This investment policy applies to all money, funds and other
financial resources held, controlled or administered by the Town of
Lima and available for investment on its own behalf or on behalf of
any other entity or individual for which or when the Town of Lima
holds or administers such funds or resources. This policy is promulgated
pursuant to New York State General Municipal Law § 39.
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.
B. To adequately safeguard principal.
C. To provide sufficient liquidity to meet all operating requirements.
D. To obtain a reasonable rate of return.
The governing board's responsibility for administration
of the investment program is delegated to the Town Supervisor, 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 database or records
incorporating description and amounts of investments, transaction
dates and other relevant information and regulate the activities of
subordinate employees.
It is the policy of the Town of Lima to diversify its deposits
and investments by financial institution, by investment instrument
and by maturity scheduling.
The banks and trust companies authorized for the deposit of
monies up to the maximum amounts are:
Depository Name
|
Maximum Amount
|
---|
HSBC
|
$2,000,000
|
In accordance with the provisions of General Municipal Law,
§ 10, all deposits of the Town of Lima, 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, as 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 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.
The Town of Lima 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 at the request
of the Town of Lima. 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 Town Supervisor
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.
Repurchase agreements are authorized, subject to the following
restrictions:
A. All repurchase agreements must be entered into subject to a Master
Repurchase Agreement.
B. Trading partners are limited to banks or trust companies authorized
to do business in New York State and primary reporting dealers.
C. Obligations shall be limited to obligations of the United States
of America and obligations guaranteed by agencies of the United States
of America.
D. No substitution of securities will be allowed.
E. The custodian shall be a party other than the trading partner.