Town of Waterford, NY
Saratoga County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Town Board of the Town of Waterford 7-2-1991; amended in its entirety 7-5-2016 by L.L. No. 6-2016. Subsequent amendments noted where applicable.]
This investment policy applies to all moneys and other financial resources for the deposit and investment by the Town of Waterford 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:
A. 
To conform with all applicable federal, state and other legal requirements (legality);
B. 
To adequately safeguard principal (safety);
C. 
To provide sufficient liquidity to meet all operating requirements (liquidity); and
D. 
To obtain a reasonable rate of return (yield).
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 policies. Such procedures shall include internal controls to provide a satisfactory level of accountability based upon records incorporating the description and amounts of investments, the fund(s) for which they are held, the place(s) where kept, and other relevant information, including dates of sale or other disposition and amounts realized. In addition, the internal control procedures shall describe the responsibilities and levels of authority for key individuals involved in the investment program.
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 Waterford to govern effectively.
B. 
Investments shall be made with prudence, diligence, skill, judgment and care, under circumstances then prevailing, which knowledgeable and prudent persons acting in like capacity would use, 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.
A. 
It is the policy of the Town of Waterford to diversify its deposits and investments by financial institution, by investment instrument, and by maturity scheduling.
B. 
The governing board shall establish appropriate limits for the amount of investments which can be made with each financial institution, and shall evaluate this listing at least annually.
A. 
It is the policy of the Town of Waterford for all moneys collected by any officer or employee of the government to transfer those funds to the chief fiscal officer within the time period specified in law.
B. 
The chief fiscal officer is responsible for establishing and maintaining internal control procedures 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, properly recorded, and managed in compliance with applicable laws and regulations.
The banks that are authorized for the deposit of moneys, and the maximum amount which may be kept on deposit at any time, are:
Depository Name
Maximum Amount
Officer
Pioneer Commercial Bank
$15,000,000
Government Accounts
All deposits and investments at Pioneer Commercial Bank, including all demand deposits, certificates of deposit and special deposits (hereinafter, collectively, "deposits") made by officers of the Town of Waterford that are in excess of the amount insured under the provisions of the Federal Deposit Insurance Act, including pursuant to a deposit placement program in accordance with law, shall be secured by:
A. 
A pledge of eligible securities with an aggregate market value (as provided by General Municipal Law § 10) that is at least equal to the aggregate amount of deposits by the officers. See Schedule A of this policy for a listing of eligible securities.[1]
[1]
Editor's Note: Schedule A is on file in the Town offices.
B. 
An irrevocable letter of credit issued in favor of the Town of Waterford by a federal home loan bank whose commercial paper and other unsecured short-term debt obligations are rated in the highest rating category by at least one nationally recognized statistical rating organization, as security for the payment of 100% of the aggregate amount of deposits and the agreed-upon interest, if any.
Eligible securities used for collateralizing deposits made by officers of the Town of Waterford shall be held by Pioneer Commercial Bank or a third party, subject to security and custodial agreements.
A. 
The security agreement shall provide that eligible securities are being pledged to secure such deposits together with agreed-upon interest, if any, and any costs or expenses arising out of the collection of such deposits upon a default. It shall also provide the conditions under which the securities held may be sold, presented for payment, substituted or released and the events of default which will enable the local government to exercise its rights against the pledged securities.
B. 
In the event that the pledged securities are not registered or inscribed in the name of the Town of Waterford, such securities shall be delivered in a form suitable for transfer or with an assignment in blank to the Town of Waterford or its custodial bank. Whenever eligible securities delivered to the custodial bank are transferred by entries on the books of a federal reserve bank or other book-entry system operated by a federally regulated entity without physical delivery of the evidence of the obligations, then the records of the custodial bank shall be required to show, at all times, the interest of the local government in the securities as set forth in the security agreement.
C. 
The custodial agreement shall provide that pledged securities will be held by the custodial bank as agent of, and custodian for, the Town of Waterford, will be kept separate and apart from the general assets of the custodial bank and will not commingled with or become part of the backing of any other deposit or other bank liability. The agreement shall also describe how the custodian shall confirm the receipt, substitution or release of the collateral and it shall provide for the frequency of revaluation of collateral by the custodial bank and for the substitution of collateral when a change in the rating of a security causes ineligibility. The security and custodial agreements shall also include all other provisions necessary to provide the Town of Waterford with a perfected security interest in the eligible securities and to otherwise secure the local government's interest in the collateral, and may contain other provisions that the governing board deems necessary.
A. 
As provided by General Municipal Law § 11, the Town Board of the Town of Waterford 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 in, or certificates of deposit issued by, a bank located and authorized to do business in the State of New York.
B. 
All investment obligations shall be payable or redeemable at the option of the Town of Waterford 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 in any event at the option of the Town of Waterford within two years of the date of purchase. Time deposit accounts and certificates of deposit shall be payable within such times as the proceeds will be needed to meet expenditures for which the moneys were obtained, and shall be secured as provided in §§ 18-8 and 18-9 herein.
A. 
All financial institutions and dealers with which the Town of Waterford transacts business shall be creditworthy, and have an appropriate level of experience, capitalization, size and other factors that make the financial institution or the dealer capable and qualified to transact business with the Town of Waterford. The chief fiscal officer shall evaluate the financial position and maintain a listing of proposed depositories, trading partners, and custodians. Recent reports of condition and income ("call reports") shall be obtained for proposed banks, and security dealers that are 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.
B. 
The Town of Waterford shall maintain a list of financial institutions and dealers approved for investment purposes and establish appropriate limits to the amounts of investments that can be made with each financial institution or dealer.
A. 
The chief fiscal officer is authorized to contract for the purchase of investments:
(1) 
Directly, from an authorized trading partner.
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 Waterford by the bank or trust company.
C. 
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(3)(a). The agreement shall provide that securities held by the bank or trust company, as agent of, and custodian for, the Town of Waterford, will be kept separate and apart from the general assets of the custodial bank or trust company and will not be commingled with or become part of the backing of any other deposit or other bank liability. The agreement shall also describe how the custodian shall confirm the receipt and release of the securities. Such agreement shall include all provisions necessary to secure the local government's perfected interest in the securities, and the agreement may also contain other provisions that the governing board deems necessary. The security and custodial agreements shall also include all other provisions necessary to provide the Town of Waterford with a perfected interest in the securities.
The Town of Waterford shall review this investment policy annually, and it shall have the power to amend this policy at any time.
The terms "public funds," "public deposits," "bank," "trust company," "eligible securities," "eligible surety bond," and "eligible letter of credit" shall have the same meanings as set forth in General Municipal Law § 10.