Resolution 2500
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RESOLUTION NO. 2500
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A RESOLUTION OF THE BOARD OF DIRECTORS
SOUTH TAHOE PUBLIC UTILITY DISTRICT
ADOPTING A STATEMENT OF INVESTMENT POLICY
IN ACCORDANCE WITH
CALIFORNIA GOVERNMENT CODE SECTION 53646
BE IT RESOLVED, by the Board of Directors of t e South
6 Tahoe Public Utility District, County of El Dorado,
7 California, as follows:
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WHEREAS, the South Tahoe Public Utility Distric enters
9 into various investments from time to time on behalf of the
10 District; and
11 WHEREAS, the South Tahoe Public utility Distri t staff
12 wish to establish policies and procedures that enh nce the
13 South Tahoe Public Utility District's oportunitie for a
14 prudent and systematic investment policy in accorda ce with
15 California Government Code section 53646.
16 NOW, THEREFORE, BE IT RESOLVED by the Board of D'rectors
17 of South Tahoe Public utility District that:
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The attached STA~EMENT OF INVESTMENT POLICY i hereby
19 adopted .and becomes a part of this Resolution by r ference
20 herein.
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PASSED AND ADOPTED by the Board of Directors f South
23 Tahoe Public utility District at a duly held regular me ting on
24 the 7 th day of December, 1989, by the following vote:
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NOES: None
AYES: Directors Mason, Walker, Sinclair, Onysko, ierini
ABSTAIN: None
ABSENT: None
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RESOLUTION NO. 2500
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ROBERT MASON, CHAIRMAN OF 30ARD
SOUTH TAHOE PUBLIC UTILITY DISTRICT
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6 ATTEST, .w a :e:%~4
PAT A. MAMATH, eLERK OF BOARD
7 SOUTH TAHOE PUBLIC UTILITY DISTRICT
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STATEMENT OF INVESTMENT POLICY
(California Government Code Section 53646)
I. Introduction:
II.
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The purpose of this document is to identify various policie
and procedures that enhance the South Tahoe Public Utility
District's (District) opportunities for a prudent and syste atic
investment policy. Activities which comprise good cash man ge-
ment include, but are not limited to: the expeditious
collection of revenue, the control of disbursements, and co t-
effective banking relations. In concert with these requir -
ments are the many facets of an appropriate and secure shor -
term investment program.
Scope:
It is intended that this policy cover all funds and investm nt
activities under the direct authority of the District.
III. Objectives:
A. Safety: It is the primary duty and responsibility of t e
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Finance Department to protect, preserve and maintain ca h
and investments placed in their trust on behalf of the
citizens of the community.
B. Liquidity: An adequate percentage of the portfolio sho ld
be maintained in liquid short-term securities which can be
ments. Since all cash requirements cannot be anticipat d,
converted to cash if necessary to meet disbursement req ire-
investments in securities with
active secondary or resa e
Emphasis is on marketabte
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markets is highly recommended.
securities with low sensitivity to market risk.
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c. Yield: Yield should become a consideration only after he
basic requirements of safety and liquidity have been me .
D. Diversification: The investment portfolio will be dive sified
to avoid incurring unreasonable and avoidable risks reg
specific security types or individual financial institu ions.
E. Prudence: The District adheres to the guidance provide by
the "prudent man rule", which obligates a fiduciary to 'nsure
that: "...investments shall be made with the exercise 0 that
degree of judgment and care, under circumstances then p e-
vailing, which persons of prudence, discretion and inte ligence
exercise in the management of their own affairs, not fo
speculation but for investment considering the probable
safety of their capital as well as the probable income 0
be derived." (Civil Code #2261)
F.
Public Trust: All participants in the investment proce s
shall act as custodians of the public trust. Investmen
officials shall recognize that the investment portfolio is
subject to public review and evaluation. The overall p ogram
shall be designed and managed with a degree of professi
inevitable, and must be considered within the context
that is worthy of the public trust. In a diversified p
it must be recognized that occasional measured losses a e
the
overall portfolio's investment return, provided that ad
diversification has been implemented.
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Delegation of Authority: Government Code #53607 - Refer to
Resolution #2304 dated 8-4-83.
Resolution #2412 dated 9-4-86.
v. Reporting:
A. Monthly:
The Finance Department shall submit a monthly investment
report to the Board of Directors. This report will incl de
all required elements of the monthly report as prescribe
by Government Code Section 53646.
Required elements of the monthly report:
a)
b)
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d)
e)
Type of investment
Institution
Date of maturity
Amount of deposit or cost of the security
Current market value of securities with
maturity in excess of 12 months
f) Rate of interest
g) Statement relating the report to the Statement
of Investment Policy
h) Statement that there are sufficient funds to meet
the next 30 days' obligations.
i) Effective January 1, 1991, Accrued Interest as
prescribed by the California Code Section 53646,
if required by the Legislative Body.
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Additional information may be included in the monthly re ort,
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but it is not required by the Government Code. I
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Unlimited 5
Unlimited 5
30% 5
40% days
30% days
10MM***
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Investment Limitations and Maturities: Security purchases a
holdings should be maintained within statutory limits impose
by the Government Code. Current limits are:
PERMITTED INVESTMENTS/ PERCENTAGES
DEPOSITS
Securities of the U.S. Govt.
Certificates of Deposits
Negotiable Certificates of Deposit
Bankers Acceptances
Commercial Paper
LAIF
Passbook deposits
Repurchase agreement
Reverse Repurchase agreements
Mutual Funds
15%
Medium Term Notes
30%
County Pooled Funds
Unlimited
1 ear
1 ear**
5 ears*
*Maximum term unless expressly authorized by Governing Body nd
within the prescribed time frame for said approval.
**Governing Body approval is required. Further, it is sugge ted
that the final maturity of the underlying investment secur'ty
be less than or equal to the maturity of the reverse repur hase
agreement.
***Limit set by L.A.I.F. Governing Board, not Government Cod.
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VII.
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Banks and Securities Dealers: In selecting Financial instit
for the deposit or investment of District funds, the Finance
Department shall consider the credit worthiness of instituti
The Finance Department shall continue to monitor financial.
institutions' credit characteristics and financial history
throughout the period in which agency funds are deposited or
invested.
VIII. Risk Tolerance: The District recognizes that investment risks
technical complications leading to temporary illiquidity.
can result from issuer defaults, market price changes or va
Portfolio diversification is employed as a way to control
Investment Managers are expected to display prudence in the
selection of securities, as a way to minimize default risk. No
~ individual investment transaction shall be undertaken which
jeopardizes the total capital position of the overall portf
The Finance Department shall periodically establish guide Ii
and strategies to control risks of default, market price ch
and illiquidity.
IX. Statement of Investment Policy: Government Code 53646 - T e
Statement of Investment Policy shall be reviewed and submit ed
annually to the Governing Body.
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