2025-019 - Statement of Investment Policy

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brought back up to one hundred two percent (102%) no later than the next business day. The underlying collateral shall be limited to United States Government Treasury Bills, Notes, and Bonds, or obligations issued by a Federal Agency or United States Government Sponsored Enterprises obligations. Upon the written approval of the Executive Director for FMSA, substituted securities may be pledged for collateral but shall consist only of investments permitted within this investment policy with a maximum maturity of five (5)years. If there is a default of the broker, the collateral securities can be sold. Since the securities are valued daily, it is likely that the sale proceeds will equal or exceed the value of the repurchase agreement amount. Purchases in this category shall not exceed one (1) year or twenty percent (20%) of the cost value of the investment portfolio. Retail repurchase agreements and reverse agreements shall not be authorized for purchase. G. Negotiable certificates of deposit issued by a nationally or state-chartered bank, a savings association or a federal association (as defined by Section 5102 of the Financial Code), a state or federal credit union or by a state-licensed branch of a foreign bank. However, the City shall not invest in negotiable certificates of deposit issued by a state or federal credit union if a member of the City Council or any City personnel with investment decision making authority also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or the supervisory committee of the state or federal credit union issuing the negotiable certificates of deposit. Effective January 1, 2020 no more than fifty percent (50%) of the cost value of the City's investment portfolio may be invested in deposits, including certificates of deposit, through a placement service as authorized under Government Code 53601.8 (excludes negotiable certificates of deposit authorized under Section 53601(i)). On January 1, 2026, the maximum percentage of the portfolio shall revert back to thirty percent (30%) percent. Investments made pursuant to Government Code Section 53635.8 remain subject to a maximum of thirty percent (30%) of the cost value of the investment portfolio. The amounts so invested shall be subject to the limitations of Government Code Section 53638 which generally provides that the deposit shall not exceed the shareholder's equity of any depository bank, or the total net worth of any depository savings association or federal association, or the total of the unimpaired capital and surplus of an insured industrial loan company. Purchases of this category shall not exceed five years to maturity. H. Local Agency Investment Fund - State Pool. The City may invest in the Local Agency Investment Fund (LAIF) established by the State Treasurer under California Government Code Section 16429.1 for the benefit of local agencies. LAIF provides daily liquidity; therefore, there is no final stated maturity for this investment category.Although there is no percentage limitation on this fund, the "prudent investor" rule shall apply for a single agency name. In keeping with LAIF deposit limit investments, City LAIF investments shall not exceed $75 million per active account, unless a greater deposit limit for regular accounts is authorized by the State Treasurer during the term of this Statement of Investment Policy, in which case City LAIF investments may increase up to that limit. City of Santa-Annual Page 10 July 1 202 5 - Statement of Investment Policy June 30,2026 Resolution No. 2025-019 Page 14 of 24