Agenda Item
City Council
Item #: 3.18. 6/27/2023 File #: 23-0247
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Trang Nguyen, Finance Director
1. SUBJECT
Annual review and approval of the Statement of Investment Policy for Fiscal Year 2023-24.
Resolution No. 11469.
2. SUMMARY
The Investment and Audit Committee met on April 26, 2023, with Chandler Asset Management, the City’s investment management firm. Chandler has conducted a thorough review of the City’s Investment Policy and updated it with current trends and laws governing public sector investments.
Chandler provided recommendations to further the best interest of the City’sinvestment strategy. As such, the Investments and Audit Committee reviewed and approved changes to the City’sStatement of Investment Policy.
3. RECOMMENDED ACTION
Adopt Resolution No. 11469. A Resolution of the City Council of the City of Orange rescinding Resolution No. 11384 and approving and adopting a Statement of Investment Policy for Fiscal Year 2023-24.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 2: Be a fiscally healthy community
b: Analyze future fiscal needs and potential revenue opportunities.
6. DISCUSSION AND BACKGROUND
The California Government Code Section 53646 requires that the Statement of Investment Policy (SIP) be reviewed and approved by the legislative body on an annual basis. The City’sInvestment Policy is one of the most conservative policies in the State and it is proposed that the very conservative features of the policy be maintained.
In collaboration with the Investment and Audit Committee (IAC), Chandler Asset Management (Chandler) and staff recently reviewed the City’sInvestment Policy to capture recent changes to California Government Code (Code) Section 53601 and those areas that govern the investment of public funds. Staff also reviewed the City’sPolicy to ensure the inclusion of the latest best practices from recognized industry groups such as Government Finance Officers Association City of Orange Printed on 6/21/2023Page 1 of 2
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Item #: 3.18. 6/27/2023 File #: 23-0247
practices from recognized industry groups such as Government Finance Officers Association (GFOA), California Society of Municipal Finance Officers (CSMFO), California Municipal Treasurers Association (CMTA), and the Association of Public Treasurers of the United States and Canada (APTUSC).
The proposed revisions to the SIP have been reviewed and approved by the IAC and are detailed as follows:
2.4 AUTHORIZED FINANCIAL INSTITUTIONS AND DEALERS
b) Selection of financial institutions and broker/dealers authorized to engage in transactions with the City shall be at the sole discretion of the City Treasurer. The Treasurer will maintain a list of financial institutions authorized to provide investment services to the City…Recommendation to add:
These institutions may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (uniform net capital rule).
3.2 PROHIBITED INVESTMENT VEHICLES AND PRACTICES
The City Treasurer is prohibited from the following:
Recommendation to add: g) The purchase of a security with a forward settlement date exceeding 45 days from the time of the investment is prohibited.
GLOSSARY
Recommendation to add: MATURITY: The date upon which the principal or states value of an investment becomes due and payable. The investment’sterm or remaining maturity is measured from the settlement date to final maturity.
7. ATTACHMENTS
· Resolution No. 11469
· FY 23-24 Statement of Investment Policy
· FY 22-23 Statement of Investment Policy - Redline
City of Orange Printed on 6/21/2023Page 2 of 2
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