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6.A. - Page 1 of 22 <br />/<�ik <br />Redwood <br />CitylCallifornia <br />Faunded 1867 <br />\:3aAW <br />DATE: January 14, 2019 <br />SUBJECT <br />STAFF REPORT <br />To the Honorable Mayor and City Council <br />Annual Update of City of Redwood City Investment Policy <br />RECOMMENDATION <br />From the City Manager <br />Review proposed changes and, by motion, approve updates to the City's Investment Policy to comply <br />with changes in State law and to make minor administrative changes. <br />STRATEGIC INITIATIVE <br />Government Operations <br />BACKGROUND <br />The City has an investment portfolio of approximately $230 million, which consists of reserves and fund <br />balances held by the City for general operations, capital projects, utilities, and various other special <br />purpose funds. The return on the investments in the form of interest income is a significant component <br />of City revenues, and it varies annually depending on the interest rates in the market. <br />Investments are governed by State law (referenced as "Code" in this report) and the City's Investment <br />Policy (Policy) in order to achieve the City's investment objectives of safety, liquidity, and return. The <br />original Policy was adopted in the early 1990s. In June 2016, the City Council adopted a new Policy to <br />address the City's investment objectives in light of the growth of the City's investment portfolio and <br />changing market conditions, and to incorporate best practices as informed by the California Municipal <br />Treasurers Association (CMTA). <br />The City Council is required to review the policy annually and approve any modifications. The Policy was <br />last reviewed in the fall of 2017. <br />The City's professional investment manager, PFM, is beginning year three of providing professional <br />investment services to the City. PFM has consulted with staff and has suggested an administrative update <br />to the Policy to align with recent State Code changes. Additionally, staff is recommending minor <br />administrative changes to the policy outlined below. <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />19 <br />