Ask your City Treasurer
The management responsibility for the City’s Investment Program is delegated to the City Treasurer by the City Council. The Treasurer will monitor and review all investments within the portfolio for consistency with the City’s Investment Policy. The City Treasurer may delegate investment decision making and execution authority to an investment advisor. The advisor will follow the Investment Policy and such other written instructions as are provided.
The first and foremost objective of the City’s Investment Program is safety of principal and/or interest, followed closely by liquidity (the ability to convert an investment into cash quickly for cash flow purposes). Secondary to these two objectives is maximizing the rate of return (yield). Attempts are made to invest in securities with the highest return potential, provided the criteria for safety and liquidity are met.
While a full list of the permitted investments can be found in the City’s Investment Policy, some of the more common types of securities eligible for investment include time certificates of deposit, Local Agency Investment Fund, U.S. Treasury securities, U.S. Agency securities, corporate medium-term notes, commercial paper, negotiable certificates of deposit, and asset backed securities. Additionally, all investments must have a final stated maturity of no more than five (5) years from the date of purchase, with the exception that the City may purchase up to 15% of its entire portfolio in U.S. Treasuries and Federal Agencies having maturities between five and seven years . All other investments shall be purchased with a final stated maturity of no more than five (5) years from the purchase date except as provided for Section IX of the Investment Policy.
The City's Investment Program is governed by California Government Code and the City’s Investment Policy, which tends to be more restrictive than the California Government Code. Both the Government Code and the Investment Policy provide guidelines and restrictions for eligible investments. Per the Investment Policy, The City Treasurer may delegate investment decision making and execution authority to an investment advisor. The advisor will follow the Investment Policy and such other written instructions as are provided. The City currently contracts with an investment advisor and under the guidance of the City Treasurer, the investment advisor may use its own list of authorized broker/dealers to conduct transactions on behalf of the City. The City Treasurer will monitor and review all investments for consistency with the Investment Policy.
The City invests in high quality securities, such as U.S. Treasury securities, the debt of U.S. Agencies, medium term notes, commercial paper of highly-rated corporations, and other short term money-market instruments. The portfolio is also very diversified, in order to mitigate the effects of issuer default. For instance, the City shall limit investments to a maximum across all permitted investment sectors (excluding U.S. Treasuries, U.S. Instrumentalities, and investment pools) of 5% combined per issuer. Additionally, credit criteria for each type of investment is stipulated in the City’s Investment Policy. The Credit criteria listed in the Investment Policy refers to the credit rating at the time the security is purchased. If an investment’s credit rating falls below the minimum rating required at the time of purchase, the City Treasurer will perform a timely review and decide whether to sell or hold the investment.