[HISTORY: Adopted by the Board of Trustees
of the Village of Naples 1-28-2009.[1] Amendments noted where applicable.]
[1]
Editor's Note: This legislation also superseded former Ch.
160, Investment Policy, adopted 7-16-2003.
This investment policy applies to all moneys and other financial
resources available for investment on its own 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 chief fiscal officer
and other officers having custody of money 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.
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 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 to diversify its deposits and
investments by financial institution, by investment instrument, and
by maturity scheduling.
A.
It is the policy of the Village for all moneys collected by an officer
or employee of the government to transfer funds to the chief fiscal
officer within 30 days of deposit, or within the time period specified
in law, whichever is shorter.
B.
The chief fiscal officer and other officers having custody of money
are 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
monies up to the following maximum amounts are:
Depository Name
|
Maximum Amount
|
Officer
|
---|---|---|
Five Star Bank
|
$3,000,000
|
Clerk-Treasurer
|
Community Bank
|
$1,600,000
|
Clerk-Treasurer
|
JP Morgan Chase
|
$1,600,000
|
Clerk-Treasurer
|
In accordance with the provisions of General Municipal Law § 10,
all deposits of the Village, 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 claim - paying ability is
rated in the highest rating category by at least two nationally recognized
statistical rating organizations
A.
Eligible securities used for collateralizing deposits shall be held
by the depositary and/or a third party bank or trust company subject
to security and custodial agreements.
B.
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 Village
or its custodial bank.
C.
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.
As authorized by General Municipal Law § 11, the Board
of Trustees authorizes the chief fiscal officer and other officer
having custody of money 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)
Certification 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)
Obligation of the State of New York;
(6)
Obligation 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;
(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 (COPs) issued pursuant to GML § 109-b;
(9)
Obligations of this local government, but only with any moneys in
a reserve fund established pursuant to GML § 6-c, 6-d, 6-e,
6-g, 6-h, 6-j, 6-l, 6-m, or 6-n.
B.
All investment obligations shall be payable or redeemable at the
option of the Village, 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,
within two years of the date of purchase.
The Village 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 Consolidate Report of Condition (Call Report) at
the request of the Village. Security dealers not affiliated with the
bank shall be required to be classified as reporting dealers affiliated
with the New York Federal Reserve Bank, as primary dealers. The chief
fiscal officer and other officers having custody of money are responsible
for evaluating the financial position and maintaining a list of proposed
depositaries, trading partners and custodians. Such listing shall
be evaluated at least annually.
A.
The chief fiscal officer and other officer having custody of money
are 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 5-G 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 tracking
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 presented for redemption or payment by
such bank or trust company only in accordance with prior authorization
from the office confirmed in writing to the Village by the bank or
trust company. Any obligation held in the custody of a bath 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 apart from the general assets
of the 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 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.
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 where principal and interest are guaranteed by 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.