Title
A Resolution Of The City Commission Of The City Of Hollywood, Florida, Amending The City’s Investment Policy Pursuant To Section 38.76(D)(9) Of The City Code Of Ordinances.
Strategic Plan Focus
Financial Management & Administration
Body
Staff Recommends: Approval of the Attached Resolution.
Explanation:
The Investment Policy of the City of Hollywood was adopted on September 16, 2020, and minimally amended by Resolution R-2022-059 on March 2, 2022 and Resolution R-2023-341 on November 1, 2023.
The City desires to update the current Investment Policy by further refining investment parameters to enhance the Investment Policy based on a review by Financial Services and recommendations from the City’s Investment Manager.
The more significant revisions in the updated Investment Policy include the following updates:
1. Revising Section X, Maturity and Liquidity Requirements, to add language regarding final maturities requirements for mortgage- and asset-backed securities.
2. Revising Section XII, Authorized Investments and Portfolio Composition, summary table of investment by sector type, and updating portfolio composition limits. The following updates were completed to the summary table:
(A) Updating the minimum rating requirement to N/A for United States Government Agencies, Federal Instrumentalities, and Mortgage-Backed Securities, as most of these types of securities are issued without ratings.
(B) Updating the maximum percentage of the portfolio permitted to be invested in Interest Bearing Time Deposits or Savings Accounts from 10% to 75% and increasing the individual issuer limit from 5% to 20% to provide flexibility in portfolio composition.
(C) Updating the maximum percentage of the portfolio permitted to be invested in Repurchase Agreements from 25% to 20%.
(D) Consolidating Intergovernmental Investment Pools (Stable Net Asset Value) and Intergovernmental Investment Pools (Floating Net Asset Value) into one category titled Intergovernmental Investment Pools.
(E) Updating maximum percentage of the portfolio permitted to be invested in Intergovernmental Investment Pool from 30% to 50% and reducing the individual issuer limit from 30% to 25% to provide flexibility in portfolio composition.
(F) Updating maximum percentage of the portfolio permitted to be invested in Corporate Notes from 25% to 30% to provide flexibility in portfolio composition.
(G) Updated Maturity Limits from 5 years to Weighted Average Life for Mortgage- and Asset-Backed Securities.
(H) The narrative section was updated to remove allocation limits that were either repeated or in conflict with the summary table. Also added a description of each investment type and examples where applicable.
3. Revising Section XIV, Performance Measurements, including language that allows the use of other benchmarks to accurately measure portfolio performance.
4. Revising Section XV, Accounting and Reporting, including additional language regarding other applicable regulations that are deemed appropriate to this policy.
5. Updated Attachment A, Glossary of Key Investment Terms with minor edits and deleted irrelevant terms.
6. Added Attachment B, Investment Pool/Fund Questionnaire to collect essential information to ensure compliance with the Investment Policy, promote transparency, provide a risk assessment, and define the objectives of the pool/fund.
In addition, there were formatting changes and other minor revisions and clarifications.
Fiscal Impact:
Revising the Investment Policy in and of itself will not have a fiscal impact on the City. The new policy further enhances opportunities for the City to obtain increased return on investment while still prioritizing safety of the City’s principal. The objective is to have an Investment Policy which is current and provides an improved opportunity for the City to yield results while maintaining its safety and liquidity goals.
Recommended for inclusion on the agenda by:
Pamela Harrell, Assistant Director of Financial Services/City Treasurer
Stephanie Tinsley, Director of Financial Services
Adam Reichbach, Assistant City Manager