, Finance concentration, San Diego State University
Certified Public Finance Officer (CPFO), Government Finance Officers Association
Series 50 Municipal Advisor Representative, Municipal
Securities Rulemaking Board (MSRB)
Series 65 Registered Investment Adviser Representative, North American Securities Administrators Association (NASAA) Our Team
Robert Michalik, BSBA
Executive Vice President & Chief Operating Officer
Robert is a savvy, results-oriented, strategic executive leader and change agent with over 24 years of experience driving and optimizing business operations and services for large and diverse organizations, including J.P. Morgan Chase, Caliber Home Loans, and First American.
He has led teams of up to 300 employees across international locations, tightly managed operating budgets exceeding $14M, and has an impeccable track record in internal- and external-facing audits.
Credentials:
B.S., Business Management, University of Phoenix
Series 65 Registered Investment Adviser Representative, North American Securities Administrators Association (NASAA)