TITLE
Recommendation to adopt the Statement of Investment Policy for Calendar Year 2022 pursuant to Section 53646(a) of the State of California Government Code. (Citywide)
DISCUSSION
In accordance with the State of California Government Code, Section 53646, et seq., the City Treasurer must present to the City Council an annual Statement of Investment Policy (Investment Policy). The Investment Policy for the City is based on policies recommended by several professional organizations, including the California Municipal Treasurers’ Association and the Government Finance Officers Association.
The California Government Code Section 53601 that governs investment by local agencies was recently amended. The attached Investment Policy for Calendar Year 2022 (Policy) includes updates to align with those changes. The revision to Section 1.4.3 (B) of the Policy reflects the change to Government Code Section 53601.6(b)(2) that permits local agencies to invest in zero or negative-yielding government-issued securities during rare periods of market duress and negative market rates. The revision to Appendix D of the Policy, Section 6 reflects the change to Government Code Section 53601(h) that permits local agencies with investment assets under management exceeding $100 million to invest up to a maximum 40 percent of the portfolio in Commercial Paper. There are also a number of non-material language improvements to various sections that are updated in Appendix D.
The Policy was reviewed and approved by the Investment Advisory Committee, composed of the Assistant City Auditor, Deputy City Attorney, City Treasurer, City Controller, and designated representatives from the Harbor and Water Departments. The Policy was reviewed by the City’s Investment Advisor, Chandler Asset Management. The changes are detailed in Attachment A.
There is also a significant change in the City’s investment practices authorized under the State Government Code and City Policy. The change in practic...
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