[Ord. No. 9.123 §§1 —
2, 3-6-2000]
A.
The
purpose of this investment policy shall be to establish the investment
objectives and provide a set of investment parameters to govern the
type, quality, diversification and term of investment in order to
realize the investment objectives of the City of California, Missouri.
B.
The
City will contract with a financial institution (or institutions)
which shall serve as a primary depository and assist in developing
an investment strategy consistent with this Statement of Investment
Policy.
[Ord. No. 9.123 §§1 —
2, 3-6-2000]
The investment objectives of the City of California are to maximize
return on investment while minimizing the risk on funds designated
for term investment. The primary objectives of the investment activity
shall be legality, safety, liquidity, yield and the provision of a
capital base sufficient to meet the needs of the City. Funds shall
be invested only within the legal guidelines set forth in the Constitution
and the Statutes of the State of Missouri and in accordance with the
Ordinances of the City of California. Any investment alternatives
outside these guidelines are not permissible. Safety of principal
is the foremost objective of the investment program. Investments shall
be undertaken in a manner that seeks to ensure the preservation of
capital in the overall portfolio. The investment portfolio shall remain
sufficiently liquid to meet all of the operation requirements that
may be reasonably anticipated based on past expenditures and budgeted
expenditures. This is accomplished by structuring the portfolio so
that the securities mature current with cash needs to meet anticipated
demands. Furthermore, since all possible cash demands cannot be anticipated,
the portfolio should consist largely of securities with active secondary
or resale markets. The investment portfolio shall be designed with
the objective of attaining market rate of return throughout budgetary
and economic cycles, taking into account the investment risk constraints
and liquidity. Return on investment is of least importance compared
to the safety and liquidity objectives described and outlined above.
At all times, the City of California shall maintain prudent investment
strategies and adjust the portfolio within the guidelines of this
policy to take advantage of market conditions, to increase return
and/or reduce risk. All investments shall be in accordance with State
law. The City of California shall maintain liquid deposit balances
in depository accounts in a sum sufficient to meet the City's short
term cash flow needs as same may vary from time to time.
[Ord. No. 9.123 §§1 —
2, 3-6-2000]
A.
Funds
designated for term investment by the City of California shall be
placed in securities deemed acceptable and in accordance with portfolio
target allocations. All funds must be deposited in institutions which
do business in the City of California, Missouri. The following are
acceptable investments:
1.
Direct obligations of the U.S. Government and any bonds or other
obligations guaranteed as to the payment of principal and interest
by the U.S. Government.
2.
Obligations of agencies sponsored by the U.S. Government including,
but not limited to, the following list:
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Federal Intermediate Credit Banks
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Federal Home Loan Banks
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Federal National Mortgage Association Residential Financing
Securities
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Banks for Cooperatives
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Federal Farm Credit Banks
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Export-Import U.S. Guaranteed Bonds
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Government National Mortgage Corporation
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Federal Home Loan Mortgage Corporation
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Student Loan Marketing Association
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Small Business Administration
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Financing Corporation
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Resolution Funding Corporation
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Tennessee Valley Authority
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SBA Guaranteed Loan Pool Certificates
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World Banks
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3.
Certificate of Deposit (PAC — packaged affiliate certificates —
CD Program).
4.
Overnight and term Repurchase Agreement.
[Ord. No. 9.123 §§1 —
2, 3-6-2000]
A.
To
provide for the safety and liquidity of the funds of the City of California,
the investment portfolio will be subject to the following restrictions:
1.
Borrowing for investment purposes (sometimes known as leverage) is
prohibited.
2.
Instruments known as Structured Notes (e.g. inverse floaters, bridged
floaters and equity-linked securities) are not permitted. Investment
in any instrument which is commonly considered a "derivative" instrument
(e.g. options, futures, swaps, caps, floors and collars) is prohibited.
3.
Contracting to sell security not yet acquired in order to purchase
other securities for purposes of speculating on developments or trends
in the market is prohibited.
[Ord. No. 9.123 §§1 —
2, 3-6-2000]
A.
All deposits which are placed in financial institutions must be at least one hundred percent (100%) collateralized (one hundred percent (100%) of the value of the funds of deposits). Specifically, the depository or financial institution must pledge securities in an amount equal to one hundred percent (100%) of the value of the funds of deposit as collateral. Securities which are acceptable as collateral to secure the deposits of the City of California are noted in Section 150.090 hereof. The City of California, Missouri, will give preference in all bidding (when reviewing bids for banking services) to any banking or financial institution which provides a notification of the pledge of securities automatically upon receipt of public funds.
B.
All
securities which serve as collateral against the deposits of a depository
institution must be retained for safekeeping in a non-custodial facility.
Depository institutions pledging collateral against deposits must,
in conjunction with the custodial agent, furnish the necessary custodial
receipts. It is the intent of the City of California to have a depository
contract and pledge agreement with each safekeeping bank.
[Ord. No. 9.123 §§1 —
2, 3-6-2000]
All investments shall be made, retained or sold only upon the
authority of the Board of Aldermen of the City of California. The
banking institution chosen to serve as a primary depository into which
City funds have been deposited shall secure authority by written communication.
[Ord. No. 9.123 §§1 —
2, 3-6-2000]
A.
The
City of California recognizes that all investments go through cycles.
Therefore, a plan review will be made as needed. This will enable
the City of California to adjust to changes occurring in the financial
markets plus new information that may call for requirement alterations.
B.
To
assist the City of California in this review, the depository institution
shall provide the following information on at least an annual basis:
[Ord. No. 9.123 §§1 —
2, 3-6-2000]
A.
The
depository institution shall hold and safeguard cash and securities
and shall collect the income and principal thereof when due. The depository
institution shall retain principal collections subject to the direction
of the City of California.
B.
All
securities will be registered in the name of the City of California
unless otherwise specifically instructed in writing by the finance
committee.
C.
The
depository institution shall receive processing and safekeeping fees
as agreed to by the City of California, Missouri, in accordance with
its schedule of fees presented by the depository institution and accepted
formally by the Board of Aldermen of the City of California, Missouri.
[Ord. No. 9.123 §§1 —
2, 3-6-2000]
A.
The
following securities are hereby designated as acceptable collateral
for City funds on deposit:
1.
Marketable Treasury securities of the United States.
2.
The following debt securities of the State of Missouri and its State
authorities:
a.
General obligations debt securities issued by the State of Missouri.
b.
Revenue bonds issued by the Missouri Board of Public Buildings or
Department of Natural Resources.
c.
Revenue bonds of the Missouri Housing Development Commission, Missouri
Health and Education Facilities Authority, Missouri Higher Education
Loan Authority, Missouri Environmental Improvement and Energy Resources
Authority, Missouri Agricultural and Small Business Development Authority,
Missouri Industrial Development Board, or State-owned educational
institutions, so long as any of the above are rated "A" or better
by Moody's or Standard & Poor's (M1 on notes), or are secured
by a Federal agency guarantee (directly or through guaranteed loans).
3.
General obligation bonds of any City in this State having a population
of not less than two thousand (2,000).
4.
General obligation bonds of any County of this State.
5.
General obligation bonds, approved and registered, of any school
district situated in this State.
6.
General obligation bonds, approved and registered, of any special
road district in this State.
7.
General obligation State bonds of any of the fifty (50) States.
8.
Debt securities of the Federal Farm Credit System.
9.
Debt securities of the Federal Home Loan Banks (FHLB).
10.
Other debt securities guaranteed by the United States or its agencies
or instrumentalities, as follows:
a.
Debt securities of the Federal National Mortgage Association (FNMA),
including mortgage-backed securities.
b.
Debt securities of the Student Loan Marketing Association (SLMA).
c.
Debt securities of the Government National Mortgage Association (GNMA),
including mortgage-backed securities.
d.
Debt securities of the Federal Home Loan Mortgage Corporation (FHLMC),
including mortgage-backed securities.
e.
Guaranteed Loan Pool Certificates of the Small Business Administration
(SBA).
f.
Federal Home Administration insured notes (CBOs).
g.
Public housing notes and bonds ("project notes and bonds") issued
by public housing agencies, guaranteed as to the payment of principal
and interest by the government of the United States or any agency
or instrumentality thereof.
h.
Debt securities of the Resolution Funding Corporation.
11.
Bonds of any political subdivision established under the provisions
of Section 30, Article VI, of the Constitution of Missouri.
12.
Tax anticipation notes issued by any County of Class One (1) in Missouri.
13.
Surety bonds issued by an insurance company licensed under the laws
of the State of Missouri whose claims-paying ability is rated in the
highest category of Deff & Phelps, A. M. Best, Standard &
Poor's or Moody's. The face amount of such surety bond shall be at
least equal to the portion of the deposit to be secured by the surety
bond.
14.
Planned Amortization Class (PAC) Collateralized Mortgage Obligations
(CMO) issued by FNMA, FHLMC or GNMA having a weighted average life
that does not exceed three (3) years and passes the FFIEC High Risk
Stress Test. These CMOs will be valued at seventy-five percent (75%)
of market value.
B.
Please
make note of the following:
1.
The above securities are acceptable as collateral for deposits, but
generally are NOT eligible as investments.
3.
Treasury CUBES are not acceptable.
4.
FHLB Zeros are not acceptable.
5.
All mortgage-backed securities are valued at ninety percent (90%)
of the market value.
6.
Strips and zones are not acceptable.
7.
All non-book-entry registered securities must be in a nominee name.
8.
FHLMC Mortgage Cash Flow Obligations are not acceptable.
9.
SBA Pool Certificates are valued at seventy-five percent (75%) of
market value.
C.
The
market value of collateral must be one hundred percent (100%) or greater
of the amount of State time deposits (including interest to maturity)
plus demand deposits with the depository, less the amount if any,
which is insured by the Federal Deposit Insurance Corporation, or
the National Credit Unions Share Insurance Fund. All securities pledged
as collateral by the depository will be held by the City in a segregated
account. All collateral pledged must be delivered in bearer form,
book-entry form, or in the case of fully registered certificates,
placed into the nominee of the custodian.
