§ 59-1Investment policy and guidelines.
§ 59-2Collateral; contracts; investment guidelines; operations; audits;
The objectives of the investment policy of the Village of Sloan are to minimize risk, to ensure that investments mature when the cash is required to finance operations, and to ensure a competitive rate of return. In accordance with this policy, the Treasurer is hereby authorized to invest all funds, including proceeds of obligations, and reserve funds in:
Certificates of deposit issued by a bank or trust company authorized to do business in the United States.
Time deposit accounts in a bank or trust company authorized to do business in New York State and the United States.
Obligations of New York State.
In repurchase agreements involving the purchase and sale of direct obligations of the United States.
All other local government officials receiving money in their official capacity must deposit such funds in negotiable order of withdrawal accounts.
All investments made pursuant to this investment policy shall comply with one or more of the following conditions:
Certificates of deposit shall be fully secured by insurance of the federal deposit insurance corporations 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. A letter of communication shall be obtained from an officer of the bank stating such collateral is obtained, and the Treasurer's signature is required to release such collateral. The market value of collateral shall at all times equal or exceed 105% of the principal amount of certificate of deposit.
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.
Written contracts. 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 Village of Sloan. The written contract shall provide that only obligations of the United States may be purchased, and the Village of Sloan shall make payment upon delivery of the securities or appropriate book-entry of the purchased securities. No specific repurchase agreement shall be entered into unless a master repurchase agreement has been executed between the Village 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 60 days.
Financial strength of institutions.
All trading partners must be credit-worthy. Concentration of investments in financial institutions should be avoided. The general rule is not to place more than $2,000,000 in overnight investments with any one institution.
Investments in time deposits and certificates of deposit are to be made with banks, trust companies, and major brokerage houses.
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.
Operations, audit and reporting.
The Treasurer shall authorize the purchase and sale of all securities and execute contracts for repurchase agreements and certificates of deposit on behalf of the Village. Oral directions concerning the purchase or sale of securities shall be confirmed in writing. The Village shall pay for purchased securities upon the delivery or book-entry thereof.
The Village 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.
The independent auditors shall audit the investments of the Village for compliance with the provisions of these investment guidelines.
The Treasurer shall maintain adequate records of investments. These records shall be made available to the Village Board of Trustees.
This policy is effective immediately and is pursuant to an annual review at the April reorganization meeting of the Board of Trustees.