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June 2, 2021 Annual Investment Policy Review ACTION ITEM # 17
•BACKGROUND / HISTORYBACKGROUND / HISTORY Investment Policy ReviewInvestment Policy Review timepolicy at this is not recommending changes to the investment Staff •3.20.012.9of District
Code Title 3 Chapter the current Investment Policy section of Staff Report is Attachment •annually The Board reviews the District’s Investment Policy
•BACKGROUND / HISTORYBACKGROUND / HISTORY Investment Policy ReviewInvestment Policy Review Codeaccordance with Section 53607 of the California Government certain duties as described
in the District’s investment policy in Each year, the Board delegate’s authority to the Treasurer to perform
•BACKGROUND / HISTORYBACKGROUND / HISTORY Investment Policy ReviewInvestment Policy Review delegation of authority pursuant to this section each year.”Subject to review, the legislative
body may renew the body. and shall make a monthly report of those transactions to the legislative those transactions until the delegation of authority is revoked or expires, , who shall
thereafter assume full responsibility for of the local agencyto the treasurer year period by the legislative body -delegated for a onelocal agency, or to sell or exchange securities
so purchased, may be The authority of the legislative body to invest or to reinvest funds of a “•statesSection 53607
Investment Policy Review($9m at 3/31/2021)JPA) in UAMPS membership our by Utah Public Treasurers’ Investment Fund (authorized –UPTIF •($8m at 3/31/2021)Placer County Treasurer’s Pooled
Investment Fund –PCIF •($19m at 3/31/2021)State Treasurer California Local Agency Investment Fund managed by –LAIF •equivalent (liquid) governmental investment pool fundsCurrently,
the District Investments comprise of three cash •NEW INFORMATIONNEW INFORMATION Investment Policy Review
Investment :Avg3 Pools Yields NEW INFORMATIONNEW INFORMATION LTM-Yields Investment LTM-Yields
Investment Policy Review income differenceinvestment $ 360,000 $30m @ 0.3% = $ 90,000 investment income•$30m @ 1.5% = $450,000 investment income•Investment Yield Change impacts•NEW
INFORMATIONNEW INFORMATION Investment Policy Review
•NEW INFORMATIONNEW INFORMATION Investment Policy ReviewInvestment Policy Review yieldschannels at current pool pool investment only compared to year $50,000 per estimated an annual
basis, utilizing new broker investment channel, generates an incremental On -$10M in investment security purchasesStaff recommends engaging with broker, Time Value Investments (TVI),
for up to •policy and CA regulatory requirements (preservation of principal)Managed funds route is expensive and investment options are limited due to •Policy and CA regulatory requirements
(CAGC Section 53646)Staff has research yield improvement options, while keeping within Investment •Budget expectations of approximately 1.0% The three pool funds (LAIF, PCIF, UPTIF)
yields at 0.34% are much lower than
Time Value Investments (TVI NEW INFORMATIONNEW INFORMATION Investment Policy ReviewInvestment Policy Review DistrictSquaw Valley Public Service •City of Nevada City•City of Loomis•City
of Madera•South Feather Water and Power Agency•This includes•Californiainvestments through TVI, including over 70 in Over 400 public entities have opened accounts and purchased •TVI
presentation provided in Staff Report, attachment 2•)
•FISCAL IMPACTFISCAL IMPACT Investment Income for the District:Investment Income for the District:channelspool investment generates an incremental estimated $50,000 per year compared
to only On an annual basis, utilizing new broker investment channel, •)in 2021 $10M invested with brokerwith broker as recommend, $92,000 shortfall in 2021 (only 5.5 months $400,000
Forecast @ current yields in pool funds and investing $10M •Budget 110,000 shortfall to $investment channels), $382,000 Forecast @ current yields using only pool funds (existing •amountbudget
at current actual yields will not achieve this –492,000 Budget 2021 $
A RECOMMENDATIONRECOMMENDATION Investment Policy ReviewInvestment Policy Review Policy funds for FY21 according to the District’s Investment ) Delegate authority to Michael Salmon, Treasurer,
to invest District Cwith new investment broker, Time Value Investments; andengagement agreement an ) Authorize the General Manager to execute Bthis actionchanges to DC or some other
improved wording of affirm no ; Title 3, Chapter 3.20.012.9 and provide direction as neededthe District’s investment policy as described in District Code ) Review