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HA Resolution 2011-003 Investment PolicyRESOLUTION NO. HA 2011 - 003 A RESOLUTION OF THE LA QUINTA HOUSING AUTHORITY AMENDING THE CITY OF LA QUINTA INVESTMENT POLICY FOR FISCAL YEAR 2010-2011 WHEREAS, policies were adopted by the La Quinta Housing Authority in Resolution No. 2010-001 on June 15, 2010; and WHEREAS, the general purpose of the Investment Policy is to provide the rules and standards users must follow in investing funds of the City of La Quinta; and WHEREAS, the primary objectives, in order of priority, of the City of La Quinta's investment activity shall be: Safety of principal is the foremost objective of the investment program. Investments of the City of La Quinta shall be undertaken in a manner that seeks to ensjre..the preservation of capital in the overall portfolio. The investment portfolio shall remain sufficiently liquid to meet operating, requirements that may be reasonably anticipated. The investment portfolio shall be designed with the objective of attain i694a -, drket ra't&\- of return or yield throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. WHEREAS, authority to manage the City of La Quinta's investment portfolio is derived from the City Ordinance. Management responsibility for the investment program is delegated to the City Treasurer, who shall establish and implement written procedures for the operation of the City's investment program consistent with the Investment Policy for Fiscal Year 2010-2011; and WHEREAS, the Investment Policy may be amended from time to time as considered necessary. NOW, THEREFORE, BE IT RESOLVED by the La Quinta Housing Authority to adopt the amendments to the Fiscal Year 2010-201 1 Investment Policy (Exhibit A). PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta Housing Authority, held on this 15`h day of March, 2011 by the following vote, to wit: Resolution No. HA 2011-033 Amendment to the Investment Policy Adopted: March 15, 2011 Page 2 of 5 AYES: Authority Members Adolph, Franklin, Henderson, Sniff, Chair Evans NOES: None ABSENT: None ABSTAIN: None - C LINDA EVANS, Authority Chairperson La Quinta Housing Authority APPROVED AS TO FORM: -Lj� - KATHERINE JENS N, Authority Counsel La Quinta Housing Authority Resolution No. HA 2011-033 Amendment to the Investment Policy Adopted: March 15, 2011 Page 3 of 5 *AY :narr_i Amended Language - in Strike out and bold Section V Annually, the Treasurer shall project the amount of funds not expected to be disbursed within five ten years. For FY 2010/201 1, the amount of such funds is projected to be $4 $30 million. Funds up to that amount may be invested in U.S. Treasury bills, notes and bonds, Local Agency Obligations, and California Local Agency Obligations maturing between 3 and g 10 years. For all other funds, investments are limited to three years maximum maturity, with no more than 25% of surplus funds invested in maturities exceeding two years and less than three years Section X and Appendix A X PERMISSIBLE DEPOSITS AND INVESTMENTS California Local Agency Obligations as an Investment Permissible deposits and investments are summarized below. A more comprehensive list is included in Appendix A. Permissible Investments and Limitations Maximum Maximum Restriction (See Appendix A for Additional Information) Allocation Maturity s Current/ Sweep Account: Checking & Savings Accounts FDIC Insured & Sweep Accounts 85% Portfolio On Demand U.S. Treasuries and/or GSE's <= $250,000, Certificates of Deposit 60% Portfolio 3 Years including interest per institution U.S. Treasury Bills, Notes and Bonds, and Government National 100%, Portfolio 3 10Years 4=54;0000,,000 <=$30,0000,000 Mortgage Association (GNMA) Securities maturing 3-5 10 Yrs 4=$4;0000,000 <=$30,0000,000 maturing 3-5 10 Local Agency BondslCalifomia Local Agency Obligations 30% Portfolio Wears Yrs Long term A, AZ A- or better U.S. Government Agency Securities and Federal Government Securities (except collateralized mortgage obligations (CMO's) or structured notes which contain embedded rate options): Resolution No. HA 2011-033 Amendment to the Investment Policy Adopted: March 15, 2011 _s c Permissible Investments and Limitations Maximum Maximum Restriction (See Appendix A for Additional Information) Allocation Maturity s - Federal National Mortgage Association (FNMA) $20,000,000 3 Years - Federal Home Loan Bank Notes & Bonds (FHLB) $25,000,000 3 Years - Federal Farm Credit Bank (FFCB) $30,000,000 3 Years - Federal Home Loan Mortgage Corporation (FHLMC) $20,000,000 3 years Prime Commercial Paper including Temporary Liquidity Guarantee 15% Portfolio 90 Days $5,000,000 per Program (TLGP) issuer maximum. Local Agency Investment Fund (LAIF) 30% Portfolio Current / On Demand $40 million per account. Money market mutual funds regulated by the SEC that consist only Current / Maintain $1 per of US Treasury Securities or GSE's and maintain a par value of $1 o 20 /o Portfolio On Demand share par value per share $5,000,000 max Corporate Notes 10% 3 Years per issuer AA rated or better $10,000,000 max Corporate Notes - Temporary Liquidity Guarantee Program (TLGP) 20% 3 Years per issuer, AA rated or better. Requires Professionally Managed Account 10% 3 Years City Council - Approved RFP Long -Term Scale S&P AAA, AA +, AA, AA-, A +, A Moody's Aaa, Aa 1, Aa2, Aa3, A 1, A2 Fitch AAA, AA +, AA, AA-, A +, A Appendix A Unauthorized Investments The City Treasurer will not be permitted to invest in the following types of investments (see Footnote 2 and "State Code Permitted Deposits And Investments Not Authorized By The City's Investment Policy", below). - Repurchase Agreements - Bankers Acceptances - Negotiable Certificates of Deposit - Mutual Funds other than money market mutual funds - Preferred and Common Stock - State and 6eea1 Government Indebtedness - Asset Backed Securities - Reverse Repurchase Agreements - Derivatives Resolution No. HA 2011-033 Amendment to the Investment Policy Adopted: March 15, 2011 Page 5 of 5 The above list of unauthorized deposits and investments is not meant to be all-inclusive. Only those deposits and investments listed in the "Permissible Deposits and Investments" section of the Policy are permissible. 3. U.S. Treasury Bills, Notes, and Bonds and Government National Mortgage Associations (GNMA) securities - The City may invest in U.S. Treasury bills, notes, and bonds, and GNMA securities directly issued and backed by the full faith and credit of the U.S. Government. The City's Investment Policy limits investments in U.S. Treasury issues and GNMA's to 100% of the portfolio. The City's Investment Policy does not allow investments in leeal- and state indebtedness New Section 10. Local Agency Bonds and California Local Agency Obligations - The City may invest in California local agency obligations pursuant to 56301(a) and 53601 (a). 53601 (a) pertains to investing in bonds issued by a local agency, department, board, agency or authority of the local agency. 53601 (e) pertains to investing in bonds and other defined indebtedness of a local agency or department, board, agency or authority of the local agency within the State of California. The City's Investment Policy limits investments in Local Agency Bonds and California Local Agency obligations to 30% of the portfolio with up to a ten year maximum maturity. In addition, The Agency obligations must be invested in the long term rating of A, A2, A or better by S&P, Moody's or Fitch is met. In the case of an initial public offering, including refinancings, the Treasurer may purchase directly from the Bond Underwriter. If the case of secondary issues, the Treasurer will rely of the approved Broker/Dealers.