RES 963RESOLUTION NO.
A RESOLUTION by the City of Camas adopting a policy for
investment of public funds.
WHEREAS,it is the policy of the City of Camas to invest public funds in a manner that
will provide the maximum security with best investment return,and
WHEREAS,the City Council of the City of Camas desires to develop an investment
policy to guide the investment of City funds to meet these objectives,and
WHEREAS,the City of Camas Treasurer has formulated a proposed policy for
investment of City funds,and
NOW,THEREFORE,be it resolved by the Council of the City of Camas as follows:
SECTION
I
The policy for investment of City funds set forth in the document entitled City of Camas,
Washington Investment Policy,which is attached hereto as Exhibit “A”and by this reference
incorporated herein,is here by adopted as official policy for investment of City funds.
rJiADOPTEDataregularmeetingoftheCounciloftheCityofCamasthis/7?.'3 day of
June,2003.
SIGNED:
Mayor
.^rK^A\V—*ATTEST:vt
Clerk/(APPRO as to form:
4 City Attorney
City of Camas,Washington
Investment Policy
I.Policy
It is the policy of the City of Camas to invest public funds in a manner that will provide
the maximum security with best investment return,while meeting the daily cash flowdemandsoftheentityandconformingtoallstateandlocalstatutesgoverningtheinvestmentofpublicfunds.
II.Scope
This investment policy applies to all financial assets of the City of Camas.All assets areaccountedforinthecity’s Comprehensive Annual Financial Report and include thefollowingfunds;
General Fund
Special Revenue Funds
Debt Service Funds
Capital Project Funds
Enterprise Funds
Internal Service Fund
Pension Trust Fund
III.Prudence
Investments shall be made with judgment and care,under circumstances then
prevailing,which persons of prudence,discretion,and intelligence exercise in the
management of their own affairs,not for speculation,but for investment,considering theprobablesafetyoftheircapitalaswellastheprobableincometobederived.(RCW
43.84.061)
The standard of prudence to be used by investment staff shall be the “prudent person”
standard and shall be applied in the context of managing an overall portfolio.Employees
of the Finance Department involved in the investment process,acting in accordance withwrittenproceduresandtheinvestmentpolicyandexercisingduediligenceshallbe
relieved of personal responsibility for an individual security’s credit risk or market price
changes,provided deviations from expectations are reported in a timely fashion and
appropriate action is taken to control adverse developments.
IV.Objectives
The primary objectives,in priority order,of the city’s investment activities shall be:
i.Legality.The city’s investments will be in compliance with all statutes governing the
investment of public funds.
Safety.Safety of principal is the foremost objective of the investment program.Investments of the city shall be undertaken in a manner that seeks to ensure the
preservation of capital in the overall portfolio.To attain this objective,the city willdiversifyitsinvestmentsbyinvestingfundsamongavarietyofsecuritiesoffering
independent returns and financial institutions.
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Liquidity.The city’s investment portfolio will remain sufficiently liquid to enable
the city to meet all operating requirements that might be reasonably anticipated.
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Return on Investment.The city’s investment policy shall be designed with the
objective of attaining a benchmark rate of return throughout budgetary and
economic cycles,taking into account the city’s investment risk constraints and the
cash flow characteristics of the portfolio.
IV.
V.Delegation of Authority
Authority to manage the city’s investment program is derived from the Camas Municipal
Code that directs the mayor to appoint a City Treasurer.The City Treasurer also serves
as the Finance Director.The Camas Municipal Code authorizes the City Treasurer to
appoint a deputy,designated as Deputy Treasurer.The management responsibility for
the investment program is designated to the Finance Director who shall be responsible
for all transactions undertaken and shall establish a system of controls to regulate the
activities of the Deputy Treasurer and other employees,and their procedures.No
employee may engage in an investment transaction except as provided under the terms
of this policy and the procedures established by the Finance Director.
VI.Ethics and Conflicts of Interest
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.
VII.Authorized Financial Dealers and Institutions
The Finance Director will maintain a list of financial institutions authorized to
provide investment services.No public deposit shall be made except in qualified
public depositories as provided by RCW 39.58.The State Treasurer is responsible for
approval of public depositories.
VIII.Authorized &Suitable Investments ^The city is empowered by statute to invest in the certain types of securities as detailed in
RCW 35.39.030 and RCW 39.59.Among the authorized investments are:
Investment deposits,including certificates of deposits,with qualified depositories
as defined in Chapter 39.58 RCW.
Obligations of the U.S.Government,its agencies and instrumentalities.
However,this authorization specifically excludes Collateralized Mortgage
Obligations (CMO’s)Real Estate Mortgage Investment Conduits (REMIC’s)and
other Principal Only (PO’s)and Interest Only (IO’s)obligations that are secured
with mortgages issued by any federal agency,instrumentality or private firm .
State of Washington Local Government Investment Pool and Clark County
Investment Pool.Before investing in the Clark County Investment Pool,a review
of their investment policy,a comparison of their performances with established
benchmarks and review of their safekeeping procedures of their securities shall
be done.
Bonds of the State of Washington and any local government in the State of
Washington,which bonds have at the time of investment one of the three highest
credit ratings of a nationally recognized rating agency,such Moody’s or Standard
and Poor’s rating agencies.
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IX.Safekeeping and Custody
Investment transactions shall be conducted only on a delivery-versus-payment (DVP)
basis,except transactions with the State of Washington Local Government InvestmentPool.All investment securities purchased by the city shall be held by the city or insafekeepingbyafinancialinstitutionorbyathird-party custodian designated by theFinanceDirectorandevidencedbysafekeepingreceiptswithawrittencustodialagreement.
X.Diversification
The purpose of diversification is to reduce the overall risk within the portfolio while
attaining market average rates of return.The city is committed to ensure the safety ofprincipalistheforemostobjectiveofitsinvestmentprogram.The city will diversify itsinvestmentsbysecuritytype,institution,and maturity.Diversification of the portfolio
maintains the following standards:
i.No more than 75%of the total portfolio may be invested with the Washington
State Local Government Investment Pool or Clark County Investment Pool.
ii.No more than 25%of the total portfolio will be invested with a single financial
institution or in a single security type,with the exception of U.S.Treasury
securities.
iii.No more than 25%of the total portfolio may be invested with any one FederalAgency.
XI.Maximum Maturities
To the extent possible,the city will attempt to match its investments with anticipated
cash flow requirements.Unless matched to a specific cash flow,the city will not directly
invest in securities maturing more than three years from the settlement date.
Reserve and pension funds may be invested in securities exceeding five years if the
maturity of such investments is made to coincide as nearly as practicable with theexpecteduseofthefunds.
The average days to maturity of the portfolio will not exceed two years.
XII.Internal Control
Internal control is a management tool to ensure that a system of checks and balancesexistforperiodicreviewandcompliancewithexistingpoliciesandprocedures.TheFinanceDirectorshallestablishandmonitorinternalcontrolsdesignedtoprotectthe
city’s cash and investments and appropriate accounting thereof.
The city including the Finance Department is subject to an annual independent audit bytheWashingtonStateAuditor’s Office.This review will provide additional internalcontrolbyassuringcompliancewithstateandfederalstatutesandestablishedpolicies
and procedures.
XIII.Performance Standards
The city’s investment strategy shall be passive.Given this strategy,the basis used bytheFinanceDirectortodeterminewhethermarketyieldsarebeingachievedshallbe toidentifyabenchmarkthatiscomparabletotheportfolio’s investment duration.AEXHIBIT H-OFPAGE
Benchmarks for investments with a short duration,90 days or less,the average rate ofreturnoftheStateofWashingtonLocalGovernmentInvestmentPoolwillbeused.Forthoseinvestmentsexceeding90daysbutlessthantwoyears,the 12 -month U.S.Treasury Note rate will be used.For those investments exceeding two years,the U.S.two-year Treasury Note will be used.
XIV.Reporting
The Finance Director shall provide to the mayor and council semi-annual investmentreportsthatprovideaclearpictureofthestatusofthecurrentinvestmentportfolio.Themanagementreportshouldincludeinvestmentperformanceandadherencetopolicyprovisions.Schedules in the report should include the following *
A summary of securities held at the end of the reporting period by authorizedinvestmentcategoryandpercentageineachcategory.
Average life of the portfolio
Earnings rate
Benchmark Comparison
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IV.
The Comprehensive Annual Financial Report will record the fair value of the city’sportfolioasofthelastdayofeachfiscalyear,December 31st.
XV.Investment Policy Adoption
The city’s investment policy shall be adopted by resolution and the city council mustapproveanymodificationsmadethereto.
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