TITLE
Recommendation to receive and file the Investment Report for Quarter Ending September 30, 2014. (Citywide)
DISCUSSION
The Department of Financial Management, City Treasurer's Office, invests the City’s funds in compliance with the California Government Code, Section 53600 et. seq., and the City’s Investment Policy. As of September 30, 2014, these funds had a book value of approximately $1.587 billion.
Approximately $719 million of the total investment pool, or approximately 45 percent of funds, will mature within six months, ensuring that sufficient funds are available to meet the City's liquidity needs.
Statutory Compliance
All investment transactions have been executed in conformance with the City's Investment Policy and the California Government Code. According to the California Government Code, the maturity term of all investments is limited to a maximum of five years, unless the local agency legislative body gives prior approval to exceed this limitation. The City’s Investment Policy currently requires that all funds invested in the City’s investment pool not exceed a weighted average maturity of three years. In addition, the Investment Advisory Committee, composed of the Assistant City Auditor, Deputy City Attorney, Director of Financial Management, City Treasurer, City Controller, Budget Management Bureau staff, and designated representatives from the Harbor and Water departments, meets monthly, or as needed, to review investment policies, strategies and performance.
Investment Pool Rating
Standard and Poor’s (S&P) rates the City’s investment portfolio at AAAf with one of the lowest volatility ratings of S1; however, this rating will likely be downgraded in the near future due to the downgrading of United States Treasuries (U.S. Treasuries). The S&P rating is based on a credit-scoring matrix that looks at the underlying rating of the securities in the portfolio and the weighted average life of the securities. The prior downgrade of the U.S...
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