[HISTORY: Adopted by the Town Board of the Town of Cobleskill 8-13-1990. Amendments noted where applicable.]
All investments made pursuant to this investment policy shall comply with the following conditions.
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 local government 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.
Securities purchased through a repurchase agreement shall be valued to market at least weekly.
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.
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 local government, 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 insure that the local government's ownership of the securities is properly reflected on the records of the custodial bank.
Payment shall be made by or on behalf of the local government 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.
Written contracts are required for repurchase agreements, certificates of deposit, and custodial undertakings. With respect to the purchase of obligations of U.S., New York State, or other governmental entities, etc., in which monies may be invested, the interests of the local government will be adequately protected by conditioning payment on the physical delivery of purchased securities to the local government 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 local government. It is therefore, the policy of the local government, to require written contracts as follows:
Written contracts shall be required for all repurchase agreements. Only credit worthy banks and primary reporting dealers shall be qualified to enter into a repurchase agreement with the local government. The written contract shall provide that only obligations of the United States may be purchased, and the local government shall make payment upon delivery of the securities or appropriate book-entry of the purchase securities. No specific repurchase agreement shall be entered into, unless a master repurchase agreement has been executed between the local government 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.
Written contracts shall be required for the purchase of all certificates of deposit.
A written contract shall be required with the custodial bank.
Custodial bank. The Key Bank of Eastern New York, NA, Cobleskill branch, the Wilber National Bank, the NBT Bank, NA, and the Bank of Richmondville chartered by the State of New York are designated to act as custodial banks of the local government's investments. However, securities may not be purchased through a repurchase agreement with the custodial bank.
All trading partners must be credit worthy. 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 credit worthiness of trading partners. Concentration of investments in financial institutions should be avoided. The general rule is not to place more than $100,000 in overnight investments with any one institution.
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.
When purchasing eligible securities the seller shall be required to deliver the securities to our custodial bank.
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 credit worthiness.
Repurchase agreements should not be entered into with undercapitalized trading firms.
A margin of 5% or higher of the market value of purchased securities in repurchase agreements must be maintained.
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 local government. Oral directions concerning the purchase or sale of securities shall be confirmed in writing. The local government shall pay for purchased securities upon the delivery or book-entry thereof.
The local government 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.
At the time independent auditors conduct the annual audit of the account and financial affairs of the local government, the independent auditors shall audit the investments of the local government for compliance with the provisions of these investment guidelines.
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 Audit and Finance Committee of the local government a quarterly investment report which indicates new investments, the inventory of existing investments, and such other matters as the chief fiscal officer deems appropriate.
Within 120 days of the end of the fiscal year, the chief fiscal officer shall prepare and submit to the Audit and Finance Committee an annual investment report; recommendations for change in these investment guidelines; the results of the annual independent audit; 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.
The Governing Board of the local government shall review and approve the annual investment report, if practicable, at its annual meeting.
At least annually, and if practicable, at the annual meeting of the Governing Board, the members shall review and amend, if necessary these investment guidelines.
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.