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HomeMy WebLinkAboutItem 32 - Adoption Authorizing the Investment of Monies into California Class Prime Fund32. Adopt a Resolution Authorizing the Investment of Monies in the California CLASS Prime Fund Department(s): Recommended Action: Adopt a Resolution Authorizing the Investment of Monies in the California CLASS Prime Fund. RESOLUTION NO. 2023-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING INVESTMENT OF MONIES IN THE CALIFORNIA CLASS PRIME FUND Finance and Management Services www.santa-ana.org/finance Item # 32 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report July 18, 2023 TOPIC: Adoption of the Resolution Authorizing the Investment of Monies into California Class Prime Fund AGENDA TITLE: Adopt a Resolution Authorizing the Investment of Monies in the California CLASS Prime Fund RECOMMENDED ACTION Adopt a Resolution Authorizing the Investment of Monies in the California CLASS Prime Fund. DISCUSSION The investment policy adopted on July 6, 2023 added California Cooperative Liquid Assets Security System (California CLASS) as an allowable investment instrument. The approval of this Resolution would be the final requirement to start investing of City of Santa Ana monies in the California CLASS Prime Fund. The California CLASS, sponsored by Cal Cities and the California Special Districts Association, is a local government investment pool. The investment program is a Joint Powers Authority (JPA) created pursuant to the California Joint Exercise of Powers Act and is governed by a Board of Trustees comprised of special district and city finance professionals. The Prime Fund is managed by the California CLASS in compliance with the requirements of California law, specifically California Government Code Section 53601(p). The investment objectives of the Prime Fund are to preserve principal, provide daily liquidity, earn a competitive rate of return, and maintain a stable Net Asset Value. The Prime Fund accrues net income daily and pays net income a pro rata basis monthly. Currently, the City participates in one other investment pool, the Local Agency Investment Fund (LAIF). While California CLASS operates in a similar manner, the short-term securities portfolio offers the opportunity to optimize interest earnings, while not sacrificing safety or liquidity of the funds. The investment committee staff conducted a thorough investigation of the proposed pool to ensure it meets the requirements of City's Investment Policy. To expand diversification of the City's investments, staff Adoption of the Resolution Authorizing the Investment of Monies into California Class Prime Fund July 18, 2023 Page 2 recommends adopting a resolution authorizing the investment of monies in the California CLASS Prime Fund. FISCAL IMPACT There is no measurable fiscal impact associated with the recommendation. The diversification of the City's investments would further enhance the safety and liquidity of its investment portfolio. EXHIBIT(S) 1. Resolution 2. California CLASS informational material Submitted By: Kathryn Downs, FMSA Executive Director Approved By: Kristine Ridge, City Manager Exhibit 1 RESOLUTION NO. 2023-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING INVESTMENT OF MONIES IN THE CALIFORNIA CLASS PRIME FUND WHEREAS, The California CLASS Prime Fund (Prime Fund) is an established Joint Powers Authority Pool authorized under Government Code section 53601(p) for the benefit of all public agencies in the State of California that have the authority to invest their treasury funds to preserve principal, provide daily liquidity, earn a competitive rate of return, and maintain a stable Net Asset Value; and WHEREAS, the City Council of the City of Santa Ana hereby finds that the deposit and withdrawal of money in the Prime Fund in accordance with Government Code section 53601(p) for the purpose of investment as provided therein expands diversification of the City's investments and offers the opportunity to optimize interest earnings, while not sacrificing the liquidity of funds, a benefit to the City of Santa Ana. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The recitals set forth above are true and correct and adopted as findings in support of this Resolution. Section 2. The City Council does hereby authorize the deposit and withdrawal of City of Santa Ana monies in the California CLASS Prime Fund in accordance with the provisions of Government Code section 53601(p) for the purpose of investment as stated therein. Section 3. The following City of Santa Ana officers holding the title(s) specified or their successors in office shall be authorized to order the deposit or withdrawal of monies in the California CLASS Prime Fund and may execute and deliver any and all documents necessary or advisable in order to effectuate the purposes of this Resolution and the transaction contemplated hereby: Executive Director of Finance and Management Services Agency, City Treasurer, Assistant Director of Finance and Management Services Agency, Treasury and Customer Services Manager, or Financial Analyst. Resolution No. 2023-XX Page 1 of 2 Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall attest to and certify the vote adopting this Resolution. ADOPTED this day of , 2023. Valerie Amezcua Mayor APPROVED AS TO FORM: Sonia Carvalho, City Attorney By._�� Jonathan T. Martinez Assistant City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATION OF ATTESTATION AND ORIGINALITY I, Jennifer L. Hall, City Clerk, do hereby attest to and certify the attached Resolution No. to be the original resolution adopted by the City Council of the City of Santa Ana on , 2023. Date: Jennifer L. Hall, City Clerk City of Santa Ana Resolution No. 2023-XX Page 2 of 2 Exhibit 2 What is California CLASS? California Cooperative Liquid Assets Securities System (California CLASS) is a joint exercise of powers entity authorized under Section 6509.7, California Government Code. California CLASS is a pooled investment option that was created via a joint exercise of powers agreement by and among California public agencies. California CLASS offers public agencies a convenient method for investing in highly liquid, investment -grade securities carefully selected to optimize interest earnings while maximizing safety and liquidity. The California CLASS Prime and Enhanced Cash funds offer public agencies the opportunity to strengthen and diversify their cash management programs in accordance with the safety, liquidity, and yield hierarchy that provides the framework for the investment of public funds. How is it governed and managed? California CLASS is overseen and governed by a Board of Trustees. The Board is made up of public agency finance professionals who participate in California CLASS and are members of the Joint Powers Authority (JPA). The Board of Trustees has entered into an Investment Advisor and Administrator Agreement with Public Trust Advisors, LLC. Public Trust is responsible to the Board for all program investment and administrative activities as well as many of the services provided on behalf of the Participants. How can we participate? Enrolling in California CLASS is simple. Public agencies may become Participants simply by filling out the Participant Registration Form that can be found in the document center on the California CLASS website. Public agencies may submit the completed registration packet to California CLASS Client Services for processing at clientservices@californiaclass.com. To obtain account forms and fund documents, visit www.californiaclass.com/document-center/. Endorsed By: 11 %LEAGUE of CALIFORNIA California Special CITIES Districts Association 4W N ©M 0 Districts Stronger Together www.calcities.org www.csda.net T (877) 930-5213 1 F (877) 930-5241 1 www.californiaclass.com I clientservicesCa)californiaclass.com What are the objectives of California CLASS? Safety The primary investment objective of the California CLASS Prime fund is preservation of principal. Both California CLASS portfolios are managed by a team of investment professionals who are solely focused on the management of public funds nationwide. The custodian for California CLASS is U.S. Bank, N.A. Liquidity When you invest in the California CLASS Prime fund, you have access to your funds on any business day. You must notify California CLASS of your funds transaction requests by 11:00 a.m. PT via the internet or phone. There are no withdrawal notices for the daily -liquid California CLASS Prime fund. Enhanced Cash is a variable NAV fund that provides next -day liquidity and a one -day notification of withdrawal. Competitive Returns California CLASS strives to provide competitive returns while adhering to the objectives of safety and liquidity. Participants benefit from the investment expertise and institutional knowledge provided by the team of Public Trust professionals. Portfolio performance is strengthened by the extensive knowledge of California public agency cash flows that the Public Trust team possesses. Ease of Use To make cash management streamlined and efficient, California CLASS includes many features that make it easy to access account information and simplify record keeping. Participants can transact on any business day using the California CLASS phone number (877) 930-5213, fax number (877) 930-5214, email clientservicesCa)californiaclass.com or via the California CLASS Online Transaction Portal at www.californiaclass.com. Flexibility You may establish multiple California CLASS subaccounts. You will receive comprehensive monthly statements that show all of your transaction activity, interest accruals, and rate summaries. These statements have been specifically designed to facilitate public sector fund accounting and to establish a clear accounting and audit trail for your records. Legality California CLASS only invests in securities permitted by California State Code Section 53601; permitted investments are further restricted to those approved by the Board of Trustees as set forth in the California CLASS Investment Policies. Have Questions? Contact us or visit www.californiaclass.com for more information M M M M Bob Shull Laura Glenn, CFA° Brent Turner Rodrigo Bettini Director, Investment Services Senior Director, Investment Services Regional Director of Strategy Director, Investment Services bob.shull@californiaclass.com laura.glenn@californiaclass.com brent.turner@californiaclass.com rodrigo.bettini@californiaclass.com (213) 378-2070 (404) 822-8287 (303) 999-8190 (813) 820-0703 Any financial and/or investment decision should be made only after considerable research, consideration, and involvement with an experienced professional engaged for the specific purpose. Past performance is not an indication of future performance. Any financial and/or investment decision may incur losses. Please see the Information Statement for further details on the fee calculation and other key aspects about California CLASS. California CLASS Prime is rated 'AAAm' by S&P Global Ratings. A 'AAAm' rating by S&P Global Ratings is obtained after S&P evaluates a number of factors including credit quality, market price exposure, and management. For a full description on rating methodology, please visit www.spglobal.com. California CLASS Enhanced Cash is rated by 1AAAf/S1' by Fitch Ratings. The 'AAAf' rating is Fitch's opinion on the overall credit profile within a fixed -income fund/portfolio and indicates the highest underlying credit quality of the pool's investments. The'St' volatility rating is Fitch's opinion on the relative sensitivity of a portfolio's total return and/or net asset value to assumed changes in credit spreads and interest rates. The'S1' volatility rating indicates that the fund possesses a low sensitivity to market risks. For a full description on rating methodology, please visit www.fitchratings.com. Ratings are subject to change and do not remove credit risk. T (877) 930-5213 1 F (877) 930-5241 1 www.californiaclass.com I clientservicesCa)californiaclass.com CL$S www.caIiforniacIass.co Client -First & User -Friendly Cash Management Solutions Designed for California Public Agencies of All Sizes Learn more about building an optimal liquidity portfolio for your public agency; contact us today. Bob Shull Director, Investment Services bob.shull@californiaclass.com (213) 378-2070 Laura Glenn, CFA° Senior Director, Investment Services laura.glenn@californiaclass.com (404) 822-8287 Brent Turner Regional Director of Strategy brent.turner@californiaclass.com (303) 999-8190 Rodrigo Bettini Director, Investment Services rodrigo.bettini@californiaclass.com (813) 820-0703 Many factors affect performance including changes in market conditions and interest rates and in response to other economic, political, or financial developments. Investment involves risk including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. California CLASS is not a bank. An investment in California CLASS is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although California CLASS seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. Please review the California CLASS Information Statement before investing. Past performance is no guarantee of future results. Any financial and/or investment decision may incur losses. California CLASS is rated 'AAAm' by S&P Global Ratings. A 'AAAm' rating by S&P Global Ratings is obtained after S&P evaluates a number of factors including credit quality, market price exposure, and management. For a full description on rating methodology, please visit www.spglobal.com. California CLASS Enhanced Cash is rated 'AAAf/S1' by FitchRatings. The'AAAf' rating is Fitch's opinion on the overall credit profile within a fixed -income fund/portfolio and indicates the highest underlying credit quality of the pool's investments. The'S1' volatility rating is Fitch's opinion on the relative sensitivity of a portfolio's total return and/or net asset value to assumed changes in credit spreads and interest rates. The'S1' volatility rating indicates that the fund possesses a low sensitivity to market risks. For a full description on rating methodology, please visit www.fitchratings.com. Ratings are subject to change and do not remove credit risk. California CL$S ■_LU California CLASS Registration Packet California CL California Cooperative Liquid Assets Securities System P Q Y Welcome to California CLASS Thank you for choosing California CLASS! We believe you have made a sound financial decision in choosing California Cooperative Liquid Assets Securities System (California CLASS). We look forward to being a trusted partner to your organization and its investment management goals and are excited to connect with you to make your investment process a positive, easy experience. This packet contains all the materials necessary to set up your California CLASS account(s). If you have any questions about the registration process or about your California CLASS account(s), please do not hesitate to contact us. The California CLASS Client Service team can be reached any business day from 8:00 a.m. to 4:00 p.m. PT by phone at (877) 930-5213 or by email at clientservices@californiaclass.com. 717 17th Street, Suite 1850 Denver, Colorado 80202 T (877) 930-5213 F (877) 930-5214 clientservices@californiaclass.com www.caIiforniaclass.com Page 2 California ClL California Cooperative Liquid Assets Securities System P Q Y Registration Procedures To participate in California CLASS, please complete the following: 1) Review the Joint Exercise of Powers Agreement and the applicable Information Statements relating to the California CLASS Prime Fund and the Enhanced Cash Fund (located in the Document Center at www.californiaclass.com). 2) Complete the California CLASS Participant Representation Form (page 4). 3) Complete the Participant Registration (page 5). 4) Complete the Authorized Contacts Form (pages 6/7). 5) Should you be interested in participating in California CLASS Prime, complete the California CLASS Prime Fund Account(s) to be Established form; you may open as many accounts as you wish (page 8). 6) Should you be interested in participating in California CLASS Enhanced Cash, complete the California CLASS Enhanced Cash Fund Account(s) to be Established Form; you may open as many accounts as you wish (page 9). 7) Keep the original forms for your records and send the completed packet to the California CLASS Client Service team by fax (877) 930-5214 or by email clientservices@caIiforniaclass.com. Questions? Please contact us; we would love to hear from you: California CLASS Client Service Team T (877) 930-5213 clientservices@californiaclass.com Through the California CLASS website, www.californiaclass.com, Participants will be regularly informed of important program information, holidays, upcoming Board meetings, Participant events, conferences, and more. Board of Trustee meetings, which are open to the public, are generally held quarterly and discuss relevant issues to the governance and operations of the California CLASS program. 717 17th Street, Suite 1850 Denver, Colorado 80202 T (877) 930-5213 F (877) 930-5214 clientservices@californiaclass.com www.californiaclass.com Page 3 California CL California Cooperative Liquid Assets Securities System P Q Y Participant Representation Form Participant Information Entity Name (Participant) Participant Representations The undersigned Authorized Signer for the Participant hereby represents and warrants the following during the period the Participant is investing in the California CLASS Investment Program: • The Participant is (1) a Public Agency (as defined in the Joint Exercise of Powers Agreement) and (2)(a) a political subdivision of the State of California or (b) an organization whose income is excluded from taxable gross income under Section 115 of the Internal Revenue Code, in each case, that has the authority to invest funds in its treasury in investments in accordance with Section 53601 of the California Government Code. • The Participant is authorized to invest in the California CLASS. • Any Authorized Signer for the Participant designated in this California CLASS Registration Packet has full power and authority to make investments for the above Participant in the California CLASS Investment Program unless the California CLASS receives written notice from the Participant otherwise. • The Participant has reviewed and agrees to the limitations described in the Joint Exercise of Powers Agreement and the Information Statements for the Funds within the California CLASS Investment Program and acknowledges that it has been supplied with or been given access to information it requested in connection with making an investment in the California CLASS Investment Program. • The Participant has reviewed the Investment Policies for the Funds within the California CLASS Investment Program and has determined that they are consistent with the legal and policy limitations applicable to the Participant's investments. • The Participant has consulted with its own counsel and advisers as to all matters concerning investment in the California CLASS Investment Program. Authorized Signer Signature Date Print Name Title Many factors affect performance including changes in market conditions and interest rates and in response to other economic, political, or financial developments. Investment involves risk including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. Past performance is no guarantee of future results. Any financial and/or investment decision may incur losses. 717 17th Street, Suite 1850 T (877) 930-5213 clientservices@caIiforniaclass.com Denver, Colorado 80202 F (877) 930-5214 www.californiaclass.com Page 4 California CL California Cooperative Liquid Assets Securities System P Q Y Entity Information Entity Name (Participant) Entity Type: ❑ City/Town ❑ Other (Specify) Mailing Address City Participant Registration ❑ County ❑ School District ❑ Special District Physical Address (if different than above) City Tax ID Zip Zip Fiscal Year End Date (Month/Day) County County California CLASS is hereby authorized to honor any telephone, faxed, or electronic request believed to be authentic for withdrawal of funds. The withdrawal proceeds can be sent only to the bank(s) indicated below unless changed by written instructions. Each Participant is responsible for notifying California CLASS of any changes to its account by filling out and sending via mail or email the Forms available on the California CLASS website. Wires will be distributed every hour with the final distribution ending at 11:00 a.m. PT; distribution times are subject to change as needed by the California CLASS Administrator. Additionally, California CLASS must be notified of any contributions by 11:00 a.m. PT to receive same day credit. If funds are not received by 2:00 p.m. PT, contribution orders will be voided. Banking Information Bank Name Account Title Bank Contact ❑ Wire ❑ ACH ❑ Both Additional Banking Information (Optional) Bank Name Account Title Bank Contact ❑ Wire ❑ ACH ❑ Both 717 17th Street, Suite 1850 Denver, Colorado 80202 Bank Routing Number (ABA) Account Number Contact's Phone Number Bank Routing Number (ABA) Account Number Contact's Phone Number T (877) 930-5213 F (877) 930-5214 clientservices@californiaclass.com www.caIiforniaclass.com Page 5 California CL California Cooperative Liquid Assets Securities System P Q Y Authorized Contacts Approve changes to the Investor Profile Receive account updates Update banking/contact information Request "view -only" access to monthly statements Transfer funds and transaction confirmations Receive account updates Authorized Signer Print First and Last Name Title Signature Required Phone Email Fax Email Notifications (notice of report availability in the online portal) ❑ Monthly Statements ❑ Transaction Confirmations Additional Contact (Optional) Print First and Last Name Title *(Signature Required if Authorized Signer) Phone Email Fax Permissions (check one only) Email Notifications (notice of report availability in the online portal) ❑ Authorized Signer to Move Funds* ❑ Monthly Statements ❑✓ Read -Only Access ❑ Transaction Confirmations Additional Contact (Optional) Print First and Last Name Title *(Signature Required if Authorized Signer) Phone Email Fax Permissions (check one only) Email Notifications (notice of report availability in the online portal) ❑ Authorized Signer to Move Funds* ❑ Monthly Statements ❑ Read -Only Access ❑ Transaction Confirmations 717 17th Street, Suite 1850 T (877) 930-5213 clientservices@caIiforniaclass.com Denver, Colorado 80202 F (877) 930-5214 www.californiaclass.com Page 6 California CL California Cooperative Liquid Assets Securities System P Q Y Additional Contact (Optional) Print First and Last Name Authorized Contacts (cont.) Title *(Signature Required if Authorized Signer) Phone Email Fax Permissions (check one only) Email Notifications (notice of report availability in the online portal) ❑ Authorized Signer to Move Funds* ❑ Monthly Statements ❑✓ Read -Only Access ❑ Transaction Confirmations Additional Contact (Optional) Print First and Last Name Title *(Signature Required if Authorized Signer) Phone Email Fax Permissions (check one only) Email Notifications (notice of report availability in the online portal) ❑ Authorized Signer to Move Funds* ❑ Monthly Statements ❑✓ Read -Only Access ❑ Transaction Confirmations Additional Contact (Optional) Print First and Last Name Title *(Signature Required if Authorized Signer) Phone Email Fax Permissions (check one only) Email Notifications (notice of report availability in the online portal) ❑ Authorized Signer to Move Funds* ❑ Monthly Statements ❑✓ Read -Only Access ❑ Transaction Confirmations 717 17th Street, Suite 1850 T (877) 930-5213 clientservices@caIiforniaclass.com Denver, Colorado 80202 F (877) 930-5214 www.californiaclass.com Page 7 California CL California Cooperative Liquid Assets Securities System P Q Y California CLASS Prime Fund Account(s) to be Established Entity Name (Participant): Desired Subaccount Names)*: (To be completed by Participant) *Name must be limited to 35 characters. Once your California CLASS account has been established, you will receive a confirmation email with your login credentials from no-reply0californiaclass.com. If you do not receive your login credentials within 48 business hours of submission, please first check your junk or Spam folder before calling the California CLASS Client Service team. 717 17th Street, Suite 1850 T (877) 930-5213 clientservices@caIiforniaclass.com Denver, Colorado 80202 F (877) 930-5214 www.californiaclass.com Page 8 California CL California Cooperative Liquid Assets Securities System P Q Y California CLASS Enhanced Cash Fund Account(s) to be Established Entity Name (Participant): Desired Subaccount Names)*: (To be completed by Participant) California CLASS Enhanced Cash is designed to complement the daily liquidity offered by the California CLASS Prime portfolio. Enhanced Cash does not seek to maintain a stable net asset value (NAV) and does not offer daily liquidity. Unlike the Prime Fund, investing in Enhanced Cash introduces the potential for the reporting of unrealized and realized gains and losses. If you have questions about which of your local government's funds are appropriate for the California CLASS Enhanced Cash portfolio, please contact your California CLASS representative or email info@californiaclass.com. *Name must be limited to 35 characters. Once your California CLASS account has been established, you will receive a confirmation email with your login credentials from no-reply@californiaclass.com. If you do not receive your login credentials within 48 business hours of submission, please first check your junk or spam folder before calling the California CLASS Client Service team. 717 17th Street, Suite 1850 T (877) 930-5213 clientservices@caIiforniaclass.com Denver, Colorado 80202 F (877) 930-5214 www.californiaclass.com Page 9