[HISTORY: Adopted by the Board of Trustees of the Village
of Dundee on 12-10-1996. Amendments noted where applicable.]
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:
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.
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.
