HomeMy WebLinkAboutItem 2b: Resolution ARA -236: Authorizing Investment of 2010A Tax Bond in Local Agency Investment FundFN.!!!
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SUMMARY
DISCUSSION
STAFF REPORT
Arcadia Redevelopment Agency
DATE: July 6, 2010
TO: Chairperson and Agency Board
FROM: Hue Quach, Administrative Services Directors
Shannon Huang, Financial Services Manager/Tr asurer q_/
SUBJECT: RESOLUTION NO. ARA -236 AUTHORIZING THE INVESTMENT
OF 2010A TAX ALLOCATION BOND PROCEEDS IN THE
LOCAL AGENCY INVESTMENT FUND
Recommendation: Approve
At the June 15 board meeting, the Agency Board approved the issuance of
2010A Tax Allocation Bonds. The Agency is expected to receive approximately
$4.8 million of project funds after the refunding of a portion of its 2001 bonds and
the repayment to the affordable housing fund of $4 million. Staff recommends
investing the project funds with the Local Agency Investment Fund (LAIF), and it
is required for the Agency Board to adopt a resolution authorizing the investment
of bond proceeds in LAIF.
The Local Agency Investment Fund is a voluntary program created by statute,
which began in 1977 as an investment alternative for California local
governments and special districts. This program offers participating agencies the
opportunity to participate in a major portfolio, which invests hundreds of millions
of dollars daily, using the investment expertise of the Treasurer's Office
Investment staff at no additional cost to the City.
The LAIF is part of the Pooled Money Investment Account (PMIA) that began in
1953 and has oversight provided by the Pooled Money Investment Board (PMIB)
and an in -house Investment Committee. The PMIB consists of the State
Treasurer, Director of Finance, and State Controller.
All securities are purchased under the authority of the Government Code Section
16430 and 16480.4. The PMIA also has policies, goals, and objectives for the
portfolio to make certain that our goals of safety, liquidity and yield are not
jeopardized, and that prudent management prevails.
In addition, the State Treasurer's Office is audited by the Bureau of State Audits
on an annual basis. The Bureau of State Audits also has a continuing audit
process throughout the year. The State Controller's Office, as well as an in-
house audit process involving three separate divisions, audit all investment and
LAIF claims on a daily basis.
The LAIF fund is protected by Government Code Section 16429.3 from
impoundment or seizure by any State official or State agency. The Section
states in effect that "the right of a city, county, city and county, special district,
nonprofit corporation, or qualified quasi - governmental agency, to withdraw its
deposited money from the LAIF upon demand may not be altered, impaired, or
denied in any way by any state official or state agency based upon the States
failure to adopt a State Budget by July 1 of each new fiscal year."
This project fund is designated to be used for project development in the central
redevelopment area. Therefore, it can only be invested with liquid funds as it will
be used to meet payment obligations when they occur. At LAIF, bond proceeds
are limited to one withdrawal per 30 -day period, and the withdrawal limitation has
been deemed workable by staff. Additionally, LAIF remains one of the best
options for short term investment despite the historically low interest rate market.
Staff recommends the Agency Board adopt Resolution No. ARA -236 and
authorize the investment of 2010A bonds proceeds with LAIF.
FISCAL IMPACT
All investment return will be credited to the project fund and can be used for
project development or debt service payments as stipulated by the bond
documents. Staff is not able to estimate the total earnings for the project fund as
it depends on the daily rates and the duration of the deposit. LAIF earnings are
currently at approximately 0.52% annually and the investment rate changes daily.
RECOMMENDATION
Adopt Resolution No. ARA -236 authorizing the Investment of 2010A
Tax Allocation Bond Proceeds in the Local Agency Investment Fund.
APPROVED:
D alld Pe, , an, Execu ive Director
RESOLUTION NO. ARA -236
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE ARCADIA REDEVELOPMENT AGENCY,
CALIFORNIA, AUTHORIZING INVESTMENT OF
ARCADIA REDEVELOPMENT AGENCY BOND
PROCEEDS IN THE LOCAL AGENCY
INVESTMENT FUND
WHEREAS, Pursuant to Chapter 730 of the statutes of 1976 Section
16429.1 was added to the California Government Code to create a Local
Agency Investment Fund in the State Treasury for the deposit of money of
a local agency for purposes of investment by the State Treasurer; and
WHEREAS, the Board of Directors does hereby find that the deposit
and withdrawal of proceeds from bonds, notes, certificates of participation,
or other forms of indebtedness (proceeds) in the Local Agency Investment
Fund in accordance with the provisions of Government Code Section
16429.1 is in the best interest of the Arcadia Redevelopment Agency and
the holders of the Arcadia Redevelopment Agency indebtedness.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE
ARCADIA REDEVELOPMENT AGENCY, CALIFORNIA, DOES HEREBY
FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. The Board of Directors does hereby authorize the
deposit and withdrawal of Arcadia Redevelopment Agency bond proceeds
in the Local Agency Investment Fund in the State Treasury in accordance
with the provisions of Government Code Section 16429.1 for the purpose of
investment as stated therein, and verification by the State Treasurer's
Office of all banking information provided in that regard.
SECTION 2. Any one or more of the following Arcadia
Redevelopment Agency officers or their successors in office shall be
authorized to order the deposit or withdrawal of monies in the Local Agency
Investment Fund:
Donald Penman, Executive Director
Hue C. Quach, Administrative Services Director
P. Shannon Huang, Financial Services Manager /Treasurer
until the Arcadia Redevelopment Agency notifies the Local Agency
Investment Fund in writing of any change in the trustee or fiscal agent.
SECTION 3. The Board Secretary shall certify as to the adoption of
this Resolution.
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Passed, approved and adopted on this 6th day of July, 2010.
ATTEST:
Secretary of the
Arcadia Redevelopment Agency
APPROVED AS TO FORM:
Stephen P. Deitsch
Agency Attorney
Chairman of the
Arcadia Redevelopment Agency