[HISTORY: Adopted by the Board of Trustees of the Village of Northport
at time of adoption of Code (see Ch. 1, General Provisions, Art. I). Amendments
noted where applicable.]
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 Treasurer 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.Â
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 Incorporated Village of Northport
to govern effectively.
B.Â
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.Â
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 Incorporated Village of Northport to diversify
its deposits and investments by financial institution, by investment instrument
and by maturity scheduling.
A.Â
It is the policy of the Incorporated Village of Northport
for all moneys collected by any officer or employee of the government to transfer
those funds to the Treasurer within 10 days of deposit or within the time
period specified in law, whichever is shorter.
B.Â
The Treasurer 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 banks and trust companies authorized for the deposit of moneys will
be designated by annual resolution.
In accordance with the provisions of General Municipal Law § 10,
all deposits of the Incorporated Village of Northport, 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.Â
By a pledge of eligible securities with an aggregate
market value, or as provided by General Municipal Law § 10, equal
to the aggregate amount of deposits from the categories designated in Appendix
A to the policy.[1]
[1]
Editor's Note: Appendix A is included at the end of this chapter.
B.Â
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.Â
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.Â
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.Â
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 Incorporated Village of Northport or its custodial bank.
C.Â
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.Â
As authorized by General Municipal Law § 11,
the Incorporated Village of Northport authorizes the Treasurer 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)Â
Special time deposit accounts.
(2)Â
Certificates of deposit.
(3)Â
Obligations of the United States of America.
(4)Â
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)Â
Obligations of the State of New York.
(6)Â
Obligations issued pursuant to the 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 Incorporated
Village of Northport.
(7)Â
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)Â
Certificate of participation (COPS) issued pursuant to
General Municipal Law § 109-b.
(9)Â
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, 6-g, 6-h, 6-j, 6-k, 6-l, 6-m or 6-n.
B.Â
All investment obligations shall be payable or redeemable
at the option of the Incorporated Village of Northport within such times as
the proceeds will be needed to meet expenditures for purposes for which the
moneys where 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 Incorporated
Village of Northport within two years of the date of purchase.
The Incorporated Village of Northport 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 to 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 Incorporated Village
of Northport. 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 Treasurer 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.Â
The Treasurer is authorized to contract for the purchase
of investments:
(1)Â
Directly, including through a repurchase agreement, from
an authorized trading partner.
(2)Â
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 governing board.
(3)Â
By utilizing an ongoing investment program with an authorized
tracking partner pursuant to a contract authorized by the governing board.
B.Â
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 Incorporated Village of Northport 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.Â
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 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.
Repurchase agreements are authorized subject to the following restrictions:
A.Â
All repurchase agreements must be entered into subject
to a master repurchase agreement.
B.Â
Trading partners are limited to banks or trust companies
authorized to do business in New York State and primary reporting dealers.
C.Â
Obligations shall be limited to obligations of the United
States of America and obligations of agencies of the United States of America
where principal and interest are guaranteed by the United States of America.
D.Â
No substitution of securities will be allowed.
E.Â
The custodian shall be a party other than the trading
partner.