HomeMy WebLinkAbout10,Review of Investment Policy & Delegate AuthorityAction Item #10
Review Investment Policy
and Delegate Authority
to the Treasurer
December 4, 2013
Background / History
• District Code requires:
— Monthly report of cash and investment balances
— Quarterly report of investment funds, yields, and terms
— Annual review of investment policy
• Compliance with current guidance and regulations
• Investment objectives
• Diversification of investments
• Custodial risk
• Financial and economic trends
2
Background / History
• Compliance with guidance and regulations
— Government Accounting Standards Board (GASB)
• Describes reporting obligations
• Requires disclosure of District's investment policy
— California State Law
• Lists acceptable investments
• Requires District to delegate investment duties annually
3
Background / History
• District Code states the investment objectives:
— Preservation of principal
— Liquidity
— Yield
• Investment diversification preserves principal
• Custodial risk is the risk of failure of the financial institution
0
New Information
• Current investments meet the objectives and requirements
of diversification and custodial risk
— US Bank interest bearing checking accounts
— FDIC Insured Bank Certificate of Deposits (CDs)
— California's Local Agency Investment Fund (LAIF)
— Placer County Treasurer's Investment Portfolio (PCTIP)
— Temporary investments in money market funds
5
New Information
• Financial and economic trends
— Yield is low
— No dramatic change expected in the short term
• May 1, 2013 the Board authorized investment of up to
$10 million into the PCTIP
— Yield is over 1.0% annually
— Yield is almost three times more than LAIF
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New Information
• Treasurer has reviewed the investment policy
— Compliant with current guidance and regulations
— Consistent with District objectives
— Diversified with investments
— Acceptable with custodial risk
— Appropriate for financial and economic trends
• No revision to the investment policy is proposed
Fiscal Impact
• There is no direct fiscal impact associated with this item
Recommendation
• Concur with the current District investment policy
• Delegate authority to Robert Mescher, District Treasurer, to
invest District funds for FY14 according to the District's
investment policy