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BOARD OF SUPERVISORS
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Requested Action(s)
recommendation
a) Request approval and authorization for the Chair to sign and submit a letter of opposition to AB 2214 (Jackson) - Local Agency Investment Fund: Community Reinvestment Account
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Financial Impact:
No financial impact at this time.
Background Information:
The Tehama County Treasurer-Tax Collector is bringing AB 2214 (Jackson) to the Board’s attention due to its potential impact on the Tehama County Treasury Pool. AB 2214 (Jackson) would require the State’s Local Agency Investment Fund (LAIF) to invest a portion of its funds in longer-term, higher-risk investments.
LAIF is a pooled investment program managed by the California State Treasurer that allows local governments to deposit and manage public funds. It invests in very safe, low-risk securities and is designed to preserve capital while maintaining immediate liquidity. LAIF is one of the liquidity options in our toolkit that we use to securely hold money needed for day-to-day operations, ensuring it can be quickly withdrawn when needed.
AB 2214 would require approximately 5-10% of LAIF funds to be redirected into longer-term lending and investment activities, which would reduce liquidity and increase risk. This proposal was not requested by the State Treasurer or local agencies and is being advanced primarily by stakeholders in the lending community seeking additional mandated investment capital sourced from public funds.