HomeMy WebLinkAbout03.e. Adopt Resolution updating names of individuals authorized to participate in LAIFCentral Contra Costa Sanitary District
BOARD OF DIRECTORS 3.e •
POSITION PAPER
Board Meeting Date: December 6, 2012
subject: ADOPT A RESOLUTION AUTHORIZING PARTICIPATION IN THE STATE
OF CALIFORNIA LOCAL AGENCY INVESTMENT FUND (LAIF)
Submitted By Initiating Dept. /Div.:
Thea Vassallo, CPA Administrative / Finance & Accounting
Finance Manaaer
R9VIEWEQ AN E OMMENDED FOR BOARD ACTION:
'Thte,
Vassallo K. Alm
Ann Farrell
Finance Manager
General Manager
ISSUE: The Contra Costa County has asked the District for an updated resolution
authorizing participation by the District in the State of California Local Agency
Investment Fund (LAIF). The District adopted similar resolutions in 1977 and 1986.
RECOMMENDATION: Adopt a new resolution authorizing participation by the District
in the Local Agency Investment Fund operated by the State Treasurer, and rescind the
prior resolutions adopted in 1977 and 1986.
FINANCIAL IMPACTS: None.
ALTERNATIVES /CONSIDERATIONS: None.
BACKGROUND: The LAIF was created by law and is administered by the State
Treasurer and an advisory board. The law permits local governments to deposit funds,
which are not immediately required, with the State Treasurer for the purpose of
investment. Before any deposits will be accepted, the local government will be required
to file a resolution with the State Treasurer which authorizes participation in the LAW
and designates individuals who are authorized to order the deposit or withdrawal of
funds in the LAIF. A description of the LAIF is provided in Attachment I.
There are no limitations on the amount that may be invested in the LAIF by a single
entity. The current yield for the LAIF is in the 0.34 %, while the District's investment in
certificates of deposits and commercial paper is presently yielding approximately 0.15%
to 0.24% depending on the maturity. The named Contra Costa County Treasurer's
Office officials would be authorized to execute the District's instructions for investments
in the LAIF, as they presently are for the District's other investments in general. The
District's Statement of Investment Policy (recently updated by the Board on
September 6, 2012) is provided in Attachment II.
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resolution to participate in LAIF 12 -6 -12 (2).doc
POSITION PAPER
Board Meeting Date: December 6, 2012
subject. ADOPT A RESOLUTION AUTHORIZING PARTICIPATION IN THE STATE
OF CALIFORNIA LOCAL AGENCY INVESTMENT FUND (LAIF)
This matter will be reviewed by the Budget and Finance Committee at the December 3,
2012 meeting.
RECOMMENDED BOARD ACTION: Adopt a resolution authorizing participation by the
District in the Local Agency Investment Fund operated by the State Treasurer, and
rescind prior resolutions 77 -55 adopted March 3, 1977 and 86 -079 adopted July 17,
1986.
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resolution to participate in LAW 12 -6 -12 (2).doc
ATTACHMENT I
CENTRAL CONTRA COST SANITARY DISTRICT
LOCAL AGENCY INVESTMENT FUND
Nature and Objective of Fund
The Local Agency Investment Fund (LAIF) is a voluntary program created by law. Local
governments and special districts may invest funds, which are not immediately needed,
in the LAIF. The program offers local agencies the opportunity to participate in a major
portfolio using the investment expertise of the State Treasurer's Office investment staff
at no additional cost to the taxpayer.
The Objective of the LAIF is to realize the maximum return consistent with safe and
prudent treasury management.
Fund Administration
The State Treasurer will invest the LAIF funds with State funds through a Pooled
Money Investment Account (PMIA). The State Treasurer is responsible for the control
and safekeeping of all investments of the LAIF. A five member Local Investment
Advisory Board assists the State Treasurer in formulating the policies which govern the
operation of the LAIF.
Fund Operation
The following summarizes the operation of the LAIF:
1. A resolution by the local government's governing body authorizing participation
will be required.
2. Maximum 15 transactions (combination of deposits and withdrawals) per month.
3. Deposits or withdrawals must be in multiples of $1,000 and the minimum
transaction amount is $5,000.
4. Deposits are made at a local bank and wire transferred to the State Treasurer's
depository bank.
5. Withdrawals will be transferred to the local government's local bank the same
day.
6. The State Treasurer will provide a monthly statement to verify receipt of
deposits.
7. After the end of each calendar quarter, interest income derived from investments
will be distributed by the State Controller to the participating entities directly
proportionate to the respective amounts and durations of the funds invested in
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the LAIF. The State Controller's payment for these earnings will be mailed
directly to the local government. Prior to the distribution an amount equal to the
reasonable cost of making the investments, not to exceed one - quarter of 1
percent of the earnings of the Fund, shall be deducted.
Advantages of the LAIF
Higher Interest Rates: The pooling of surplus cash balances of the State with
the LAIF creates a multi - billion dollar pool which enables investing in diversified
instruments at high denominations.
2. Liquidity: Deposits in the LAIF can be converted to cash in twenty -four hours or
less. No interest is lost if a withdrawal is made sooner than originally
contemplated. There is no minimum investment period.
3. Lower Cost: Large denomination purchases avoid charges generally assessed
on small lot purchases.
4. Investment Expertise: The State Treasurer's Office is in constant contact with
investment markets and handles investment transactions in the hundreds of
millions of dollars.
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Number: BP 005
Authority: Board of Directors
Effective: September 1, 2011
Revised: September 6, 2012
Reviewed:
Initiating Dept. /Div.: Finance
PURPOSE
• r r r r r
ATTACHMENT 11
BOARD POLICY
STATEMENT OF INVESTMENT POLICY
The investment policy of the Central Contra Costa Sanitary District governs the District's
temporary investments. A separate investment policy governs the District's GASB 45
Trust. This investment policy is embodied in the following eleven sections:
POLICY
Statement of Objectives
The temporary investment portfolio of the District will be managed to ensure
that normal cash needs, as well as scheduled extraordinary cash needs can
be met. Therefore, adequate liquidity will be the first priority. Second priority
will be the safety of the portfolio ensuring that the investments could be
readily converted to cash if needed without causing a material change in the
value of the portfolio. Lastly, the portfolio will be invested to attain a market
average rate of return, after meeting the first two previously stated objectives.
H. Permissible Investments
Within the constraints prescribed by the Government Code of the State of
California for permissible investments, the District's investment portfolio will
only be invested in the following instruments:
• United States Treasury Bills and Notes, and obligations of government
agencies for which the full faith and credit of the United States are
pledged.
• Bankers Acceptances, drawn on and accepted by a commercial bank,
which are eligible for purchase by the Federal Reserve System.
BP 005
Page 2 of 4
• Collateralized Certificates of Deposit issued by a Federal or State
chartered bank or a Federal or State chartered savings and loan
association.
• Negotiable Certificates of Deposit issued by a Federal or State chartered
bank or a Federal or State chartered savings and loan association.
• Commercial Paper of prime quality limited to corporations with assets over
$500,000,000.
• Medium Term Notes of a maximum of five years maturity issued by U. S.
corporations or any Federal or State depository institution.
• Local Agency Investment Fund of the State of California.
III. Bank and Dealers
The District will use the services of the Treasurer's Office of the County of
Contra Costa which will transact the District's investment decisions in
compliance with the requirements described in this investment policy. The
County Treasurer's Office will execute the District's investments through such
brokers, dealers and financial institutions as are approved by the County
Treasurer, and through the State Treasurer's Office for investment in the
Local Agency Investment Fund.
IV, Maturities
The maximum maturity for investments of the District is one year. Prior
approval of the Board of Directors must be obtained to acquire investments
with maturities beyond one year. However, investments in Treasury Notes
and the Local Agency Investment Fund would not be subject to the one -year
maximum maturity.
V. Diversification
To minimize the risk of loss through default, the total amount invested in a
single issuer will not be greater than 10 percent of the District's investment
portfolio value, except that the 10 percent limitation will not apply to United
States Treasury Bills and Notes and investment in the Local Agency
Investment Fund.
BP 005
Page 3 of 4
VI. Risk
Credit and market risks will be minimized through adherence to the list of
permissible investments, a limit on maximum maturities, and the limitation on
the total investment in a single issuer.
VII. Delegation and Authority
The District Finance Manager will be responsible for investment transactions
which should be made in accordance with this investment policy and within
the internal controls described in Section IX.
VIII. Prudence
Prudent judgment must be exercised by the District Finance Manager
responsible for investment transactions undertaken in accordance with this
investment policy.
IX. Controls
The District Finance Manager will establish subsidiary accounting records of
each investment which will enable the determination of income earned
monthly and through maturity, and the balancing of the principal amounts to a
control account in the general ledger. Internal control procedures require the
Finance Manager to sign all transactions, which are then countersigned by
the General Manager. Such internal controls are to be reviewed by the
District's independent auditors annually.
X. Reporting
The District Finance Manager will annually render a statement of investment
policy to the Board of Directors. Also, annually, the GASB 45 Trust
Investment Policy will be brought before the Board. The Finance Manager
will submit a monthly report to the District's General Manager and Board of
Directors showing the type of investment, issuer, date of maturity, par (or
face), dollar amount invested, current market value of all securities, and the
source of this same valuation, and a statement of compliance of the portfolio
with the investment policy.
XI. Performance Evaluation
A performance evaluation will be completed by the District's independent
auditors every year, commencing with the 2004 -2005 fiscal year, to determine
whether the investment objective of achieving a market - average rate of return
is being realized. In determining the market - average rate of return, the
average return, of three -month U.S. Treasury Bills will be used as a
BP 005
Page 4 of 4
comparison. The weighted average of the portfolio will be calculated each
month and compiled to determine the annual yield. Results of the
comparison between the District's portfolio and the three -month Treasury-Bill
benchmark will be reported to the Board annually.
RESOLUTION NO. 2012 -094
A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT
AUTHORIZING INVESTMENT OF MONIES
IN THE LOCAL AGENCY INVESTMENT FUND AND
RESCINDING RESOLUTIONS 77 -55 AND 86 -079
WHEREAS, pursuant to Chapter 730 of the statues of 1976, Section 16429.1 was
added to the California Government Code to create a Local Agency Investment Fund
(LAIF) in the State Treasury for the deposit of money of a local agency for purposes of
investment by the State Treasurer; and
WHEREAS, the Central Contra Costa Sanitary District Board of Directors does hereby
find that the deposit and withdrawal of money in the LAIF in accordance with the
provisions of California Government Code Section 16429.1 for the purpose of
investment as stated therein as in the best interests of the District.
NOW, THEREFORE, BE IT RESOLVED BY THE Board of Directors of the Central
Contra Costa Sanitary District ( "District ") as follows:
(1) That, the Board of Directors of the District does hereby authorize the deposit and
withdrawal of District monies in the LAIF in the State Treasury in accordance with the
provisions of Section 16429.1 of the Government Code for the purpose of investment as
stated therein, and verification by the State Treasurer's Office of all banking information
provided in that regard; and
(2) That, the following District officers or their successors in office shall be authorized
to order the deposit or withdrawal of monies in the LAIF:
Name
Ann Farrell (or successor)
Thea Vassallo (or successor)
Title
General Manager
Finance Manager
Signature
(3) That Resolution 77 -55 and Resolution 86 -079 are hereby rescinded.
PASSED AND ADOPTED this 6th day of December 2012, by the Board of Directors of
the District by the following vote:
Resolution No. 2012 -094
Page 2
AYES:
Members:
NOES:
Members:
ABSENT:
Members:
James A. Nejedly
President of the Board of Directors
Central Contra Costa Sanitary District
County of Contra Costa, State of California
COUNTERSIGNED:
Elaine R. Boehme, CIVIC
Secretary of the District
Central Contra Costa Sanitary District
County of Contra Costa, State of California
Approved as to form:
Kenton L. Alm, Esq.
Counsel for the District
DELEGATION OF AUTHORITY
CENTRAL CONTRA COSTA SANITARY DISTRICT
Local Agency Investment Fund
P.O. Box 942809
Sacramento, CA 94209 -0001
To Whom It May Concern:
LAIF Account No.
70 -07 -001 and 11 -07 -036
Pursuant to the resolution of the CENTRAL CONTRA COSTA SANITARY
DISTRICT for AUTHORIZING INVESTMENT OF MONIES IN THE LOCAL AGENCY
INVESTMENT FUND, this letter shall serve as delegation of authority to the following persons
or their successors from the Contra Costa County Treasurer's Office to execute the deposit and
withdrawal of monies on behalf of the CENTRAL CONTRA COSTA SANITARY
DISTRICT. The deposit or withdrawal of monies shall only be permitted with prior written
instructions from the CENTRAL CONTRA COSTA SANITARY DISTRICT to the County
Treasurer. In addition, these persons or their successors from the Contra Costa County
Treasurer's Office shall be given the authority to update the account as necessary upon changes
in personnel, address or banking information with the Local Agency Investment Fund on behalf
of the CENTRAL CONTRA COSTA SANITARY DISTRICT.
Russell V. Watts
Treasurer -Tax Collector
Ammy Pluth
Treasurer's Investment
Officer
Sincerely,
Ann air - e r l Manager
(NAME) be ori resolution
(SIGNATURE)
(DATE)
Brice Bins Belinda Zhu
Chief Deputy Assistant County Treasurer
Treasurer -Tax Collector
Esther Garibay
Treasurer's Investment
Operations Analyst
Thea Vassallo — Finance
Manager
(NA E) Must/ be on reso tion
v
( SIGNATURE)
1/ /-,/ /I,
(DATE)