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CITY OF SAN LEANDRO <br />MEMORANDUM <br />DATE: June 3, 2011 <br />TO: Finance Committee <br />FROM: Stephen L. Hollister, City Manager <br />BY: Tracy Vesely, Finance Director <br />Mary Ann Perini, Budget and Compliance Manager <br />SUBJECT: City of San Leandro's Investment Policy for FY 2011 -12 <br />SUMMARY AND RECOMMENDATION <br />Staff recommends that the Finance Committee review and approve the City of San <br />Leandro's Investment Policy for FY 2011 -12. The policy is scheduled for the June 20, <br />2011 City Council agenda. The Policy is approved annually, and while not substantively <br />modified from previous years, staff is proposing some clarifying new language. <br />BACKGROUND <br />California Government Code Section 53600 et seq. and Section VIII of the San Leandro <br />Investment Policy requires the City Council to annually review and approve the City's <br />Investment Policy. This policy was last adopted on June 21, 2010. <br />The City of San Leandro Investment Policy (Investment Policy) provides specific <br />guidelines for the City's investment management functions and remains in compliance <br />with the model policy approved by the Association of Public Treasurers of the U.S. & <br />Canada. The investment policy serves as a guide for setting and achieving investment <br />objectives, defines rules and established benchmarks, prohibits and/or restricts <br />investment instruments and reduces exposure to liability of both staff and Council. <br />Compliance with the policy is an element of fiscal discipline considered by the auditors <br />and rating agencies during their respective reviews. <br />Staff has reviewed the current policy and has eight recommended changes for 2011 -12. <br />In addition, staff has reviewed state legislation to determine if there have been any <br />updates or changes to state law that should be reflected in the City's policy and there <br />are none. Should the legislature take such action in 2011 -12, then staff will return to <br />Council with the necessary recommended changes. <br />Page 2, III. Delegation of Investment Authority /Prudence — The <br />recommended changes are as follows: <br />• Added the second paragraph that states "The City may engage the services <br />of one or more external investment managers to assist in the management of <br />