2026-2027 Annual Investment Policy
It is the policy of the City of Marysville's office to invest public funds in accordance with the governing statutes and in such a manner as to obtain the highest investment return possible consistent with the safety and liquidity objective outlined in this policy.
Scope
This investment policy applies to all financial assets of the City of Marysville. These funds are accounted for in City of Marysville's Comprehensive Annual Financial Report and include:
General Fund.
Special Revenue Funds.
Capital Project Funds.
Enterprise Funds.
Trust and Agency Funds.
• Any new fund created by the legislative body, unless specifically exempted.
Prudence
Investments shallbe made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.
The standard of prudence to be used by investment officials shall be the "Prudent Person" standard and shall be applied in the context of managing an overall portfolio under prevailing economic conditions at the moment of investment commitments. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence, shall be relieved of personal responsibility for an individual security's credit risk ormarket price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
In determining whether an Investment official has exercised prudence with respect to an investment decision, the determination shall be made taking into consideration the investment of all funds over which the official had responsibility rather than a consideration as to the prudence of a single investment, and, whether the investment decision was consistent with the written investment policy of the entity.
Objectives
The City's investments will be in accordance with all state statutes governing the investment of public funds.
The City shall invest its cash with three objectives, listed in order of priority:
1. Safety. Safety of the principal invested is the primary objective to insure against loss. All investments must be fully insured, guaranteed, orcollateralized. In orderto obtain this objective, the portfolio will be diversified to guard against losses in any one security class. The City seeks to maximize protection afforded bythe FDIC and the State's Public Deposit Protection Commission on its depository accounts.
2. Liquidity. The City's portfolio will remain sufficiently liquid to enable the City to meet all operating requirements, which might be reasonably anticipated. Investment maturities shall be matched to anticipated cash flow requirements whenever possible. At a minimum, the City will "ladder" investment maturities to coincide with cash outflow needs and to ensure a consistent minimum balance in the liquid portion of the portfolio.
3. Return on Investment. The City's investment portfolio shall attain a market-average rate of return throughout budgetary and economic cycles, taking into account the cash flow characteristics of the City and shall be in keeping with accepted financial management practices and procedures.
Investment Authority and Delegation
Authority to manage the investment program is granted to the Finance Director hereinafter referred to as investment officer as designated by City Code.
Responsibility for the operation of the investment program is hereby delegated to the Investment Officer who shall act in accordance with this Investment Policy. Officers will prepare monthly investment reports and other special reports as may be deemed necessary.
All participants in the investment process shall seek to actresponsibly as custodians of the public trust. No officer or designee may engage in an investment transaction except as provided under the terms of this policy and supporting procedures.
Ethics and Conflicts of Interest
Employees involved in the investment process shall refrain from any personal business activity that could conflict with the proper execution of the investment program, or which could impair their ability to make impartial investment decisions. The Investment Officer shall disclose any material financial interest in financial institutions that conduct business with the City, and they shall further disclose any personal financial/investment positions that could be related to the performance of the City's portfolio.
Authorized Investments
The City's investments shall be consistent with the State Policy of California:
Certificates, notes, bonds, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States, such as:
• Treasury bills.
• Treasury bonds.
• Government National Mortgage Association bonds.
• Federal Home Loan Bank notes and bonds.
• Federal National Mortgage Association notes, debentures, and guaranteed certificates of participation.
• Obligations of any other government-sponsored corporation whose obligations are or may become eligible as collateral for advances to member banks as determined by the Board of Governors of the Federal Reserve System, such as:
• Federal Farm Credit Banks consolidated system-wide bonds and discount notes. • Federal Home Loan Mortgage Corporation bonds and discount notes. • Federally Insured Certificates of Deposit
• Continuously investing a portion of the portfolio in readily available funds such as the LAF (Local Agency Investment Fund)
The City may also invest in other Joint Powers Authorities (JPAs) that meet the State Policy of California criteria for eligible investments such as:
California Asset Management Program (CAMP), a California Joint Powers Authority (JPA) established in 1989 to provide professional investment services to California public agencies.
CAMP offers two primary investment options:
• CAMP Pool: A fully liquid, stable net asset value (NAV) investment emphasizing daily liquidity and safety of principal. It holds an AAAm rating from Standard & Poor's.
• CAMP Term: Designed for agencies with known cash flows, this fixed-rate, fixed-term investment option offers securities with maturities ranging from 60 days to one year. It is rated AAAf by Fitch.
• Investment principal and interest are paid at maturity, with an automatic sweep into the CAMP Pool.
Safekeeping and Custody
Securities shall be held at a major national bank (such as Bank of New York, for example).
Maximum Maturities
The City's objective is to hold investments to maturity. The securities in the portfolio will be "laddered" and will attempt to match investments with anticipated cash flow requirements.
No single security will be purchased with a maturity date more than five years from the date of purchase.
Internal Controls
These reviews provide internal control by assuring compliance with the established policies, procedures, and prudent investment practices as outlined above.
The City Council will meet on a quarterly basis for review of the investment portfolio and performance. The Finance Director will provide a report summarizing investment activity, which will demonstrate compliance with the City's Investment Policy.
Performance Standards
The investment portfolio will be designed to obtain an average rate of return during budgetary and economic cycles consistent with the investment objectives and cash flow needs.
The investment strategy is active. Given this strategy, the benchmark used by the Treasurer to determine performance levels will be the average return on the LAIF (Local Agency Investment Fund). Yield considerations are secondary, however, to legality, safety, and liquidity.
Reporting
The Treasurer shall provide the City Council with a quarterly report for review, which will demonstrate compliance with the City of Marysville's Investment Policy. This report will summarize the current performance of the portfolio for City as measured against the benchmark, including the following:
• A listing of individual securities held at the end of the reporting period.
Final maturity of all investments listed.
Earnings rate.