[HISTORY: Adopted by the Board of Trustees of the Village of Akron
11-6-1989. Amendments noted where applicable.]
GENERAL REFERENCES
Procurement policy — See Ch. 42.
The objectives of the investment policy of the Village of Akron 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 chief fiscal officer
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.
C.
Only reserve funds may be invested in obligations of
the Village of Akron.
D.
No other Village of Akron officials have the authority
to receive money in their official capacity.
All investments made pursuant to this investment policy 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, or a combination of same.
Collateral shall be delivered to the Village of Akron or a custodial bank
with which the Village of Akron 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 monthly, 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 Akron
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 Akron'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 Akron 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.
(3)
Written contracts. 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 interests of the Village of Akron will be adequately protected by conditioning
payment on the physical delivery of purchased securities to the Village of
Akron or custodian or, in 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 Akron. It is,
therefore, the policy of the Village of Akron 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 Akron.
The written contract shall provide that only obligations of the United States
may be purchased, and the Village of Akron shall make payment upon delivery
of the securities or appropriate book-entry of the purchased securities. No
specific repurchase agreement has been executed between the Village of Akron
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 over $100,000.
(c)
A written contract shall be required with the custodial
bank.
The bank or trust company chartered by the State of New York is designated
to act as custodial bank of the Village of Akron'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 chief fiscal officer
to determine satisfactory financial strength, or the chief fiscal officer
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 $1,000,000 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 chief fiscal officer to determine satisfactory financial strength.
C.
When purchasing eligible securities, the seller shall
be required to deliver the securities to our custodial bank.
D.
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.
E.
Repurchase agreements should not be entered into with
undercapitalized trading firms.
F.
A margin of 5% or higher of the market value of purchased
securities in repurchase agreements must be maintained.
A.
The chief fiscal officer or the deputy chief fiscal officer
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 Akron. Oral directions concerning the purchase or sale of securities shall
be confirmed in writing. The Village of Akron shall pay for purchased securities
upon the delivery or book-entry thereof.
B.
The Village of Akron will encourage the purchase and
sale of securities and certificates of deposit through a competitive or negotiated
process involving telephone solicitation of at least two bids for each transaction.
C.
At the time New York State auditors conduct the annual
audit of the accounts and financial affairs of the Village of Akron, the New
York State auditors shall audit the investments of the Village of Akron for
compliance with the provisions of these investment guidelines.
D.
Within 60 days of the end of each of the first three
quarters of the fiscal year, the chief fiscal officer shall prepare and submit
to the Board of Trustees of the Village of Akron a quarterly investment report
which indicates new investments, the inventory of existing investments and
such other matters as the chief fiscal officer deems appropriate.
E.
Within 120 days of the end of the fiscal year, the chief
fiscal officer shall prepare and submit to the Board of Trustees of the Village
of Akron an annual investment report; recommendations for change in these
investment guidelines; the results of the annual New York State audit, if
available; the investment income record; a list of total fees, commissions
or other charges, if any, paid to the custodial bank; and such other matters
as the chief fiscal officer deems appropriate.
F.
At least annually, and, if practicable, at the annual
organization meeting of the Board of Trustees of the Village of Akron, the
Board of Trustees shall review and amend, if necessary, these investment guidelines.
