CITY COUNCIL STAFF REPORT
Meeting Date: May 20, 2024
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT RESOLUTION NO. ___-24 APPROVING THE CITY OF PLEASANT HILL INVESTMENT POLICY EFFECTIVE JULY 1, 2024
AND DELEGATING INVESTMENT AUTHORITY TO THE CITY
TREASURER
SYNOPSIS
California state law requires the City Treasurer to render a statement of Investment Policy annually to the City Council at a public meeting and the City Council to annually delegate investment authority to the City Treasurer. The Budget Committee reviewed the investment policy at its meeting of April 23, 2024 and recommended approval to City Council. The City Treasurer recommends the Council adopt the proposed resolution approving the City of Pleasant Hill Investment Policy effective July 1, 2024 and delegating the investment authority to the City Treasurer.
DISCUSSION
Background
Government Code 53607 et seq. requires the City Treasurer to “render” annually to the legislative body of the local agency at a public meeting a statement of investment policy. The investment policy is intended as a guide with specific controls for safety, liquidity, and yields.
Analysis
In consultation with the City’s professional investment advisor, Kara Hooks - Chandler Asset Management, the City Treasurer and Finance Department reviewed the City’s investment policy to 1) confirm that it continues to comply with California Government Code, and 2) continues to provide strong safeguards over the City’s investment program. While the City’s investment policy continues to be robust, it is recommended that the City add additional protections recognized as industry best practices. The following are the main proposed changes in the attached Investment Policy:
• Delegation of Authority: It is recommended by the City California Government Code, Section 41006, in addition to 53607.
• Qualified Dealers: It is recommended the City update the list of institutions eligible to transact investment business with the City to match industry best practices. • Ethics and Conflicts of Interest: It is recommended the City include the requirement to comply with the Political Reform Act in the filing of Form 700s. • Authorized Investments: It is recommended the word “total” be added to issuer and sector limitations in order to consolidate the maximum to include both the investment portfolio and other accounts (example: LAIF or other LGIP). • Ineligible Investments: It is recommended the City incorporate the new prohibition from Senate Bill 1489. The purchase of a security with a forward settlement date exceeding 45 days from the time of investment is prohibited. It is also recommended to remove the Qualified Institutional Buyers definition as this can be determined outside an investment policy.
• Investment Pools/Mutual Funds: It is recommended the City seek responses to a set of eligibility questions from any pool or mutual fund utilized by the City. • Review of Investment Portfolio: It is recommended the City state the frequency the Treasurer will review the portfolio to ensure compliance with the investment policy. • Performance Evaluation: It is recommended the City include how the portfolio and benchmark is evaluated.
• Glossary: It is recommended the City only incorporate terminology used throughout the investment policy.
FISCAL IMPACT
No Impact
PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center, and at the Pleasant Hill Police Department.
The agenda and staff report are posted on the City’s web page.
RECOMMENDED ACTION
Adopt the proposed resolution approving the City of Pleasant Hill Investment Policy effective July 1, 2024, and delegating the investment authority to the City Treasurer.
ALTERNATIVES TO RECOMMENDED ACTION
None
ATTACHMENT(S):
Proposed Resolution
City of Pleasant Hill Investment Policy 2024 - Redlined City of Pleasant Hill Investment Policy 2024 - Clean
Prepared by: Andrew Kalinowski, City Treasurer