HomeMy WebLinkAboutItem 4 PPP 12-09-2020 Administration Committee - Investment PolicyInvestment Policy
For Calendar Year 2021
Administration Committee
December 9, 2020
Presenter: Wally Ritchie, Controller
1
Background Information
•California Government Code 53607
•Allows for the Board of Directors to delegate authority to invest and/or reinvest the Sanitation District’s funds to the Treasurer for a one-year period
•California Government Code 53646
•Requires the Sanitation District to review its Investment Policy annually and readopt its Investment Policy at a public meeting
•Investment Policy Section 18.2
•Establishes the Administration Committee as the oversight committee for the Sanitation District’s Investment program
2
Local Agency Investment Guidelines (LAIG)
•Public Bank Obligations
•Public bank as defined in California Government Code Section 57600-57607
•Maximum five years maturity
•Includes commercial paper, debt securities or other obligations of a public bank
3
Senate Bill No. 998 (SB 998)
•Commercial Paper
•Increased the allowable limit in investments from 25% to 40%
•This applies to local agencies with more than $100 million of investable assets
•Securities Backed by the US Government with Zero or Negative Yields
•Allows the inclusion of negative yielding securities, currently prohibited by California Government Code
•Effective January 1, 2021 until January 1, 2026
4
Local Agency Investment Fund (LAIF)
•Current policy: Allowable investment in LAIF is the lesser of 15% of the portfolio or the statutory maximum ($75 million)
•Proposed change: Allowable investment in LAIF is the statutory
maximum ($75 million)
5
Summary of Proposed Changes
•Add:
•Public Bank Obligations (LAIG)
•Securities backed by the US Government with zero or negative yields (SB 998)
•Change:
•Commercial paper
•Limit changed from 25% to 40% of the market value of the portfolio (SB 998)
•LAIF
•Maximum changed from the lesser of 15% of the portfolio or statutory maximum to statutory maximum ($75 million)
6