CITY OF MENIFEE
SUBJECT: Fiscal Year 2024/2025 Annual Investment Policy Review MEETING DATE: May 7, 2024
TO: Finance Committee
PREPARED BY: Ann-Marie Etienne, Finance Manager
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
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RECOMMENDED ACTION
1. Review and provide feedback on the draft Fiscal Year 2024/2025 Investment Policy and recommend submittal to the City Council for approval at a future City Council meeting.
DISCUSSION
In accordance with Investment Policy No. CC-11 (“Policy”), the Policy shall be reviewed and adopted at least once a year within 120 days of the end of the fiscal year, to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends.
The Policy was last endorsed and adopted by the Menifee City Council and became effective on May 5, 2021 with the most recent annual update on October 18, 2023.
The purpose of the Policy is to identify various policies and procedures that will foster a prudent and systematic investment program designed to seek the City of Menifee’s objectives of safety, liquidity and return on investment through a diversified investment portfolio. This Policy also serves to organize and formalize the City of Menifee’s investment-related activities, while complying with all applicable statutes governing the investment of public funds. This Policy is written to incorporate industry best practices and recommendations from sources such as the Government Finance Officers Association (GFOA), California Municipal Treasurers Association (CMTA), California Debt and Investment Advisory Commission (CDIAC) and the Association of Public Treasurers (APT).
On July 5, 2022, the CMTA Investment Policy Certification was granted to the City of Menifee.
This Investment Policy Certification recognizes that CMTA has validated that the City of Menifee’s Investment Policy adheres with the State of California Government Code and meets
City of Menifee Staff Report
Fiscal Year 2024/2025 Annual Investment Policy Adoption May 7, 2024
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specific requirements deemed to be best practices for municipal agency investment policies. Per CMTA recommendation, the City will seek to certify our Policy every two to three years or whenever a major update occurs.
Any recommended modifications or amendments shall be presented by staff to the governing body for their consideration and adoption. The draft Fiscal Year 2024/2025 Investment Policy revisions consist of:
•Added state-licensed broker dealers as an authorized institution. •Updated “portfolio” to “total portfolio” to reflect compliance is assessed across the entire client relationship.
•Clarified the provisions around Placement Services, including the associated glossary term based on Assembly Bill (AB) 945.
•No action necessary for Senate Bill (SB) 822 (effective 1/1/2024) related to Asset Backed Securities (ABS)/ Mortgage-Backed Securities (MBS)/ Collateralized Mortgage Obligations (CMO) as it was already stated in the policy. •Added indication that benchmarks may change based on the needs of the City. •Updated the “City of Menifee Policy Maximum” to align to the narrative in the Authorized Investments.
•Removed terms not used in the document from the glossary. •Updating the annual review of the Policy to be once a year, and no later than 120 days of the end of fiscal year. This will align the review to be able to be completed at the beginning of each fiscal year and in alignment with the annual budget process.
Although minor changes have occurred with the state government code, we are recommending that we leave the City of Menifee’s Policy maximums unchanged.
The overall goal of this Policy is to ensure that the City’s investments are managed with the degree of professionalism worthy of the public trust, with preservation and protection of the City’s assets being the guiding philosophy.
STRATEGIC PLAN OBJECTIVE
Responsive and Transparent Government
FISCAL IMPACT
There is no fiscal impact associated with the recommended action.
City of Menifee Staff Report
Fiscal Year 2024/2025 Annual Investment Policy Adoption May 7, 2024
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ATTACHMENTS
1. Draft Revised Investment Policy FY 2024/2025