[HISTORY: Adopted by the Board of Trustees of the Village of Groton 7-20-1987
by resolution; amended in its entirety 5-16-1994 by L.L.
No. 4-1994. Subsequent amendments noted where applicable.]
GENERAL REFERENCES
Accounting procedures — See Ch. 5.
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 Village's investment activities are,
in priority of order:
The governing board's responsibility for administration of the
investment program is delegated to the chief fiscal officer 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 to 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 Groton 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.
Where, in the opinion of the chief fiscal officer and the Board of Trustees,
the diversification of deposits and investments by financial institution,
investment instrument and maturity scheduling is to the advantage and vital
interests of the Village, diversification will be encouraged.
A.
It is the policy of the Village of Groton for all moneys
collected by any officer or employee of the government to be transferred to
the chief fiscal officer within three days of deposit or within the time period
specified in law, whichever is shorter.
B.
The chief fiscal officer 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.
[Amended 3-17-2003 by L.L. No. 5-2003]
The banks and trust companies authorized for the deposit of moneys up
to the following maximum amounts are:
|
Depository Name
|
Maximum Amount
|
|---|---|
|
First National Bank of Groton
|
$2,500,000.00
|
In accordance with the provisions of General Municipal Law § 10,
all deposits of the Village of Groton, 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.
A.
Eligible securities used for collateralizing deposits
shall be held by the depository and/or a third party 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 Village of Groton authorizes the chief fiscal officer 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 is 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 Groton.
(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-l, 6-m or 6-n.
B.
All investment obligations shall be payable or redeemable
at the option of the Village of Groton 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 Groton within
two years of the date of purchase.
The Village of Groton 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 Groton.
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 chief fiscal officer 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.
A.
The chief fiscal officer 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 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 written authorization from the
officer authorized to make the investment. All such transactions shall be
confirmed in writing to the Village of Groton 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 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 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.
F.
No repurchase agreement shall be entered into without
prior approval of the Village Board of Trustees.
Eligible securities shall be as follows:
A.
Obligations issued, or fully insured or guaranteed as
to the payment of principal and interest, by the United States of America,
an agency thereof or a United States government sponsored corporation.
B.
Obligations partially insured or guaranteed by any agency
of the United States of America, at a proportion of the market value of the
obligation that represents the amount of the insurance or guaranty.
C.
Obligations issued or fully insured or guaranteed by
the State of New York, obligations issued by a municipal corporation, school
district or district corporation of such state or obligations of any public
benefit corporation which under a specific state statute may be accepted as
security for deposit of public moneys.
D.
Obligations issued by states (other than the State of
New York) of the United States rated in one of the three highest rating categories
by at least one nationally recognized statistical rating organization.
E.
Obligations of counties, cities and other governmental
entities of a state, other than the State of New York, having the power to
levy taxes that are backed by the full faith and credit of such governmental
entity and rated in one of the three highest rating categories by at least
one nationally recognized statistical rating organization.
F.
Obligations of domestic corporations rated in one of
the two highest rating categories by at least one nationally recognized statistical
rating organization.
G.
Any mortgage-related securities, as defined in the Securities
Exchange Act of 1934, as amended, which may be purchased by banks under the
limitations established by bank regulatory agencies.
H.
Commercial paper and bankers' acceptances issued
by a bank, other than the bank, rated in the highest short-term category by
at least one nationally recognized statistical rating organization and having
maturities of not longer than 60 days from the date they are pledged.
I.
Zero coupon obligations of the United States
government marketed as treasury strips.
