Chapter 4.05
INVESTMENT POLICY
Sections:
4.05.030 General manager responsibilities.
4.05.050 Investment instruments.
4.05.010 Objective.
Hi-Desert Water District monies not required for immediate expenditure will be invested in compliance with governing provisions of law. As specified in Government Code Section 53600.5, when investing, reinvesting, purchasing, acquiring, exchanging, selling and managing public funds, the primary objective of the district shall be to safeguard the principal of the funds under its control. The secondary objective shall be to meet the liquidity needs of the depositor. The third objective shall be to achieve a return on the funds under its control. District investments are controlled by the restrictions contained in Government Code Section 53601. The restrictions set forth in Government Code Section 53635 shall apply in the event the district pools money in deposits or investments with other local agencies that have separate governing bodies. [Res. 08-08 § 1].
4.05.020 Prudence.
Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the proper management of public funds. Pursuant to Government Code Section 53600.3, the standard of prudence to be used by the investment officials shall be the prudent investor standard and shall be applied in the context of managing an overall portfolio. [Res. 08-08 § 2].
4.05.030 General manager responsibilities.
The general manager shall be responsible for all the transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The general manager or his/her designee shall review the policy annually, for approval of the board of directors. Under the provisions of California Government Code Section 53600.3, the general manager or his/her designee is a trustee and a fiduciary subject to the prudent investor standard. All investment transactions or reporting conducted by a designee of the general manager shall be reviewed and approved by the general manager prior to execution. [Res. 08-08 § 3].
4.05.040 Bonds.
The general manager, or his/her designee, and any and all individuals involved in the investment practices and investment decisions of the district shall be bonded by a recognized insurance company duly authorized to transact a general surety business in the state of California. The district shall provide liability insurance for the protection of the general manager, or his/her designee, and/or any other authorized individuals with fiduciary responsibility to the district’s investments. [Res. 08-08 § 4].
4.05.050 Investment instruments.
The Hi-Desert Water District’s investment portfolio is limited to the following instruments in which funds may be invested. In general, funds deposited for investment purposes are to be held in financial instruments with an investment grade rating of AAA issued by a United States Credit Rating Agency (CRA) such as Standard and Poor’s or Moody’s. Such investments are subject to the requirements of state law including, without limitation, the restrictions set forth in Government Code Section 53601.
A. Local agency bonds including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the district.
B. U.S. Treasury bills, notes or bonds.
C. Negotiable Certificates of Deposit. Negotiable certificates of deposit issued by a nationally or state-chartered bank, a savings association or a federal association, a state or federal credit union, or by a state-licensed branch of a foreign bank.
D. Local Agency Investment Fund. The investment with LAIF may not, by state regulation, exceed $10,000,000 with the exception of bond proceeds that may be directly deposited to the LAIF account.
Under the provisions of Government Code Sections 53601.6 and 53631.5, the district shall not invest any funds covered by this investment policy in inverse floaters, range notes, or mortgage-derived, interest-only strips, or any investment that may result in a zero interest accrual if held to maturity.
In accordance with State of California Government Code Section 53646, the Hi-Desert Water District’s chief financial officer shall prepare a quarterly report to the general manager and the board of directors showing the type of investment, institution, date of maturity, amount of deposit, and interest rate. [Res. 08-08 § 5].