AGENDA MEMORANDUM

Meeting Date: March 23, 2009

From:                    Jerry Boop, Finance Director, CPA, CGFO

Subject: Resolutions of the City of Leesburg, Florida amending section 17 of City resolutions 7964 and 7965 by providing that permitted investments in regard to the City's Utility System Revenue Bonds and Electric System Revenue Bonds 2007A and taxable 2007B may also include Florida Surplus Asset Fund Trust.

Staff Recommendation:

Staff recommends approval of the resolutions adding the Florida Surplus Asset Fund Trust (Florida Safe) to the list of permitted investments.

Analysis:

Florida Safe was created to mirror a similar fund in Colorado which is managed by Davidson Fixed Income Management (DFIM) a subsidiary of D.A. Davidson.  On April 14, 2008 the City revised its investment policy to allow Local Government Investment Pools (LGIP’s) other than those overseen by the state due to the investment practices of the Florida State Board of Administration (SBA).  Section 17 of the respective resolutions provides a listing of the permitted investments for bond proceeds.  This listing is very specific and reflects the types of permitted investments and objectives embedded within the City’s investment policy.  Those objectives are first and foremost, safety of principal, liquidity and yield.  The resolutions add Florida Surplus Asset Fund Trust to the list of permitted investments.  Bond Counsel has obtained consent from the bond insurer of the 2007 bonds, MBIA Insurance Corporation (“MBIA”), to add Florida Surplus Asset Fund Trust to the list of permitted investments.  This permission shall remain in effect so long as the trust (i) maintains AAAm criteria and is rated AAAm by S&P, (ii) the final maturity of all investments are 397 days or less, and (iii) the weighted average maturity of the investments is less than 60 days. 

Options:

1. Adopt the resolutions adding the Florida Surplus Asset Fund Trust to the list of permitted investments; or

2.  Such alternative action as the Commission may deem appropriate

Fiscal Impact: 

Bond proceeds are currently invested in an overnight repo account with Sun Trust and earning .01% interest (1 basis point).  As of Friday, March 13, 2009 Florida Safe’s yield was .55 or 55 basis points.  The City is also working with its investment advisor Glenn Scott of DFIM for other governmental securities offering higher yields.

Submission Date and Time:    3/19/2009 11:43 AM____

Department: __Accounting___________ Prepared by:  __Jerry Boop________ Attachments:         Yes____   No ___ Advertised:   ____Not Required ______                      Dates:   __________________________                       Attorney Review :       Yes___  No ____ _________________________________            Revised 6/10/04

Reviewed by: Dept. Head _JB_____ Finance  Dept. __________JB______                                    Deputy C.M. ______EFS__________                                          Submitted by: City Manager ___________________

Account No. __________________ Project No. ___________________ WF No. ______________________ Budget  ______________________ Available _____________________