ANNUAL INVESTMENT POLICY REVIEW
FISCALYEAR 2022-2023
Public Safety, Finance and
Strategic Support Committee
JULIA H. COOPER, DIRECTOR OF FINANCE
LUZ COFRESÍ-HOWE, ASSISTANT DIRECTOR OF FINANCE
QIANYU SUN, DEPUTY DIRECTOR OF FINANCE – DEBT & TREASURY MANAGEMENT COMMITTEE AGENDA: FEBRUARY 16, 2023
ITEM: (d) 3
FILE: CC 23-021
INVESTMENT POLICY
(COUNCIL POLICY 1-12)
• The City’s Investment Policy conforms with California Government Code section 53601
• Manage investments to meet the City’s Investment Policy objectives:
▪ Safety
▪ Liquidity
▪ Yield
• Investment Strategy:
▪ Maintain a diversified portfolio of conservative and highly-rated fixed income securities ▪ Match cash flow needs with maturing securities
▪ Buy-and-hold trading strategy
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AUTHORIZED INVESTMENTS
AUTHORIZED INVESTMENT TYPE POLICY LIMIT %
U.S. Treasuries & Government Agencies None
Local Agency Investment Fund None
Investment Agreements None
Supranationals 20%
Bankers Acceptances 20%
Time Deposits 15%
Commercial Paper 20%
Negotiable CDs 20%
Repurchase Agreements 20%
Corporate Notes 30%
Joint Powers Authority Pool 20%
Money Market Funds 20%
Reverse Repurchase Agreements 20%
Municipal Bonds 30%
Mortgage-Backed Securities 10%
Asset-Backed Securities 5%
POLICY REVIEW REQUIREMENTS
• The Policy requires that the Finance Department:
▪ Perform an annual review of the Policy;
▪ Submit any proposed changes to the Public Safety, Finance, and Strategic Support Committee for its review subsequent consideration; and ▪ Approval by the entire City Council.
• A redlined version of the City of San José Investment Policy, Policy Number 1-12, is included as Exhibit A.
4 PROPOSED POLICY REVISIONS
• Reduce the single issuer/institution exposure in the portfolio from 10% to 5%
▪ Apply to combined credit exposure from a single issuer in Banker’s Acceptances, Commercial Paper, Negotiable CDs and Corporate Notes ▪ Enhance diversification of the City’s portfolio
▪ Lower the potential loss from a single issuer related corporate event ▪ Align with the City’s investment objectives of safety and liquidity 5 RECOMMENDATION
1) Approve the City of San Jose Investment Policy,
as amended.
2) Refer the City of San Jose Investment Policy as well as the appropriate resolution to the full City Council for consideration at the March 21, 2023 City Council Meeting.
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