Policy. It is the policy of the Village of Coal City to invest public
funds in a manner which will provide the highest investment return
with the maximum security while meeting the daily cash flow demands
of the entity and conforming to all state and local statutes governing
the investment of public funds.
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 probable safety of their capital,
as well as the probable income to be derived.
The standard of prudence to be used by investment officials shall
be the "prudent person" standard and shall be applied in the context
of managing an overall portfolio.
The portfolio should be reviewed periodically as to its effectiveness
in meeting the Village's needs for safety, liquidity, rate of return,
diversification and its general performance.
Delegation of authority. Management and administrative responsibility
for the investment program is hereby delegated to the Village Treasurer
who, under the delegation of the Board of Trustees, in conjunction
with the Village Administrator, shall establish written procedures
for the operation of the investment program.
Ethics and conflicts of interest. Officers and employees involved
in the investment process shall refrain from personal business activity
that could conflict with the proper execution and management of the
investment program, or that could impair their ability to make impartial
decisions.
Collateralization. Funds on deposit (checking accounts, certificates
of deposit, etc.) in excess of FDIC limits must be secured by some
form of collateral, witnessed by a written agreement and held at an
independent third-party institution in the name of the Village.
Safekeeping and custody. All security transactions, including collateral
for repurchase agreements, entered into by the Village shall be conducted
on a delivery-versus-payment (DVP) basis. Securities will be held
by an independent third-party custodian designated by the Village
Treasurer and evidenced by safekeeping receipts and a written custodial
agreement.
Diversification. The Village shall diversification its investments
to the best of its ability based on the type of funds invested and
the cash flow needs of those funds. Diversification can be by type
of investment, number of institutions invested in, and length of maturity.
To the extent possible, the Village shall attempt to match its investments
with anticipated cash flow requirements. Unless matched to a specific
cash flow, the Village will not directly invest in securities maturing
more than one year from the date of purchase.
Reserve funds may be invested in securities exceeding one year if
the maturity of such investments is made to coincide as nearly as
practicable with the expected use of the funds.
Internal control. The Village Treasurer, with the assistance of the
Village Administrator and his or her staff, is responsible for establishing
and maintaining an internal control structure designed to insure that
the assets of the entity are protected from loss, theft or misuse.
The internal control structure shall be designed to provide reasonable
assurance that these objectives are met. The internal controls shall
address, among other things, the following points:
Performance standards. This investment portfolio will be managed
in accordance with the parameters specified within this policy. The
portfolio should obtain a comparable rate of return during a market/economic
environment of stable interest rates. Portfolio performance should
be compared to benchmarks with similar maturity, liquidity and credit
quality as the portfolio (ninety-day T-bill, Illinois Funds, etc.).
Reporting. The Village Treasurer, with the assistance of the Village
Administrator and his or her staff, shall prepare an investment report
at least quarterly. The report should be provided to the Board of
Trustees and made available to the public on request. The report should
be in a format suitable for review by the general public. The report
shall include information regarding securities in the portfolio by
class or type, book value, income earned, and market value as of the
report date. An annual report should also be provided to the Board
of Trustees.
Investment Policy adoption and review. The investment policy shall
be adopted by the Board of Trustees. The policy shall be reviewed
on an annual basis by the Village Treasurer, and any modifications
made thereto must be approved by the Board of Trustees.