BREA : Council May Tighten Investment Policy

In response to the county financial crisis, the City Council will consider tightening Brea’s investment policy and establishing an investment oversight committee. The proposals will be discussed by the council as part of its regular meeting at 7 p.m. tonight.

The city routinely reviews its investment policy on an annual basis to reflect changes in state law. But the review has taken on special significance this year in light of the county bankruptcy. Brea had $9 million in the county-run investment pool when bankruptcy was filed Dec. 6.

Proposed modifications to Brea’s investment policy include:

* Eliminate the option of using reverse repurchase agreements. Brea has never used “reverse repos,” but they are not specifically prohibited in the current investment policy. The county’s aggressive use of such investments was a major cause of the pool collapse.

* Further diversify Brea’s investments. Under the proposed policy changes, no more than 60% of the city’s portfolio could be placed in pooled investments. And no more than 40% of the portfolio could be placed in any one pool.

* Establish an investment committee. This group would meet at least once a month to review Brea’s investments. The elected city treasurer would serve on the committee, along with the financial services director, revenue manager, assistant city manager, a City Council member and a private citizen.

Also on the council agenda tonight is a status report on the county bankruptcy. In addition, the council will announce appointments to city commissions and committees.

For more information, call (714) 990-7755.