Finance Committee Agenda and Packet 2011 12 19

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COUNCIL COMMUNICATION TO: MAYOR AND CITY COUNCIL FROM: MALCOLM FLEMING, CITY MANAGER DATE: DECEMBER 19, 2011 SUBJECT: UPDATES TO INVESTMENT POLICY ORIGINATING DEPARTMENT: FINANCE SUMMARY: Attached is both a redline and clean version of the proposed changes to the City of Louisville’s Investment Policy. The amendments are being proposed by the Finance Director and the City’s investment advisor, Davidson Fixed Income Management. The amendments are still in draft stage and are being reviewed by the City Attorney and by the Association of Public Treasurers of the United States & Canada. This draft was presented to, and approved by, the Finance Committee on September 19, 2011. In this first draft, the main focus is on compliance with State statutes, meeting the Government Finance Officers Association’s recommended practices, and satisfying all requirements of the Association of Public Treasurer’s Investment Policy Certification Program. Once all feedback has been received an incorporated, a final draft will be presented to the Finance Committee with a request that the policy be forwarded to the City Council for final approval. Please note – due to Standard & Poor’s downgrade of certain US Government securities and how CRS 24-75-601.1 currently reads, there are some temporary changes to the 2nd and 6th bullets under the Legal Investments section. These temporary changes will allow continued investment in securities issued by US Government Instrumentalities.The State Legislature is expected amend the language in CRS 24-75-601.1 during the upcoming legislative session. Once those amendments are in effect, there may be some slight amendments to the current proposal. For reference, attached is an article on this issue by Davidson Fixed Income Management and a copy of CRS 24-75-601.1. SUBJECT AGENDA ITEM UPDATES TO INVESTMENT POLICY 10