PREPARED BY: HEATHER ROWDEN DATE OF MEETING: 06/17/2024
SUBJECT:
TITLE
CONSIDER ADOPTING RESOLUTIONS OF THE CITY COUNCIL OF THE CITY OF SAN PABLO AND THE SAN PABLO LOCAL SUCCESSOR AGENCY BOARD APPROVING AND ADOPTING AN INVESTMENT POLICY FOR FISCAL YEAR 2024-25
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
Continue Fiscal Resilience, Fiscal Excellence and Fiscal Transparency and New Strategic Budget Initiatives to Address New Structural Deficits Forecasted to FY 2025-2027 are adopted City Council Priorities contained in the adopted Fiscal Year 2023-2025 City Council Priority Workplan, effective May 1, 2023.
BACKGROUND
Government Code Section 53646 allows the Treasurer or Chief Financial Officer to render annually to the City Council and the Local Successor Agency (LSA) Board of Directors a statement of investment policy and requires that any change in the policy be considered at a public meeting. The City’s Investment Policy (the Policy) requires that the Policy be reviewed annually to ensure it comports with current City objectives. Further, Government Code Section 53607 requires that a legislative body delegate investment authority to the CFO annually.
The Policy was reviewed by staff and Insight Investments, the City’s/LSA’s investment advisor. Several administrative changes are being suggested including the removal of any glossary definitions for items that are not found elsewhere in the Policy. The only substantive change being suggested is the movement of the following section:
Securities that have been downgraded to a level that is below the minimum ratings described herein may be sold or held at the City’s discretion. The portfolio will be brought back into compliance with Investment Policy guidelines as soon as is practical.
The section previously only applied to the sale of medium-term notes. Moving this section to apply to all securities provides the City the ability hold investments that have been downgraded below Policy requirements, but the sale of which would incur a loss. If approved, staff would analyze any potential transactions to ensure holding the securities was not a substantial risk to the City, selling at a loss if a higher risk exists.
FISCAL IMPACT
There is no direct fiscal impact as a result of this action.
Attachment(s)
Att A - Resolution 2024
Att A Exh 1 - Proposed FY 2024/25 Investment Policy
Att B - LSA Resolution 2024
Att B Exh 1 - Proposed FY 2024/25 Investment Policy