[HISTORY: Adopted by the Board of Trustees of the Village of Cedarhurst 4-20-1998. This resolution also superseded former Ch. 35, Investment
Policy, adopted 6-1-1987. Amendments noted where applicable.]
GENERAL REFERENCES
Procurement policy — See Ch. 49.
This investment policy applies to all moneys and other financial resources
available for investment on its own behalf or on behalf of any other entity
or individual.
The primary objectives of the local government's investment activities
are, in priority order:
The governing board's responsibility for administration of the
investment program is delegated to the Chief Fiscal Officer 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 accountability
based on a data base or records incorporating description and amounts of investments,
transaction dates and other relevant information and regulate the activities
of subordinate employees.
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 village 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 activities 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 village to diversify its deposits and investments
by financial institution, by investment instrument and by maturity scheduling.
A.
It is the policy of the village for all moneys collected
by any officer or employee of the government to transfer those funds to the
Chief Fiscal Officer within three days of deposit, or within the time period
specified in law, whichever is shorter.
B.
The Chief Fiscal Officer is responsible for establishing
and maintaining an internal control structure to provide reasonable, but not
absolute, assurance that deposits and investments are safeguarded against
loss from unauthorized use or disposition, that transactions are executed
in accordance with management's authorization and recorded properly,
and are managed in compliance with applicable laws and regulations.
The bank authorized for the deposit of moneys up to the following maximum
amounts is:
Depository Name
|
Maximum Amount
|
Officer
|
Fleet Bank
|
$4,000,000
|
Vice President, Municipal Finance
|
In accordance with the provisions of General Municipal Law § 10,
all deposits of the village 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:
A.
By a pledge of eligible securities with an aggregate
market value, or provided by General Municipal Law § 10, equal to
the aggregate amount of deposits from the categories designated in Appendix
A to the policy.
B.
By an eligible irrevocable letter of credit issued by
a qualified bank other than the bank with the deposits in favor of the government
for a term not to exceed 90 days with an aggregate value equal to 140% of
the aggregate amount of deposits and the agreed upon interest, if any. A qualified
bank is one whose commercial paper and other unsecured short-term debt obligations
are rated in one of the three highest rating categories by at least one nationally
recognized statistical rating organization or by a bank that
is in compliance with applicable federal minimum risk-based capital requirements.
C.
By an eligible surety bond payable to the government
for an amount at least equal to 100% of the aggregate amount of deposits and
the agreed upon interest, if any, executed by an insurance company authorized
to do business in New York State, whose claims-paying ability is rated in
the highest rating category by at least two nationally recognized statistical
rating organizations.
A.
Eligible securities used for collateralizing deposits
shall be held by (the depository and/or a third party) bank 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 an assignment in blank to
the village 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 village authorizes the Chief Fiscal Officer 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.
(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.
B.
All investment obligations shall be payable or redeemable
at the option of the village within 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 village within two years
of the date of purchase.
The village 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 village. 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 is responsible for evaluating the financial position
and maintaining a listing of proposed depositories, trading partners and custodians.
Such listing shall be evaluated at least annually.
A.
The Chief Fiscal Officer is authorized to contract for
the purchase of investments.
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 investments. All such transactions shall be
confirmed in writing to the village 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 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 shall describe how the custodian shall confirm the receipt and
release of the securities. Such agreement shall include all provisions necessary
to provide the local government a perfected interest in the securities.