Administrative
Report
N.1., File # 23-7120 Meeting Date: 11/21/2023
To: MAYOR AND CITY COUNCIL
From: EUGENE SOLOMON, CITY TREASURER
TITLE
DISCUSSION AND POSSIBLE ACTION REGARDING THE ANNUAL REVIEW OF THE CITY'S
STATEMENT OF INVESTMENT POLICY
EXECUTIVE SUMMARY
The City Treasurer strives to maintain a well-balanced and diversified investment portfolio that meets the investment criteria and performance objectives of the City's Statement of Investment Policy.
The governing body of public funds should regularly review and approve investment guidelines. The City Council approves the City’s Statement of Investment Policy annually.
California Government Code Section 53646(a)(2) states that the treasurer or chief fiscal officer of a local agency may annually render to his/her legislative body, and any oversight committee, an investment policy, that the legislative body shall consider at a public meeting.
This raises questions about whether or not the policy should be adopted officially by the legislative body, and the time during the year that this “consideration” should take place. The consensus recommendation of the California Debt and Investment Advisory Commission (CDIAC) states: “An investment policy should always be in place. While not required by statute, it is in the best interest of the local agency to present and discuss the policy with the agency’s legislative body or oversight committee, and then have the policy approved by a vote of the legislative body. A public vote signifies that the legislative body shares fiduciary responsibility with the treasurer, increases the authority and legitimacy of the investment policy, and provides transparency and disclosure.” Section 23 of the City's Investment Policy specifies that the City Treasurer present the City's statement of investment policy for annual review and adoption by the City Council, as well as annual review by the Budget and Finance Commission. Review of the investment policy incorporates input and analysis of the State of California government code; Legislative changes impacting investment management enacted in 2023; and the CDIAC annual update of local agency investment policy guidelines may be found at: <http://www.treasurer.ca.gov/cdiac/LAIG/guideline.pdf>.
The City Treasurer recommends the following amendments to the investment policy:
Section I
Government Money Market Fund(s) maximum increased to 20% in place of the current 15% limit.
N.1., File # 23-7120 Meeting Date: 11/21/2023
Section II
No more than 20% of the pool may be invested in government money market mutual funds. Only up to 20% of the pool may be invested in any individual government money market mutual fund.
We believe this change is important to ensure proper liquidity during specific times of the year in alignment with cash flow needs.
The Budget and Finance Commission has reviewed the requested change and recommended the term “Government” be added to the phrasing thereby ensuring that we invest in only government money market funds. Staff is seeking Council direction on incorporating these amendments to the City’s Investment Policy.
COORDINATION
The City's statement of investment policy was reviewed by the City Attorney’s Office.
FISCAL IMPACT
There is no direct fiscal impact as a result of the review and approval of this Investment Policy.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Statement of Investment Policy Fiscal Year 2024
o Exhibit A - Draft City of Redondo Beach Statement of Investment Policy 2023 o Exhibit B - Registered investment advisor and list of qualified brokers from which the City may purchase investments.
o Exhibit C - Investment Procedures Manual