HomeMy Public PortalAboutResolution - 04-01- 20040114 - Annual Investment Policy RESOLUTION NO. 04-01
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
MMPENINSULA REGIONAL OPEN SPACE DISTRICT
ADOPTING A STATEMENT OF INVESTMENT POLICY
AND AUTHORIZING THE CONTROLLER TO INVEST
SURPLUS FUNDS ALLOWED BY GOVERNMENT CODE
WHEREAS, the District needs to maximize the yield on surplus temporarily idle funds in
order to help meet land,acquisition objectives; and
WHEREAS, Chapter 4,Division 2 of Title 5 of the Government Code authorizes the
District to deposit and invest surplus funds in investments which, at times, yield interest rates
higher than achievable through the Santa Clara County Pooled Fund, or the California Pooled
Investment Authority; and
WHEREAS, the District can often improve its yield on surplus funds without sacrificing
financial safety and flexibility.
NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS:
Section One. The Board of Directors of the M[idpeninsula Regional Open Space District
does hereby authorize the Controller to invest surplus or temporarily idle funds according to the
Investment Policy attached hereto as Exhibit"X' and by reference made a part hereof.
Section Two. Before any particular investments the Controller shall consult with the
General Manager, or a District employee authorized to act in his/her behalf, to determine
anticipated cash flow needs of the District.
Section Three. This Resolution supersedes Resolution No. 03-01 adopted January 8,
2003. This Resolution shall no longer be in effect as of January 15, 2005, unless extended in
time, and inactive funds shall then be deposited in the Santa Clara County Pooled Investment
Fund, with the California Pooled Investment Authority, or invested through the District's bank.
FYMIT"All
STATEMENT OF INVESTMENT POLICY
GOALS
Goal 1, Capital Preservation
The primary goal shall be to safeguard the principal of invested funds. The secondary objective shall be
to meet the liquidity needs of the District. The third objective shall be to achieve a return on funds
consistent with this Policy. Temporarily idle funds shall be invested in a conservative manner, such that
funds can always be withdrawn at,or just above or below, full invested value. Investments that offer
opportunities for significant capital gains and losses are excluded.
Goal 2. Liquidity
Temporarily idle funds will be managed so that normal operating cash needs and scheduled extraordinary
cash needs can be met on a same day basis. Investments will be sufficiently liquid to provide a steady
and reliable flow of cash to the District to insure that all land purchases can be made promptly(within
two weeks).
Goal 3. Income
Temporarily idle funds shall earn the highest rate of return that is consistent with capital preservation and
liquidity goals and the California Government Code.
GUIDELINES
1. Determination of Idle Funds
The Controller will prepare a complete cash flow projection prior to all investment decisions. This cash
flow projection will be reviewed and evaluated by the General Manager. The General Manager is
responsible for approving the Controller's designation of the amount of funds not required for the
immediate necessity of the District and available for investment.
2. Contingency Reserve
A contingency reserve of at least$1,000,000 shall be maintained with the Santa Clara County Pooled
investment fund. The General Manager is responsible for approving the Controller's designation of the
size of this contingency reserve. At all times this contingency reserve will be sufficient to satisfy the
reserve requirements for all District debt.
3. Non-Invested Funds
Idle District funds not otherwise invested or maintained with trustee paying agents will be deposited with
the Santa Clara County Pooled investment fund.
4. Selection of Investments
The Controller is responsible for selecting investments that fit within the amounts and maturities
recommended by the Controller and by the General Manager. The Controller is also responsible for
directing security transactions.
5. Investments Instruments and Deposit of Funds
Investments and deposits of funds shall be limited to those allowed by and subject to the procedures of
Government Code Section 53600 et seq. and 53635 et seq. In the event of any conflict between the terms
of his Policy,and the Government Code,the provisions of the Government Code shall prevail.
Investments shall not be leveraged. Investments,and"derivatives,"that offer opportunities for significant
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capital gains and losses are excluded. All investments,other than funds held in trust for note holders and
trust funds released after posting surety bonds, shall mature within 180 days.
6. Diversification
Investments other than insured or collateralized deposits at banks and savings and loan associations shall
be diversified.
7. Marketability
For investments other than deposits,the breadth of ownership and number of securities outstanding will
be sufficient to establish a secondary market in which investments can be readily converted to cash
without causing a material change in their market value.
8. Acceptable Banks
Bankers'Acceptances and Negotiable Certificates of Deposit may be purchased only from banks and
savings and loan associations with over$1,000,000,000 of deposits and reporting profitable operations
and which meet all applicable criteria of the Government Code.
9. Acceptable Collateral
Securities collateralizing bank or savings and loan deposits must be rated"A"or higher.
10. Investments in Name of District
All investments purchased shall stand in the name of the District.
11. Reporting
The Controller shall report all security transactions to the Administration and Budget Committee no later
than the next Regular Meeting of the Board of Directors after any transaction has been made. The
Controller shall submit a report of the District's investments and security transactions to the
Administration and BudgetCommittee by the fourth Wednesday of each month in accordance with
Government Code Section 53607. The Controller will render a quarterly investment report to the Board
of Directors as required by Government Code Section 53646. Such reports shall also be submitted to the
General Manager and to the District's' auditor. The Administration and Budget Committee shall act on
behalf of the Board of Directors in receiving reports from the Controller required by Government Code
Section 53607.
12. Purchase of Securities Through Bank
The Controller is authorized to purchase securities through the investment department of the District's
bank. The Bank shall be instructed in writing only to purchase securities in the name of the District and
that all matured funds shall be returned to the District's bank account. The Bank shall also be instructed
to send receipts for transactions to the General Manager.
RESOLUTION No. 04-01
PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional Open Space
District on January 14, 2004, at a Regular Meeting thereof, by the following vote:
AYES: M. Davey, P. Siemenz, L. Ha.aaett, D. L-c tte.e, N. Hanko, J. Cyn, K. N.c tz
NOES: None
ABSTAIN: None
ABSENT: None
ATTEST: APPROVED:
1
y
cretary President
Board of Directors Board of Directors
I, the District Clerk of the Midpeninsula Regional Open Space District, hereby certify that
the above is a true and correct copy of a resolution duly adopted by the Board of Directors of
the Midpeninsula Regional Open Space District by the above vote at a meeting thereof duly
held and called on the above day.
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Di to Clerk