REPORT TO COUNCIL
SUBJECT
Title
Adopt the City's Investment Policy for Fiscal Year 2022/23 and Receive Annual Performance Report for Fiscal Year 2021/22
Report
BACKGROUND
The City Council first adopted a policy governing the investment of City funds on July 30, 1985. This policy has been reviewed and adopted on an annual basis since that time.
To support the management of an increasingly complex investment environment and a portfolio that is growing significantly, Council approved a three-year contract with Chandler Asset Management, Inc. (Chandler) on April 24, 2018 (RTC No. 18-0281). Chandler investment managers have been managing City investments since July 1, 2018. The City executed the option to extend the contact for two additional years.
EXISTING POLICY
Council Policy 7.1.2 Investment and Cash Management requires that the Investment Policy be reviewed and adopted annually within 120 days of the fiscal year. This review ensures consistency with the overall objectives of safety, liquidity, and yield and its relevance to current laws as well as financial and economic trends.
The key provisions of the existing Investment and Cash Management Policy are as follows:
1. Safety of principal is the foremost objective of the investment program. The City's portfolio is diversified by type of investment, issuer, and maturity date. Diversification is required to minimize exposure to any potential market and credit risk. The investment policy specifies the percentage of funds that can be invested in each investment type and issuer and the maximum maturity of each investment. The policy allows a maximum maturity of seven years for US Treasury, US Agency and Government Sponsored Enterprises (GSE) investments and shorter maturities for all other investments.
2. Liquidity- the portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. A schedule of major revenues and expenditures for at l...
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