[HISTORY: Adopted by the Town Board of the
Town of Chili 1-4-2006. [1] Amendments noted where applicable.]
[1]
Editor's Note: The text of the introduction to this resolution is included at the end of this chapter.
A.
This investment policy applies to all moneys and other
financial resources available for short-term investments on behalf
of the Town of Chili or on behalf of any other entity or individual.
B.
Pooling of funds. Except for cash in certain restricted
and special funds, the Town of Chili will consolidate cash balances
from all funds to maximize investment earnings. Investment income
will be allocated to the various funds based on their respective participation
and in accordance with generally accepted accounting principles.
The primary objectives of the Town of Chili's
investment activities are, in priority order:
The Town Board's responsibility for administration
of the investment program is delegated to the Chief Fiscal Officer,
or other officer so designated, having custody of money, who shall
establish written procedures for the operation of the investment program
consistent with these investment guidelines. Such procedures shall
include an adequate internal control structure to provide a satisfactory
level of safekeeping, accountability based on a database or records
incorporating description and amounts of investments, transaction
dates, and other relevant information and regulate the activities
of subordinate employees. No person may engage in an investment transaction
except as provided under the terms of this policy and the procedures
established by the investment officer. The investment officer shall
be responsible for all transactions undertaken and shall establish
a system of controls to regulate the activities of subordinate officials.
A.
All participants in the investment process shall seek
to act responsibly as custodians of the public trust and shall avoid
any transaction that might impair public confidence in the Town of
Chili to govern effectively.
B.
Investments shall be made with judgment and care,
under circumstances then prevailing, which persons of prudence, discretion
and intelligence exercise in the management of their own affairs,
not for speculation, but for investment, considering the safety of
the principal as well as the probable income to be derived.
C.
All participants involved in the investment process
shall refrain from personal business activity that could conflict
with proper execution of the investment program, or which could impair
their ability to make impartial investment decisions.
It is the policy of the Town of Chili to diversify
its deposits and investments by financial institution, by investment
instrument, and by maturity scheduling.
A.
It is the policy of the Town of Chili for all moneys
collected by any officer or employee of the government to transfer
those funds to the Chief Fiscal Officer, or other officer so designated,
having custody of money, within the number of days indicated below,
or within the time period specified in law, whichever is shorter.
B.
The Chief Fiscal Officer, or other officer so designated,
having custody of money, is responsible for establishing and maintaining
an internal control structure designed to ensure that assets of the
Town of Chili are protected from loss, theft or misuse. The internal
control structure shall be designed to provide reasonable assurance
that these objectives are met. The concept of reasonable assurance
recognizes that the cost of a control should not exceed the benefits
likely to be derived and the valuation of costs and benefits requires
estimates and judgments by management.
C.
Accordingly, the investment officer shall establish
a process for an annual independent review by an external auditor
to assure compliance with policies and procedures. The internal controls
shall address the following points:
(1)
Control of collusion.
(2)
Separation of transaction authority from accounting
and recordkeeping.
(3)
Custodial safekeeping.
(4)
Avoidance of physical delivery securities.
(5)
Clear delegation of authority to subordinate staff
members.
(6)
Written confirmation of transactions for investments
and wire transfers.
(7)
Development of a wire transfer agreement with the
lead bank and third-party custodian.
The banks and trust companies authorized for
the deposit of monies, as designated at the Town of Chili Town Board's
reorganization meeting each year, are only commercial banks licensed
to do business in the State of New York.
In accordance with the provisions of General
Municipal Law § 10, all deposits of Town of Chili, including
certificates of deposit and special time deposits, in excess of the
amount insured under the provisions of the Federal Deposit Insurance
Act shall be secured by a pledge of "eligible securities" with an
aggregate market value of 105%, or provided by General Municipal Law
§ 10, equal to 105% the aggregate amount of deposits from
the categories designated in Appendix A to the policy. [1]
[1]
Editor's Note: Said Appendix A is included at the end of this chapter.
A.
Eligible securities used for collateralizing deposits
shall be held by a third party or trust company subject to security
and custodial agreements.
B.
The security agreement shall provide that eligible
securities are being pledged to secure local government deposits together
with agreed upon interest, if any, and any costs or expenses arising
out of the collection of such deposits upon default. It shall also
provide the conditions under which the securities may be sold, presented
for payment, substituted or released and the events, which will enable
the local government to exercise its rights against the pledged securities.
In the event that the securities are not registered or inscribed in
the name of the local government, such securities shall be delivered
in a form suitable for transfer or with the Town of Chili or its custodial
bank.
C.
The custodial agreement shall provide that securities
held by the bank or trust company, or agent of and custodian for the
local government, will be kept separate and apart from the general
assets of the custodial bank or trust company and will not, in any
circumstances, be commingled with or become part of the backing for
any other deposit or other liabilities. The agreement should also
describe that the custodian shall confirm the receipt, substitution
or release of the securities. The agreement shall provide for the
frequency of revaluation of eligible securities and for the substitution
of securities when a change in the rating of a security may cause
ineligibility. Such agreement shall include all provisions necessary
to provide the local government a perfected interest in the securities.
A.
As authorized by General Municipal Law § 11,
the Town of Chili authorizes the Chief Fiscal Officer, or other officer
so designated, having custody of money, to invest moneys not required
for immediate expenditure for terms not to exceed its projected cash
flow needs in the following types of investments:
(1)
Special time deposit accounts authorized to do business
in New York State;
(2)
Certificates of deposit;
(3)
Obligations of the United States of America;
(4)
Obligations guaranteed by agencies of the United States
of America where the payment of principal and interest are guaranteed
by the United States of America;
(5)
Obligations of the State of New York;
(6)
Obligations issued pursuant to Local Finance Law § 24.00
or 25.00 (with approval of the State Comptroller) by any municipality,
school district or district corporation other than the Town of Chili.
(7)
Obligations of public authorities, public housing
authorities, urban renewal agencies and industrial development agencies
where the general State statutes governing such entities or whose
specific enabling legislation authorizes such investments.
(8)
Obligations of this local government, but only with
any moneys in a reserve fund established pursuant to General Municipal
Law §§ 6-c, 6-d, 6-e, 697g, 6-h, 697j, 6-k, 6-1, 6-m,
or 6-n.
B.
All investment obligations shall be payable or redeemable
at the option of the Town of Chili with in such times as the proceeds
will be needed to meet expenditures for purposes for which the moneys
were provided and, in the case of obligations purchased with the proceeds
of bonds or notes, shall be payable or redeemable at the option of
the Town of Chili within two years of the date of purchase. The designated
depository will confirm all purchases and transactions in writing
to the Town of Chili.
The Town of Chili shall maintain a list of financial
institutions and dealers approved for investment purposes and establish
appropriate limits to the amount of investments, which can be made
with each financial institution or dealer. All financial institutions
with which the local government conducts business must be credit worthy.
Banks shall provide their most recent consolidated report of condition
(call report) at the request of the Town of Chili. Security dealers
not affiliated with a bank shall be required to be classified as reporting
dealers affiliated with the New York Federal Reserve Bank, as primary
dealers. The Chief Fiscal Officer, or other officers so designated,
having custody of money, is responsible for evaluating the financial
position and maintaining a listing of proposed depositaries, trading
partners and custodians. Such listing shall be evaluated at least
annually.
A.
The Chief Fiscal Officer, or other officers so designated,
having custody of money, is authorized to contract for the purchase
of investments:
(1)
By participation in a cooperative investment program
with another authorized governmental entity pursuant to Article 5G
of the General Municipal Law where such program meets all the requirements
set forth in the Office of the State Comptroller Opinion No. 88-46,
and the specific program has been authorized by the Town Board.
(2)
By utilizing an ongoing investment program with an
authorized tracking partner pursuant to a contract authorized by the
Town Board.
B.
All purchased obligations, unless registered or inscribed
in the name of the local government, shall be purchased through, delivered
to and held in the custody of a bank or trust company. Such obligations
shall be purchased, sold or presented for redemption or payment by
such bank or trust company only in accordance with prior written authorization
from the officer authorized to make the investment. All such transactions
shall be confirmed in writing to the Town of Chili by the bank or
trust company. Any obligation held in the custody of a bank or trust
company shall be held pursuant to a written custodial agreement as
described in General Municipal Law § 10.
C.
The custodial agreement shall provide that securities
held by the bank or trust company, as agent of and custodian for,
the Town of Chili, will be kept separate and apart from the general
assets of the custodial bank or trust company and will not, in any
circumstances, be commingled with or become part of the backing for
any other deposit or other liabilities. The agreement shall describe
how the custodian shall confirm the receipt and release of the securities.
Such agreement shall include all provisions necessary to provide the
Town of Chili a perfected interest in the securities.
A.
The Chief Fiscal Officer, or other officer so designated,
having custody of money, shall authorize the purchase and sale of
all securities and execute contracts on behalf of the Town of Chili.
Oral directions concerning the purchase, transaction, or sale of securities
shall be confirmed in writing. The Town of Chili shall pay for purchased
securities upon delivery.
B.
The Town of Chili will encourage the purchase and
sale of securities through a competitive or negotiated process involving
telephone solicitations of at least three bids for each transaction.
C.
At the time independent auditors conduct the annual
financial audit of the accounts and affairs of the Town of Chili,
the auditors shall audit compliance with the investment guidelines.
D.
Within 60 days of the end of each of the first three
quarters of the fiscal year, the Chief Fiscal Officer, or other officer
so designated, having custody of money, shall prepare and submit to
the Town Board a quarterly investment report which indicates new investments,
the inventory of existing investments, and such other matters as the
Chief Fiscal Officer deems necessary.
E.
Within 120 days of the end of the fiscal year, the
Chief Fiscal Officer, or other officer so designated, having custody
of money, shall prepare and submit to the Town Board an annual investment
report; recommendations for change in these investment guidelines;
the result of the independent audit; the commission of other charges,
if any, paid to the custodial bank and such other matters as deemed
appropriate by the Chief Fiscal Officer, or other officer so designated,
having custody of money.
F.
The provisions of these investment guidelines and
any amendments hereto shall take effect prospectively, and shall not
invalidate the prior selection of any custodial bank or prior investment.
