[HISTORY: Adopted by the Board of Trustees
of the Village of Rhinebeck 12-13-1994 as L.L. No. 4-1994.[1] Amendments noted where applicable.]
[1]
Editor's Note: This local law superseded former
Ch. 9, Investment Policies, adopted 2-14-1989 as L.L. No. 1-1989.
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 Clerk-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.
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 Village
of Rhinebeck to govern effectively.
B.
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.
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 Village of Rhinebeck
to diversify its deposits and investments by financial institution,
by investment instrument and by maturity scheduling.
A.
It is the policy of the Village of Rhinebeck for all
moneys collected by any officer or employee of the government to transfer
those funds to the chief fiscal officer within three days of deposit
or within the time period specified in law, whichever is shorter.
B.
The Clerk-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 and 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 up to the maximum amounts are:
|
Bank or Company
|
Maximum Amount
|
Officer
|
|---|---|---|
|
M & T Bank
|
$1,000,000.00
|
President
|
|
Rhinebeck Savings Bank
|
$1,000,000.00
|
President
|
In accordance with the provisions of General
Municipal Law § 10, all deposits of the Village of Rhinebeck,
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:
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 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.
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.
Eligible securities used for collateralizing
deposits shall be held by First Hudson Valley, Rhinebeck Savings Bank
and/or a third party bank or trust company subject to security and
custodial agreements.
A.
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 First Hudson Valley Rhinebeck Savings Bank or its
custodial bank.
B.
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 other liabilities. The agreement should also
describe that the custodian shall conform 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.
As authorized by General Municipal Law § 11,
the Village of Rhinebeck authorizes the Clerk-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)
Special time deposit accounts;
(2)
Certificates of deposit;
(3)
Obligations of the United States of America;
(4)
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)
Obligations of the State of New York.
(6)
Obligations issued pursuant to 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 Village of
Rhinebeck.
(7)
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)
Certificates of participation (COP's) issued pursuant
to General Municipal Law § 109-b.
(9)
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.
All investment obligations shall be payable or redeemable
at the option of the Village of Rhinebeck 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
at the option of the Village of Rhinebeck within two years of the
date of purchase.
The Village of Rhinebeck 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 creditworthy. Banks shall provide their most recent Consolidated
Report of Condition (Call Report) at the request of the Village of
Rhinebeck. 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 Clerk-Treasurer is responsible
for evaluating the financial position and maintaining a listing of
proposed depositaries, trading partners and custodians. Such listing
shall be evaluated at least annually.
A.
The Clerk-Treasurer is authorized to contract for
the purchase of investments:
(1)
Directly, including through a repurchase agreement,
from an authorized trading partner.
(2)
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)
By utilizing an ongoing investment program with an
authorized trading partner pursuant to a contract authorized by the
governing board.
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 prescribed 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 Village of Rhinebeck 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.
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 other liabilities. The agreement shall describe
how the custodian shall conform 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.
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.
