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Agenda Item
ASR
Control 23-000880 |
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MEETING
DATE: |
12/19/23 |
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legal entity taking action: |
Board
of Supervisors |
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board of supervisors district(s): |
All
Districts |
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SUBMITTING Agency/Department: |
Treasurer-Tax
Collector (Approved) |
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Department contact person(s): |
Shari
L. Freidenrich (714) 834-7625 |
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Jason
Prole (714) 834-4774 |
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Subject: Approve Investment Policy Statement
and Delegate Investment Authority
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ceo CONCUR |
County Counsel Review |
Clerk of the Board |
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Concur |
Approved
Resolution to Form |
Discussion |
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3
Votes Board Majority |
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Budgeted: N/A |
Current Year
Cost: N/A |
Annual Cost: N/A |
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Staffing Impact: |
No |
# of Positions: |
Sole Source: N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 12/20/2022 #15, 12/14/2021 #15,
11/17/2020 #12, 11/19/2019 #14 |
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RECOMMENDED
ACTION(S):
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1. |
Approve the 2024
Investment Policy Statement. |
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2. |
Adopt Resolution
approving the 2024 Investment Policy Statement and delegating investment
authority to the Treasurer-Tax Collector for calendar year 2024. |
SUMMARY:
Approval of the Investment Policy
Statement will continue to authorize the Treasurer-Tax Collector to invest
public funds for calendar year 2024 and provide for oversight of public funds.
BACKGROUND
INFORMATION:
In accordance with California
Government Code Section 53646, the Treasurer-Tax Collector (Treasurer) may
annually render to the Board of Supervisors (Board) and any oversight committee
a statement of investment policy for funds in the County Treasury, which the
Board shall review and approve at a public meeting. As required by the current
Investment Policy Statement (IPS), any changes to the IPS must be reviewed and
approved by the Board at a public meeting after being reviewed by the Treasury
Oversight Committee (TOC). In addition,
in order to continue the delegation of authority from the Board to the
Treasurer to invest funds, the Board is required under County of Orange
Ordinance 1-2-320 to receive and approve an annual investment policy statement
from the Treasurer. The annual report of the TOC for 2023 is expected to be
reviewed by the TOC at the January 2024 meeting, and the Chair is expected to
present this required verbal and written report to the Board during the first
quarter of 2024.
Consistent with the August 4, 2015,
memo to the Board describing the process in place for due diligence of the IPS,
the Treasurer performed the due diligence review of the County of Orange 2024
IPS and updated the policy based on that review. The TOC reviewed the draft
2024 IPS on October 25, 2023, as required by the TOC Bylaws.
There are no major changes being
requested in the current proposed IPS but there are several non-substantive
changes primarily related to funds covered by the IPS. The non-substantive
changes are as follows:
Section
PURPOSE: Moved the list of government agencies to
Scope section.
Section
I. POLICY STATEMENT: Deleted the section
on separate funds as it is no longer applicable.
Section
II. SCOPE: Defines the funds that are
excluded from the County Treasury that are established by the governing
body.
Section
II. SCOPE. FUNDS: Adds that revolving
funds established by the governing body are not part of the County
Treasury. Adds that all pooled funds and
specific investment account funds are governed by the IPS.
Section
II. SCOPE. Funds a) Pooled Funds: Adds
that Orange County Treasurer’s Pool (OCTP) may be a permitted investment in
bond indenture documents.
Section
II. SCOPE. Funds b) Specific Investment Accounts: Defines that the agency must bank with the
County, that new accounts require Treasurer approval and adds, consistent with
state law that the net interest income, after investment administrative fees,
is to be credited to each account.
Section
IV. DELEGATION OF AUTHORITY: Removes
Government Code Section 53608 as it is not applicable in this section.
Section
V. OBJECTIVES: Identifies the primary
three objectives from state law and separates out the MARK-TO-MARKET section,
which is internal County of Orange policy.
Section
VI. AUTHORIZED INVESTMENTS: Adds that
both OCTP and Specific Investment Accounts must only use authorized
investments.
Section
VI. AUTHORIZED INVESTMENTS. 7. MONEY MARKET MUTUAL FUNDS (MMMF): Added c) to be
consistent with State law and clarified that for specific investment accounts,
this limit applies to the total balances of the agency’s funds.
Section
VII. INVESTMENT CREDIT RATING RESTRICTIONS: Clarified that this applies to both
OCTP and Specific Investment Accounts and that exceptions for MMMF to only have
one NRSRP must meet the requirements of Section VI.7.b.
12. Section
VIII. INVESTMENT TYPE, DIVERSIFICATION, MATURITY AND DURATION
RESTRICTIONS: Clarified that this
applies to both OCTP and Specific Investment Accounts and added the MMMF
restriction noted above and that only the OCTP had a duration restriction.
Based on the above, the Treasurer
believes that the proposed changes to the 2024 IPS are appropriate and suitable
for the County of Orange.
Delegation
of Investment:
The Board is vested with certain
public funds investment authority with respect to the County and other funds
and may delegate its authority to invest funds to the Treasurer under
California Government Code Sections 27000.1 and 53607 and County of Orange
Ordinance 1-2-320 (a) and (b). If the Board delegates its authority to invest
funds to the Treasurer, then the Treasurer shall thereafter assume full
responsibility for such transactions, for a period of one year. This delegation
is subject to the Treasurer's submission to the Board an IPS for review and
approval annually.
The Treasurer, as required by
California Government Code Section 53607, has made and will continue providing
the monthly transactions to the legislative body. In addition, as noted above
in the IPS changes, the Treasurer will provide at least quarterly investment
reports within 45 days of the end of the quarter that, as required by
Government Code Section 53646, will state the compliance of the portfolio to
the IPS and include a statement denoting the ability of the County to meet the
pool expenditure requirements for the next six months and included other
information relative to the County investments.
Delegation
for Safekeeping Authority
On December 14, 2021, as allowed
under Government Code 53608 and County Ordinance 1-2-320(c), the Board
delegated the depository authority for safekeeping to the Treasurer and that
delegation is effective until revoked.
Prior
Board Actions:
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Board
Date |
Board
Action |
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12/20/2022 #15 |
Approved the
2023 IPS and the delegation of investment to the Treasurer for calendar year
2023. |
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12/14/2021 #15 |
Approved the
2022 IPS, the TOC Bylaws, the delegation of investment to the Treasurer for
calendar year 2022 and delegated the deposit for safekeeping authority to the Treasurer-Tax Collector |
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11/17/2020 #12 |
Approved the
2021 IPS, the TOC Bylaws and the delegation of investment and depository
authority to the Treasurer for calendar year 2021 |
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11/19/2019 #14 |
Approved the
2020 IPS, the amended TOC Bylaws and the delegation of investment and
depository authority to the Treasurer for calendar year 2020 |
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12/18/2018 #21 |
Approved the
2019 IPS, the amended TOC Bylaws and the delegation of investment and
depository authority to the Treasurer for calendar year 2019 |
County Audits in Last Three Years:
The Auditor-Controller Internal
Audit Division (A-C IAD) regularly audits compliance with the Investment Policy
Statement as required by Government Code 26920(a) and (b) and a Treasury
Oversight Committee directive. A-C IAD performed the Quarterly Compliance
Monitoring of the Treasury Investment Portfolio from January 1, 2021, through
June 30, 2023, with no compliance exceptions. The Annual Compliance Audit as
required by Government Code 27134 was completed for FY 2021-22 with no
compliance exceptions.
FINANCIAL
IMPACT:
N/A
STAFFING
IMPACT:
N/A
ATTACHMENT(S):
Attachment
A - 2024 Investment Policy Statement
Attachment B - 2024 Investment Policy Statement Redlined
Attachment C - County Resolution
Attachment D - California Government Code Section 53646
Attachment E - County Ordinance 1-2-320
Attachment F - August 4, 2015, Memo to the Board of Supervisors
Attachment G - California Government Code Sections 53600-53608
Attachment H - California Government Code Section 27000.1
Attachment I - California Government Code Sections 27134
Attachment J - California Government Code Sections 26920(a) and (b)