BOARD MEETING DATE: June 6, 2008
AGENDA NO. 12
TITLE:
Adopt Resolution and Memorandum of Understanding Directing Specific Investment of Excess AQMD Funds by Los Angeles County Treasurer
SYNOPSIS:
On September 8, 1995, the Board adopted Resolution No. 95-20 authorizing the investment of AQMD funds by the Los Angeles County Treasurer. The Los Angeles County Treasurer, AQMD’s Treasurer, has requested that the AQMD adopt a new Resolution and a Memorandum of Understanding in order to better define the exact roles and responsibilities of the depositor and the Treasurer as related to the Specific Purpose Investment portfolio. This action is to adopt a new Resolution and Memorandum of Understanding.
COMMITTEE:
Investment Oversight, May 16, 2008, Recommended for Approval
RECOMMENDED ACTION:
Adopt Resolution authorizing the execution of a Memorandum of Understanding directing the specific investments of AQMD funds.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
For the past 31 years, the County of Los Angeles has provided treasury management services to the AQMD. These services are limited to the processing of payroll and accounts payable warrants and the investment of the AQMD’s cash balances.
Proposal
The Treasurer’s current practice requires a resolution of the depositor’s governing body in order to establish a Specific Purpose Investment (SPI) portfolio. On September 8, 1995, the AQMD Board adopted Resolution No. 95-20 authorizing the specific investments of AQMD funds by the Los Angeles County Treasurer. In reviewing the form of resolution currently used, both the Treasurer and the Office of the County Counsel agreed that a revised resolution and a more detailed Memorandum of Understanding are necessary in order to better define the exact roles and responsibilities of the depositor and the Treasurer as related to the SPI program.
Under the terms of the revised MOU, the depositor is responsible for developing and maintaining its own Investment Policy. Furthermore, the depositor is responsible for ensuring that it provides specific instructions to the Treasurer’s Investment Office for all investment transactions, which comply with the depositor’s Investment Policy. The MOU provides additional information regarding the Treasurer’s responsibilities to depositors and their SPI portfolio, including but not limited to an acknowledgment that, in executing investment transactions for the depositor, the Treasurer is not acting in a fiduciary or investment advisory capacity, and that the Treasurer is providing investment transaction execution, securities clearance and custody, and accounting services for the depositor.
The AQMD established its own investment policy in 1996 which is annually reviewed and approved by the Governing Board in March. The AQMD investment policy complies with the applicable provisions of the California Government Code and is more restrictive than the Los Angeles County Treasurer’s Investment Policy.
Resource Impacts
Funding to cover the cost of processing payroll and accounts payable warrants, and for the investment of AQMD’s cash balances are included in the annual budget.
Attachments (exe 61 kb)
Resolution
Memorandum of Understanding