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HomeMy WebLinkAbout4988 ~ , RESOLUTION NO. 4988 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA SUPPORTING AN INVESTIGATION AND ANALYSIS OF THE INVESTMENT POLICIES OF THE CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM IN AN EFFORT TO INCREASE THE RATE OF RETURN. THE CITY COUNCIL OF THE CITY OF ARCADIA DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The California Public Employees Retirement System membership $S of June 30, 1980, included 357,157 members who are employed by local public agencies; and SECTION 2. Letters and presentations were made to the PERS Board of Administration in April of 1980 encouraging a change in investment policies in order to take advantage of short term investment opportunities, such as Federal Treasury Bills, which are guaranteed by the Federal Government, and encouraging the Board to revise its investment policies in an effort to maximize the rate of return, and SECTION 3. As of this date no action has been taken by the PERS Board of Administration to indicate that a change in investment policies is imminent; and SECTION 4. The 1980 Annual Financial Report end report of operations issued by the Public Employees Retirement System of the State of California for the fiscal period ended June 30, 1980, has revealed that the "Computed !late of Return" on the entire $12.85 billion investment portfolio was 7.91% and SECTION 5. The City of Arcadia desires to declare its support for the adoption of the proposed Resolution by the League of California Citiea at its annual conference to be held in San Francisco in October, 1981. -l- 4988 NOW THEREFORE BE IT RESOLVED: by the City Council of the City of Arcadia to support the resolutions of the other cities and the Leagues of California Cities, wherein: 1) The California Public Employees Retirement System (PERS) is not currently meeting the 2nd and 3rd objectives of its stated, "Investment Ojectives", which it has officially adopted as policy guidelines for the retirement system investment program: and 2) While J.t is recognized that the PERS Board of Administration had managed its investment portfolio in a prudent and effective manner in the past, that the League of California Cities take appropriate action to influence the PERS Board of Administration to change its investment strategy so that a significantly higher precentage of new revenue could be placed in Federal T-Bills, Certificates of Deposit, Bankers Acceptance and other performance investment vehicles with high yield when market conditions so justify, in a concerted e,ffort to maximize earning from investments; and 3) The League of California Cities take appropriate action to in- fluence the PERS Board of Administration to examine the maturity period when purchasing new, long term bonds to determine whether they should be shortened. This procedure would allow increased opportunities to examine investment decisions in view of current market conditions; and 4) The League of California Cities aggressively oppose passage of Senate Constitutional Admendment 21, or any similar legislation, which would increase the existing 25~: PERS portfolio ceiling on PERS stock market investments, which investments have not provided a satisfactory rate of return over the eleven year period ending June 30, 1979. Justification of the position can be easily reached upon careful review of Exhibit "A" attached hereto and by this reference made a part hereof, entitled, "Annual Equities Transactions, 11 Year Record" -2- 4988 of the Public Employees Retirement System (If the State of California; 5) The Leagul~ of California Cities sponsor legislation which will expand membership. of the PERS Board of Administration and the PERS Investment Committee to ensure representation of public agency. employers who are PERS ~ers and that such additional positions be filled by appointment of the ~resident of the League of-California'Cities; and 6) Employee orgainzations, such as the Peace Officers Research Assoc- iation of California (PORAC), California State Firefighters Association (CSFA), American Federation of State, County and Municipal EmPloyees (AFSCME), Service Employees International Union (SEIU), other organized labor organizations and other interested organizations and committees, be fully informed of the importance of .the issue and legislation relsted thereto, and seek their support; and 7) Support be given by the League of CAlifornia Cities to the Investment Practices Sub-<:ommittee of the Finance, Insurance and Commerce Committee, Assemblyman LouiS J. Pap an I s Assembly Committee, which is conducting an in- vestigation of the investment policies of the California Publici Employees.. Retirement System in an effort to ensure that PERS maxWzes it rate of return from investments; and 8) Encouragement be given to PERS member cities. member counties, individual members and public agency enployee organizations to write letters to the PESR Board of Administration and to personally appear de fore the Board to demonstrate wide public agency and employee organization support for a full review of and. change" as appropriate, of current investment policies; 9) The effort to maximize interest earnings fron the PERS investment portfolio will directly benefit PERS member cities and individual members -3- 4988 of the California Public Employees Retirement System and, in so. doing, will reduce the need for employer rate increases which would be furided from tax revenuea. SECTION 6. That the Clerk of the Council shall certify to the adoption of this resolution. I RERF~Y CKRTlFY that the foregoing resolution was adopted at a regular meeting of the City Council of the City of Arcadia held on the 1 'itb day of September, 1981 by the affirmative vote of a least three eouncilmen, to wit, AYES, NOES: Councilrren Dring, Haltom, Pellegrino, saelid & Gilb None ABSENT: None , ~~ City Clerk of the City of Arcadia SIGNED AND APPROVED this ATTEST: ~~Jr~ City Clerk ~ -4- 4988