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La Verne amends investment policy to allow California Class Prime Fund
Summary
The council voted 3-0 to update the city's investment policy to permit placing idle funds in the California Class Prime Fund (a cooperative local-government liquidity pool); staff said the move provides diversification, daily liquidity, and modestly higher returns than LAIF.
The La Verne City Council on Oct. 7 adopted a resolution authorizing the city to invest idle funds in the California Class Prime Fund, a pooled local-government liquidity vehicle.
Finance Director Christy Lopez told the council California Class (California Cooperative Liquid Assets Security System) invests in high-quality short-term financial products, offers daily liquidity and diversification by pooling funds across jurisdictions, and is managed to comply with state law. Lopez cited a daily yield of 5.04% for California Class as of Sept. 30 and compared it with a 4.58% daily yield for the Local Agency Investment Fund (LAIF) on the same date, noting the difference of roughly 0.46 percentage points.
She said the pool is authorized under California Government Code section 53601 and that using California Class would provide another tool alongside the city's existing arrangements (including LAIF and other advisors such as Western Asset Management and Schuster Financial). Lopez described the operational approach as cash-flow driven: staff will evaluate cash needs (property-tax inflows, payroll, operating expenses) and place funds accordingly to maintain liquidity and earnings.
Council discussed oversight, liquidity, and advisor support; staff said the city will continue to work with investment advisors and monitor allocations. Council approved the resolution 3-0.
The resolution allows the city to open an account and invest in California Class subject to existing cash-management and reporting protocols.
