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Home My WebLink AboutCC 17 INVEST POLICY 06-19-89CONSENT CALEN DAR NO. 17 TO: FROM: SUBJECT: WILLIAH A. HUSTON, CITY NANACER RONALD A. NAULT, DIRECTOR OF FINANCE CITY OF TUSTIN STATENENT OF INVESTNENT POLICY FOR THE FISCAL YEAR 1989-.1990 RECOMMENDATIOn: Approve the attached Statement of Investment Policy for the fiscal year 1989-1990. DISCUSSION: The Government Code requires that the City Treasurer 'must submit an Annual Statement of Investment Policy to the City Council, and to submit a monthly report containing specified information regarding investments and deposits. · This year the City of Tusttn Audit Committee has reviewed and modified our. previous policy and they have recommended the approval of the Investment Poli'c~ for fiscal year 1989-1990 as attached. Ron~j~d ~' Naul~ ~ ' Director of Finance RAN:ls Attachment CITY OF TUSTIN STATEMENT OF INVESTMENT POLICY FOR THE FISCAL YEAR 1989-1990 I. GENERAL i · Safety. It is the primary duty and responsibility of the City, City Council, City Treasurer and Director of Finance at all times to protect, preserve and maintain intact the principal placed in trust with the City on behalf of the citizens of the community. · · Liquidit. y. An adequate percentage of the portfolio shall be m~intained in liquid, short-term securities which can be converted to cash as necessary to meet disbursement requirements. Yield. Yield is to be a consideration only after the basic requirements of adequate safety and liquidity have been met. · · Legal Investment Authority. Temporarily idle monies shall be invested in accordance with State and local laws and regulations and this Statement of Investment Policy. Statement of Investment Policy. Each year after review- and report by the Audit Committee the Treasurer shall submit to the. City Council a proposed Statement of Investment Policy fo~- Council consideratio~ and adoption as submitted or as revised by the City Council. · Cash Purchase Only. Securities shall not be purchased on margin, credit or for other than full cash payment. and shall not be pledged as collateral. · Repurchase Aqreements. Funds shall not be invested in repurchase or reverse repurchase agreements of any ' kind. · · Selling Securities Prior to MatUrity. Generally losses will be acceptable on a sale before maturity if the reinvested proceeds will earn income with a present value greater than the present value of the income that would have been generated by the old investment, considering any capital loss or forgone interest on the original investment. Monthly Report. The Treasurer shall render a monthly report to the City Manager and City Council which confirms 'compliance with this Statement of Investment Policy, in compliance with the Government Code and pursuant to attached Exhibit 'I". II. GUIDELINES -- The following directiOns and limitati0ns are hereby established, to direct and control investment activities in such a manner that above-stated goals are achieved. 1. Investment Transactions. Every investment transaction shall be reviewed, authorized and documented by the Treasurer. 2. Pooled Cash. Wherever practical, the City's cash shall be consolidated into one bank account and invested on a pooled concept basis. Interest earnings shall be all6cated according to fund cash and investment balances. 3. Competitive Bids. Purchase and' sale of securities shall be made on the basis of competitive offers and bids whenever practical. 4. ~Cash Forecast. The cash flow for the City shall be analyzed with the receipt of revenues and maturity of investments scheduled so that adequate cash will be available to meet disbursement requirements. · InveStment Limitations2 Security purchases, deposits and holdings shall be maintained wi thin statutory limits imposed bY the California Government Code and shall include only the following: i · Certificates of d~posit (or time deposits) of commercial banks, ..savings and loan institutions and federally insured industrial loan companies (with a percentage of equity to assets of not less than 3.0%) to the extent they are fully insured by the Federal Deposit Insurance Corporation or the Federal Savings and 'Loan Insurance Corporation as required by the Government Code. ii. Prime quality commercial paper (highest letter and numerical rating by Moody's or Standard and Poors, A-1 or P-l), but not to exceed twenty-five percent (25%) of invested funds at the time of purchase and limited to a maximum maturity of two hundred and seventy (270) days. iii. Local Agency Investment Fund (State Pool) demand deposits. iv. Commercial bank time drafts (banker' s acceptances), but not in excess of twenty-five percent (25%) of invested funds at the time of purchase with a maximum maturity of one hundred and eighty (180) days· v. Federal agency short 'term bonds or notes, but not in excess of twenty-five' percent (25%) of invested funds at time of purchase with a three hundred and sixty-five (365) day maximum maturity· vi. Treasury bills of 'three (3) months, six (6) months and one (1) year maturity. · _L_i~uidit~. The marketability (salability) of a security shall be co~sidered 'at the time of purchase, as the security may have to be sold at a later date to meet an unanticipated cash demand. · · Lonq-Term Maturities. As a general rule, long-term maturities shall not represent a significant percentage of the total portfolio, as the principal risk involved can outweigh the potential for higher earnings. In no event shall any investment have a term longer than five (5) years. Authorized Dealers/Brokers. Investments shall be transacted only through brokers/dealers which have been reviewed by the Finance Director for reliability and trustworthiness · · Diversification. The portfolio shall consist of a mix of the various types of securities approved by statute and this Statement of Investment Policy as well as a mix of issuers and maturities. 10. Safekesoing. SecuritieS-purchased from brokers/dealers shall'b'e held. in third..party safekeeping by the trust department of the local agency's bank, or by other third party trustee designated by the Director of Finance. Said securities shall be held in the name of the City with the trustee executing agreements and confirmations of investment transactions as directed by the City Treasurer III. STRATEGY'-- Strategy 'refers to the ability to manage financial resources in the most advantageous manner. i · Economic Forecasts. The Treasurer periodically shall obtain economic forecasts from economists and financial experts through bankers and brokers in order to assist the Treasurer with the formulation of investment plans. · Implementinq Investment Strateq¥. The Treasurer shall execute investment transactions which conform with anticipated interest rate trends and the current investment strategy plan. · R~DDort. The Treasurer shall maintain a close working relationship with the departments of the City so as to anticipate and accommodate disbursements of City funds. · For' liquidity planning purposes, department heads shall apprise the Treasurer when large expenditures anticipated. Preserve Portfolio Value· The Treasurer shall 'develop yield standards in order to'maintain earnings near the market and to preserve the value of the City' s portfolio. · JGR: rr :R: 6/14/89 (63f. tw) (1-4) Exhibi~ i DATE: MAY ]0,1989// TO: ilOHORABLE MA~U~'~O MEMBERS OF THE CITY CCXJ#CIL FROH: RO~ALD A. I~I~UL]~',~THA#CE DIRECTOR SUBJECT: INVESTM~JI~-~'~F APRIL 30,1989 ! CiTY OF T~STI'#' INVESTMENT SCHEDULE UITH MATURITIES 12 MONTHS OR LESS CURRENT MARKET VALUE COHPAP Ford 9.66% O4/28/89 05/08/89 $1,496,041 99.74~ TCD American Interstate S&L 8.00X o5/16/~8 05/16/89 $95,000 lO0.OOX TCD Pacific Coast S & L 8.10X 05/17/88 05/17/89 $95,000 IO0.OOX COMPAP Gen. Etect.Cap. Corp. 9.78% 03/20/89 05/18/89 S805,264 99.97'/, COMPAP Pepsico 9.99X 03/2?/89 05/26/89 $983,833 9~.1~/, COMPAP OMAC 9.99'/. 0]/2?/89 05/26/89 $?L~,021 99.21~ TCO Southwest S & L ?.90X 05/31/88 05/31/89 $98,000 IO0.OOX TCO Pacific Savings Bank 8.00~ 06/02/88 06/02/89 $99,000 100.00~ TCD Sears Bank 9.60~ 06/19/85 06/19/89 -. $100,000 100.00~ TCO Brookside S & L 8.20~ 06/27/88 06/27/89 S99,000 lO0.OOX TCO Gateway S & L 8.25X 06/30/88 06/30/89 $95,000 100.00~ TCD Rancho Santa Fe S & L 9.00~ 07/05/87 07/05/89 $95,000 100.00'/, COMPAP Sears 9.80X 04/07/89 07/06/89 S50&,799 99.23~ TCO Oet Ama S & L 8.75~ 07/06/88 07/06/89 S100,000 100.00~ TCO FLagship S & L 8.00~ 07/08/88 07/10/89 S99,000 100.00~ TCD Hawthorne S & L ?.9O% 0?/08/88 07/10/89 $100,000 100.00~ TCO Hutterfieid S & L 8.60X 08/01/88 08/01/89 S95,000 100.00~ TCD County Savings Bank 8.75~ 08/01/88 08/01/89 $100,000 100.00~ TCO Newport Balboa S & L 8.?OX 08/lr/88 08/17/89 $99,000 lOO.OOX TCO Mercury S & L' 8.40X 09/07/88 09/07/89 $100,000 ' IO0.OOX TCD Sank of LA 9.00X 09/14/88 09/14/89 $99,000 I~O.OOX TCO Central Sank 9.00X 09/23/88 09/25/89 S99,000 100.00~ 'TCO Sacramento 1st Nat'[ Bk 9.00X 09/28/88 0,9J28/89 $99,000 IO0.OOX TCO . Viking S & L 9.00X 09/28/88 09/28/89 $99,000 100.00~ TCD Long Beach S & L 8.63% 10/20/88 ?ff/19/89 $100,000 IO0.OOX TCO Investment S&L 9.13X 11/02/88 11/02/89 $98,000 IO0.OOX TCD Guardian S & L 8.75% 11/03/88 11/03/89 S99,000 100.00~ TCD Bet Air S & L 9.00% 11/04/88 11/06/89 $99,000 100.00% TCD Franklin Bank 9.00~ 12/02/88 12/15/89 $99,000 100.00% TCD Tracy S&L 9.38% 12/15/88 12/15/89 S99,000 100.00~ TCO The Guardian S & L 9.00% 01/05/89 01/05/90 S98,000 IO0.OOX TCO PLaza S & L 9.40X 01/09/89 01/09/90 $98,000 100.00~ TCO Gibratter S&L ' 9.75% 02/23/89 02/23/90 S99,000 IO0.OOX TCD Monarch Bank 9.80~ 02/23/89 02/23/90 S99,000 100.00~ TCO San Ctemente S & L 9.85% 02/2~/89 02/23/90 $99,000 IO0.OOX TCD United Coffvnunity Bk 10.10% 02/24/89 02/27/90 S99,000 100.00~ TCD Great ~estern Bank 10.15% 0~/02/89 03/02/90 $99,000 IO0.OOX TCO Home Federal S&L 10.10X 03/02/89 0]/02/90 S100,000 100.00% TCD' Sterling S & L 10.00% 03/17/89 03/20/90 $99,000 IO0.OOX TCO California Fed S&L 10.70% 03/22/89 03/22/90 $100,000 IO0.OOX TCD Uestern Federal S&L 10.50~ 04/11/89 04/11/90 $95,000 IO0.OOX TCO F'irst Republic Thrift 10.50~ 04/12/89 04/12/90 $100,000 100.00~ TCO Vista Savings Bank 10.25X 04/25/89 0&/25/90 $99,000 100.00% TCO ContinentiaL Savings 10.25% 04/25/89 0~/25/90 $99,000 IO0.OOX TCO Household Bank 9.45% 04/24/89 04/25/90 $98,000 100.00% TCD CoLumbus S&L 10.35~ 04/28/89 04/30/90 S98,000 100.00~ COMPAP GE 9.25% 04/20/89 05/22/90 $499,856 99.18X TCD Far,est S & L 9.85% 02/28/89 08/2?/90 S98,0eO 100.00% TOTAL SHORT TERM DEPOSITS $10,643,064 100.00~ 1 O0.00~ 99.97X 99.21% 100.00~: · 100.00~ 1 O0.00~ 100.00~ 100.00~ 1 O0.00~ 100.00~ lO0.OOX 100.00~, 1 O0.00% 1 O0.00~, 100.00% 100.00~. IO0.OOX 100.00% 1 O0.00~, 100. OOr, 100.00~{ 1 O0.00~ 100.00~, 100.00~, 100.00% 1 O0. OOX ~00.00~ 100.00~ 1 O0.00~. 1 O0.00~ 100.00% 100.00% 100.00~ 100.00% 100.00% 100.00~ 100.00~. 100.00~ 100.00~ 100.00% 100.00~ 1 O0.00~ 99.18% 100.00% ° PURCHASE MATURITY PURCHASE TYPE BANK/AGENCY RATE DATE DATE AMOUNT PRICE ...... ...................... ...... .o..o...o ......~ 0o....o.o0.. oo~...o.. COMPAP GMAC 9.30X 04/25/89 04/24/89 )1,488,250 98.47~ 98.47~ Savings: B of A 4.75Z $27,603 LAIF 8.87X $26,500,000 'TOTAL I#VESTMENTS OF 12 HOIITHS OR LESS $37,170,667 .. CITY INVESTMENT SCHEDULE UITH NATURITIES IN EXCESS OF 12 MONTHS .............................------ CURRENT PURCHASE NATURITY AHOUNT PURCHASE TYPE BANK/AGENCY YIELD DATE DATE INVESTED PRICE ...... ..............-------- .....-- ........- ......... ..........-- ......... ......... CURRENT HARKET VALUE TCD Lincoln S & L 11.85Z 12/14/84 12/19/89 $100,000 10&.17'/. 104.17'/. NOTE Fed. Home Loan Bank 6.65~ 09/02/86 01/25/90 $250,000 113.63~ 105.09~ TCD Capital Bank 8.63X 0~112/88 04/12190 $~9,000 100.00'4 IO0.OOX TCD Imperiat Savings 9.00~ 11/22/88 05/21/90 $99,000 100.00~ 100.00~ TCD Hamilton Savings BK 9.35X 11/03/88 11/05/90 S99,000 100.00~ 100.00~ TCD Westport S&L 9.20'X 11/23/88 11/73/90 S99,000 IO0.OOX IO0.OOX T~D Executive S&L 9.25~ 11/23/88 .11/73/90 $99,000 100.00~ 100.00~ TCD Encino S&L 9.25X 11/23/~. 11/26/90 $99,000 100.00'4 IO0.OOX NOTE Fed. Nat't Hort. Corp. 6.99'X 09/10/86 12/10/90 $306,535 107.63~ 101.25~ NOTE Fed. Farm Credit Bank 7.08~ 09/04/86 04/22/91 $600,000 102.13~ 98.15Z TCO Homestead S & L 8.&5~ 08/17/87 08/12/91 $90,000 100.00~ 100.00~ NOTE Fed. Farm Credit Bank 7.51~ 09/02/86 01/20/92 $220,313 117.38~ 108.32~ TCD Genera[ Bank 12.25X 06/19/87 06/17/92 $98,000 IO0.OOX 98.25~ TCO Feather'River State BK 9.55~ 11/04/88 11/04/93 $99,000 100.00~ 100.00~ ............ $2,357,848 · TOTAL CITY INVESTMENTS $39,528,515 TUSTIM COI~NITY REDEVELOPHENT AGENCY IHVESTHENT SCHEDULE WITH HATURITIE$ 12 HONTH$OR LESS ...............................--- PURCHASE HATURITY PURCHASE TYPE BANK/AGENCY RATE DATE DATE AHOUNT PRICE ...................--------- ...... ......... ........~ ............ .................. CURRENT #ARKET VALUE TO) South.est S & L 7.90~ 05/31/88 05/31/89 $98,000 100.00~ IO0.OOX CONPAP GE 9.452 04/28/89 05/31/89 ~99,T31 100.002 100.00~ TO) P~cJfic Savings Bank '8.00~ 06/03/88 06/03/89 $99,000 IO0.OOX IO0.OOX CONPAP GE Capita{ Corp 9.97~ 03/27/89 06/23/89 $352,529 99.20~ 99.20~ TO) ButterfJeLd S & L 8.25X 07/07/88 07/09/89 $95,000 ]00.00~ IO0.OOX TO) Hawthorne S & L 7.93~ 07/08/88 07/10/89 $100,000 ~00.00~ 100.00~ TO) Executive S &.L 9.00~ 09/05/88 09/05/89 $99,000 IO0.OOX 100.00~ TO) Brookside S & L 8.50~ 09/29/88 09/29/89 $98,000 100.00~ 100.00~ TO) American S & L 8.50X 10/03/88 10/03/89 $99,000 100.00~ 100.00~ TCD Gateway Savings Bank 9.00~ 12/05/88 12/05/89 $99,000 100.00~ 100.00~ TO) Omni Bank 8.90~ 12/15/88 12/15/89 $99,000 100.00~ 100.00~ TCD Western Fed. S&L 9.50X 12/15/88 12/15/89 $99,000 IO0.OOX IO0.OOX TO) Tracy S&L 9.50X 12/15/88 12/15/89 $99,000 100.00~ 100.00~ TO) Westco Savfngs Bank 9.75X 01/11/89 01/11/90 $98,000 IO0.OOX 100.00~ TO) Guardian S & L 9.55X 01/11/89 01/11/90 $98,000 IO0.OOX 100.00~ TO) Standard Pac. Say. Bk 9.50~ 01/11/89 01/11/90 $98,000 IO0.OOX 100.00~ TO) Net~ort BaLboa $ & L 9.50X 02/21/89 02/21/90 $99,000 100.00~ IO0.OOX TO) San CLemente S&L 9.85~ 02/23/89 02/23/90 $99,000 100.00~ 100.00~ TO) Home Federal S&L 10.10~ 02/28/89 02/28/90 $100,000 100.00~ IO0.OOX TCD CaLifornia Fed S&L 10.70~ 03/22/89 03/22/90 $100,000 100.00~ 100.00~ TO) Southern CaLifornia IO.OOX 03/29/89 03/29/90 $95,000 100.00~ IO0.OOX TCD County Savings Bank 9.88X 03/30/89 03/30/90 $100,000 100.00~ 100.00~ TO) Century CJ~y S&L 10.50~ 04/07/89 04/07/90 $99,000 100.00~ IO0.OOX TO) FoothiLL Thrift 10.25X 04/07/89 04/07/90 $99,000 IO0.OOX 100.00~ TCD Columbus &L 10.35~ 04228/89 04/30/90 $98,000 100.00~ 100.00~ TCD gonarch Bank 9.80X 02/23/89 09/27/90 $99,000 IO0.OOX 100.00~ ............ - TOTAL TCB's $3,218,260 LAIF 8.77~ TOTAL INVESTHENTS OF 12 HOHTHS OR LESS $5,000,000 $8,218,260 ............ TUSTIN CONHUNITY REDEVELOPMENT AGENCY · INVESTMENT SCHEDULE WITH NATURITIES l# EXCESS OF 12 NONTHS ....................--.------------ CURRENT PURCHASE NATURITY AMOUNT PURCHASE TYPE BANK/AGENCY YIELD DATE DATE INVESTED PRICE ...... ...........----------- .....-- ........- .......-- .........--- ........- ......... CURRENT MARKET VALUE TCD CoLumbia S & L 6.76X 12/31/86 08/31/89 $100,000 106.50~ 99.00~ TO) Rancho Santa Fe S & L 9.25~ 08/21/87 08/20/90 $99,000 100.00~ IO0.OOX ~CD General Bank 7.50~ 06/19/87 06/17/92 $98,000 100.00~ 100.00~ Bonds Fed. #at'L HorZ. Corp. IO.&3X 12/31/85 09/13/13 $22,074 100.00~ 100.00~ $319,074 TOTAL RDA INVESTMENTS S8,537,334. ............ TOTAL INVESTMENTS $~8,065,8~9 Legend: TCD-TIHE CERTIFICATE OF DEPOSIT NCD-#EGOT~ABLE CERTIFICATE OF DEPOSIT COI~PAP-COI~ERCIAL PAPER NOTE-GOV. AGENCY NOTES BOfJD$-GOV. AGENCY BONDS