Staff Report
PREPARED BY: STEPHEN CONWAY
FINANCE DIRECTOR
Reviewed by: Town Manager and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 05/16/2017
ITEM NO: 5
ITEM NO: 11
DATE: MAY 9, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: ADOPT AN UPDATE TO THE TOWN’S INVESTMENT POLICY AS
RECOMMENDED BY THE COUNCIL FINANCE COMMITEE.
RECOMMENDATION:
Adopt an update to the Town’s Investment Policy as recommended by the Council Finance
Committee.
REMARKS:
The Town demonstrates sounds fiscal administration and updates its financial policies regarding
revenue, expenditure, budgeting, fund balance reserves, capital improvement, long term debt,
and investments. The policies regarding revenue, budgeting and expenditure, capital
improvement, and long term debt were first incorporated into the Fiscal Year (FY) 2004/05
budget document and have been updated as necessary at the time of the annual budget
adoption. All of the Town’s financial policies are following Government Financial Officers
Association recommendations and meet Government Financial Officers Association standards.
The Town’s Investment Policy and Debt Policy were last updated in November 2016. The
Investment Policy establishes the investment scope, objectives, delegation of authority,
standards of prudence, reporting requirements, internal controls, eligible investments and
transactions, diversification requirements, risk tolerance, and safekeeping and custodial
procedures for the investment of the funds of the Town. All Town funds are invested and/or
will be invested in accordance with the Investment Policy and with applicable sections of the
California Government Code.
PAGE 2 OF 2
SUBJECT: INVESTMENT POLICY
DATE: MAY 9, 2017
S:\COUNCIL REPORTS\2017\05-16-17\Investment Policy\Staff Report FINAL.docx 5/11/2017 9:09 AM SLL
REMARKS (cont’d):
Revisions are recommended to the Investment Policy on page 6 for the Money Market Funds
(see Attachment 1). This revision would further restrict the Town’s investment in Money
Market Funds on those that invest in only government securities. The recent amendments to
the Securities and Exchange Commission rules that govern money market mutual funds (SEC
Rule 2-a7) requires all other (than government) Money Market Funds to have a floating Net
Asset Value.
At its May 4, 2017 meeting, the Council Finance Committee reviewed and discussed the
proposed update to the Town Investment Policy. The Committee acted to move the
recommendations forward to the Town Council for consideration at the May 16, 2017 Town
Council meeting.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
There is no fiscal impact from approving the recommended changes.
Attachment:
1. Proposed Town Investment Policy (red lined).