AgdaPkt 2000-12-18 - Laserfiche WebLink

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� s � ' ^ �' fil�� f f6Y� - �'+ f '� . , h �w �' '. . .. �,"'.p+1M�r � 'Yr . �-'� . * '1 r ' 1 �` � �' ' .. � 4 �dY.. �� 's�. V .^ v�' � . )� � p�' � M .:�� :�x._°. �.:'� �' .�`''� �"� �'' i s f � . "� �' a#" ''` � � . Z . .. . p � � .. 2 '�'' � To th�Honorab�e� 1��;��►� �' nd��G��.'Gounc�i= � ro r � �_ a � �Q� � �� ~� � � � :��a ��:�+� � � Ntanag�er-� �. �,� . ��. �� rt .� 3_„�� .,.:_ December 18, 2000 Subject -� Investment Policy Recommendation It is recommended that the City Council approve the proposed changes to the City's Investment Policy. Background The government code requires that the City's Investment Policy be presented to Council for review and approval each year. The City's practice has been to first present the Investment Policy to the Finance Committee (formerly known as the Investment Committee) for review and approval of any suggested changes. In keeping with this practice, the Finance Committee reviewed and approved one suggested change to the City's Investment Policy at their November 1, 2000 meeting. This recommended change is to provide the authority to invest in high-grade corporate notes. Corporate notes are unsecured promissory obligations issued by corporations organized and operating in the United States. These notes are traded in the security markets and are debt instruments that corporations use to raise capital for various business needs. Staff recommends that the Treasurer be authorized to invest up to 30% of the City's portfolio in corporate notes that are rated "A" or better by Moody's or Standard and Poor's ratin.g services. Moreover, it is recommended that not more than $5 million be invested in any single issuer and that the maximum maturity for any such investment not exceed three years. This change is recommended so that the City may obtain increased interest income without exposing the City to substantial risk of principal losses. As of November 1, 2000, corporate notes maturing in three years, rated "A", were yielding about 1.10% greater than U.S. Treasury notes. Adding corporate notes to the City's portfolio could increase general fund interest income befinreen $20,000 to $40,000 per year. The proposed Investment Policy with changes is attached. � ' ,��,�, Brian Ponty Edward P. Everett . Director of Finance and Financial Planning City Manager _ , . , . .. .. . . . . ..... .. . .. � _... . .. . . ..., .. _.._... ._.......��..... .. .