FINANCIAL POLICIES
Authorized and Suitable Investments The City is governed by the California Government Code, Sections 53600 et seq. Within the context of these limitations and based on the cost at the time of purchase, the following investments are authorized as further limited herein:
Authorized Investment Summary Matrix
Category
Percent no limit no limit
A. US Treasuries B. US Agencies
C. Bankers’ Acceptances D. Commercial Paper E. Repurchase Agreements
40% 25%
no limit
F. Reverse Repurchase Agreements G. Local Agency Investment Fund (LAIF)
20%
no limit no limit
H. Municipal Bonds
I. J.
Corporate Medium Term Notes Money Market Mutual Funds
30% 20% 30%
K. Supranationals
L. Mortgage Pass-Through
and Asset Backed Securities
20%
M. JPA Investment Pools authorized under California Government Code Section 53601 (p)
no limit
A. United States Treasury Bills, Bonds, and Notes, or those for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no limitation as to the percentage of the portfolio that can be invested in this category. Per Government Code Section 53601.6(b)(2), which allows a local agency to invest in securities issued by, or backed by, the United States government that could result in zero-or negative-interest accrual if held to maturity, in the event of, and for the duration of, a period of negative market interest rates. B. Obligations issued by United States Federal agencies or government sponsored enterprise obligations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. Although there is no percentage limitation on these issues, the "prudent investor" standard shall apply to investments from a single agency. C. Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as Bankers’ Acceptances. Bankers’ Acceptances purchased may not exceed 180 days to maturity or 40 percent of the cost (book) value of the portfolio. No more than 5 percent of the cost (book) value of the portfolio may be invested in Bankers’ Acceptances issued by any one bank. Prior to the purchase of any Banker’s Acceptance, the portfolio manager shall review the rating of the issuing bank. Bankers’ Acceptances of issuing financial institutions shall have both a short and long term rating in the highest category by at least one nationally recognized rating agency at the time of purchase.
D. Commercial paper ranked of "prime" quality of the highest ranking or of the highest letter and number rating as provided for by NRSRO and issued by a domestic corporation having assets in
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FY 2023-25 Adopted Budget
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