HomeMy WebLinkAboutMINUTES - 12142010 - C.129RECOMMENDATION(S):
ADOPT Resolution No. 2010/607 authorizing the County of Contra Costa Public Financing
Authority to invest monies in the Local Agency Investment Fund (LAIF) as recommended
by the County Administrator.
FISCAL IMPACT:
Investing monies in the Local Agency Investment Fund is projected to be more cost
effective than other options explored.
BACKGROUND:
The Local Agency Investment Fund (LAIF), is a voluntary program created by statute;
began in 1977 as an investment alternative for California's local governments and special
districts. The enabling legislation for the LAIF is Section 16429.1 et seq. of the California
Government Code.
This program offers local agencies the opportunity to participate in a major portfolio, which
invests hundreds of millions of dollars, using the investment expertise of the Treasurer's
Office investment staff at no additional cost to the taxpayer. This in-house management
APPROVE OTHER
RECOMMENDATION OF CNTY
ADMINISTRATOR
RECOMMENDATION OF BOARD
COMMITTEE
Action of Board On: 12/14/2010 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Gayle B. Uilkema, District II Supervisor
Mary N. Piepho, District III Supervisor
Federal D. Glover, District V Supervisor
Contact: Lisa Driscoll, County
Finance Director (925) 335-1023
I hereby certify that this is a true and correct copy of an action taken and entered
on the minutes of the Board of Supervisors on the date shown.
ATTESTED: December 14, 2010
David J. Twa, County Administrator and Clerk of the Board
of Supervisors
By: June McHuen, Deputy
cc: Brice Bins, Assistant Treasurer
C.129
To:Board of Supervisors
From:David Twa, County Administrator
Date:December 14, 2010
Contra
Costa
County
Subject:Public Finance Authority Authorization to Invest Monies in the Local Agency Investment Fund
team is comprised of civil servants who have
BACKGROUND: (CONT'D)
each worked for the State Treasurer's Office for an average of 20 years.
The LAIF is part of the Pooled Money Investment Account (PMIA). The PMIA began in
1955 and oversight is provided by the Pooled Money Investment Board (PMIB) and an
in-house Investment Committee. The PMIB members are the State Treasurer, Director of
Finance, and State Controller.
The Local Investment Advisory Board (LIAB) provides oversight for LAIF. The Board
consists of five members as designated by statute. The Chairman is the State Treasurer or
his designated representative. Two members qualified by training and experience in the
field of investment or finance, and the State Treasurer appoints two members who are
treasurers, finance or fiscal officers or business managers employed by any county, city
or local district or municipal corporation of this state. The term of each appointment is
two years or at the pleasure of the appointing authority.
All securities are purchased under the authority of Government Code Section 16430 and
16480.4. The State Treasurer's Office takes delivery of all securities purchased on a
delivery versus payment basis using a third party custodian. All investments are
purchased at market and a market valuation is conducted monthly.
Additionally, the PMIA has Policies, Goals and Objectives for the portfolio to make
certain that our goals of Safety, Liquidity and Yield are not jeopardized and that prudent
management prevails. These policies are formulated by investment staff and reviewed by
both the PMIB and the LIAB on an annual basis.
The State Treasurer's Office is audited by the Bureau of State Audits on an annual basis
and the resulting opinion is posted to the STO website following its publication. The
Bureau of State Audits also has a continuing audit process throughout the year. All
investments and LAIF claims are audited on a daily basis by the State Controller's Office
as well as an in-house audit process involving three separate divisions.
Under Federal Law, the State of California cannot declare bankruptcy, thereby allowing
the Government Code Section 16429.3 to stand. This Section states that "moneys placed
with the Treasurer for deposit in the LAIF by cities, counties, special districts, nonprofit
corporations, or qualified quasi-governmental agencies shall not be subject to either of
the following: (a) transfer or loan pursuant to Sections 16310, 16312, or 16313, or (b)
impoundment or seizure by any state official or state agency."
During the 2002 legislative session, California Government Code Section 16429.4 was
added to the LAIF's enabling legislation. The Section states that "the right of a city,
county, city and county, special district, nonprofit corporation, or qualified
quasi-governmental agency to withdraw its deposited moneys from the LAIF, upon
demand, may not be altered, impaired, or denied in any way, by any state official or state
agency based upon the state's failure to adopt a State Budget by July 1 of each new fiscal
year."
The LAIF has grown from 293 participants and $468 million in 1977 to more than 2,778
participants and $21 billion at the end of October 2010.
Today's action will allow monies recently borrowed by the Public Facilities Authority for
the construction of the West County Clinic to be invested in LAIF. Contra Costa County
is already an active participant in LAIF.
CONSEQUENCE OF NEGATIVE ACTION:
Inability to use LAIF as an investment option for the Public Finance Authority.
CHILDREN'S IMPACT STATEMENT:
None.
ATTACHMENTS
Resolution No. 2010/607
Resolution No. 2010/607