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<br />r <br /> <br />" <br /> <br /> <br />4L <br /> <br />'- <br /> <br />~ <br /> <br />pLEASANTONc <br /> <br />City Council <br />Staff Report <br /> <br />April 18, 2006 <br />Finance Department <br /> <br />SUBJECT: <br /> <br />APPROVAL OF INVESTMENT POLICY AND GUIDELINES <br /> <br />STAFF RECOMMENDATION: <br /> <br />Staff recommends that Council adopt the attached Investment Policy and <br />Guidelines. <br /> <br />SUMMARY: <br /> <br />Pursuant to Government Code ~~53601 and 53635, the City's investment <br />policy must be submitted to Council annually for adoption. <br /> <br />Honorable Mayor and Members of the City Council: <br /> <br />BACKGROUND <br /> <br />California Government Code Section 53646 provides for the City Council to adopt an annual <br />investment policy. This policy for FY 2006-07 and adopting resolution is attached. <br /> <br />DISCUSSION <br /> <br />Aside from being legally required, an investment policy is important because it provides the <br />framework for a prudent investment program and is a fundamental requirement in fulfilling <br />fiduciary responsibilities. Specifically, a formal investment policy is necessary to identity <br />investment objectives, define risk tolerance, assign responsibility, and establish control over the <br />investment process. Safekeeping of cash and investments is one of the most important <br />responsibilities of both the City Council, City Manager and the Director of Finance. A well- <br />developed investment policy serves as a working document that directs the investment activities of <br />the staff and protects the government from potential losses stemming from unsuitable investment <br />practices. <br /> <br />SR:06:112 <br />