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Receive an update from the County Treasurer; Adopt a resolution to renew annual delegation of investment authority to the County Treasurer; Approve the proposed County Investment Policy; and Adopt a second resolution to approve the proposed County PARS 115 Trust Investment Policy
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Published Notice Required? Yes ____ No __X_
Public Hearing Required? Yes ____ No __X_
DEPARTMENTAL RECOMMENDATION:
It is recommended that the Board of Supervisors:
1) Receive an update from the County Treasurer;
2) Adopt a resolution to renew annual delegation of investment authority to the County Treasurer;
3) Approve the proposed Investment Policy; and
4) Adopt a resolution to approve the proposed County PARS 115 Trust Investment Policy.
SUMMARY/DISCUSSION:
California Government Code section 27000.3 provides that the Board of Supervisors is the agent of the County that serves as a fiduciary and is subject to the prudent investor standard for the County Investment Pool unless an annual delegation of authority has occurred pursuant to Government Code section 53607. Section 27000.1 permits the Board to delegate to the County Treasurer the authority to invest funds in the County Treasury for a period of one year. When such a delegation occurs, the County Treasurer and not the Board of Supervisors serves as the fiduciary and is subject to the prudent investor standard.
On February 10, 2015 this Board took action to adopt Resolution 2015-21 establishing the PARS 115 Pension Trust (the Trust). The Trust is to be used exclusively to fund contractual obligations to provide pension benefits. This Board also delegated to the Treasurer investment authority for the Trust. While not mandated, in keeping with the tenets of Section 27000.1, the Treasurer is requesting an annual reaffirmation of the delegation and investment policy as a means of providing transparency.
Retirement trust funds have different objectives and statutory prohibitions than the County Treasurer’s Pool and therefore require a separate investment policy that is reflective of those differences. The purpose of these funds require staff to manage the funds to a risk profile unique from the investment pool. These differences include an ability to purchase and hold equities, private placement securities, and fixed income investments whose risk profiles are greater than those found in a cash management pool such as the Treasurer’s Pool. Since these funds will be held for a greater length of time and with more predictable cash flow needs, they can be invested in securities that provide the potential for a greater return on investment than might otherwise be achievable.
FINANCING:
The cost to prepare this agenda item is nominal and is included in the Treasurer’s FY2023/24 Working Budget. The full cost of operations for the Treasurer’s Office is paid from investment earnings of the Treasury pool, which is allocated to all pool participants proportionately to their share of the pool investments.
ALTERNATIVES:
The Board may choose not to renew the delegation of authority to the Treasurer and choose instead to keep the investment responsibilities and serve as fiduciary. The Board could elect to make changes to either of the proposed policies.
OTHER AGENCY INVOLVEMENT:
County Counsel has reviewed the policies
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION