AGENDA ITEMS ON FILE FOR CONSIDERATION AT THE MEETING OF THE CITY OF MONTEBELLO INVESTMENT COMMITTEE TO BE HELD ON TUESDAY, MARCH 14TH, 2017 AT 6:00 O'CLOCK P.M. AT THE MONTEBELLO CITY HALL FINANCE DEPARTMENT CONFERENCE ROOM, 1600 WEST BEVERLY BOULEVARD, MONTEBELLO CALIFORNIA. COMMITTEE MEMBERS Dominic Picon Alberto Perez Art Padilla Maria G. Arevalos CITY TREASURER Ashod Mooradian CITY STAFF William Quan, Interim Director of Finance Anays Navarro, Account Clerk II / Minute Clerk OPENING CEREMONIES 1. CALL MEETING TO ORDER: William Quan, Interim Director of Finance 2. ROLL CALL: Minute Clerk Anays Navarro NEW BUSINESS Investment Report, 11/30/2016, 12/31/2016 and 01/31/2017 ORAL COMMUNICATIONS None ADJOURNMENT
MONTEBELLO CITY HALL 1600 WEST BEVERLY BLVD. MONTEBELLO, CALIFORNIA OCTOBER 19, 2016 WEDNESDAY 6:00 P.M. The Investment Committee of the City of Montebello met in a regular session at the above date and time in the Finance Department Conference Room. OPENING CEREMONIES 1. CALL MEETING TO ORDER: Finance Director, Steve Kwon called the meeting to order at the hour of 6:09 p.m. 2. ROLL CALL COMMITTEE MEMBERS PRESENT: Sona Mooradian Dominic Picon Alberto Perez Art Padilla COMMITTEE MEMBERS EXCUSED: COMMITTEE MEMBERS ABSENT: CITY TREASURER: STAFF MEMBERS PRESENT: STAFF MEMBERS ABSENT: None Charles Pell Steve Kwon, Finance Director William Quan, Senior Management Analyst Kristina Zendzhiryan, Assistant to the City Manager Anays Navarro, Account Clerk II/Minute Clerk None UNFINISHED BUSINESS Committee member Padilla suggested to select the Chair and Vice Chairman for the next meeting, seconded by Picon, motion carried. 3. REVIEW AND APPROVAL OF MINUTES A review of the reports was made by the Committee Members. Stated Rates of July 2016 Committee member Picon reviewed the stated rates of July 2016 and questioned the reason for the discrepancies he saw shown on the report. Senior Management Analyst William Quan stated that the report is drawn from a software, which allows him to plug in the interest rates and the software will then calculate the given rates. Committee member Perez inquired on the large difference listed in the July 2016 activity summary which stated a decrease in number, ten million-six million under the successor agency section. Senior Management Analyst, William Quan stated that it would vary every time you want to invest or take out money.
Property Tax Committee member Picon reviewed the property tax and noticed that the listed tax didn t add up to the December June report. Senior Management Analyst, William Quan stated that the retail tax would vary each month, with April bringing in the biggest sales tax. Picon questioned if the four million listed under property tax was in fact the total listed for property tax, or was it calculated alongside the sales tax as well. Senior Management Analyst, William Quan said that the stated property tax included retail sales tax and other incomes. Picon suggested itemizing each tax so they could have an accurate reading of all tax income coming into the city by category. The investment reports for July and August were approved carried by Committee member Picon and seconded motioned by Padilla. NEW BUSINESS 4. INVESTMENT REPORT 11/30/16, 12/31/16, and 01/31/17 ORAL COMMUNICATIONS None ADJOURNMENT Committee Member Picon adjourned the meeting at the hour of 7:02 p.m. seconded by Committee member Padilla. Meeting adjourned. Next quarterly meeting will be held on March 14, 2017. 2
RESOLUTION NO 11-59 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MONTEBELLO ADOPTING INVESTMENT POLICIES FOR THE CITY'S INVESTMENT PORTFOLIO FOLLOWS. THE CITY COUNCIL OF THE CITY OF MONTEBELLO DOES HEREBY RESOLVE AS WHEREAS, the Investment Committee and Finance Director met and based upon this meeting, made recommendations for changes to the Investment Policy NOW, THEREFORE, BE IT RESOLVED THAT SECTION 1 Investments of City funds shall be made in accordance with the Investment Policy attached hereto as Exhibit A and made a part hereof. SECTION 2. An Outline of the Segregation of Responsibilities of the City investment function is provided as Exhibit B and made a part hereof SECTION 3. The policies adopted by this resolution are in addition to and supplements of any other legal requirements. SECTION 4. The City Clerk shall deliver a copy of the resolution to any securities firm, which handles investments for the City SECTION 5. This resolution shall supersede and revoke Resolution No. 11-31 SECTION 6. The City Clerk shall certify to the adoption of this resolution and the same shall be in full force and effect. ADOPTED AND APPROVED THIS 13th day of July, 2011 4 _ ART BARAJAS, MAYOR ATTEST XAf 4 ROBERT J. KING, ITY CLE
STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) CITY OF MONTEBELLO ) ss. 1, ROBERT J KING, City Clerk of the City of Montebello, do hereby certify that the foregoing Resolution No. 1 1-59 as duly and regularly approved and adopted by the Montebello City Council at special meeting held on the 13th day of July 2011, as approved by law by the following vote: AYES. NOES. ABSTAIN ABSENT Members: Molinari, Cortez, Gomez, Barajas Members: None Members: None Members: None IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of said City on the 13th of July, 2011 Robert J Z, f L King, CiTy Clerk
STATEMENT OF INVESTMENT POLICY CITY OF MONTEBELLO Exhibit A PURPOSE The purpose of this statement is to provide guidelines for investing the City's surplus cash. Surplus cash is defined as funds not required for immediate cash flow. The Policy does not include debt proceeds, which proceeds may be invested in accordance with the applicable documentation and laws controlling the funds resulting from that debt issue, or if the documentation and laws do not control such investment, then in accordance with this policy CRITERIA Criteria for selecting investments in order of priority are: SAFETY - Safeguarding and maximizing security of investments and assets shall be the first priority. Safety refers to two types of risk, loss of potential interest and actual loss of principal. The City will maintain an investment portfolio, which is designed to minimize both types of risk. LIQUIDITY - This is the ability to " cash in" at any moment in time with a minimal chance of losing some portion of principal and /or interest. The City will maintain cash flow projections to enable the ongoing monitoring of its liquidity YIELD - This is sometimes referred to as Rate of Return or the potential dollar earnings an investment can provide. The City of Montebello will follow the Prudent Investor Standard ( Government Code Section 53600. 3) when investing, reinvesting, purchasing, acquiring, exchanging, selling, and managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency The City Council will appoint an Investment Committee composed of five citizens. Each City Councilmember will appoint one person to this committee. This committee will meet at a minimum quarterly to review, monitor, and make recommendations with respect to the City's investment program. A registered investment advisor may be appointed by the City Council to serve as advisor to the Committee and to the City Council. The Chair and Co -Chair will be elected in July of each year by the Investment Committee to serve a one year ( Fiscal Year July to June). term of All officials, employees and agents of the City responsible for preparing assessments, reports or recommendations regarding the City' s investments or otherwise making or directing investments on behalf of the City shall avoid all conflicts of interest as set forth in the Political Reform Act of 1974 ( Government Code Section 87000 et seq.), the Contractual Conflict of Interest Rules ( Government Code Section 1090 et seq) and other provisions of California law relating to conflicts of interest. POLICY City deposits and investments may be allowed to the extent allowed under the State of California statutes Government Code Section 53632, et seq, and 53601, et seq) and will be further limited to the following types of deposits and investments:
o Interest- Bearing Active Deposits: These deposits may be withdrawn on demand subject to agreements entered into with the City's depository. These deposits must be secured by collateral of the depository as provided in Section 53652 of the Government Code, with such collateral exceeding 100% of the value of the City' s deposits, except for such portion of the deposits as are fully protected by federal deposit insurance ( i. e., $ 100, 000), including commercial banks and credit unions. o United States Treasury Bills, Notes, or Certificates of Indebtedness or those for which the full faith and credit of the United States are pledged for payment of principal and interest. No more than 80% of City' s portfolio may be invested in these issues. Federal Agency investments shall be limited to short-term obligations issued by FNMA, FHLMC or FHLB with maturities not to exceed 365 days. Investments in Federal Agency obligations shall not exceed in aggregate 50% of the City' s portfolio. o State and Local Agency Obligations: State and Local Agency Obligations include bonds, notes, warrants, or other evidence of indebtedness of any local agency within the State of California and /or the State of California. Investment in State and Local Agency Obligations are limited to taxable issues rated " AAA" by one of the three nationally recognized rating agencies and further limit investments to 30% of the City' s surplus funds. o Medium Term Notes: Medium Term Notes of maximum of three years issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any State and operating within the United States. Notes eligible for investment shall be rated in a rating category of " AV or its equivalent or better by at least two nationally recognized rating agencies ( Standard & Poor's and Moody' s). Furthermore, the Medium Term Note may not be rated below " AA" by any rating agency. Investments may not exceed 30% of the City' s surplus funds. o Commercial Paper- Paper of " prime" quality of the highest rating as provided by Moody's Investors Service, Inc., or Standard and Poor's Corporation ( A -1, P -1). Purchases of eligible commercial paper may not exceed 90 days maturity nor represent more than 10% of the outstanding paper of an issuing corporation, nor 15% of the City' s surplus money which may be invested. An additional 10 %, or a total of 25% of the City' s surplus money may be invested in commercial paper if the dollar- weighted average maturity of the entire amount does not exceed 31 days. Eligible paper is further limited to issuing corporation that are organized and operating within the United States and having total assets in excess of five hundred million dollars 500, 000, 000). The issuing corporation must have an " A" or higher rating for the issuer' s debt, other than commercial paper, if any, as provided by Moody' s Investors Services Inc. or Standard and Poor's Corporation.
o Repurchase Agreements ( Repos): The City may invest in repurchase agreements with banks with which the City has entered into a master repurchase agreement which specifies terms and conditions of repurchase agreements. Transactions shall be limited to banks which have assets in excess of $5 billion and have the highest short -term rating issued by not less than two of the three largest nationally recognized rating services. The maturity of repurchase agreements shall be limited to an overnight business banking day The market value of securities used as collateral for repurchase agreements shall be 110% of the value of the repurchase agreement. The only securities acceptable as collateral shall be United States Treasury securities. No more than 40% of the City' s surplus funds may be invested in repurchase agreements and a " perfected security interest" shall always be maintained in the securities subject to a repurchase agreement. Money Market Mutual Funds: To be eligible, the Money Market Mutual Fund can only invest in United States Treasuries with the exception of the City's custodial bank. The Money Market Mutual Fund must ( 1) attain the highest ranking or highest letter and numerical ranking provided by not less than two of the three largest nationally recognized rating services. The purchase price of shares of the Money Market Mutual Fund shall be purchased at the net asset value and shall not include any commission and shall not exceed 25% of the City' s surplus money o Local Agency Investment Fund ( LAIF- California) created by law, which the State Treasurer invests through the Pooled Money Investment Account. Money invested in LAIF is available overnight liquidity; however, it is also subject to a limited number of transactions per month. Investment of funds in the LAIF is limited to $ 30, 000, 000 of the City' s portfolio. o The City is not allowed to directly invest in derivative products. SAFEKEEPING Securities or evidence of securities purchased shall be held in third party safekeeping by the Trust Department of the City' s service bank or other designated Trustee. UOTES All investments whether rollover or new must have at least three quotes. To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing more than one ( 1) year from the date of purchase.
giyi: 7i!M11116IS] T if TiN The City investment function is organized so that specific responsibility for performance of duties are assigned with clear lines of authority and reporting. The functions of authorizing, executing and recording transactions, custody of investments and performing reconciliations are handled by separate persons to reduce the risk that a person is in a position to conceal errors or fraud in the normal course of duty While no internal control system however elaborate can guarantee absolute assurance that the City' s assets are safeguarded, it is the intent of the City' s internal control system to provide reasonable assurance that management of the investment function meets the City' s objectives. Outlines of the Segregation of Responsibilities of the City' s investment function will be reviewed by City Council on an annual basis. MONTHLY REPORTS A schedule of investments prepared by the Finance Department will be provided to the City Council, City Administrator, and the City' s Investment Committee showing the type of investment, institution, cost, face amount, interest rate, date of maturity, market value for all investments, and composition of the portfolio by percent. Borrowing of funds for the sole purpose of reinvesting for a profit is prohibited.
Exhibit B OUTLINE OF SEGREGATION OF RESPONSIBILITIES OF INVESTMENT FUNCTION CITY OF MONTEBELLO Function Responsibility Development and approval of investment policy: o Formal Investment Policy is adopted by Council prepared by reviewed for adoption Investment Committee City Council Authorization and placement of investment transactions: Obtaining of Investment Quotes Deputy Treasurer /Finance Supervisor Investment Transactions as required by the City Council' s Investment Policy shall be approved by Execution of investment Transactions as required by the City Council' s Investment Policy shall be approved by Verification of investment, i. e., confirmation to City Investment record Director of Finance City Treasurer or Director of Finance Director of Finance /Finance Supervisor Timely recording of investment transactions: Recording of investment transactions in the City records Deputy Treasurer /Finance Supervisor /Accountant Recording of investment transactions in the accounting records Accountant Safeguarding of Assets and Records o o Monthly Reconciliation of Investment records to the Accounting records Monthly Reconciliation of Investment records to bank statements and Accountant
safekeeping records Accountant Review of (a) financial institution' s financial condition, ( b) safety, liquidity, and potential yields of investment instruments Director of Finance o Safekeeping Investment securities will be held in safekeeping in the Trust Department of the City's depository bank, or other designated Trustee. Periodic reviews of collateral should be performed Director of Finance Management' s periodic review of the investment portfolio as prepared by the Director of Finance, key areas which should be reviewed are investment types, purchase price, market values, maturity dates and investment yields as well as conformance to stated investment policy Investment Committee