[HISTORY: Adopted by the Town Board of the
Town of Naples 1-11-1999 by resolution. Amendments noted where applicable.]
This investment policy applies to all moneys
and other financial resources available for investment on its own
behalf or any other entity or individual.
The primary objectives of the local government's
investment activities are, in priority order:
The governing board's responsibility for administration
of the investment program is delegated to the Chief Fiscal Officer
and other officers having custody of money 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 incorporation description
and amounts of investments, transaction dates, and other relevant
information, and 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 town 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.
It is the policy of the town to diversify its
deposits and investments by financial institution, by investment instrument,
and by maturity scheduling.
A.
It is the policy of the town for all moneys collected
by an officer or employee of the government to transfer those funds
to the Chief Fiscal Officer within 30 days of deposit, or within the
time period specified in law, whichever is shorter.
B.
The Chief Fiscal Officer and other officers having
custody of money are 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.
The banks and trust companies authorized for
the deposit of moneys up to the following maximum amounts are:
Depository Name
|
Maximum Amount
|
Officer
|
---|---|---|
Fleet Bank
|
$900,000
|
Supervisor
|
Fleet Bank
|
$50,000
|
Town Clerk
|
Fleet Bank
|
$1,400,000
|
Tax Collector
|
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:
A.
By 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.
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 depositary 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 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 Town of Naples or its custodial bank.
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 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 Town Board authorizes the Chief Fiscal Officer and other officer
having custody of money 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 are 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 town;
(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 (COPs) 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-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 local government conducts business must be credit worthy.
Banks shall provide their most recent Consolidated Report of Condition
(Call Report) 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 Chief Fiscal Officer and other officers having custody of money
are responsible for evaluating the financial position and maintaining
a listing of proposed depositaries, trading partners and custodians.
Such listing shall be evaluated at least annually.
A.
The Chief Fiscal Officer and other officers having
custody of money are 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 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 office 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 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 of agencies of the United
States of America where principal and interest are guaranteed by the
Unites States of America.
D.
No substitution of securities will be allowed.
E.
The custodian shall be a party other than the trading
partner.