Oxnard Wins National Award for Investments : Finance: Money managers emphasize low risk. Good results, however, do little to counteract the city’s $4-million budget deficit.

Despite being saddled with a $4-million deficit, the city of Oxnard has won a national award for the way it handles municipal city funds.

Oxnard was one of seven U.S. cities honored for its investment policies by the Municipal Treasurers’ Assn. of the United States and Canada, but city officials said the investments will do little to solve Oxnard’s financial troubles.

“Investment earnings make up about $2 million of the city’s $60-million General Fund,” said Rudy Muravez, director of finance. “Even if you increase your earnings by 10%, $200,000 is not going to make or break the budget.”

City Treasurer Dale V. Belcher said Oxnard’s investment portfolio is worth about $80 million, but most of the funds are locked in various accounts that cannot be transferred to the General Fund to overcome the city’s deficit.

She said that due to the recession, the city’s investments as of March were yielding 7.99% annually, about a percentage point lower than the yield in March, 1990.

“We thought we’d be pulling out of the recession in the fall, but now it looks like we’ll have to wait a little longer,” she said. While lending rates have slumped to as low as 5% and 6%, several long-term investments have earned a higher yield for the city, Belcher said.

She said Oxnard has spread out its investments, with an emphasis on security over a high return.

“We don’t do junk bonds or high-risk things like that,” Belcher said.

“While a good investment policy won’t solve your financial problems, a bad investment can place the city in serious financial trouble,” Muravez said.

About 25% of the city’s funds are invested in the state treasury investment fund, Belcher said. Another quarter is invested in certificates of deposit in banks and savings and loans, “in some of the highest-quality institutions,” Belcher said.

About 20% is invested in federal Treasury notes and agency bonds, Belcher said. About 10% is in long-term bank investments called bankers’ acceptances, and another 10% is invested in short- and medium--term corporate notes. The remaining 5% is invested in overnight stock transactions or five- to 10-day corporate paper, Belcher said.

“We really follow the market,” Muravez said. “Given our size and the fact that we’re a public agency, we don’t try to second-guess the market,” he said.

Belcher said that security is the first investment criterion she adheres to, followed by liquidity, or the ability to cash in the investment and, finally, how much the investment yields.

“Our policy is to make sure we don’t lose any money and to take advantage of the cash we have and not let it sit around,” Belcher said.

As for helping the city overcome its deficit, Belcher said Oxnard officials will have to look for funds elsewhere.

“It’s very important to keep our investment policies separate from our budgeting policies,” she said. “I cannot be swayed by the city’s needs for funds, so that in order to gain additional revenue I make an investment that is less than conservative,” she said.

In addition to Oxnard, certificates of excellence were awarded to Duluth, Minn.; Fremont, Calif.; National City, Calif.; North Richland Hills, Texas; Santa Clarita, Calif., and Tempe, Ariz.