FA Resolution 2011-001RESOLUTION NO. FA 2011 - 001
A RESOLUTION OF THE LA QUINTA FINANCING
AUTHORITY AMENDING THE CITY OF LA QUINTA
INVESTMENT POLICY FOR FISCAL YEAR 2010-2011
WHEREAS, policies were adopted by the La Quinta Financing 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 ensure the
preservation of capital in the overall portfolio.
The investment portfolio shall remain sufficiently li uid to meet all operating
requirements that may be reasonably anticipated.
The investment portfolio shall be designed with the objective of attaining a market rate
y of return or ield 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 investrh.ent
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 Financing Authority to
adopt the amendments to the Fiscal Year 2010-201 1 Investment Policy (Exhibit A).
Resolution No. FA 2011-001
Amendment to the Investment Policy
Adopted: March 15, 2011
Page 2 or 5
PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta
Financing Authority, held on this 15th day of March, 2011 by the following vote, to
wit:
AYES:
NOES:
ABSTAIN
ABSENT:
Authority Members Evans, Franklin, Henderson, Sniff, Chair Adolph
None
None
None
()CY-W I
DON ADOL H, Ch ' person
La Quinta Financing Authority
M
'ECINO, CMC, Secretary
Authority
APPROVED AS TO FORM:
M. KATHERINE JENTON, Auth rity Counsel
La Quinta Financing Authority
Resolution No. FA 2011-001
Amendment to the Investment Policy
Adopted: March 15, 2011
Page 3 of 5
EXHIBIT A
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 b 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
Is
Checking &Savings Accounts FDIC Insured 8 Sweep Accounts
85% Portfolio
Current /
Sweep Account:U.S. Treasuries
On Demand
and/or GSE's
Certificates of Deposit
60% Portfolio
3 Years
<= $250,000,
including interest
per institution
U.S. Treasury Bills, Notes and Bonds, and Government National
<=$4,000"W<=$30,0000,000
Mortgage Association (GNMA) Securities
100°k Portfolio
3 tOYears
maturing 3-6 10
Yrs
<440001000
<=$30,0000,000
Local Agency Bonds/California Local Agency Obligations
30% Portfolio
10years
maturing 3-5 10
Yrs
Long term A, AZ
A" or better
Resolution No. FA 2011-001
Amendment to the Investment Policy
♦a,...,.a. M—h 14.2011
le Investments and Limitations
Maximum
Maximum
Restriction
endix A for Additional Information)
Allocation
Maturity
s
r�coiiateraiized
t Agency securities and Federal Government
lized mortgage obligations (CMO's) or structured
notes which contain embedded rate options):
- 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 perissuer maximum.
Program (TLGP)
Current I
$40 million
Local Agency InvestmtZE
30% Portfolio
On Demand
per account.
Money market mutual y the SEC that consist only
Current I
Maintain $1 per
of US Treasury Securimaintain a par value of $1
20% Portfolio
On Demand
share par value
per share
$5,000,000 max
°
10 �'
3 Years
per issuer AA rated
Corporate Notes
or better
$10,000,000 max
Corporate Notes - Temporary Liquidity Guarantee Program (TLGP)
20%
3 Years
per issuer, aced 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
Resolution No. FA 2011-001
Amendment to the Investment Policy
Adopted: March 15, 2011
Page 5 of 5
- State And Iann' Government Indebtedness
- Asset Backed Securities
- Reverse Repurchase Agreements
- Derivatives
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 'AAR' 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.