[HISTORY: Adopted by the Town Board of the Town of Wheatfield 3-5-1990.
Amendments noted where applicable.]
GENERAL REFERENCES
Procurement policy — See Ch. 28.
The objectives of this policy of the Town of Wheatfield 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)
In 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 Town of Wheatfield.
D.
All other Town of Wheatfield officials receiving money
in their official capacity must deposit such funds in negotiable order of
withdrawal accounts.
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. Collateral shall be delivered
to the Town of Wheatfield or a custodial bank with which the local government
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 Town of Wheatfield
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 Town of Wheatfield'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 Town of
Wheatfield 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 interests of the Town
of Wheatfield will be adequately protected by conditioning payment on the
physical delivery of purchased securities to the Town of Wheatfield 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 Town of Wheatfield.
(2)
It is therefore the policy of the Town of Wheatfield
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 Town of Wheatfield.
The written contract shall provide that only obligations of the United States
may be purchased, and the Town of Wheatfield shall make the 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 Town of Wheatfield 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.
D.
Designation of custodial bank. The Trust Bank Company
chartered by the State of New York is designated to act as custodial bank
of the Town of Wheatfield's investments. However, securities may not be purchased
through a repurchase agreement with the custodial bank.
E.
Financial strength of institutions.
(1)
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 $1,500,000 in overnight investments
with any one institution.
(2)
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.
(3)
When purchasing eligible securities, the seller shall
be required to deliver the securities to our custodial bank.
(4)
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.
(5)
Repurchase agreements should not be entered into with
undercapitalized trading firms.
(6)
A margin of 5% or higher of the market value of purchased
securities in repurchase agreements must be maintained.
F.
Operations, audit and reporting.
(1)
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 Town
of Wheatfield. Oral directions concerning the purchase or sale of securities
shall be confirmed, in writing. The Town of Wheatfield shall pay for purchased
securities upon the delivery or book-entry thereof.
(2)
The Town of Wheatfield 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.
(3)
At the time independent auditors conduct the annual audit
of the accounts and financial affairs of the Town of Wheatfield, the independent
auditors shall audit the investments of the Town of Wheatfield for compliance
with the provisions of these investment guidelines.
(4)
Within 60 days of the end of each of the first three
quarters of the fiscal year, or monthly, whichever the Town of Wheatfield
Town Board and the Chief Fiscal Officer agree upon, the Chief Fiscal Officer
shall prepare and submit to the Town Board of the Town of Wheatfield a quarterly
or monthly investment report which indicates new investments, the inventory
of existing investments and such other matters as the Chief Fiscal Officer
deems appropriate.
(5)
At least annually and, if practicable, at the first meeting
in January of the governing board, the members shall review and amend, if
necessary, these investment guidelines.
(6)
The provisions of these investment guidelines and any
amendments hereto shall take effect prospectively and shall not invalidate
the prior selection of any custodial bank or prior investment.
