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RESOLUTION NO. OCSD-04-21
AUTHORIZING THE DISTRICT'S TREASURER TO INVEST AND/OR
REINVEST DISTRICT'S FUNDS, AND ADOPTING DISTRICT'S INVESTMENT
POLICY STATEMENT AND PERFORMANCE BENCHMARKS
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE
COUNTY SANITATION DISTRICT, AUTHORIZING THE DISTRICT'S
TREASURER TO INVEST AND/OR REINVEST DISTRICT'S FUNDS, AND
ADOPTING DISTRICT'S INVESTMENT POLICY STATEMENT AND
PERFORMANCE BENCHMARKS; AND REPEALING RESOLUTION NO.
OCSD 03-17
* * * * * * * * * * * * * * *
WHEREAS, on July 23, 2003, the Board of Directors adopted Resolution No. 03-17,
readopting the District's Investment Policy Statement, and establishing specific performance
benchmarks and objectives, together with a schedule of frequency of investment performance
reports; and,
WHEREAS, pursuant to California Government Code Section 53607, the Board of
Directors may delegate authority to invest and/or reinvest District's funds to the Treasurer for a
one-year period; and,
WHEREAS, pursuant to California Government Code Section 53646, the District is
required to review its Investment Policy annually and readopt its Policy at a public meeting,
which Policy will establish specific performance benchmarks and objectives, and specific
monitoring and reports.
NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District,
DOES HEREBY RESOLVE, DETERMINE AND ORDER:
Section 1: That the authority of the Board of Directors to invest or reinvest District's
surplus funds, or to sell or exchange securities so purchased, or to deposit for safekeeping the
funds and investments of the Districts with depositories, as provided for in California
Government Code Sections 53608 and 53630, is hereby delegated to the District's Treasurer for
a one-year period commencing on the date this Resolution is adopted, as authorized by
California Government Code Section 53607.
REPEALED BY
OCSD 05-21
Section 2: That the Board of Directors hereby adopt the Investment Policy
Statement of the Orange County Sanitation District, as set forth in Exhibit "A", attached hereto
and incorporated herein by reference.
Section 3: That the Board of Directors hereby adopt the following specific
performance benchmarks for their two investment funds in accordance with Section 14.0 of the
District's Investment Policy:
LIQUID OPERATING MONIES: The Short-Term Operating Fund will be compared to
the three month T-Bill rate, and the Callan Active Cash Flow Income Style Group. The
Callan Active Cash Flow Income Style Group represents a peer group of managers who
operate with a maximum maturity of one year.
LONG-TERM OPERATING MONIES: The Long-Term Operating Fund will be compared
to the Merrill Lynch Government and Corporate One-to-Five Year Maturity Index and to
the Callan Defensive Fixed Income Style Group.
Section 4: That the Board of Directors hereby adopt a performance monitoring and
reporting schedule, as required by Section 15.0 of the District's Investment Policy, which
schedule is attached hereto as Exhibit "B", and incorporated herein by reference.
Section 5: That Resolution No. OCSD 03-17 is hereby repealed.
PASSED AND ADOPTED at regular meeting held July 21, 2_Q04. '·'
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H:\DEPT\ADMIN\BS\RESOLUTIONS\2004 RESOLUTIONS\RESOLUTION NO. 04-21.INVESTMENT POLICY.DOC
POLICY
REFERENCE
15.1.1
15.1.2
15.1.3
15.1.4
15.1.5
15.1.6
15.1.7
15.1.8
15.1.9
ADDL**
ADDL**
ADDL**
ADDL**
15.1.10
Notes
*M =Monthly
*Q = Quarterly
EXHI "B"
ORANGE COUNTY SANTIATION DISTRICT
PERFORMANCE MONITORING & REPORTING
FOR THE
DISTRICT'S INVESTMENT PROGRAM
PERFORMANCE CHARACTERISTt:C
Cost and market value of the portfolio {monthly mark-to-market).
Modified duration of the portfolio compared to benchmark.
Dollar change in value of the portfolio for a 1 % change in interest rate.
Percent of portfolio invested in reverse repurchase agreements, and a schedule which
matches the maturity of such reverse repurchase agreements with the cash flows which
are available to repay them at maturity.
For the Liquid Operating Monies account only, the percent of portfolio maturing within 90
days.
Average portfolio credit quality.
Percent of portfolio with credit ratings below "A" by any rating agency, and a description
of such securities.
Listing of any transaction or holdings which do not comply with this policy or with the
California Government Code.
Time-weighted total rate of return for the portfolio for the prior three months, twelve
months, year-to-date, and since inception compared to the benchmark returns for the
same periods.
Comparison of portfolio performance to market index benchmark.
Comparison of Manager's performance to peer group benchmark.
Monitoring of organizational and structural changes of investment management firm.
Audit portfolios for compliance with investment policy guidelines.
REPORTING PARTY*
PIMCO MELLON CALLAN
M,Q M,Q Q
M,Q Q
M,Q Q
M,Q
M,Q Q
M,Q Q
M,Q Q
M,Q
M,Q Q
M,Q Q
Q
Q
Q
OCSD will report if sufficient funds are available for it to meet operating expenditure requirements for the next six months, or if
not, state the reason for the shortfall.
**ADDL= Monitoring of Additional Peformance Characteristics H:\dept\fin\220\white\Treasury Mgmt\lnvestment Policy\2004-05\Monitoring Rpt.doc