CITY OF POMONA
COUNCIL REPORT
August 7, 2023
To: Honorable Mayor and Members of the City Council
From: James Makshanoff, City Manager
Submitted By: Andrew Mowbray, Finance Director/City Treasurer SUBJECT: ADOPTION OF A RESOLUTION APPROVING THE FISCAL YEAR 2023-24 STATEMENT OF INVESTMENT POLICY FOR THE CITY OF POMONA RECOMMENDATION:
It is recommended that the City Council adopt the following resolution:
RESOLUTION NO. 2023-130 – A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA, APPROVING THE 2023-24 STATEMENT OF INVESTMENT POLICY FOR THE INVESTMENT OF PUBLIC FUNDS BY THE CITY TREASURER EXECUTIVE SUMMARY:
The Fiscal Year 2023-24 Statement of Investment Policy (Exhibit A) provides guidelines and parameters for the investment of idle cash and is annually approved and adopted by the City Council per Resolution (Attachment No. 1), if approved, will serve to constitute that adoption.
FISCAL IMPACT:
None.
PREVIOUS RELATED ACTION:
On July 18, 2022, City Council approved the Fiscal Year 2022-23 Statement of Investment Policy and reaffirmed the City Treasurer appointment.
DISCUSSION:
The City of Pomona conducts its investment activities in compliance with a Statement of Investment Policy, which is reviewed and adopted annually by the City Council. The policy has been formulated based upon the provisions of California Government Code Section 53601, et. seq., and the Statement of Investment Policy herein submitted is in compliance with that section of the California Government Code.
As submitted for consideration, the City’s Statement of Investment Policy is in full compliance with applicable State Law. Upon approval, the Statement of Investment Policy will continue to furnish the City of Pomona with a source document, assuring compliance with current State legislation, while providing staff with a tool by which to safely implement future investment decisions on behalf of the City, the Housing Authority, and the Successor Agency.
The City consulted Chandler Asset Management (CAM) on modifying the City Investment policy to allow different investment vehicles which would be advantageous in the current market climate. The specific changes to the policy are as follows:
The relevant changes from Senate Bill 1489 (effective 01/01/2023) and Senate Bill 998 (effective 01/01/2021) were incorporated:
Section VIII(A)(8). Added a provision that allows agencies to invest up to 40% in commercial paper if the AUM is > $100 million, which expires 01/01/2026 unless extended.
Section X. Prohibited Investment Vehicles and Practices. Investments are prohibited to have a forward settlement > 45 days from the date of investment. And, clarified zero-and negative interest accrual securities are permitted for US-government backed securities under a provision that sunsets on 01/01/2026, unless extended.
XVII. Performance Evaluation. Quarterly reporting is now required within 45 days, rather than 30 days.
Included in updated Glossary. Remaining maturity shall be measured from settlement date to final maturity, rather than the commonly interpreted trade date.
Changes to support investment in the CAMP Pool
Section VII(A). Added LGIPs as an eligible category. Although no limit is required by code, similar to money market funds, Chandler recommends a 20% limit in any single pool as a best practice.
Section VII(C). Added explanation of the responsibilities of the City to evaluate investment pools, which is a best practice.
Glossary. Added definitions for CAMP and LGIP.
Best practice to review annual investment policy within 120 of fiscal year end.
Based upon the information contained herein, it is recommended that the City Council adopt the attached resolution approving the City of Pomona’s Statement of Investment Policy.
Prepared by:
_____________________________
Dustin Andolsen
Accounting Supervisor
ATTACHMENT(S):
Attachment No. 1 – Resolution No. 2023-130, with Fiscal Year 2023-24 Statement of Investment Policy as EXHIBIT “A” Resolution – Adoption of the Statement of Investment Policy for Fiscal Year 2023-24