Loading...
Resolution 2714-00 \.- 1 2 3 4 RESOLUTION NO. 2714-00 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SOUTH TAHOE PUBLIC UTILITY DISTRICT ADOPTING A STATEMENT OF INVESTMENT POLICY 5 BE IT RESOLVED, by the Board of Directors of the South Tahoe Public Utility 6 District, County of EI Dorado, State of California, as follows: 7 WHEREAS, the South Tahoe Public Utility District enters into various investments 8 from time to time on behalf of the District; and 9 WHEREAS, the South Tahoe Public Utility District staff wish to update the 10 Statement of Investment Policy to enhance the South Tahoe Public Utility District's 11 opportunities for prudent and systematic investments. 12 NOW, THEREFORE BE IT RESOLVED, by the Board of Directors of the South Tahoe 13 Public Utility District that: ... 14 The attached Statement of Investment Policy is hereby adopted and becomes a 15 part of this Resolution by reference herein. 16 PASSED AND ADOPTED by the Board of Directors of the South Tahoe Public Utility 17 District at a duly held regular meeting on the 21 st Day of December, 2000 by the Wallace, Jones, Strohm, Gochnauer, Mosbacher ~ Id/~-_. CHRISTOPHER H. STROHM, BOARD PRESIDENT SOUTH TAHOE PUBLIC UTILITY DISTRICT E BOARD AND THE BOARD OF DIRECTORS \... SOUTH TAHOE PUBLIC UTILITY DISTRICT STATEMENT OF INVESTMENT POLICY I. Statement of Intent This statement of investment policy is adopted to establish an overall policy and procedures for the management and investment of surplus or idle funds of the South Tahoe Public Utility District. This policy is effective as of its adoption by the Board of Directors. It will be reviewed by the Board and readopted at least once each year. II. Scope of Policy This policy covers all funds and investment activities under the direct authority of the District. It does not cover funds related to District borrowing, which are controlled by documents related to each debt issue. III. Objectives The basic objectives of the District's investment policy are, in order of priority: \., . Safety: Investments shall be made in a manner which first seeks to ensure the preservation of capital in the overall portfolio. Each investment transaction shall seek to first ensure that capital losses are avoided, whether they be from securities defaults or erosion of market value. . Liquidity: Investments shall be made whose maturity date is compatible with cash flow requirements. An adequate percentage of the portfolio should be maintained in liquid short-term securities which can be converted to cash if neces- sary to meet disbursement requirements. Since all cash requirements cannot be anticipated, investments in securities with active secondary or retail markets is highly recommended. Emphasis is on marketable securities with low sensitivity to market risk. . Return on Investment: Yield should become a consideration only after the basic requirements of safety and liquidity have been met. . Diversification: The investment portfolio shall be diversified to avoid incurring unreasonable and avoidable risks regarding specific security types or individual financial institutions. The portfolio shall also be diversified with respect to the term of individual investments purchased by the District. ~ . Public Trust: All participants in the investment process shall act as custodians of the public trust. Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. The overall program shall be designed and managed with a degree of professionalism that is worthy of the public trust. 1 \.. \., \., . ' IV. Prudence The District adheres to the guidance provided by the "prudent investor rule," which obligates a fiduciary to "act with the care, skill, prudence, and diligence under the circumstances then prevailing, specifically including, but not by way of limitation, the general economic conditions and the anticipated needs of the trust and its beneficiaries, that a prudent person acting in the like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims..." [Civil Code ~2261(a)] v. Delegation of Authority The Chief Financial Officer is designated as Investment Officer of the District, under the direction of the General Manager. In the Chief Financial Officer's absence, the Accounting Manager shall act as the Investment Officer. The Chief Financial Officer shall develop and maintain written administrative procedures for the operation of the investment program, consistent with this investment policy. VI. Internal Controls The Chief Financial Officer shall establish a system of written internal controls, which will be reviewed annually by the independent auditor. The controls will be designed to prevent loss of public funds due to fraud, error, misrepresentation, unanticipated market changes or imprudent actions. Controls deemed most important include: minimization of opportunities for collusion, separation of duties, separating transaction authority from accounting and record keeping, custodial safekeeping, avoidance of bearer-form securities, specific limitation regarding securities losses and remedial actions, written confirmation of all transactions, minimizing the number of authorized investment officials, documentation of transactions and strategies, and proper review and approval of brokerage accounts and investment transactions. VII. Reporting The Finance Division shall submit a monthly investment report to the Board of Directors. The report will include the following information: . Type of investment . Institution . Maturity date . Amount of deposit or cost of security · Current market value of securities with maturity over 12 months . Rate of interest · Statement affirming that all investments conform to the policy · Statement that there are sufficient funds for the next 30 days' objectives VIII. Eligible Investments as Per Government Codes 53601 and 53635 The Chief Financial Officer shall invest District moneys as directed by this policy and only in the investments specifically authorized in this section. 2 \. \., \. . Investments and Limitations: PERMITTED INVESTMENTS/DEPOSITS LIMIT )( Government Code ~53601 and 53635 U.S. government securities (treasuries, agencies, instrumentalities) .................... Unlimited Certificates of deposit ................. Unlimited LAIF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LAIF maximum (presently $20M) Passbook accounts .... . . . . . . . . . . . . . . .. Unlimited; must be collateralized County pooled funds .................. Unlimited Commercial paper of" prime" quality of the highest ranking or highest rating ............................. 15 % of portfolio Shares of beneficial interest issued by diversified management com- panies investing in securities and obligations MTN - Medium term corporate notes/ bonds issued by corporations operating within the UnitectStates ............... 15% of portfolio Bankers acceptance ................... 40% of portfolio Repurchase agreements. . . . . . . . . . . . . . . . N/A · Term of Investments: The term of any investment may not exceed three years without express authority from the Board of Directors for each such investment. · Prohibition on Floating Rate: The District may purchase U.S. government secu- rities which are discount or securities bearing interest at a fixed rate; no floating rate securities may be purchased for investment of District funds. · Investment Policies of Pools: The District shall review at least annually the in- vestment policies of LA IF and the El Dorado County investment pool to ascertain that its funds in these pools are invested in accordance with the District's invest- ment objectives. The District shall also review the provisions of these investment policies requiring internal controls on the investment process to ascertain that there is a division of responsibility in the investment procedures. The District shall not invest in pools which do not provide adequate information on their in- vestment policies and practices. IX. Leveraging No representative of the District is authorized to engage in margin transactions nor reverse repurchase agreements or any other form of borrowing money for investment purposes under any circumstances. 3 \." \., \. X. Banks and Securities Dealers In selecting financial institutions for the deposit or investment of District funds, the Chief Financial Officer shall consider the creditworthiness of institutions. The Chief Financial Officer shall continue to monitor financial institutions' credit characteristics and financial history throughout the period in which District funds are deposited or invested. Each financial institution must certify to the District in writing that it has received and read a copy ofthe District's investment policy and that it will comply with that policy in its investment recommendations to the District. XI. Ethics and Conflicts of Interest Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Such employees and investment officials shall disclose to the District Board and the General Manager any material financial interests in financial institutions that conduct business within the District, and they shall further disclose any large personal finan- cial/investment positions that could be related to the performance of the District's portfolio. Adopted 12/16/99 h:\finance\investmt.pol 4