TITLE
Recommendation to receive and file the Investment Report for Quarter Ending December 31, 2015. (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 December 31, 2015, these funds had a book value of approximately $1.535 billion.
Approximately $520 million of the total investment pool, or approximately 34 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 and Performance Management Bureau staff, and designated representatives from the Harbor and Water departments, meets quarterly, or as needed, to review investment policies, strategies and performance.
Investment Pool Rating
On March 13, 2015, Standard and Poor’s (S&P) downgraded the City’s investment pool rating to AAf from AAAf, with one of the lowest volatility ratings of S1, due to the increased exposure to longer-termed U.S. Treasury and Agency securities. All portfolios that have substantial holdings of similar U.S. Government securities will be negatively impacted. S&P rates the City’s investment pool based on a credit-scoring matrix that looks at the un...
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