The current City Investment Policy, has continued to remain in compliance with State guidelines including the following stipulations:

1. The Chief Fiscal Officer may submit a quarterly report to the legislative body that contains detailed information on all securities, investments, and monies of the local agency.
2. Prohibition of governments investing in inverse floaters. 
3. Prohibition of governments investing in any security that could result in zero interest accrual if held to maturity.

Also, consistent with State guidelines, the City Council may renew the delegation of authority each year to the City Treasurer and to the Finance Director, or his designee, as Deputy City Treasurer, as the persons responsible for the investments.  The City Council has delegated this authority by Resolution No. 9456-17 to said positions.  

Prior to Chapter 889, Statutes of 2004 (AB 2853, Laird), California Government Code Section 53646 required cities to annually render an investment policy to be considered at a public meeting. With the advent of AB 2853, the requirement to submit investment policies was made optional, although the Legislature still encourages the submittal of investment policies because of the public interest served. The Finance Director, acting as Deputy City Treasurer, provides the City Council a copy of the investment portfolio monthly.  Also, the City’s Investment Policy is presented to the City Council for review and approval at a public meeting annually.  The Investment Policy outlines the City’s investment guidelines and investing strategy.  The Policy requires the City to hold the securities or have safekeeping by a recognized financial institution.  Currently,  U.S. Bank and Union Bank, N.A. (which is a custodial service completely separate from Union Bank operations) provide custodial/safekeeping services to the City.

The City Investment Policy applies to secure the investment principal, allows for ease of liquidation, and provides a reasonable return on the investments.  In addition, the Investment Policy allows the City of Garden Grove to maintain sufficient cash so all payments due in at least the next six months may be made in a timely manner.   The requirements and strategies outlined in the City’s Investment Policy have allowed the City of Garden Grove to have no losses in principal while maintaining a reasonable return on the portfolio.  Last fiscal year the City’s Investment Portfolio return was approximately 1.25%.  All of the investments held in the portfolio at this time are either Federal Securities or invested in the Local Agency Investment Fund (LAIF).

It is recommended that the City Council take the following actions:

• Approve the attached 2018 Investment Policy;  

• Re-appoint Laura J. Stover as City Treasurer, and Kingsley Okereke as the Deputy City Treasurer; and

• Renew delegation to the City Treasurer and Deputy City Treasurer the responsibility to invest or to reinvest City funds.