CITY OF SIGNAL HILL
STAFF REPORT
2175 Cherry Avenue • Signal
Hill, California 90755-3799
6/27/2023
AGENDA ITEM
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
HONORABLE CHAIR
AND MEMBERS OF THE CITY COUNCIL AS SUCCESSOR AGENCY
FROM: CARLO TOMAINO
CITY MANAGER
BY: SHARON DEL ROSARIO
ADMINISTRATIVE SERVICES OFFICER/FINANCE DIRECTOR
SUBJECT:
RESOLUTIONS ADOPTING INVESTMENT POLICIES
Summary:
The City's Investment Policy provides guidelines for the prudent investment of the City's available resources and outlines policies for maximizing the efficiency of the City's cash management process.
The ultimate goal of an Investment Policy is to enhance the economic status of the City while protecting its pooled cash. In accordance with California Government Code Section 53646(a), an annual rendering of the City’s Investment Policy shall be presented to the City Council for consideration. Staff does not propose changes to the Investment Policy at this time. In addition, the City Council as Successor Agency, will consider adoption of a companion policy addressing Successor Agency funds.
Recommendations:
City Council:
Adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA,
ADOPTING ITS INVESTMENT POLICY FOR PUBLIC FUNDS
Successor Agency:
Adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL AS SUCCESSOR AGENCY OF THE CITY OF SIGNAL,
CALIFORNIA, ADOPTING ITS INVESTMENT POLICY FOR PUBLIC FUNDS CITY OF SIGNAL HILL Page 1 of 3 Printed on 6/23/2023
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Fiscal Impact:
There is no fiscal impact associated with the proposed recommendations.
Strategic Plan Objectives:
Goal No. 1: Ensure long-term fiscal sustainability.
Goal No. 6: Promote a transparent and open government.
Background and Analysis:
The primary objective of the City’s Investment Policy is to provide a framework of approved securities in which the City can legally invest. The Investment Policy drives the cash, treasury, and investment management functions of the City, and serves as a guide for setting and achieving program objectives, defining rules, establishing benchmarks, and reducing exposure to risk. It is also important to note that rating agencies pay close attention to the City’s Investment Policy and portfolio in determining its credit rating, which is a key element when seeking financing options.
The Investment Policy is based on State of California Government Code Sections 53600 through 53609 and 53630 through 53686. These laws, as well as guidelines set forth by the Association of Public Treasurers of the United States and Canada, the California Municipal Treasurers Association (CMTA), and the Government Finance Officers Association (GFOA), have aided City staff in policy development. The State laws and established guidelines encompass a broad array of allowable investments and investment standards to suit the different needs of California's local agencies.
Annual adoption of the City’s Investment policy provides an opportunity to regularly review the policy to ensure its consistency with the overall objectives of safety, liquidity, and yield, as well as its relevance to current law and economic trends. The Investment Policy applies to the City's Pooled Investment Portfolio, Bond Proceeds Portfolio, and the Special Districts Portfolio. These portfolios encompass all funds under the oversight of the City Treasurer or approved designee.
The Investment Policy is more conservative than what is allowed by State law as it further restricts the percentage of allowable credit investments (Appendix C of Exhibit A to the Resolutions).
Currently, the Finance Department presents the Schedule of Investments on a monthly basis. This level of disclosure exceeds the quarterly reporting requirement by the State. The City’s banking investment broker also reviews the policy periodically to ensure compliance with applicable State statutes and also provides recommendations for strategic changes to position the portfolio in a way that maximizes yield while maintaining safety and liquidity.
Staff intends to continue presenting the Investment Policy annually for adoption and will continue to present the Schedule of Investments monthly. Staff does not recommended changes to the Investment Policy at this time.
Attachments:
A. City Council Resolution
B. City Council Investment Policy
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C. Successor Agency Resolution
D. Successor Agency Investment Policy
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