SR - RES-11005 - STATEMENT OF INVESTMENT POLICY FY 2017-181. SUBJECT
Annual review and approval of the Statement of Investment Policy (SIP) for Fiscal Year 2017-
18.
2. SUMMARY
Per recommendation from the Investment Advisory Committee, the Investment Oversight
Committee, and staff, it is proposed that the portfolio limit in federal agencies at time of purchase
be increased from 70% to 75 %.
3. RECOMMENDATION /ACTION
Adopt Resolution No. 11005.
4. FISCAL IMPACT
No fiscal impact.
5. STRATEGIC PLAN GOAL(S)
2d. Be a Fiscally Healthy Community — Effectively manage and develop City assets.
6. GENERAL PLAN IMPLEMENTATION
N/A
7. DISCUSSION and BACKGROUND
The California Government Code Section 53646 requires that the Statement of Investment Policy
be reviewed and approved by the legislative body on an annual basis. The City's Investment
Policy is one of the most conservative policies in the State and it is proposed that the very
conservative features of the policy be maintained. Many of the allowable investments under the
State Code are not permitted in the City's policy. Also, our policy puts additional specific limits
on U.S. Government Agency investments and the Local Agency Investment Fund (LAIF).
The proposed revision to the Statement of Investment Policy has been the result of a review and
recommendation from staff, the Investment Advisory Committee, and the Investment Oversight
Committee. A joint meeting of both Committees was held on February 1, 2017 to discuss the
proposed investment policy update. The proposed change to increase federal agencies percentage
of the total portfolio at time of purchase from 70% to 75% will allow more flexibility to invest
funds with higher rates of return. The recommended change to the investment policy is as
follows:
Section 3.1 Investments Authorized (see p.6 of SIP attached)
(2) Obligations issued by banks for cooperatives, federal land banks, federal
intermediate credit banks, the Federal Home Loan Bank, the Tennessee Valley
Authority, the Federal National Mortgage Association, or other instruments of, or
issued by, a federal agency or a United States government- sponsored enterprise. In
every case, any issue purchased must be fully guaranteed as to principal and interest
by the full faith and credit of the United States, or the issuing federal agency.
(Limits: Maximum maturity at purchase 5 years; maximum concentration
75 of portfolio at time of purchase with no more than 35% of total portfolio in any
single agency and excluding completely Government National Mortgage
Association bonds; i.e., GNMA's.)
8. ATTACHMENTS
Resolution No. 11005
Statement of Investment Policy (Redlined Version)
Statement of Investment Policy (Clean Version)
ITEM
6/13/17
` 0Printed on Recycled Paper
RESOLUTION NO. 11005
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ORANGE APPROVING AND
ADOPTING A STATEMENT OF INVESTMENT
POLICY FOR FISCAL YEAR 2017 -18
WHEREAS, California Government Code Sections 53600 et seq. set forth detailed
provisions regarding permitted and prohibited investments by cities and accountability
therefor; and
WHEREAS, the City Council adopted Resolution No. 10945 on June 14, 2016
adopting the City's Statement of Investment Policy for Fiscal Year 2016 -17 (herein referred
to as the "FY 2016 -17 SIP "); and
WHEREAS, the FY 2016 -17 SIP requires that the City Council annually review its
Statement of Investment Policy and adopt a policy annually within 120 days following the
end of each fiscal year by a resolution and vote of the City Council at a public meeting; and
WHEREAS, the City's Investment Advisory Committee and Investment Oversight
Committee have reviewed the proposed Statement of Investment Policy for Fiscal Year 2017-
18 (herein referred to as the "FY 2017 -18 SIP ") in the form attached to this Resolution, and
has recommended that the City Council adopt the FY 2017 -18 SIP; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Orange that the FY 2017 -18 SIP, in the form attached, is the City's Statement of Investment
Policy for Fiscal Year 2017 -18 and is duly adopted in accordance with State law and Chapter
2.49 of Title 2 of the Orange Municipal Code.
ADOPTED this day of , 2017.
Teresa E. Smith
Mayor of the City of Orange
ATTEST:
Mary E. Murphy
City Clerk of the City of Orange
I, MARY E. MURPHY, City Clerk of the City of Orange, California, do hereby
certify that the foregoing Resolution was duly and regularly adopted by the City Council of