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6.1.D. - Page 1 <br />REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br />June 27, 2011 <br />SUBJECT <br />Investment Policy <br />RECOMMENDATION <br />Approve, by motion, the City of Redwood City investment policy as amended. <br />BACKGROUND <br />The government code requires that the City's investment policy be presented to the City <br />Council for review and approval each year only if there are changes made to the policy. <br />The following changes are recommended: <br />1. Section VIII. A. — increase the limits from $100,000 to $250,000 to reflect the <br />increase in Federal Deposit Insurance Corporation (FDIC) insurance on <br />certificate of deposits with banks that are insured by the FDIC. <br />2. Section VIII. C. and D. — clarify and make more explicit that the safekeeping and <br />delivery instructions in section XVI apply to securities described in these <br />sections. <br />3. Section X. — Delete the requirement that certificates of deposits may only be <br />purchased directly from banks. This is an inefficient way for staff to locate the <br />best rates available for certificates of deposits and does not improve the safety or <br />security of the underlying investment. <br />Inasmuch as the recommended changes are more clerical and ministerial in nature the <br />Council Finance Committee was not convened to review these changes. Instead staff <br />presented the proposed change to Mayor Ira, chair of the Finance Committee, who <br />reviewed these proposed changes and directed staff to present the revised investment <br />policy to the full Council for consideration. <br />The recommended investment policy with the recommended changes illustrated in <br />underline and strikethrough format is attached. <br />ALTERNATIVES <br />Council may elect not to approve this recommendation but in doing so places the City in <br />the position of having its investment policy lacking some measure of clarity. <br />