[HISTORY: Adopted by the Town Board of the
Town of Deerpark 4-19-2010.[1] Amendments noted where applicable.]
[1]
Editor's Note: This resolution superseded former Ch. 42, Investment
Policy, adopted 3-21-1994.
This investment policy applies to all moneys and other financial
resources available for investment on their own behalf or on behalf
of 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,
which is the Town Supervisor, 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 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 Board of Deerpark
to govern effectively. 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.
"Prudence" further means consulting with the Town Accountant before
making investment decisions.
B.
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 of Deerpark to diversify its deposits
and investments by financial institution, by investment instrument,
and by maturity scheduling.
A.
It is the policy of the Town of Deerpark for all moneys collected
by any officer or employee of the government to transfer those funds
to the Chief Fiscal Officer, within three days of deposit, or within
the time period specified in law, whichever is shorter.
B.
The Chief Fiscal Officer 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, 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 maximum amounts are:
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Depositary Name
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Maximum Amount
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Officer
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(To be discussed yearly at the reorganization meeting and updated
as needed)
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In accordance with the provisions of General Municipal Law § 10,
all deposits of the Town of Deerpark, 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:
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.
Safekeeping and collateralization.
A.
Eligible securities used for collateralizing deposits shall be held
by the depositary 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
Deerpark 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.
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 of
Deerpark authorizes the Chief Fiscal Officer 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 is guaranteed by the United
States of America.
(5)
Obligations of the State of New York.
(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.
(9)
Obligations of this local government, but only with any moneys in
a reserve fund established pursuant to GML §§ 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 of Deerpark 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 of Deerpark within two years of the date of purchase.
The Town of Deerpark 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 creditworthy. Banks shall provide
their most recent consolidated report of condition (call report) at
the request of the Town of Deerpark. 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 is 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 is 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 trading
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 officer authorized to make the investment. All such transactions
shall be confirmed in writing to the Town of Deerpark 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 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.
