Council Approves 3rd Investment Option
To help balance its investment portfolio, the City Council has authorized a third category for use of surplus city funds.
The council unanimously approved putting as much as 15% of the city’s surplus in mutual funds.
City Manager Fred Maley told council members the money will go into mutual funds that invest solely in U.S. Treasury bills.
Before the investment guidelines were amended, the city could handle its surplus funds in only two ways: direct purchase of U.S. Treasury bills and deposit in the state’s Local Agency Investment Fund.
But the same guidelines also forbade either investment to exceed 50% of the total on hand.
Because Villa Park had been dividing its investments equally between Treasury bills and the state fund, a few dollars in interest could tip one category into more than 50%, Maley said.
“Just $1 could throw it beyond 50% by a small fraction,” Maley said. “We therefore need a three-legged stool.”
Start your day right
Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.
You may occasionally receive promotional content from the Los Angeles Times.
