1 of
1 April
5 , 202
3 Memorandum
To:
Rajneil Prasad
,
Deputy
Finance Director
City of Napa
Finance Team
City of
Napa
From:
Monique Spyke, Managing Director
Allison Kaune, Senior Analyst
PFM Asset Management LLC
RE
:
City of
Napa
Investment Policy Review
PFM
Asset Management LLC
has completed its review
of
t
he City
of Napa’s June
202
2 Investment
Policy (the “Policy”).
At this time,
we are recommending Policy changes in response to changes to California Government Code (
the
“Code”) that
went
into effect on Jan
uary 1, 2023, following the
passage of Senate Bill 1489 (“SB 1489”) in September 2022.
We have summarized
the relevant
Code changes and
our
Policy recommendations
below
and
have attached a marked
-
up version of
the
City’s
Policy to illustrate our recommend
ations.
Senate Bill 1489, also known as the Local Government Omnibus Act of 2022, made a number of changes to Code, including several that impact the investment of public funds and the reporting practices of public agencies. Changes made to Code section 5 3601, the section of Code that
governs the investment of public funds, include
new
language stating that an investment’s term or
remaining maturity shall be measured from the settlement date to final maturity, and, that a security purchased in accordance with
Code section 53601 shall not have a forward settlement date exceeding 45 days from the time of investment. Previously, Code was silent on both items. To address these Code changes, we have made the following recommend ed edits
in
the
Investment
Policy.
•
In
Po
licy
section
12 . Maximum Maturi
ties
,
we recommend adding
the new Code language
regarding calculating a security’s term to maturity
.
•
In
Po
l
icy section
A. Cash and Investment Instrument
s
of the
Allowable Investments and
Additional Investment Guidelines,
we recommend adding the new Code language
regarding forward settlement.
SB 1489 also modified Code section 53646 and its quarterly reporting requirements. Per Code, producing a quarterly report is optional for public agencies. However, should an agency ch oose to
produce a quarterly report, certain requirements must be met. One of those requirements was to produce the quarterly report within thirty (30) days following the end of the quarter. With SB 1489 ,
that time has been extended to forty
-
five (45) days.
•
In Policy section
15. Reporting
,
we recommend
adding the Code language regarding the
submission timeline of quarterly reports.
Please let
us
know if you’d like to schedule a call to discuss our recommendations further
.
Thank you
.
ATTACHMENT 2