[HISTORY: Adopted by the Common Council of the City of Cohoes 12-14-1993 by Ord. No. 59-1993. Amendments noted where applicable.]
The objectives of this investment and deposit policy and procedure are three-fold:
Investments and bank deposits (hereafter collectively referred to as "investments") shall be made in a manner so as to safeguard the funds of the municipality.
Investments shall be sufficiently liquid so as to allow funds to be available as needed to meet the obligations of the municipality.
Funds shall be invested in such a way as to earn the maximum yield possible given the first two investment objectives.
The authority to deposit and invest funds is delegated to the Director of Finance pursuant to the Charter of the municipality. These functions shall be performed in accordance with the applicable sections of the General Municipal Law of the State of New York.
The municipality's Director of Finance may invest funds in the following eligible investments:
Obligations of the State of New York.
Obligations of the United States government or any obligations for which principal and interest are fully guaranteed by the United States government.
Time deposit accounts placed in a commercial bank* authorized to do business in the State of New York, provided that the account is collateralized as described within this policy. [*NOTE: Banking law § 237(2) prohibits a savings bank from accepting a deposit from a local government. This also applies to savings and loan associations.]
Transaction accounts (demand deposits), both interest-bearing and non-interest-bearing, that do not require notice of withdrawal placed in a commercial bank authorized to do business in the State of New York, provided that the account is collateralized as described within this policy.
Certificates of deposit placed in a commercial bank authorized to do business in the State of New York, provided that the certificates are collateralized as described within this policy.
Securities purchased pursuant to a repurchase agreement whereby one party purchases securities from a second party and the second party agrees to repurchase those same securities on a specific future date at an agreed upon rate of return (interest rate).
The municipality, upon the recommendation of the Director of Finance, shall annually designate authorized depositories for funds of the municipality. These depositories shall only be commercial banks authorized to conduct business in the State of New York. Each authorized depository shall execute a security agreement, which will provide that collateral is being pledged by the bank as security for the municipality's deposits. Each authorized custodial bank or trust company shall execute a custodial agreement. This agreement must acknowledge that the pledged collateral is being held by the custodian bank or trust company as agent of and custodial for the municipality. The depository and custodian may be the same bank or trust company.
Certificates of deposit. Investments in certificates of deposit shall be collateralized as described in the executed security/custodial agreement. The municipality shall take possession of the actual certificate and maintain it in a safekeeping area.
The Director of Finance is responsible for the investment of the municipality's funds. Authorized Finance Department staff will make investments based upon projections of cash flow needs so that investments shall mature at such time when funds are estimated to be needed for the orderly payment of the municipality's obligations. The Director of Finance shall annually receive and review the financial statements of all institutions with which the municipality is depositing funds or entering into investment transactions.
Investments should be based upon competitive bids solicited by telephone by the Finance Department and shall be awarded to the highest bidder who is able to pledge according to this policy.
Funds will only be transferred between institutions in the name of the municipality by using the Federal Reserve Wire Transfer (Fed Wire) system or by check and only by staff as authorized in writing by the Director of Finance of his designee. Funds may be transferred within the same institution only between accounts and by authorized staff.
A listing of authorized staff will be maintained by the Department of Finance and will be forwarded to the authorized depositories.
If changes in staffing or staff responsibilities occur, updated authorization letters will be forwarded to the depositories.
All investments shall be in the name of the municipality. The Department of Finance will maintain an investment log, detailing the specific information relative to each investment. All investment transactions will be promptly reported to the Comptroller for entry into the accounting system.
Comparisons of the existing investments to those recorded in the accounting system will be performed routinely.
Monthly, a report of all existing investments will be provided to the Director of Finance, as well as to the Comptroller of the municipality, who will compare existing investments to those recorded in the accounting system.
Internal controls. The individual(s) responsible for the day-to-day activity of the cash investments must annually take at least one vacation of five consecutive business days, and the day-to-day investment activities will be carried out by another member of the Finance Department.
Collateral. All investments of the municipality, except repurchase agreements and direct purchases of obligations of the federal government, shall be securities. All such investments shall first be secured by the Federal Deposit Insurance Corporation (FDIC) insurance coverage to the extent available. Collateral required in excess of FDIC insurance coverage shall be pledged in accordance with Chapter 708 of the General Municipal Law and the executed security/custodial agreement. The agreement should be approved by the New York State Office of the Comptroller.
Possession of securities.
Purchased obligations. When obligations of the United States of America or obligations guaranteed by the United States of America are purchased directly by the municipality, the municipality as owner shall be inscribed on the securities, and they shall be delivered to the municipality or its designated depository for safekeeping. If in book entry form, such securities shall be registered in the name of the municipality.
Audit and control.
The internal audit section and/or the municipality's independent certified public accountants shall, in conjunction with the municipality's audit, annually review the investment policies and procedures used by the Department of Finance to be certain they are in conformance with all applicable laws and regulations.
The investments and deposits of the municipality will be made in accordance with the specifics as outlined in the above-noted resolutions.