SR-204-001 (2)
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OCT 2 5 198n
Santa Monica, California
FD:CMD:RB:aks/srhanks
Council Meeting: October 25, 1988
TO: Mayor and city council
FROM: City staff
SUBJECT: Resolution Authorizing the Investment of One or More
Deposit Accounts with Certain Banks, savings and Loan
Associations, and Broker/Dealers; Also Authorizing the
Purchase of Marketable Investment Securities of
Japanese Banks
INTRODUCTION
From time to time, the city revises the authority of staff to do
business with approved financial institutions and updates the
authorization for specific city staff to have access to the
City's safe deposit box. The attached resolution modifies the
previous authorizing resolution, No. 7365 (CCS) / by adding
authorization for the purchase of marketable securities of eleven
Japanese banks, revising the list of staff authorized to access
the city's safe deposit box, and deleting a currently authorized
savings and loan association. The addition of these Japanese
banks will generate higher yields for city investments.
DISCUSSION
Purchase of Marketable Securities of Japanese Banks
During the 1980's, the presence of Japanese banks in the global
financial markets has grown tremendously. In a recent
BusinessWeek "International Bank Scoreboard", the five largest
banks in the world, based on total assets, were Japanese, as were
seven out of the top ten/ 12 out of the top 20, and 17 out of the
top 30. As a result of this growing presence of Japanese banks
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in the U.S. and world financial markets, large amounts of higher
yielding marketable securities issued by these banks are being
sold and purchased. Under current state law (Sections 53601 and
53635 of the Government Code), local agencies may purchase
authorized securities of foreign financial institutions.
The fallowing is a partial list of cities and counties in
California that currently purchase Japanese bank securities:
Cities
Anaheim
Beverly Hills
Buena Park
Burbank
Culver City
Fremont
FUllerton
Inglewood
Lakewood
Long Beach
Los Angeles
Milpitas
Orange
Pasadena
Santa Barbara
San Diego
San Francisco
Stockton
Visalia
Whittier
Counties
Kern
Los Angeles
Orange
San Barbara
San Diego
Ventura
In addition to the cities and counties noted above, the state of
California is a major purchaser of Japanese bank securities.
Following extensive search by Treasury staff, the following 11
Japanese banks were judged acceptable for addition to the city's
authorized financial institutions list:
-Bank of Tokyo
-Dai-Ichi Kangyo Bank
-Daiwa Bank
-Kyowa Bank
-Long Term credit Bank
-Mitsui Bank
-Mitsubishi Bank
-Sanwa Bank
-Sumitomo Bank
-Taiyo Kobe Bank
-Tokai Bank
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All of these Japanese banks maintain local Los Angeles branches,
comply with the city's South African policy, and meet the city's
audit standards.
City staff recommends that the City Council adopt the attached
resolution authorizing the addition of these 11 Japanese banks to
the City's authorized financial institutions list.
staff Authorized to Access the City Safe Deposit Box
The city maintains a safe deposit box at First Interstate Bank of
California which contains various Parking Authority interest
coupons and various other items which require safe keeping. Both
william Ramsey, Assistant Finance Director, and Esmerelda Kelley,
Supervising Fiscal Staff Assistant, are no longer employed by the
city of Santa Monica; therefore, their names have been deleted.
Bernadette Neal, Acting Supervising Fiscal staff Assistant, is
being added to the authorized list in their place.
Deletion of American Savings and Loan Association from City's
Authorized Financial Institutions
Recently, American Savings and Loan Association was taken over by
the Federal Savings and Loan Insurance Corporation (FSLIC) and
placed under the new ownership of the Bass Family of Fort worth,
Texas (with assistance from the FSLIC). As a result of the
problems at American savings, we recommend removal of the savings
and loan institution from the city's authorized financial
institutions list. Over the last several years, the city has not
purchased any certificate of deposits (CD) from American Savings.
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city funds have not been, nor currently are, invested with this
institution.
BUDGET/FINANCE IMPACT
Due to the higher yields currently available on Japanese banks'
marketable securities, relative to the city's current investment
alternatives, there would be an increase in interest income.
staff estimates that the additional income realized should range
from $10,000 to $50,000 annually.
RECOMMENDATION
It is recommended that the Council adopt the attached resolution
authorizing: 1) the addition of 11 Japanese banks to the city's
authorized financial institutions list; 2} the addition of
Bernadette Neal, Acting Supervisor Fiscal Staff Assistant, and
the deletion of William Ramsey and Esmeralda Kelley, with respect
to personnel authorized to access the city's safe deposit box;
and 3) the deletion of American Savings and Loan from the City's
authorized financial institutions list.
Prepared by:
C.M. Dennis, Director of Finance
Ralph Bursey, city Treasurer
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B~tORE DISTRIBUTION "'ECK CONTENT OF
--
DISTRIBUTION OF RESOLUTION # 770 7
Councll Meetlng Date /;;i?s-/FI
Agenda Item #- C - c:.-
Was ~t amended? )/~;>
VOTE: Afflrmatlve: 7 -- U
Negatlve:
Abstaln:
Absent:
PROOF VOTES WITH ANOTHER PERSON BEFORE ANYTHING
DISTRIBUTION: ORIGINAL to he s~gned, sealed and flied In Vault.
ALL FOR CI~CLERK'S ACTION
ORDINANCE #:
Introduced:
Adopted:
ALWAYS PUBLISH ADOPTED ORDINANCES
Cross out Attorney's approval
NEWSPAPER PUBLICATION {Date: )
Department or~glnatlng staff report ( Laurle Lleberman)
Ordlnances only for Attorney ( Claudla Thompson) 2
Management Servlces Lynne Barrette ORDINANCES ONLY 1
Agency mentloned In document or staff report
(certlfled?)
SubJect flle (agenda packet)
1
Counter flle
1
Others: (Revlew for departments who need to know).
Alrport Parklng Auth.
Aud~torlum
Personnel
BUlldlng Dept. Plannlng
C/ED Pollce
Flnance Purchaslng
General Servo Recr/Parks
Llbrary Transportatlon
Manager Treasurer I
Flre
SEND FOUR COPIES OF ALL ORDINANCES TO:
CODED SYSTEHS
120 Maln Street
Avon, New Jersey 07717
4
SEND FOUR COPIES OF ALL ORDINANCES TO: 4
Debra Hyrlck
Santa Monlca Munlclpal Court
1725 Maln Street, Room 118
Santa Monlca, CA 90401 Total Caples
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Council Meeting: october 25, 1988
Santa Monica, California
RESOLUTION NO. 7707
(CCS)
(City council Series)
A RESOLUTION OF THE CITY corNCIL OF THE CITY OF
SANTA MONICA AUTHORIZING THE ESTABLISHMENT, USE
AND INVESTMENT OF ONE OR MORE DEPOSIT ACCOUNTS
WITH CERTAIN BANKS, SAVINGS AND LOAN ASSOCIATIONS
AND BROKER/DEALERS; AND REVISING THE LIST OF STAFF
AUTHORIZED TO ACCESS THE CITY'S SAFE DEPOSIT BOX
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES
RESOLVE AS FOLLDWS:
SECTION 1.
That the City of Santa Monica, a municipal
corporation, establishes in its name one or more deposit accounts
with the Alliance Bank of Culver city, American Clty Bank,
American Pacific State Bank, Bank of America National Trust and
Savings Assoclation, Bank of Be.verly Hills, Bank of J.Iarina Del
Rey, Bankers Trust Company, Brentwood Bank, California First
Bank, California Korea Bank, Century Bank, city National Bank,
Chase Manhattan Bank, Columbia National Bank, First Interstate
Bank of California, First National Bank of Chicago, First Paclfic
Bank,
First
Women's
Bank
of
California,
Imperial
Bank,
Manufacturers Hanover Trust, NCNB Texas National Bank (formerly,
RepubllC Bank of Dallas), Olympic National Bank, Santa l10nica
Bank, Sanwa Bank of California, Security Pacific National Bank,
SUInitomo Bank of Californla, Union Bank,
Wells Fargo Bank, and
Western Bank of Commerce, upon such terms and conditions as are
provided by the statutes of the State of California governing
public deposits,
and that Charles M. Dennis,
Director of
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.Finance/City Controller, and Ralph E. Bursey, city
Treasurer/Revenue Manager, be and they hereby are authorized to
establish such accounts.
SECTION 2. That the City of Santa Moniea, a municipal
corporation, establishes in its name one or more deposit accounts
with Bel-Air Savings and Loan Association, Beverly Hills Savings
and Loan Association, Brentwood Savings and Loan Association,
california Federal savings and Loan, centurion savings and Loan
Association, Century Federal Savings and Loan Association, Coast
Federal savings and Loan Association, Fidelity Federal Savings
and Loan Association, First Federal Savings Bank, First
Nationwide Savings Bank, Gibraltar Savings and Loan Association,
Glendale Federal Savings and Loan, Great Western Bank, FSB,
Hawthorne savings and Loan Association, Home Federal Savings and
Loan Association, Home Savings of America, Imperial Savings and
Loan Association, Lincoln Savings and Loan Association, Los
Angeles Federal savings, Marina Federal savings, Mercury Savings
and Loan Association, Pacific Federal Savings Bank, Perpetual
Savings and Loan Association, Provident Federal Savings and Loan
Association, Sears Savings Bank, Southern California Savings and
Loan Association, Southwest savings and Loan Association,
Westdale Savings and Loan, Western savings and Loan, and World
Savings and Loan Association, upon such terms and conditions as
are provided by the statutes of the State of California governing
pUblic deposits, and that Charles M. Dennis, Director of
Finance/City Controller, and Ralph E. Bursey, city
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Treasurer/Revenue Manager be and they hereby are authorized to
establish such accounts.
section 3.
That the City of Santa Monica, establishes
in its name one or more investment/deposit accounts with First
Boston Corporation, Goldman Sachs & Company, Kidder Peabody &
Company,
Inc. ,
Merrill
Lynch
Government
Securities
Inc. ,
Prudential-Bache Securities, and Dean Witter Reynolds, and that
Charles M. Dennis, Director of Finance/City Controller, and Ralph
E. Bursey, City Treasurer/Revenue Manager be and they hereby are
authorized to establish such accounts.
section 4.
That the Santa Monica office of the Santa
Monica Bank, First Interstate Bank and the Bank of America
National
Trust
and
Savings
Association,
as
designated
depos1tories of the city,
be and they,
incl uding their
correspondent banks, hereby are requested,
authorized,
and
directed to honor all checks, drafts, or other orders for the
payment of money drawn to the individual order of any person or
persons whose names appear thereon as signer or signers thereof,
when bearing or purporting to bear the facsimile signatures of
Charles M. Dennis and Ralph E. Bursey in lieu of said person's
manual signature; provided that all previous authorizations for
the signing and honoring of checks, drafts, or other orders for
the payment of money drawn on said banks by the City hereby are
continued in full force and effect as amplified hereby.
Section 5.
That the City of Santa Monica, a municipal
corporation, has rented safe deposit box "BII at the First
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~nterstate Bank, and that Charles M. Dennis, Director of
Finance/City
Controller,
or
Ralph
E.
Bursey,
City
Treasurer/Revenue Manager, jointly with Bernadette Neal, Acting
Supervising Fiscal staff Assistant, be and they are hereby
authorized to enter said safe deposlt box.
Section 6.
Any provision of any other Resolution
inconsistent with the provisions of this Resolution, to the
extent of such inconsistencies and no further, are hereby
repealed or modified to that extent necessary to affect the
provisions of this Resolution.
section 7. The City Clerk shall certify to the adoption
of this Resolution, and thenceforth and thereafter the same shall
be in full force and effect.
APPROVED AS TO FORM:
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ROBERT M. MYERS () ~
city Attorney
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Adopted and
approved
(
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, 1988.
)
I hereby certify that
foregoing Resolution No. 7707(CCS)
was duly adopted by the City Council of the City of Santa Monica
at a meeting thereof held on October 25/ 1988 by the following
council vote:
Ayes: Councilmembers: Finkel, Jennings, A. Katz, H.
Ka t z , Reed, Zanet Mayor Conn
Noes: Councilmembers: None
Abstain: Councilmembers: None
Absent: Councilmembers: None
ATTEST:
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---- Clty Cle