[HISTORY: Adopted by the Town Board of the
Town of Clinton 6-13-2000. Amendments noted where applicable.]
GENERAL REFERENCES
Procurement Policy — See Ch. 70.
In the following text, "Town" will be used for
the phrase, the " Town of Clinton"; "Board" will be used for the "Clinton
Town Board."
This investment policy applies to all moneys
and other financial resources available for investment on the Town's
own behalf or on behalf of any other entity or individual.
The primary objectives of these investment activities
are, in priority order:
The Board's responsibility for administration
of the investment program is delegated to the Chief Financial 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 database or records
incorporating descriptions 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 Board's
ability 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.
It is the policy of the Board to diversify its
deposits and investments by financial institution, by investment instrument,
and by maturity scheduling.
A.
It is the policy of the Board for all moneys collected
by any officer or employee of the Town to transfer these funds to
the financial officer within 30 days of deposit, or within the time
period specified by law, whichever is shorter.
B.
The financial 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, that transactions
are executed in accordance with management's authorization and recorded
properly, and are managed in compliance with applicable laws and regulations.
Annually, the financial officer shall prepare
a list of the banks and trust companies that are authorized for the
deposit of moneys and the maximum amounts that may be deposited therein.
This list shall be approved by the Board.
In accordance with the provisions of General
Municipal Law § 10, all deposits of the Town, 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 by:
A.
A pledge of eligible securities with an aggregate
market value, or provided by General Municipal Law § 10,
equal to the aggregate amount of deposits from the categories designated
in Appendix A to the policy.[1]
[1]
Editor's Note: Appendix A is included at the end of this chapter.
B.
An eligible irrevocable letter of credit issued by
a qualified bank other than the bank with the deposits in favor of
the Town 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.
An eligible surety bond payable to the Town 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 bank or trust
company subject to security and custodial agreements.
B.
The security agreement shall provide that eligible
securities are being pledged to secure the Town's 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 Town to exercise its rights against the pledged securities. In
the event that the securities are not registered or inscribed in the
name of the Town, such securities shall be delivered in a form suitable
for transfer or with an assignment in blank to the Town 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
Town, 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 rating of a security may cause ineligibility. Such agreement
shall include all provisions necessary to provide the Town a perfect
interest in the securities.
A.
As authorized by General Municipal Law § 11,
the Board authorizes the financial 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 deposits.
(2)
Certificates of deposit.
(3)
MBIA - Municipal Investors Service Corporation's Cooperative
Liquid Assets Securities System-New York (CLASS).
(4)
Obligations of the United States of America.
(5)
Obligations guaranteed by agencies of the United States
of America, where payment of principal and interest are guaranteed
by the United States of America.
(6)
Obligations of the State of New York.
(7)
Obligations issued pursuant to Local Finance Law § 24.00
or 25.00 (with the approval of the State Comptroller) by any municipality,
school district or district corporation other than the Town.
(8)
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.
(9)
Certificates of participation (COPs) issued pursuant
to General Municipal Law § 109-b.
(10)
Obligations of the Town, but only with moneys
in a reserve fund established pursuant to General Municipal Law § 6-c,
6-d, 6-c, 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 Town 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 Town within two years of the date of purchase.
The Town 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 Town conducts business must be creditworthy. Banks
shall provide their most recent Consolidated Report of Condition at
the request of the Town. 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 financial
officer is responsible for evaluating the financial position and maintaining
a listing of proposed depositories, trading partners and custodians.
Such a list shall be evaluated at least annually.
A.
The financial 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 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 Board.
(3)
By utilizing an on-going investment program with an
authorized tracking partner pursuant to a contract authorized by the
Board.
B.
All purchased obligations, unless registered or inscribed
in the name of the Town, 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 Town by the bank or trust company.
Any obligation held in 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 the securities
held by the bank or trust company, as agent of and custodian for the
Town, 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 Town a perfected
interest in the securities.
