County of Alameda
Investment Policy
Year 2026
Henry C. Levy
Treasurer-Tax Collector
Introduction and Overview of the County of Alameda
Delegation of Authority and Investment Responsibility
Socially Responsible Investment Objectives
Prohibited Investments and Transactions
Directed Investments and Withdrawal Policy
Investment Reporting and Review
Ethics and Conflicts of Interest
Authorized Financial Institutions, Depositories, and Broker/Dealers
Allocation of Investment Income and Costs
Limit on Receipt of Honoraria, Gifts and Gratuities
Introduction and Overview of the County of Alameda
The County of Alameda is a political subdivision of the State of California in the San Francisco Bay Area formed in 1853. The County covers an area of approximately 821 square miles in the Bay Area of the State, and it is the 20th largest County (by population) in the United States. The City of Oakland, the County seat, is one of the most populous cities in the State.
Governing Authority
The County of Alameda is governed by a five-member Board of Supervisors, each of whom is elected on a non-partisan basis from a separate district where he/she lives. Within the broad limits established by the State Constitution, State General Law, and the Alameda County Charter, the Board exercises both the legislative and the executive functions of government. The Board of Supervisors is also the governing body for a number of “special districts” within Alameda County.
Delegation of Authority and Investment Responsibility
The Alameda County Board of Supervisors, by Ordinance # O-2025-68 has renewed the annual delegation of its investment authority and responsibility to invest and/or to reinvest the funds in the Alameda County treasury to the Alameda County Treasurer. Accordingly, to provide a framework for the oversight of the Treasurer’s investment responsibilities and activities, the Government Code of the State of California through Section 27133 requires the Treasurer to prepare an annual investment policy that provides the specific guidelines, pursuant to which, the Treasurer should carry out investment-related functions.
Policy Statement
The purpose of this Investment Policy is to establish investment guidelines for the Treasurer, to whom the Board of Supervisors annually delegates the responsibility for the stewardship of the County’s Investment Program. Each transaction and the entire portfolio must comply with applicable California Government Code, County Ordinances, and this Policy. All investment program activities will be judged by the standards of the Policy and ranking of Primary Investment Objectives. Those activities that violate its spirit and intent will be deemed to be contrary to the Policy. This Policy shall remain in effect until the Board of Supervisors approves a subsequent revision.
Scope
This Investment Policy applies to all funds over which the Treasurer has been delegated the fiduciary responsibility and direct control for its management.
Primary Investment Objectives
The Treasurer shall invest monies in the treasury in accordance with the following basic principles of investing, in the order of priority:
- Safety: Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.
- Liquidity: The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This objective shall be achieved by matching investment maturities with forecasted cash outflows and maintaining an additional liquidity buffer for unexpected expenditures.
- Investment Income: The investment portfolio shall be designed with the objective of attaining a market rate of investment income throughout budgetary and economic cycles, considering the investment risk constraints of safety, while bearing in mind the cash-flow characteristics and operating cash needs of County departments, the County’s various subdivisions, school districts and special districts.
Primary Investment Philosophy
Securities shall generally be held until maturity, with the following exceptions:
- A security with declining credit may be sold early to minimize loss of principal.
- Liquidity needs of the portfolio require that the security be sold.
- A security swap would improve the quality, yield, or target duration in the portfolio.
Standard of Prudence
The standard of prudence to be used by the Treasurer shall be the Prudent Investor Standard as set forth by California Government Code, Section 53600.3 and 27000.3. The Section reads as follows: The Prudent Investor Standard states that when investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the Treasurer, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the Treasurer.
This standard of prudence shall be applied in the context of managing those investments that fall under the Treasurer’s direct control. Investment officers acting in accordance with written procedures and this Investment Policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes provided that deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
Allowable Investments
Section 53600 et seq. of the Government Code of the State of California prescribes the statutory requirements relating to investments by local treasurers, including types of allowable investments, proportional limits by investment type relative to the size of the investment pool, maximum maturity of investments, and credit rating criteria. The term to maturity of investments in the pool shall not exceed a final maturity of 5 years from date of purchase, except when specifically authorized by a resolution of the Alameda County Board of Supervisors. Final maturity limits, investment type limits, and issuer ratings and limits are calculated/considered at time of
purchase.
The investments shall conform to the legal provisions set forth in the Government Code, except that, the County further prescribes the following requirements:
(Please refer to SUMMARY OF ALLOWABLE INVESTMENTS)
U.S. Treasury Obligations or backed by the full faith and credit of the United States
Maximum Term: 5 years with 25% of total holdings allowable to 10 years
Maximum Type Allocation: Not applicable
Maximum Issuer Concentration: Not applicable
Minimum Issuer Rating: Not applicable
U.S. Federal Agencies
Maximum Term: 5 years with 25% of total holdings allowable to 10 years
Maximum Type Allocation: Not applicable
Maximum Issuer Concentration: Not applicable
Minimum Issuer Rating: Not applicable
U.S. Federal Agencies CMBS
Maximum Term: 5 years with 25% of total holdings allowable to 10 years
Maximum Type Allocation: Not applicable
Maximum Issuer Concentration: Not applicable
Minimum Issuer Rating: Not applicable
Money Market Mutual Funds
Maximum Term: 1 day
Maximum Type Allocation: 20%
Minimum Fund Rating: AAA equivalent or better by two or more Nationally Recognized Statistical Ratings Organizations (NRSRO), or is rated AAA by one NRSRO and retains an investment adviser registered or exempt from registration with the United States Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of five hundred million dollars ($500,000,000).
Other: Maintain a consistent net asset value (NAV) of $1.00
Commercial Paper
Maximum Term: 397 days
Maximum Type Allocation: 25%
Maximum Issuer Concentration: 10% in aggregate with corporate notes/bonds and CDs
Minimum Issuer Rating: A-1, P-1, F-1 equivalent or better by a NRSRO
Other: Issuer must meet the following criteria: Is organized and operating in the United States as a general corporation, has total assets in excess of $500 million, has debt other than commercial paper, if any, that is rated in a rating category of “A” or its equivalent or higher by an NRSRO, or; is organized within the United States as a special purpose corporation, trust, or limited liability company, and has program wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond.
Negotiable Certificates of Deposit
Maximum Term: 1 year
Maximum Type Allocation: 30%
Maximum Issuer Concentration: 10% in aggregate with corporate notes/bonds and CP
Minimum Issuer Rating: A-1, P-1, F-1 equivalent or better by a NRSRO
Other: Issued by a nationally or state-chartered bank, a savings association or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank
Medium-Term Corporate Notes
Maximum Term: 5 years
Maximum Type Allocation: 30%
Maximum Issuer Concentration: 10% in aggregate with CDs and CP
Minimum Issuer Rating: A category, equivalent or better
Other: Issued by corporations organized and operating within the United States, depository institutions licensed by the United States, or any state and operating within the United States
Asset-Backed Securities
Maximum Term: 5 years
Maximum Type Allocation: 20%
Maximum Issuer Concentration: 5%
Minimum Issuer Rating: AAA equivalent by a NRSRO
Other: Equipment lease-backed certificates, consumer receivable pass-through certificates or consumer receivable-backed bonds are eligible for purchase.
State and Local Government Obligations
Maximum Term: 5 years
Maximum Type Allocation: 20%
Maximum Issuer Concentration: 5%
Minimum Issuer Rating: A equivalent or better by one NRSRO
Other: Issued by State and local governments in the United States.
Repurchase Agreements
Maximum Term: 180 days
Maximum Type Allocation: 20%
Maximum Issuer Concentration: Not applicable
Minimum Issuer Rating: Not applicable
Collateral: 102%, by Treasury or Agency securities with a final maturity of 5 years of less, marked-to-market daily.
Other: Counter-party requirements: A financial institution that will deliver the securities versus payment, either to the Treasurer’s custodian bank or to a third-party custodian.
Reverse Repurchase Agreements
Maximum Term: 180 days
Maximum Type Allocation: 20%
Maximum Issuer Concentration: Not applicable
Minimum Issuer Rating: Not applicable
Other: Borrowing for leveraging purposes shall conform in all aspects to the governing provisions of the Government Code Section 53601, et. seq. Reverse repurchase agreements which have been entered for purposes of either raising temporary cash needs or for the purpose of leveraging to attain favorable investment spreads, must be approved by the Board of Supervisors, pursuant to Government Code guidelines.
Banker’s Acceptances
Maximum Term: 180 days
Maximum Type Allocation: 30%
Maximum Issuer Concentration: 10%
Minimum Issuer Rating: A-1, P-1, F-1 equivalent or better by a NRSRO
Other: Drawn on and accepted by a commercial bank
Supranationals
Maximum Term: 5 years
Maximum Type Allocation: 30%
Maximum Issuer Concentration: 15%
Minimum Issuer Rating: AA equivalent or better by a NRSRO
Other: Purchase of U.S. dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank of Reconstruction and Development (IBRD), International Finance Corporation (IFC), or Inter-American Development Bank (IADB) that are eligible for purchase or sale in the United States.
Local Agency Investment Fund (LAIF)
Maximum Term: 1 day
Maximum Type Allocation: Current State limit
Minimum Issuer Rating: Not applicable
CalTRUST (Joint Powers Authority Investment Trust for California Public Agencies)
Maximum Term: 1 day
Maximum Type Allocation: Twice the limit of LAIF
Minimum Issuer Rating: Not applicable
CAMP (Joint Powers Authority created to provide a statewide local government investment pool)
Maximum Term: 1 day
Maximum Type Allocation: Twice the limit of LAIF
Minimum Issuer Rating: Not applicable
CalFIT (Joint Powers Authority created to provide a statewide local government investment pool)
Maximum Term: 1 day
Maximum Type Allocation: Twice the limit of LAIF
Minimum Issuer Rating: Not applicable
Collateralized/FDIC Insured Time Deposits
Maximum Term: 5 years
Maximum Type Allocation: 30%
Maximum Issuer Concentration: FDIC limit
Minimum Issuer Rating: Not applicable
Other: The Treasurer may place interest-bearing time deposits with banks and or credit unions located within the State of California, collateralized in accordance with requirements of the Government Code. Further, pursuant to the requirement of Government Code Section 53635.2, to be eligible as a depository of local agency monies, the depository institution must have a CRA (Community Reinvestment Act) rating of “Satisfactory” or better in its most recent evaluation by FFIEC. The bank may use a private sector entity to help place deposits with banks or credit union located in the United States.
Collateralized Money Market Bank Accounts
Maximum Term: 1 day
Maximum Type Allocation: 30%
Maximum Issuer Concentration: 20%
Minimum Issuer Rating: Not applicable
Other: The Treasurer may deposit funds in interest-bearing collateralized money market bank accounts in banks or credit unions that qualify under the eligibility requirements required for collateralized/FDIC insured time deposits. Deposits in money market bank accounts are made to provide better short-term yield and overnight liquidity.
Other Investments
Any other legally permitted investments by specific authorizing resolutions of the Alameda
County Board of Supervisors shall be eligible investments.
Credit Rating Information
Credit rating requirements for eligible securities referred-to in this policy shall mean the numeric,
alpha, and/or alpha-numeric designations assigned by the following National Recognized
Statistical Rating Organizations (NRSRO) rating agencies:
- Moody’s Investor Service
- Standard & Poor’s Rating Services
- Fitch IBCA, Inc.
- Thompson Bank Watch
A list of possible ratings for Standard and Poor’s, Moody’s and Fitch is in RATINGS INTERPRETATION
Socially Responsible Investment Objectives
In addition to and subordinate to the objectives set forth in the County’s Primary Investment Objectives, the Treasurer seeks to implement a policy of responsible investment, which is a strategy and practice to incorporate environmental, social and governance (ESG) factors in investment decisions. Investments will be made with responsible investment goals to the extent that such investments achieve substantially equivalent safety, liquidity and yield compared to other investment opportunities available at the same time.
The Treasurer will actively incorporate ESG factors in its investment analysis and decision-making process and will work to enhance its effectiveness in implementing the principles of responsible investing.
Within the guidance for responsible investing, the Treasurer will consider additional socially responsible and impact investing criteria. Such criteria shall be consistent with values promulgated by the County of Alameda.
Securities Lending
Pursuant to Section 53601 (j) (3) of the Government Code, the Treasurer may engage in securities lending through a third-party custodian and lending administrator. Revenues derived from securities lending will be considered incremental investment income to be shared among participating funds in the investment pool.
Prohibited Investments and Transactions
The following are prohibited investments and transactions:
- Range notes
- Inverse floating rate securities
- Step-down securities
- Short selling
- Any security that could result in zero interest accrual if held to maturity
Diversification Parameters
The investment program shall follow the following diversification parameters:
- Issuer: No more 10% in aggregate corporate exposure (CD, CP, Corporate Notes)
- Floating Rate, Structured Notes, and Other Derivative Securities: No more than 15%
Maturity Parameters
The investment program shall follow the following maturity parameters:
- Weighted Average Maturity no greater than 3 years (using stated final maturity)
- At least 10% of the County Investment Pool maturing within 90 days
Investment Procedures
The Treasurer has written procedures for the operation of the investment program. The procedures include such items as delegation of duties/authority, reconciliation, trade settlement, investment strategy/selection, compliance monitoring, reporting, and internal controls.
Performance Information
The investment portfolio shall be designed with the objective of obtaining a market rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs of the County. The County’s investment strategy is conservative and is reflected in its general “hold to maturity” philosophy. Given this strategy, the Treasurer shall develop an appropriate custom benchmark for investment considerations which shall reflect the prominent and persistent characteristics of the portfolio over time. The benchmark will be adjusted periodically when material changes take place regarding asset allocation and/or duration.
Directed Investments and Withdrawal Policy
School Districts and Community College Districts
Pursuant to Education Code section 15146(g), at no time shall bond proceeds be withdrawn by the school districts or community college districts for investment outside the county treasury.
Special Districts
Self-directed investments made by any special district, including deposits by same districts into the State’s Local Agency Investment Fund (LAIF) are considered withdrawal of funds from the County treasury. Each special district withdrawing funds for the purpose of investing outside of the Treasurer’s investment pool may only do so once each month, upon a 3-day written notice to the Treasurer in an amount not exceeding $20,000,000. Such withdrawal is hereafter referred to as a “Permissible Withdrawal”. Permissible withdrawals are further subject to the following requirements:
- Each special district wishing to invest bond proceeds and/or bond funds outside of the
Treasurer’s investment pool, must notify the Treasurer no later than on the day of the
bond closing, so that the Treasurer could place such bond proceeds in short-term
investment/s whose maturity would coincide with the settlement/purchase date of the
directed investment. - Securities representing district- directed investments shall be held solely for the purpose
of safekeeping by the County Treasurer at the County’s custodial bank. - Directed investments shall be the direct responsibility of each respective district with
respect to their accounting and accountability.
Other Provisions
Further, the Treasurer sets forth the following:
- The Treasurer shall maintain sufficient funds in the County Treasury, to meet the estimated normal daily operating cash demands of the County and investment pool participants by investing funds to maturities that anticipate major cash needs. Investments shall, whenever possible, be made in securities that have active secondary or resale markets to provide maximum portfolio liquidity.
- The Treasurer’s investment pool practices a “buy and hold” strategy, thus, funds are invested in securities that mature on dates coincident with the anticipated operating cash requirements of all participating entities. Consequently, withdrawal of funds for purposes other than to pay operating expenditures is unanticipated and could risk the pool’s liquidity and stability. Nevertheless, subject to the Directed Investments and Withdrawal Policy, the Treasurer may liquidate securities to meet unanticipated cash withdrawals or disbursements made by the County or any pool participant, whether the purpose of such withdrawal or disbursement is to make payment for a legitimate obligation or to pull out funds to reinvest outside the Treasurer’s pool. Except for permissible withdrawals as described in the previous section, in the event the Treasurer is obligated to liquidate investments in an adverse market due to a withdrawal for the purpose of investing funds outside of the Treasurer’s investment pool, the resulting loss, if any, shall be borne by the withdrawing district alone. Losses due to the sale of securities to meet unanticipated cash needs other than for investing funds outside the Treasurer’s pool shall be considered as a normal cost of providing unanticipated liquidity needs.
- The Treasurer shall hold all securities including collateral on repurchase agreements, in safekeeping with the County’s custodial bank or with a national bank located in a Federal Reserve City which has provided the County with a safekeeping agreement.
- Pursuant to Government Code Section 53684(a) and unless otherwise provided by law, if the treasurer of any local agency, or other official responsible for the funds of the local agency, determines that the local agency has excess funds which are not required for immediate use, the treasurer or other official may, upon the adoption of a resolution by the legislative or governing body of the local agency authorizing the investment of funds pursuant to this section and with the consent of the County Treasurer, deposit the excess funds in the county treasury for the purpose of investment by the county treasurer pursuant to Section 53601 or 53635, or Section 20822 of the Revenue and Taxation Code after signing an Investment Management Agreement.
Investment Reporting and Review
The Treasurer shall submit a report on the monthly transactions and the status of the investment pool to the Alameda County Board of Supervisors, the Treasurer’s Oversight Committee and the participating districts. The investment report must include the book and market value of securities held, income received, book yield, duration, liquidity profile, and investment policy compliance.
Ethics and Conflicts of Interest
Officers and employees involved in the investment process shall refrain from personal activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose any material interests in financial institutions with which they conduct business. Disclosure shall be made to the governing body. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the Treasurer’s investment pool.
Further, any securities broker or dealer who has made a political contribution to the Treasurer, any member of the Board of Supervisors, or any candidate for those offices, in an amount that exceeds the limitations contained in Rule G-37 of the Municipal Securities Rulemaking Board within any consecutive 48-month period following January 1, 1996, shall be disqualified from transacting securities trades (purchase, sale and/or exchange) with the Treasurer.
Internal Controls
The Treasurer shall employ internal controls designed to prevent losses of public funds arising from fraud, employee error, misrepresentations by third parties, or imprudent actions by employees and officers of County.
Internal and External Audit
The custodian/safekeeping account, investment transactions, and records shall be audited at least quarterly by internal auditors independent of the Treasurer and/or by outside independent auditors and the audit results reported to the members of the Treasury Oversight Committee, Board of Supervisors, or the Auditor-Controller. Pursuant to the Treasury Oversight Committee mandate, the investment pool shall be audited annually by an independent auditor and the results reported to the members of the Treasury Oversight Committee, the Board of Supervisors, the Grand Jury, the Auditor-Controller, and all participating entities in the investment pool as governed by state law.
Safekeeping and Custody
The following process shall be maintained for safekeeping and custody of securities:
- All trades of marketable securities will be executed (cleared and settled) on a delivery vs. payment (DVP) basis to ensure that securities are deposited in the Alameda County’s safekeeping institution prior to the release of funds.
- All marketable securities except for money market funds registered in the County’s name shall be deposited for safekeeping with banks contracted to provide the Treasurer with custodial security clearance services. Securities are NOT to be held in investment firm/broker-dealer account.
Authorized Financial Institutions, Depositories, and Broker/Dealers
The Treasurer shall maintain a list of financial institutions and depositories authorized to provide investment services. In addition, a list will be maintained of broker/dealers that are approved to conduct investment security transactions with the Treasurer. These may include primary dealers, regional broker/dealers, minority-owned broker/dealers and direct issuers of securities.
The Treasurer shall request a certificate of having read and understood and agreeing to comply with the Treasurer’s investment policy on an annual basis from all financial institutions and depositories, including broker-dealers.
All broker/dealers who desire to become qualified for investment transactions must supply the following (as appropriate):
- Audited financial statements
- Proof of FINRA registration
- Proof of state registration
- Completed broker/dealer questionnaire
- Certification of having read and understood and agreeing to comply with the Treasurer’s investment policy
Allocation of Investment Income and Costs
The Treasurer shall account for investment income to be apportioned based on average daily cash balances of participating funds during the quarterly allocation period. Government Code Section 27013 permits the Treasurer to charge the cost of treasury operations and administration to the investment income prior to distribution. The cost of operating the County treasury which includes tax and revenue receipt processing, county-wide central cashiering and banking, investment services, management, operations, safekeeping and accounting, daily redemption of county warrants/checks and other direct and indirect treasury operations costs, shall be netted on a quarterly basis against the un-apportioned income prior to its allocation to the pool participants. The treasury operations costs are determined each fiscal year as part of the budgeting process, during which the departmental budget is allocated among the various functioning units of the Treasurer-Tax Collector’s department.
Treasury Oversight Committee
The Treasury Oversight Committee shall meet at least once annually, preferably in May. The responsibilities of the Treasury Oversight Committee are:
- To ensure that an annual audit of the investment portfolio is performed;
- To review and monitor the Treasurer’s Annual Investment Policy before it is submitted to the Board of Supervisors for authorization; and
- To ensure that the Treasurer’s investments conform to the requirements of the annual investment policy.
Limit on Receipt of Honoraria, Gifts and Gratuities
No individual responsible for the management of the County’s investment portfolio or any member of the Treasury Oversight Committee shall accept honoraria, gifts or gratuities from any advisor, broker, dealer, banker or other person with whom the county treasury conducts business, consistent with the state law.
Business Continuity
The Treasurer has developed a Business Continuity Plan describing the Treasurer’s anticipated response to a range of events that could significantly disrupt its business. Because the timing and impact of disasters, emergencies and other events is unpredictable, flexibility is necessary when responding to actual disruptions as they occur. With that in mind, the goal of the Plan is to resume operations as quickly and smoothly as possible.
The Plan for responding to a significant business disruption addresses safeguarding of employees’ lives and County property, making a financial and operational assessment, quickly recovering and resuming operations, protecting all the Treasurer’s books and records, and allowing the continued ability to manage the investment program and transact business.
Investment Policy Adoption
The Treasurer shall submit the County’s Investment Policy to the Board of Supervisors for annual adoption by resolution. The policy shall be reviewed annually by the Treasury Oversight Committee and any modifications made thereto must be authorized by the Board of Supervisors.
Conclusion
Any provision in this, the investment policy of Alameda County, which may later be disallowed by the governing sections of the Government Code of the State of California, shall also be so disallowed. Conversely, any new permissive provisions under the governing sections of the Government Code shall be allowed without necessarily amending the investment policy during the year that the law takes effect. However, such new provision shall be adopted by policy in the next annual investment policy. This investment policy shall be in effect until revised or replaced by the investment policy of the following year.
| AUTHORIZED INVESTMENTS | MAXIMUM % HOLDINGS | PURCHASE RESTRICTIONS | MAXIMUM MATURITY | CREDIT QUALITY |
|---|---|---|---|---|
| US Treasurer Obligations | 100% | N/A | 5 years with 25% allowed to 10 years | N/A |
| Federal Agencies and CMBS | 100% | Max issuer 10% | 5 years with 25% allowed to 10 years | N/A |
| Money-Market Mutual Funds | 20% | Max 10% issuer, must maintain constant NAV | Daily Liquidity | AAA rated from at least 2 NRSROs |
| Commercial Paper | 25% | Max issuer 10%, combined with corporates and CP | 397 days | A-1 equivalent or better by 2 NRSROs |
| Negotiable CDs | 30% | Max issuer 10%, combined with corporates and CP | 1 year | A-1 equivalent or better by 2 NRSROs |
| Medium Term Corporate Notes | 30% | Max issuer 10%, combined with corporates and CP | 5 years | A equivalent or better by 2 NRSROs |
| Asset-Backed Securities | 20% | Max issuer 5%, equipment leased-backed certificate, consumer receivable pass-throughs, consumer receivables-backed bonds | 5 years | AA equivalent or better by 1 NRSRO |
| State and Local Government Bonds | 20% | Max issuer 5% | 5 years | A equivalent or better by 1 NRSRO |
| Repurchase Agreements (REPO) | 20% | Collateral to be US Government or Federal Agency with max maturity of 5 years. 102% of funds borrowed and marked-to-market daily | 180 days | N/A |
| Reverse Repurchase Agreements (Reverse REPO) | 20% | Prior approval of the Board of Supervisors | 180 days | N/A |
| Banker’s Acceptances | 30% | Drawn on and accepted by a comercial bank | 180 days | A-1 equivalent or better by 2 NRSROs |
| Supernational | 30% | Max 15% issuer, Senior unsecured unsubordinated or guaranteed by IBRD, IFC, or IADB | 5 years | AA equivalent or better by 2 NRSROs |
| LAIF | State Limit | Per LAIF | Daily Liquidity | N/A |
| CalTRUST, CAMP, CalFIT | 2X LAIF | Per CalTRUST | Daily Liquidity | N/A |
| Collateralized/FDIC Insured Time Deposits | 30% | Refer to page 8 | 5 years | N/A |
| Collateralized Money Market Bank Accounts | 30% | Refer to page 8 | Daily Liquidity | N/A |
RATINGS INTERPRETATIONS
LONG TERM DEBT RATINGS
RATINGS INTERPRETATION FOR CREDIT
STONGEST QUALITY
- MOODY’S
- Aaa
- S&P
- AAA
- FITCH
- AAA
STRONG QUALITY
- MOODY’S
- Aa1
- Aa2
- Aa3
- S&P
- AA+
- AA
- AA-
- FITCH
- AA+
- AA
- AA-
GOOD QUALITY
- MOODY’S
- A1
- A2
- A3
- S&P
- A+
- A
- A-
- FITCH
- A+
- A
- A-
MEDIUM QUALITY
- MOODY’S
- Baa1
- Baa2
- Baa3
- S&P
- BBB+
- BBB
- BBB-
- FITCH
- BBB+
- BBB
- BBB-
SPECULATIVE
- MOODY’S
- Ba1
- Ba2
- Ba3
- S&P
- BB+
- BB
- BB-
- FITCH
- BB+
- BB
- BB-
LOW
- MOODY’S
- B1
- B2
- B3
- S&P
- B+
- B
- B-
- FITCH
- B+
- B
- B-
POOR
- MOODY’S
- Caa
- S&P
- CCC+
- FITCH
- CCC
HIGHLY SPECULATIVE TO DEFAULT
- MOODY’S
- Ca
- C
- S&P
- CCC
- CCC-
- CC
- D
- FITCH
- CCC
- DDD
- DD
- D
SHORT TERM DEBT RATINGS
RATINGS INTERPRETATION FOR CREDIT
STONGEST QUALITY
- MOODY’S
- P-1
- S&P
- A-1+
- FITCH
- F1+
STRONG QUALITY
- S&P
- A-1
- FITCH
- F1
GOOD QUALITY
- MOODY’S
- P-2
- S&P
- A-2
- FITCH
- F2
MEDIUM QUALITY
- MOODY’S
- P-3
- S&P
- A-3
- FITCH
- F3
ADDENDUM – Ethical Investment Policy Statement
This Addendum will not be implemented until the Board of Supervisors provides final approval.
Responsible and Ethical Investment Criteria
To support the Socially Responsible Investment Objectives outlined in Alameda County’s Investment Policy Statement, the following Responsible and Ethical Investment Criteria should guide the County’s investments in its portfolio of bonds, cash and other debt instruments. Investments shall be made in compliance with the criteria outlined here to the extent that such investments achieve substantially equivalent safety, liquidity and yield compared to other investments permitted by state law.
The mission of Alameda County is to enrich the lives of its residents through visionary policies and accessible, responsive and effective services. Alameda County’s Vision 2036 seeks to achieve a healthy environment; a thriving and resilient population; safe and livable communities; and a prosperous and vibrant community across six goals:
- Eliminate Homelessness
- Health for All
- Employment for All
- Eliminate Poverty & Hunger
- Crime-Free County
- Accessible & Integrated Infrastructure
These responsible and ethical investment criteria seek to inform investment decision-making that advances Vision 2036 and its goals, as well as the wider UN Sustainable Development Goals. In turn, systemic risk to the County’s portfolio will be reduced.
The Treasurer will use positive screening – to the extent practicable, based on the best available data, tools and standards that exist – to support these goals and proactively benefit investment performance.
Corporate and financial institution investments within the portfolio will undergo assessment of their environmental, social, governance and controversy ratings at the time of purchase of the securities, based on available information. The County will prefer entities, when appropriate, that maintain higher ratings as opposed to those that have lower ratings. Ratings reflect the strength of institutional practices that may pose reputational, financial, operational and legal risks to the County’s investments and therefore the financial safety and resilience of the investment.
Investments are encouraged in entities that:
- Promote sustainability and environmental stewardship, taking into account carbon emissions, pollution, biodiversity, deforestation, water and waste management for current residents and future generations
- Value social responsibility, health, nutrition and protection for life, resources, and property
- Support decent work, diversity and equity, treating people equally without discrimination and implementing responsible employer and contractor policies
- Uphold good governance and respect for the law, through proper internal policies and controls, transparency, and protection for stakeholder rights
- Promote community economic development, particularly for marginalized communities, by fostering job creation, housing opportunities, infrastructure development and access to essential services
The Treasurer will actively look for investment opportunities that can be tailored to have a beneficial impact on Alameda County residents or other communities, including but not limited to investment-grade loan funds, commercial mortgage-backed securities (CMBS) like Freddie K loans or the Fannie Mae DUS program, and impact funds. The County’s Impact Deposit Program will direct investments into local financial institutions that demonstrate commitment to community economic development.
The Treasurer will use negative screening – to the extent practicable, based on the best available data, tools and standards that exist – that undermine or conflict with the goals of Alameda County outlined above.
Investments are discouraged in entities that derive more than 10% of total revenues from the following industries:
- Energy – Oil & Gas, Coal Operations
- Firearms
- Tobacco
- Casinos & Gaming
- Security & Correctional Facilities
- Alcoholic Beverages: Distillers & Vintners
- Industrials – Defense
Investments are also discouraged in companies within certain sectors that demonstrate severe or persistent human rights violations in their own operations or supply chains. These sectors include, but are not limited to: Textiles & Apparel, Electronic Equipment & Components, and Agricultural Products.
Alameda County will not invest in companies that consistently, knowingly and directly facilitate and enable severe violations of human rights, as outlined in international law and the U.N. Guiding Principles on Business and Human Rights.
The Treasurer’s investment policy states that securities shall generally be held until maturity, except in cases of declining credit, portfolio liquidity needs or when a security swap improves quality, yield or target duration.
In the context of this Ethical and Responsible Investment Criteria, divestment during an investment period will also be considered on a case-by-case basis when negative environmental, social, governance or controversy performance is severe, ongoing and unremedied, and where such divestment does not materially compromise the County’s fiduciary responsibilities. Documented justification will be presented by the Treasurer and approved by the Board of Supervisors. The Treasurer will decide on the timing and process to execute the decision.
The Treasurer will monitor ongoing opportunities to invest more responsibly and ethically, and engage directly, as they become available and where resources are available. The Responsible and Ethical Investment Criteria, as part of the Investment Policy Statement, shall be reviewed annually by the Treasury Oversight Committee
TREASURER TAX-COLLECTOR
1221 Oak Street, Room 131
Oakland, CA • 94612
(510) 272-6800