[HISTORY: Adopted by the Board of Trustees of the Village
of Haverstraw 10-17-2022 by L.L. No. 4-2022. Amendments noted where
applicable.]
The objectives of the investment policies and guidelines of
the Village of Haverstraw are to minimize risk, to ensure that investments
mature when the cash is required to finance operations and to ensure
a competitive rate of return.
A.
In accordance with this policy, the Treasurer is hereby authorized
to invest all funds, including proceeds of obligations and reserve
funds, in:
(1)
Certificates of deposit issued by a bank or trust company authorized
to do business in New York State.
(2)
Time deposit accounts in a bank or trust company authorized to do
business in New York State.
(3)
Obligations of New York State.
(4)
Obligations of the United States government.
(5)
Repurchase agreements involving the purchase and sale of direct obligations
of the United States.
D.
All other Village of Haverstraw officials receiving money in their
official capacity must deposit such funds in negotiable order of withdrawal
accounts.
All investments made pursuant to the investment policies and
guidelines of the Village of Haverstraw shall comply with the following
conditions:
A.
Collateral.
(1)
Certificates of deposit shall be fully secured by insurance of the
Federal Deposit Insurance Corporation or by obligations of New York
State or obligations of the United States or obligations of federal
agencies, the principal and interest of which are guaranteed by the
United States, or obligations of New York State local governments.
Collateral shall be delivered to the Village of Haverstraw or a custodial
bank with which the Village of Haverstraw has entered into a custodial
agreement. The market value of collateral shall at all times equal
or exceed the principal amount of the certificate of deposit. Collateral
shall be monitored no less frequently than weekly, and "market value"
shall mean the bid or closing price as quoted in the Wall Street Journal
or as quoted by another recognized pricing service.
(2)
Securities purchased through a repurchase agreement shall be valued
to market at least weekly.
(3)
Collateral shall not be required with respect to the direct purchase
of obligations of New York State, obligations of the United States
and obligations of federal agencies, the principal and interest of
which are guaranteed by the United States government.
B.
Delivery of securities.
(1)
Repurchase agreements. Every repurchase agreement shall provide for
payment to the seller only upon the seller's delivery of obligations
of the United States to the custodial bank designated by the Village
of Haverstraw or, in the case of a book-entry transaction, when the
obligations of the United States are credited to the custodian's
Federal Reserve Bank account. The seller shall not be entitled to
substitute securities. Repurchase agreements shall be for periods
of 30 days or less. The custodial bank shall confirm all transactions
in writing to ensure that the Village of Haverstraw's ownership
of the securities is properly reflected on the records of the custodial
bank.
(2)
Payment shall be made by or on behalf of the Village of Haverstraw
for obligations of New York State, obligations the principal and interest
of which are guaranteed by the United States, United States obligations,
certificates of deposit and other purchased securities upon the delivery
thereof to the custodial bank or, in the case of a book-entry transaction,
when the purchased securities are credited to the custodial bank's
Federal Reserve System account. All transactions shall be confirmed
in writing.
C.
Written contracts.
(1)
Written contracts are required for repurchase agreements, certificates
of deposit and custodial undertakings. With respect to the purchase
of obligations of the United States, New York State or other governmental
entities, etc., in which moneys may be invested, the interest of the
Village of Haverstraw will be adequately protected by conditioning
payment on the physical delivery of purchase securities to the Village
of Haverstraw or custodian or, in the case of book-entry transactions,
on the crediting of purchased securities to the custodian's Federal
Reserve System account. All purchases will be confirmed, in writing,
to the Village of Haverstraw.
(2)
It is, therefore, the policy of the Village of Haverstraw to require
written contracts as follows:
(a)
Written contracts shall be required for all repurchase agreements.
Only creditworthy banks and primary reporting dealers shall be qualified
to enter into a repurchase agreement with the Village of Haverstraw.
The written contract shall provide that only obligations of the United
States may be purchased, and the Village of Haverstraw shall make
payment upon delivery of the securities or appropriate book-entry
of the purchased securities. No specific repurchase agreement shall
be entered into unless a master repurchase agreement has been executed
between the Village of Haverstraw and the trading partners. While
the term of the master repurchase agreement may be for a reasonable
length of time, a specific repurchase agreement shall not exceed 30
days.
(b)
Written contracts shall be required for the purchase of all
certificates of deposit.
(c)
A written contract shall be required with the custodial bank.
A trust bank company chartered by the State of New York must
be designated to act as custodial bank of the Village of Haverstraw's
investments. However, securities may not be purchased through a repurchase
agreement with the custodial bank.
A.
All trading partners must be creditworthy. Their financial statements
must be reviewed at least annually by the Treasurer to determine satisfactory
financial strength, or the Treasurer may use credit rating agencies
to determine creditworthiness of trading partners. Concentration of
investments in financial institutions should be avoided. The general
rule is not to place more than $500,000 in overnight investments with
any one institution.
B.
Investments in time deposits and certificates of deposit are to be
made with banks or trust companies. Their annual reports must be reviewed
by the Treasurer to determine satisfactory financial strength.
C.
When purchasing eligible securities, the seller shall be required
to deliver the securities to our custodial bank.
A.
Repurchase agreements shall be entered into only with banks or trust
companies or registered and primary reporting dealers in government
securities. Sound credit judgments must be made with respect to trading
partners in repurchase agreements. It is not assumed that inclusion
on a list of the Federal Reserve is automatically adequate evidence
of creditworthiness.
B.
Repurchase agreements should not be entered into with undercapitalized
trading firms.
C.
A margin of 5% or higher of the marker value of purchased securities
in repurchase agreements must be maintained.
A.
The Treasurer or one so designated by the Treasurer shall authorize
the purchase and sale of all securities and execute contracts for
repurchase agreements and certificates of deposit on behalf of the
Village of Haverstraw. Oral directions concerning the purchase or
sale of securities shall be confirmed in writing. The Village of Haverstraw
shall pay for purchased securities upon the delivery or book-entry
thereof.
B.
The Village of Haverstraw will encourage the purchase and sale of
securities and certificates of deposit through a competitive or negotiated
process involving telephone solicitation of at least three bids for
each transaction.
C.
At the time independent auditors conduct the annual audit of the
accounts and financial affairs of the Village of Haverstraw, the independent
auditors shall audit the investments of the Village of Haverstraw
for compliance with the provisions of these investment policies and
guidelines of the Village of Haverstraw.
D.
At least annually, and whenever requested by the Board of Trustees,
the Treasurer shall prepare and submit to the Board of Trustees an
investment report which will indicate new investments; the inventory
of existing investments; the investment income record; a list of total
fees, commissions or other charges, if any, paid to the custodial
bank; the results of any independent audit; recommendations for change
to these investment policies and guidelines of the Village of Haverstraw,
and such other matters as the Treasurer deems appropriate.
E.
At least annually, and whenever an investment report is submitted
by the Treasurer, the Board of Trustees shall review and approve such
investment report within 60 days of receipt.
At least annually, and whenever deemed appropriate, the Board
of Trustees of the Village of Haverstraw shall review and amend by
written resolution, if necessary, these investment policies and guidelines
of the Village of Haverstraw.
The provisions of these investment policies and guidelines of
the Village of Haverstraw and any amendments hereto shall take effect
prospectively and shall not invalidate the prior selection of any
custodial bank or prior investment.
