Inter-Departmental Correspondence

Treasurer-Tax Collector-Revenue Services



May 6, 2011


May 24, 2011







Honorable Board of Supervisors


Sandie Arnott, Treasurer-Tax Collector


Approve the 2011 San Mateo County Investment Policy Statement



Adopt a Resolution approving the 2011 San Mateo County Investment Policy Statement, submitted and reviewed by the Finance and Operations Committee.



Pursuant to Government Code 53646, the Treasurer may annually render to the Board of Supervisors and any Oversight Committee a statement of investment policy, which the Board shall review and approve at a public meeting. The Treasurer has re-written the 2008 Policy that was approved by the Board of Supervisors on January 8, 2008.



The financial markets have changed dramatically since the last approved Investment Policy dated 2008. The 2011 Investment Policy has been improved with a more conservative investment approach resulting in greater diversification and increased transparency of investment procedures followed within the Treasurer’s office. In addition, the policy has been reviewed by PFM Asset Management LLC, an investment advisor recently hired by the Treasurer’s office. The majority of their comments and suggestions have been incorporated.


Key changes to the 2011 Investment Policy are found in the area of diversification and maturity restrictions such as: Maturity limitations on U.S. Treasury/Agency securities have been lowered from 15 years to 7 years. U.S. Agency securities have been reduced from 100% to 40% per issuer. In addition, the maximum for any callable agency security is 25% per issuer. The percent of the fund per issuer for any non U.S. Government Security (corporates, money markets, etc.) has been lowered from 10% aggregate to 5% aggregate of the entire pool. Corporate securities remain at 30%, however, only 25% of that 30% may be rated single A. The percentage of the fund that can be used to purchase Collateralized Time Deposits within the State of California has been reduced from 30% to 15% of the fund.


All changes are in compliance with Government Code 53601. The overriding objective of the Investment Policy Statement is Preservation of Principal. On April 25, 2011, the San Mateo County Treasury Oversight Committee approved the 2011 Investment Policy Statement for review by the Finance and Operations Committee. The Finance and Operations Committee reviewed the 2011 Investment Policy Statement on May 4, 2011. The Treasurer will communicate the approved 2011 Investment Policy Statement to all pool participants and receive their written acknowledgement of the current version of the Investment Policy.


Performance Measure(s):


FY 2009-10

FY 2010-11

Dollar growth in County Pool due to investments

$28,487,957 / 1.09%

$26.5M / 1.25%


County Counsel has reviewed and approved the Resolution as to form and content.


Approval of this Resolution contributes to the Shared Vision 2025 outcome of a Collaborative Community by managing the financial assets of the County and maintaining the value of the investment pool through professional and efficient administration of the County Treasury for County departments, special districts, schools, cities and taxpayers.



There is no net County cost.