HomeMy WebLinkAbout1993-03-11 - Resolution No. 93-076 RESOLUTION NO. 93-07 1*
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE YORBA LINDA WATER DISTRICT
SETTING FORTH PUBLIC FUNDS INVESTMENT POLICY
AND RESCINDING RESOLUTION 91-22
WHEREAS, the Government Code Section 53600 sets forth guidelines for the investment of
public finds and requires that the Board of Directors review the District's
Investment Policy annually; and,
WHEREAS, the Policy was last reviewed and adopted by the Board on Resolution No. 91-22
on July 11, 1991; and,
WHEREAS, the District is in possession of public funds that are not required for immediate
expenditure, and are available for investment; and,
WHEREAS, a policy setting forth guidelines for the investment of said funds is necessary for
compliance with the principles of sound financial management; and,
WHEREAS, the Board of Directors of the Yorba Linda Water District has reviewed the
District's investment policy and desire to adopt the policy set forth herein.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Yorba Linda
Water District as follows:
Section 1: Public funds held for investment by the District may be categorized as follows:
(1) Those funds that are allocated for immediate expenditure on District operations
as authorized by the Board of Directors at their bimonthly meetings;
(2) Those funds that are allocated for use in an intermediate time frame, such as
budgeted purchases that have not been delivered;
(3) Those funds that are allocated for future use, which do not fall into the
above categories. This policy sets forth guidelines for funds that are identified as
"available for investment."
Section 2: Priorities regarding the investment of District held public funds are:
(1) The safety of the funds;
(2) The maintenance of sufficient liquidity to conduct day-to-day operations.
(3) The best return on investments pursuant to the preceding qualifications, one (1) and two
(2)•
Section 3: The District may invest funds that are available for direct investment in the following
categories:
(1) Banks or Savings and Loans
Cash will be invested only in FDIC or FSLIC insured or fully collateralized
certificates of deposit. Collateral for a given investment must be 110 percent of principal
for governmental securities collateral and 150 percent of principal for first mortgage
collateral.
The institution must maintain a net worth to asset ratio of at least 3.0 percent, and a
positive earnings record. The bank or savings and loan must be located in California. The
maximum maturity shall be five years. No limit will be placed on the percentage total
invested in this category.
(2) The State Local t&cy Investment Fund 0
The amounts invested in this category is limited to $10 M111on plus bond proceeds. No
limit will be placed on the percentage total in this category.
(3) Orange County Treasurer's Commingled Investment Pool
The maximum amount invested in this category is limited to $5 million. No limit
will be placed on the percentage total in this category.
(4) California Arbitrage Management Program
The amounts invested in this category shall be limited to bond proceeds and are to be
invested for the purpose of arbitrage management only. Proceeds may be invested in the
Treasury Portfolio and/or the Money Market Portfolio. No limit will be placed on the
percentage total in this category.
(5) Treasury Bills, Notes and Bonds - Government Code Section 53601(a-c)
The District will require physical delivery of these securities to an acceptable safekeeping
account in the District name and must be properly insured. The maximum maturity shall
be limited to five years. No limit will be placed on the percentage total invested in this
category.
(6) Obligations Issued by Government Agencies - Government Code Section
53601(e)
The District will require physical delivery of these securities to an acceptable safekeeping
account in the District's name and must be properly insured. Examples of
these securities include Federal National Mortgage Association, Federal Land Bank and
Federal Home Loan Bank. Maturities are limited to five years. Maximum investment of
50% of the portfolio in the aggregate.
(7) Medium-Term Notes - Government Code Section 536010)
The District will require physical delivery of these securities to an acceptable safekeeping
account in the District's name and must be properly insured. The corporation must be
domestic and the notes must be issued in the United States. The corporation must be rated
AA or better by a nationally recognized rating service. The maximum maturity is limited to
five years and the maximum percentage allowable for investment is 10% of the portfolio in
the aggregate.
(8) Banker's Acceptances-Government Code Section 53601(f)
The District will require physical delivery of these securities to an acceptable safekeeping
account in the District's name and must be properly insured. The maximum term may not
exceed 270 days and the maximum percentage allowable for investment is 5% of the
portfolio in the aggregate.
(9) Commercial Paper-Government Code Section 53601(g)
The District will require physical delivery of these securities to an acceptable safekeeping
account in the District's name and must be properly insured. The corporation must be
domestic and the notes must be issued in the United States. The corporation must also
have total assets in excess of five hundred million dollars ($500,000,000). The
corporation must be rated AA or better by a nationally recognized rating service. The
maximum maturity is limited to 180 days and the maximum percentage allowable for
investment is 5% of the portfolio in the aggregate.
Section 4: All investments of sums of less than $100,000 do not require approval of the Board
of Directors or need to be collateralized. Provided , however that such investments must be made
in saving saving institutions covered by federal deposit insurance. Investments shall be made in
sums greater than $100,000 whenever possible.
Section 5: Investments of sums greater than $100,000 and less than $1,000,000 in a single
institution shall be made in institutions approved by the Board of Directors (see Exhibit A) and
shall collateralized in accordance with state law.
Section 6: All investmIaounts greater than $1,000,000 in orostitution with the exception
of LAIF, requires approval of the Board of Directors.
Section 7: When the District uses the services of a Broker/Dealer to purchase securities, they
shall be selected by credit worthiness. These may include "primary" dealers or regional dealers.
Each security purchased thru a broker/dealer shall be registered in the name of Yorba Linda Water
District. No deposit of cash and/or securities shall be made by the broker/dealer except in a
qualified public depository as established by state law and Section 3 (1) of this Resolution. Before
a broker/dealer is used, they must provide the following and be investigated by the General
Manager or his designated representative:
(1) Certification of having read this Investment Policy Resolution and that these policies will
be followed by personnel working with the District.
(2) Proof of National Association of Security Dealers certification and state registration.
(3) Compliance with Federal capital adequacy regulations and provide documentation of
financial solvency.
(4) Provide Audited financial statements within 120 days of fiscal year end.
(5) Provide similar services to other public-sector clients.
Section 8: The Board of Directors delegates the authority for investing District Funds to the
General Manager, who may in turn delegate this authority to a designated representative.
Section 9: The General Manager or his designated representative shall maintain a cash flow
analysis for projecting cash available for investments. All funds not required for immediate or
intermediate use may be invested in accordance with this policy.
Section 10: Each month the General Manager or his designated representative shall furnish the
Board of Directors with a Investment Portfolio Report including, but not limited to:
(1) A list of the previous month's investments;
(2) Institutions where investments were placed;
(3) Dates of transactions;
(4) Dates of maturity;
(5) Interest rates on said investments.
(6) Investment categories percent of the total portfolio.
Section 11: That Resolution 92-22 and all conflicting Minute Orders are hereby rescinded
immediately upon adoption of this Resolution.
PASSED AND ADOPTED this 11th day of March, 1993 by the following called vote:
Ayes:5 - Sterling Fox, Carl Scanlin, Paul Armstrong, Michael Beverage and
Noes: 0 Arthur Korn
Absent: 0
Abstain: 0
President, Sterling L. X
Yorba Linda Water District
Attest: 5
Se etary, W-Ham J. Robertson
0 4
EXHIBIT A
TO RESOLUTION 93-07
List of instutions authorized by the Board of Directors of the Yorba Linda Water District for
Investments over $100,000:
Wells Fargo Bank
Great Western Bank
Bank of America
Sears Savings Bank
Pomona First Federal
Downey Savings & Loan