FINANCIAL POLICIES
Liquidity: The portfolio will be structured with sufficient liquidity to allow the Treasurer to meet anticipated cash requirements. This will be accomplished through the purchase of a diversity of instruments to include those with active secondary markets, those that can match maturities to expected cash needs, and the State Local Agency Investment Fund (LAIF) with immediate withdrawal provisions. Yield: A competitive market rate of return is the third objective of the investment program after the fundamental requirements of safety and liquidity have been met. The portfolio shall be managed to consistently attain a market rate of return throughout budgetary and economic cycles. Whenever possible, and consistent with risk limitations and prudent investment management, the City will seek to augment returns above the market average rate of return through the implementation of active portfolio management strategies.
Social Responsibility Environmental, Social and Governance (“ESG”)
The City supports companies that consider long-term sustainability as part of their operations. ESG factors will be considered when selecting securities. When possible, it is the City’s policy to invest in companies that promote ESC factors, subject to the prudent investment standard. Additionally, the City discourages direct investments in fossil fuel companies, for-profit positions, and manufacturers of tobacco, firearms, and alcohol. Performance Evaluation Investment performance is continually monitored and evaluated by the City Treasurer. Investment portfolio reports are generated on a monthly basis and submitted to the City Council, City Manager, and Investment Advisory Committee. A quarterly Treasurer’s report is also presented to the City Council and Investment Advisory Committee during respective regularly scheduled meetings. The investment portfolio reports are to be submitted within 30 days of the end of the reporting period. The monthly average yield of the Irvine Pooled Investment Portfolio will be compared to the monthly average six-month CMT (Constant Maturity Treasury) as calculated by the Federal Reserve Bank of New York. As an added reference, the monthly average yield of the Irvine Pooled Investment Portfolio will be compared to the monthly average two-year CMT as calculated by the Federal Reserve Bank of New York. Diversification The City will diversify use of investment instruments to avoid unreasonable risks inherent in over-investing in specific instruments, individual financial institutions, or maturities. Market price volatility shall be controlled through maturity diversification, as well as ensuring adequate liquidity is available to meet cash flow requirements, thereby precluding the need to sell instruments at a market loss. Risk of default will be controlled by acquiring instruments such as Government Securities, or by diversifying the portfolio within the constraints and parameters of Section 17 of this Policy, Authorized and Suitable Investments.
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FY 2023-25 Adopted Budget
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