2003-056 - Considering the City's Statement of Investment Policy

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CITY OF SANTA A_NA $'fAT~MENT OF INVESTMENT POLICY JULY 2003-2004 i~.umerical rating provided by not ~ less than two of the following: Moody's, S&P or Fitch, and Retained an inYestment adviser registered or sn<empt from registration w~th the Securities and Exchange Commission with not less than five years experience managing money marke~ funds with assets under ma~.agement in excess of five hundred ~llion dullars ($500,000,000). The purchase price of shares of beneficial interest, (mutual '~unds) purchase pursuant to this subdivision shall not include any commission that these companies may charge. Ineligible investments. Invsstments not described herein are ineligible investments. In accordance with Section 53631.5 of the Government Code, the City shall not invest any funds in inverse floaters, range notes, or interest only strips that are dsrived froln a pool of mortgages. In addition, ~he C~ty shall not invest any f~nds in any security that could result in zero interest accrual if held to maturity. However, prohibited securities c~hat ar~ in t~ City's portfolio, as of the date of this policy adoption, may be held ~until their maturity dates. Money musz be deposited in state or national bar~s, state or federal savings associasions or state or federa~ credit ,anions in the state. It m~y be in i~ctive deposit~, active depqsics or interest-bearing active d~posits. The deposits cannot exceed the amount of the bank's or savings and loan's paid up capital and suz~lus. Tbs bank or savings eu~d loan must secure the active ~u]d inactive deposits with ellgible securities having a market value of 110% of the total smother of the deposits. State ]aw also allows as an eligible security, first tr~st deeds having a value o~ 150% o~ the total amount of the deposits. A third class of collateral is letters of credit drawn on the Federal Home.Loan Ba~ (FHLB). The treasurer may waive, at his discretion, security for that portion of a deposit which is insured pursuant to federal law. Currently, the f~rst $I00,000 of a deposit is federally insured. It is to the City's advantage to waive this collateral requirement ~or the first $100,000 because we receive a higher interest rate. The City shall transact business only with banks, savings and loans and registered investment sscurities dealers. The purchase by the City of any investment other than those purchased directly from the issuer, shall be purchased either from an institution licensed by the State as a broker-dealer, as d~ined in Section 25004 of the Co~o%l~ticns Code, who is a ~t~er of the National Association of Resolution No. 2003-056 Page 9 of 11