[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.
A.
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.
B.
Securities purchased through a repurchase agreement
shall be valued to market at least weekly.
C.
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.
A.
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.
B.
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:
A.
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.
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.
[Amended 10-3-2011 by L.L. No. 2-2011; 7-12-2021]
Custodial bank. The Key Bank of Eastern New
York, NA, Cobleskill branch, the Community Bank, the NBT Bank, NA,
New York Cooperative Liquid Assets Securities System (NYClass), 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.
A.
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.
B.
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.
C.
When purchasing eligible securities the seller shall
be required to deliver the securities to our custodial bank.
D.
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.
E.
Repurchase agreements should not be entered into with
undercapitalized trading firms.
F.
A margin of 5% or higher of the market value of purchased
securities in repurchase agreements must be maintained.
A.
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.
B.
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.
C.
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.
D.
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.
E.
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.
F.
The Governing Board of the local government shall
review and approve the annual investment report, if practicable, at
its annual meeting.
G.
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.
H.
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.
