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10.
City Council Work Session
Meeting Date:
09/26/2017
From:
Rick Tadder, Management Services Director

TITLE

Discussion related to possibly amending the Investment Policy to further pursue socially responsible investing.

STAFF RECOMMENDED ACTION:

Council Direction

EXECUTIVE SUMMARY:

On April 4, 2017, Councilmember Putzova presented a Future Agenda Item Request (F.A.I.R.) to have a discussion related to amending the City's Investment Policy, specifically to further pursue socially responsible investing and to state what we seek to invest in. 

Councilmember Putzova will be seeking agreement from at least three additional Councilmembers to further the discussion on this request.

INFORMATION:

Councilmember Putzova provided staff with recommended amendments to the Investment Policy. Below is a summary of recommended changes noted in bold/underline text:

1.0 Policy
It is the policy of the City of Flagstaff to invest public funds in a manner which will provide the highest reasonable investment return with the maximum security by integrating fiscal responsibility, social equity, and community and environmental stewardship while meeting the daily cash flow demands of the entity and conforming to all applicable state and local statutes governing the investment of public funds.

4.0 Objective
The primary objectives, in priority order, of the City of Flagstaff’s investment activities shall be safety of principal, liquidity, social responsibility and yield.

4.1 Investment Objectives
3. Social Responsibility
The City of Flagstaff investment portfolio shall prioritize sustainable, responsible and impact investing (SRI) as an investment discipline that considers environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact.
 
9.1 Authorized Investments

1. Obligations of the United States or its agencies and instrumentalities;
2. Obligations of the State of Arizona, or any of its counties, incorporated cities or towns, or school districts;
3. Fully insured or collateralized certificates of deposit issued by a nationally or state chartered bank or savings institution;
4. Negotiable or brokered certificates of deposit issued by a nationally or state charted bank or savings and loan association that are rated within the top three ratings by a nationally recognized rating agency;
5. Interest bearing savings account deposits at banks and savings institutions doing business within Arizona whose accounts are insured by the Federal Deposit Insurance Corporation (FDIC);
6. Banker’s Acceptances eligible as collateral for borrowing from the Federal Reserve, of U.S. banks whose short-term obligations are rated Aa or better by two nationally recognized rating agencies;
7. Repurchase agreements, with a maximum maturity of 180 days, whose underlying collateral consist of securities in section 9.1.1 of this policy and executed with an Arizona bank or primary dealer;
8. Commercial paper rated A-1/P-1/F1 or the equivalent by two nationally recognized rating firms;
9. Corporate SRI bonds, debentures, and notes rated within the top three ratings by two nationally recognized rating firms;
10. SEC registered money market funds whose portfolios are limited to the foregoing authorized securities;
11. The State of Arizona’s Local Government Investment Pool (LGIP); and
12. Companies that are not in the practice of extracting fossil fuels. SRI assets.

Attachments