[Ord. No. 605 §1, 8-7-2000]
A. 
This policy applies to the investment of all operating funds of the City of Concordia, Missouri. Longer-term funds, including investments of employee's retirement funds and proceeds from certain bond issues, are covered by separate ordinances.
1. 
Checking account for general operation. Except for cash in certain restricted and special funds, the City of Concordia will consolidate cash balances from all funds in one (1) checking account for operating purposes. The depository for the general checking account will be bid every three (3) years with a July first (1st) effective date. As required by State statutes, only financial institutions within the City of Concordia will be solicited. Interest paid on the general checking account will be allocated to the various funds based on their respective participation in generating income.
2. 
Investments. Funds maintained for reserves or special long-term purposes will be invested. Management of these investments will be as described in this policy. Every effort will be made to invest locally in certificates of deposits if the interest rate is competitive. Certain benefits accrue to the City's economy if money is invested locally. Local financial institutions are encouraged to offer an aggressive loan policy, not only to stimulate economic growth, but also to create loan demand and thereby the ability to offer higher rates of interest on certificates of deposit. For the purposes of this policy, a one percent (1%) interest differential will be assigned to the benefits of investing locally.
3. 
External management of funds. The City of Concordia may enlist professional help in investment decisions. Investment through external programs, facilities and professionals operating in a manner consistent with this policy will constitute compliance.
[Ord. No. 605 §2, 8-7-2000]
A. 
The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield.
1. 
Safety. Safety of principal is the foremost objective of the City of Concordia's investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk.
a. 
Credit risk. The City of Concordia will minimize credit risk, the risk of loss due to the failure of the security issuer or backer, by:
(1) 
Pre-qualifying the financial institutions, brokers/dealers, intermediaries, and advisors with which the City of Concordia will do business.
(2) 
Diversifying the portfolio so that potential losses on individual securities will be minimized.
b. 
Interest rate risk. The City of Concordia will minimize the risk that the market value of securities in the portfolio will fall due to changes in general interest rates, by:
(1) 
Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity.
(2) 
Investing operating funds primarily in shorter-term securities.
2. 
Liquidity. The investment portfolio shall remain sufficiently liquid to meet future requirements that may be reasonably anticipated. This is accomplished by structuring the investments so that securities mature concurrent with cash needs to meet anticipated demands. The general checking account receives competitive interest income by virtue of the three year bid process and is used to meet the day-to-day operating expenses as budgeted.
3. 
Yield. The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core investments will be limited to low risk securities such as competitively solicited bank certificates of deposit. Securities shall not be sold prior to maturity with the following exceptions:
a. 
A security with declining credit may be sold early to minimize loss of principal.
b. 
A security swap would improve the quality, yield, or target duration in the portfolio.
c. 
Liquidity needs of the portfolio require that the security be sold.
[Ord. No. 605 §3, 8-7-2000]
A. 
Prudence. The standard of care to be used by investment officials shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal liability for an individual security's credit risk or market price changes. Deviations from expectations must be reported in a timely fashion to the Board of Aldermen and the liquidity and the sale of securities are to be carried out in accordance with the terms of this policy.
Investments shall be made with judgement 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.
B. 
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. Employees and investment officials shall disclose any material interests in financial institutions with which they conduct business.
C. 
Delegation Of Authority. Responsibility for the operation of the investment program is hereby delegated to the City Administrator, who shall act in accordance with the established written procedures and internal controls for the operation of the investment program consistent with this investment policy. The City Treasurer will manage the day-to-day activities of the investment program under the supervision of the City Administrator.
[Ord. No. 605 §4, 8-7-2000]
A. 
Authorized Financial Dealers And Institutions. The City Administrator will approve all financial institutions and broker/dealers considered for investment services by the City Treasurer. Prior to approval, they maybe required to submit all or some of the following information:
1. 
Audited financial statements;
2. 
Proof of National Association of Securities Dealers (NASD) certification;
3. 
Proof of State registration; and/or
4. 
Certification of having read and understood and agreeing to comply with the City of Concordia's investment policy.
A periodic review of the financial condition and registration of qualified financial institutions and broker/dealers will be conducted by the City Treasurer. In the event financial institutions within the City of Concordia are used for investments, the above qualification requirements may be waived.
B. 
Internal Controls.
1. 
The City Administrator is responsible for establishing and maintaining an internal control structure that will be reviewed annually with the City of Concordia's independent auditor.
2. 
The internal control structure shall be designed to ensure that the assets of the City of Concordia are protected from loss, theft or misuse and to provide reasonable assurances that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits require estimates and judgements by management.
3. 
Internal control will address the following points:
a. 
Control of collusion;
b. 
Separation of transaction authority from accounting and record keeping;
c. 
Custodial safekeeping;
d. 
Clear delegation of authority;
e. 
Written confirmation of telephone transactions;
f. 
Documentation of transaction strategies; and
g. 
Monitoring of ethics and conflict of interest provisions of this policy.
[Ord. No. 605 §5, 8-7-2000]
A. 
Investment Types. In accordance with and subject to restrictions imposed by current statutes, the following list represents the entire range of investments that the City of Concordia will consider and which shall be authorized for the investment of funds.
1. 
Certificates of deposits. Instruments issued by financial institutions which State that specified sums have been deposited for specified periods of time and at specified rates of interest. The certificates of deposit are required to be backed by acceptable collateral securities as dictated by State statute.
2. 
United States Treasury Securities. The City of Concordia may invest in obligations of the United States Government for which the full faith and credit of the United States are pledged for the payment of principal and interest.
3. 
United States Army Securities. The City of Concordia may invest in obligations issued or guaranteed by any agency of the United States government, such as:
a. 
U.S. Government Agency Coupon and Zero Coupon Securities. Bullet coupon bonds with no embedded options.
b. 
U.S. Government Agency Discount Notes. Purchased at a discount with maximum maturity of one (1) year.
c. 
U.S. Government Agency Securities. The coupon rate is fixed for an initial term. At a coupon date, the coupon rate rises to a new, higher fixed term. This provision is restricted to securities with final maturity of three (3) years or less.
d. 
U.S. Government Floating Rate Securities. The coupon rate floats off one (1) index. Restricted to coupons with no interim caps that reset at least quarterly.
e. 
U.S. Government Mortgagee Backed Securities. Restricted to securities with final maturity of three (3) years or less.
B. 
Prohibited Transactions. To provide for the safety and liquidity of the City of Concordia's funds, the investment portfolio will be limited only to the investment instruments listed above. Certificates of deposits with financial institutions outside the City limits of the City of Concordia will be taken only if the interest rate differential exceeds one percent (1%). Local financial institutions are encouraged to offer an aggressive loan policy, not only to stimulate economic growth, but also to create loan demand and thereby higher rates of interest on certificates of deposits.
C. 
Collateralization. All deposits placed in financial institutions must be at least one hundred percent (100%) collateralized with approved securities. All securities, which serve as collateral against the deposits of a depository institution must be safe-kept at a non-affiliated custodial facility. Depository institutions pledging collateral against deposits must, in conjunction with the custodial agent, furnish the necessary custodial receipts.
[Ord. No. 605 §6, 8-7-2000]
A. 
Diversification. The investments shall be diversified to minimize the risk of loss resulting from over concentration of assets in specific maturity, specific issuer, or specific class of securities. Diversification strategies will be established and periodically reviewed.
B. 
Maturities. To the extent possible, the City of Concordia will attempt to match its investments with anticipated cash flow requirements. Because of inherent difficulties in accurately forecasting cash flow requirements, a large portion of the investment portfolio will be continuously invested in readily available funds such as one (1) year certificates of deposits with staggered maturities.
[Ord. No. 605 §7, 8-7-2000]
A. 
A report will be issued quarterly by the City Treasurer which gives the following information regarding the investments of the City:
1. 
Investment type, issuer, maturity, par value, and dollar amount invested in all securities and monies held by the City.
2. 
Funds or investments managed by contracted parties.
3. 
Market value as of the date of the report and the source of valuation.
4. 
Citation of compliance with the City's investment policy/regulation or an explanation for non-compliance.
5. 
Percentage of the City's total investments which comprise each category of the investment set out herein.
B. 
The quarterly investment report will be provided to the Mayor and Board of Aldermen in the packet provided for the regular open meeting. Additional explanation will be provided if requested by the Board of Aldermen.