[HISTORY: Adopted by the Town Board of the Town of Rhinebeck 5-26-2009.[1] Amendments noted where applicable.]
ATTACHMENTS
025a Appendix A
[1]
Editor's Note: The resolution adopted 5-26-2009 also repealed former Ch. 25, Investment Policy, adopted 3-9-1987.
This investment policy applies to all monies and other financial resources available for investment by the Town of Rhinebeck. Public monies must be deposited and invested in accordance with the following statutes:
A. 
General Municipal Law (GML).
(1) 
Section 10 requires the designation of one or more banks or trust companies for deposit of public funds and for the securing of deposits.
(2) 
Section 11 allows for certain temporary investment of monies not required for immediate expenditure.
(3) 
Section 39 requires the adoption, by resolution, and annual Town Board review of an investment policy.
B. 
Banking Law.
(1) 
Section 107-a requires a bank or trust company to provide a pledge of assets or other security for public deposits under certain conditions.
The primary objectives of the Town of Rhinebeck's investment policy, in priority order, are:
A. 
Legal: to conform with all applicable federal, state and other legal requirements.
B. 
Safety: safety of principal is the foremost objective of the investment program. The objective will be to mitigate credit risk and interest risk.
C. 
Liquidity: the investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities/investments mature concurrent with cash needs to meet anticipated demands. A portion or all of the portfolio may be placed in money market funds that offer same-day liquidity for short-term needs.
D. 
Yield: the investment portfolio shall be designed with the objective of attaining a market rate of return throughout the budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of the investments is limited to relatively low-risk investments in anticipation of earning a fair return relative to the risk being assumed.
The responsibility for administration of the investment policy is delegated to the Supervisor or Town Board approved designee, who shall establish and maintain an internal control structure to provide reasonable, but not absolute, assurance that deposits and investments are safeguarded against loss from unauthorized use or disposition. Procedures shall include an adequate internal control structure to provide a satisfactory level of accountability based on a database or records incorporating 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 of Rhinebeck to govern effectively.
B. 
Investments and deposits 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 as well as the probable income to be derived.
C. 
All persons involved in the investment decision-making process shall refrain from personal business activity that could conflict with proper execution of the investment program or the deposit of the Town's funds which could impair their ability to make impartial investment decisions.
It is the policy of the Town of Rhinebeck to diversify its deposits and investments by financial institution, by investment instrument and by maturing scheduling.
A. 
It is the policy of the Town of Rhinebeck for all monies collected by any officer or employee of the Town to transfer those funds to the designated bank within two business days of receipt, or within the time period specified by law, whichever is shorter.
B. 
The Supervisor is responsible for establishing and maintaining an internal control structure to provide for reasonable, but not absolute, assurance that deposits and investments are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization and recorded properly and are managed in compliance with applicable laws and regulations.
C. 
The Supervisor or designee of the Town of Rhinebeck shall maintain or cause to be maintained a proper record of all books, notes, securities or other record of indebtedness held by the Town of Rhinebeck for the purpose of investment. Such record shall identify the security, the fund for which held and the place kept. Entries shall be made showing the date of sale or other disposition and the amount realized therefrom.
D. 
The Supervisor or designee shall report to the Board on a quarterly basis all investments of the Town of Rhinebeck, including type of investment, maturity date, yield and gain/loss of investments. In addition, the Supervisor or designee shall monitor/investigate current yields from like investments from approved providers to insure the Town of Rhinebeck is receiving competitive yields on idle funds.
In accordance with the provisions of General Municipal Law § 10, all deposits of the Town of Rhinebeck, including certificates of deposit in excess of the amount under the provision of the Federal Deposit Insurance Act (FDIC), shall be secured:
A. 
By a pledge of eligible securities with aggregate market value, as provided by General Municipal Law § 10, equal to the aggregate amount of deposits from the categories designated in Appendix A[1] to this chapter.
[1]
Editor's Note: Appendix A is located 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 at least 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 the State of New York, 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 designated 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 local government deposits together with agreed-upon interest, if any, and any costs or expenses arising out of 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 that 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 Rhinebeck or its custodial bank.
C. 
The custodial agreement shall provide that securities held by the bank or trust, or 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 of 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. 
The Town of Rhinebeck shall maintain a list of financial institutions and trust companies authorized for the deposit of monies. All financial institutions with which the Town conducts business must be credit worthy. Banks must, upon request, provide their most recent Consolidated Report of Condition (Call Report). Security dealers not affiliated with a bank shall be required to be classified as reporting dealers affiliated with the Federal Reserve Bank, as primary dealers. The Supervisor or designee is responsible for evaluating the financial position and maintaining a listing of current and proposed depositories, trading partners and custodians. Such a listing shall be evaluated annually.
B. 
The following banks and trust companies authorized for the deposit of monies by the Town of Rhinebeck are:
(1) 
M&T Bank.
(2) 
Citizens Bank.
As authorized by General Municipal Law, § 11, the Town of Rhinebeck authorizes the Supervisor or designee to invest monies not required for immediate expenditure for terms not to exceed its projected cash flow needs in the following types of investments:
A. 
Time deposit accounts.
B. 
Certificates of deposit.
C. 
Obligations of the United States of America.
D. 
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.
E. 
Obligations of the State of New York.
A. 
The Supervisor is authorized to contract for the purchase of investments as follows:
(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 the 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 trading partner pursuant to a contract authorized by the Town Board. All purchased obligations, unless registered or inscribed in the name of the Town of Rhinebeck, shall be purchased through, delivered to, and held in the custody of a bank or trust company.
B. 
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 Supervisor, upon proper authorization from the Town Board, where required by law. All such transactions shall be confirmed, in writing, to the Town of Rhinebeck by the bank or trust company.
C. 
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. The custodial agreement shall provide that securities held by the bank or trust company as agent of and custodian for the Town of Rhinebeck 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 of Rhinebeck 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 guaranteed by agencies of the United States of America.
D. 
No substitution of securities will be allowed.
E. 
The custodian shall be a party other than the trading partner. Appendix A