[HISTORY: Adopted by the Board of Trustees of the Village of Dundee on 12-10-1996. Amendments noted where applicable.]
ATTACHMENTS
Attachment 1 - Appendix A
A. 
The Village Board of Trustees wishes to provide the finest public services possible to the residents of the village, at the least cost to its taxpayers. To achieve this goal, all moneys and other financial resources available for investment must be enhanced. Interest earnings offer a large potential alternative source of revenue.
B. 
The Board of Trustees wants excess village moneys not needed for immediate payment of bills to be invested to earn a safe return, as provided in the Village Law, General Municipal Law and Local Finance Law. The priorities for investing village moneys shall be as follows:
(1) 
Legal. To conform to all applicable federal, state and other legal requirements.
(2) 
Safety. Funds must not be lost to the Village.
(3) 
Liquidity. Appropriate amounts must be available for the payment of each payroll, debt service and audit.
(4) 
Yield. The highest market interest rate available should be earned.
The Board of Trustees authorizes the use of the following commercial banks or trust companies (not savings banks or associations), located and authorized to do business in New York State, for placing investments and specifically prohibits using private brokerage or investment firms [General Municipal Law § 11, Local Finance Law § 165.00(b)]:
A. 
Five Star Bank.
[Amended 2-28-2006 by Res. No. 2006-4]
B. 
CHEMUNG CANAL TRUST COMPANY.
[Amended 2-28-2006 by Res. No. 2006-4]
C. 
Lyons National Bank.
[Amended 2-28-2006 by Res. No. 2006-4]
D. 
Any other commercial banks or trust companies meeting the above requirements when bidding conditions warrant.
A. 
As authorized by General Municipal Law § 11, the Board of Trustees authorizes the Clerk-Treasurer 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) 
Savings accounts.
(2) 
NOW accounts.
(3) 
Money market deposit accounts.
(4) 
Super NOW accounts.
(5) 
Seven- to thirty-one-day accounts.
(6) 
Certificates of deposit.
(7) 
Repurchase agreements.
(8) 
United States treasury bonds, bills and notes.
B. 
All investment obligations shall be payable or redeemable at the option of the Village of Dundee within such times as the proceeds will be needed to meet expenditures for purposes for which the moneys shall be payable or redeemable at the option of the Village of Dundee within two years of the date of purchase.
A. 
The Board of Trustees hereby specifically delegates the authority to make the day-to-day investment decisions within the guidelines and limitations of this policy resolution to the Clerk-Treasurer of the village.
B. 
It is the policy of the Village of Dundee for all moneys collected by any officer or employee of the government to transfer those funds to the Clerk-Treasurer within three days of deposit or within the time period specified in law, whichever is shorter.
C. 
The Clerk-Treasurer is hereby authorized to utilize the advisory services of municipal consulting firms in planning the timing, amount, maturity, bidding, placement and reporting on any investments made hereunder. The Clerk-Treasurer shall establish written procedures for the operation of the investment program consistent with these guidelines and including an adequate internal control structure.
D. 
The Clerk-Treasurer is 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 and that transactions are executed in accordance with management's authorization and recorded properly and are managed in compliance with applicable laws and regulations.
E. 
It is the policy of the Village of Dundee to diversify its deposits and investments by financial institution, by investment instrument and by maturity scheduling.
F. 
All investments shall be documented in written reports to the Board of Trustees, outlining the details of each investment (including, if applicable, the interest rate bids received thereon).
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 Village of Dundee 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.
A. 
The primary objectives of this policy are to enhance the safety and availability of any village moneys invested. These objectives are partially met by Federal Deposit Insurance Corporation (FDIC) insurance for the first $100,000 of village checking account deposits, and an additional $100,000 for time or savings account deposits with any one specific commercial bank or trust company (12 CFR 330.8).
B. 
Any amounts exceeding the FDIC insurance limit, as presently set or subsequently revised, are to be collateralized by requiring a pledging of appropriate collateral by the bank or trust company winning the bid for the investment. Where appropriate and banks are able to participate, all investments should be bid specifying "With Third-Party Collateral" or (if the third-party arrangement is not available from the designated bank) "With Collateral."
In accordance with the provisions of General Municipal Law § 10, all deposits of the Village of Dundee, 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 as provided by General Municipal Law § 10, equal to the aggregate amount of deposits from the categories designated in Appendix A to the policy.
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 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 a third-party custodial bank or trust company subject to security and custodial agreements.[1]
[1]
Editor's Note: Appendix A, Schedule of Eligible Securities, is located at the end of this chapter.
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 Village of Dundee or its custodial bank.
C. 
The custodial agreement shall provide that securities held by the bank or trust company 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 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.
D. 
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. 
Repurchase agreements. Every repurchase agreement shall provide for deposit of the investment proceeds with the issuing bank or trust company only upon its delivery of collateral obligations of the United States to the custodial bank designated by the village or to the Trust Department or, in the case of a book-entry transaction, when the obligations of the United States are credited to the custodial bank's Federal Reserve account. The issuing bank shall not be entitled to substitute securities without prior approval of the village. Repurchase agreements shall be for periods of 30 days or less. The custodial bank or the Trust Department shall confirm all transactions in writing to ensure that the village's ownership of the securities is properly reflected on the records of the custodial bank or the Trust Department.
B. 
Deposit of the investment proceeds shall be made by or on behalf of the village 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 the Trust Department or, in the case of a book-entry transaction, when the purchased securities are credited to the custodial bank's Federal Reserve account. All transactions shall be confirmed in writing.
Where practical, written contracts are to be completed for repurchase agreements, certificates of deposit and custodial undertakings. With respect to the purchase of obligations of United States, New York State or other governmental entities in which moneys may be invested, the interests of the village will be adequately protected by conditioning payment on the physical delivery of purchased securities to the village, the custodial bank or the Trust Department or, in the case of book-entry transactions, on the crediting of purchased securities to the custodial bank's Federal Reserve account. All purchases will be confirmed in writing to the village.
The Board of Trustees specifically authorizes the Clerk-Treasurer to use electronic transfer of funds, among the approved banking institutions, to assist in obtaining federal funds at enhanced interest rates. Each such transfer shall be specifically identified in the original journal entry as a "wire transfer" and subsequently supported by the bank confirmation notice to provide an audit trail.
A. 
The Local Finance Law authorizes operating borrowings to cover cash-flow shortfalls, including revenue anticipation notes, tax anticipation notes or budget notes. These types of borrowings must be authorized in advance by the Board of Trustees through the adoption of a formal borrowing resolution.
B. 
Capital borrowings may include bond anticipation notes, statutory installment bonds and serial bonds. These borrowings are only authorized for items for which a period of probable usefulness has been established by the New York State Legislature through § 11.00 of the Local Finance Law. These borrowings, generally, may only be undertaken after a positive two-thirds-majority vote at a regular or properly advertised special meeting of the Board of Trustees. The Board of Trustees must formalize the authority for the indebtedness by adopting a legally complete formal bond resolution prior to any borrowing. The Board of Trustees hereby delegates its authority to set the terms and conditions of any borrowing to the Clerk-Treasurer, as chief fiscal officer of the village. Most borrowings require a five-percent project down payment (payment from current budgeted funds), and the resolution is subject to a thirty-day permissive referendum period followed by an additional twenty-day period of estoppel before contracts can be signed or money borrowed.
A. 
The Clerk-Treasurer, assisted by the staff and any village financial consultant, shall make recommendations to the Board of Trustees on the timing, bidding, terms and conditions of, placement and reporting on any borrowings. Operating borrowing recommendations shall be supported by a monthly cash flow estimate covering the time thereof and establishing the amount of such borrowing. The Clerk-Treasurer may be authorized in individual cases, where appropriate, to solicit and use the services of a financial consultant in planning and completing any borrowing, to optimize the number of potential bids and obtain lower market interest rates and to solicit and use the services of recognized bond counsel to draft the legal notices, resolutions and borrowing instruments and render an approving legal opinion on the legality and tax status of the debt instrument.
B. 
All borrowings shall be documented in written reports outlining the details of each borrowing and the interest rate bids received thereon. The written report shall first be presented to the Mayor who shall report thereon at the next regularly scheduled Board meeting.
C. 
The Village Board of Trustees shall be responsible for conducting an annual review of the Financial Management and Investment Policy and for an evaluation of the internal control structure established to ensure compliance with same.