DATE: June 20, 2017
SUBJECT:
Title
RESOLUTION AUTHORIZING THE REQUIRED ANNUAL ADOPTION OF BPC POLICY NO. 115, GUIDELINES FOR PRUDENT INVESTMENTS, INCLUDING RECENT LEGISLATIVE UPDATES PERTAINING TO PUBLIC FUNDS INVESTMENTS
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EXECUTIVE SUMMARY:
Board of Port Commissioners (BPC) Policy No. 115, Guidelines for Prudent Investments, requires that this policy be submitted annually to the Board of Port Commissioners for review and adoption by resolution of the Port's investment policy. This policy is also updated for relevant legislative changes to California Government Code Section 53600 et seq. which details numerous requirements on how and where public funds may be invested.
The California Debt and Investment Advisory Commission (CDIAC) published a statutory update dated January 1, 2017 reflecting changes in the law with respect to public funds investments. The statutory updates were adopted by the Legislature and signed by the Governor. This legislative change clarifies and amends rating requirements contained in Government Code Section 53601. Specifically, wording in ratings requirements were updated to a rating agency "category" which is inclusive of modifies such as symbols or numbers; further, the legislative update now includes the wording "equivalent or higher ratings" from Nationally Recognized Statistical Rating Organizations (NRSRO). The specific sections of the Government Code pertain to four types of investment instruments: Commercial Paper, Medium Term Notes, Mortgage Passthrough Securities, and Supranationals.
The Port currently invests in two (Medium Term Notes and Supranational securities) of the four security instruments included in the legislative update. As such, staff proposes to align all relevant wording in the policy with the above updates and recommends that the Board adopt a resolution authorizing the annual adoption and legislative updates to BPC Policy 115, Guidelines for Prudent Investments.
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