December 3, 2024
Finance Department
DATE: December 3, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Jerry Gurule, Accounting Manager
SUBJECT:
City Council’s Direction for Investment Policy Update
FINANCIAL IMPACT: There is no fiscal impact due to this agenda item
PREVIOUS COUNCIL
ACTION:
April 30, 2024
STATEMENT OF THE
ISSUE:
On April 30, 2024, City Council directed staff to review and modify the City of Richmond’s Investment Policy.
City staff is bringing the revised Policy and associated resolution before City Council for review and approval.
RECOMMENDED ACTION:
REVIEW the City’s Investment Policy and ADOPT a
resolution to approve the updated policy – Finance
Department (Andrea Miller 510-620-6740).
AGENDA
REPORT
December 3, 2024
DISCUSSION:
The City of Richmond’s Investment Policy is an integral part of the Finance Department, setting standards and procedures regarding how the City's funds are invested. The Investment Policy is consistent with the guidelines of the California Municipal Treasurers Association (CMTA) Certification Program. The Investment Policy addresses the 19 sections that the Association deems as critical elements, which are as follows:
1. Policy
2. Scope
3. Prudence
4. Objective
5. Delegation of Authority
6. Ethics and Conflicts of Interest
7. Authorized Financial Dealers and Institutions
8. Authorized and Suitable Investments
9. Review of Investment Portfolio
10. Investment Pools/Mutual Funds
11. Collateralization
12. Safekeeping and Custody
13. Diversification
14. Maximum Maturities
15. Internal Controls
16. Performance Standards
17. Reporting
18. Investment Policy Adoption
19. Glossary
The Investment Policy provides for the City to invest public funds in a manner which prioritizes safety and liquidity over yield, while meeting the daily cash flow demands of the City and conforms to all state and local statutes governing the investment of public funds per California Government Code Section 53601. The investment policy further provides that the policy shall be reviewed annually and adopted by resolution of the City Council (last updated October 17, 2023).
At the special City Council meeting on April 30, 2024, City Council directed City staff to review and modify the City of Richmond’s Investment Policy to add additional restrictions eliminating the investment of City funds in industries that facilitate violence, war, oppression, and apartheid. City staff has been directed to present Investment Policy modifications and recommendations for socially responsible investments to City Council for consideration.
Following the special City Council meeting, City staff reached out to the neighboring City of Hayward to discuss policy changes as the City of Hayward approved similar restrictions in January 2024. During the meeting with City of Hayward, concerns were brought up around Assembly Bill (AB) 2844 that relates to Public Contracts and
December 3, 2024
Discrimination. To ensure the additional restrictions comply with the AB 2844 text, City staff developed four new restrictions to address City Council’s concerns around socially responsible investments while complying with the text included in AB 2844.
Based on City staff’s research and City Council direction, the following restrictions are added to the City’s Investment Policy:
4. The City will not invest in companies that develop and manufacture commodities that facilitate violence, war, oppression, and apartheid.
5. The City will not invest in companies that develop and manufacture arms and weapons.
6. The City will not invest in companies that develop and manufacture commodities involved in border and mass surveillance industries.
7. The City will not invest in companies involved in mass incarceration and detention industries, nor those companies that use prison labor to manufacture products.
In addition, the Director of Finance has sent a letter to the California State Treasurers’ Office requesting the state eliminate the investment of Local Agency Investment Funds (LAIF) in industries that facilitate violence, war, oppression, and apartheid.
DOCUMENTS ATTACHED:
Attachment 1 – Investment Policy
Attachment 2 – Investment Policy Resolution