[HISTORY: Adopted by the Town Board of the Town of Verona 5-7-1990 (Ch. 32 of the 1998 Code). Amendments
noted where applicable.]
GENERAL REFERENCES
Procurement policy — See Ch. 62.
The objectives of this chapter are to minimize risk; to ensure
that investments mature when the cash is required to finance operations;
and to ensure a competitive rate of return. In accordance with this
chapter, the Chief Fiscal Officer is hereby authorized to invest all
funds, including proceeds of obligations and reserve funds in:
A.
Certificates of deposit issued by a bank or trust company authorized
to do business in New York State.
B.
Time deposit accounts in a bank or trust company authorized to do
business in New York State.
C.
Obligations of New York State.
D.
Obligations of the United States Government.
E.
Repurchase agreements involving the purchase and sale of direct obligations
of the United States.
All investments made pursuant to this chapter shall comply with
the following conditions.
A.
Certificates of deposit shall be fully secured by insurance of the
Federal Deposit Insurance Corporation or by obligations of New York
State or obligations of the United States or obligations of federal
agencies the principal and interest of which are guaranteed by the
United States, or obligations of New York State local governments.
Collateral shall be delivered to the Town of Verona or a custodial
bank with which the Town of Verona has entered into a custodial agreement.
The market value of collateral shall at all times equal or exceed
the principal amount of the certificate of deposit. Collateral shall
be monitored no less frequently than weekly, and market value shall
mean the bid or closing price as quoted in the Wall Street Journal
or as quoted by another recognized pricing service.
B.
Securities purchased through a repurchase agreement shall be valued
to market at least weekly.
C.
Collateral shall not be required with respect to the direct purchase
of obligations of New York State, obligations of the United States,
and obligations of federal agencies the principal and interest of
which are guaranteed by the United States Government.
A.
Repurchase agreements. Every repurchase agreement shall provide for
payment to the seller only upon the seller's delivery of obligations
of the United States to the custodial bank designated by the Town
of Verona or in the case of a book-entry transaction, when the obligations
of the United States are credited to the custodian's federal
reserve bank account. The seller shall not be entitled to substitute
securities. Repurchase agreements shall be for periods of 30 days
or less. The custodial bank shall confirm all transactions in writing
to ensure that the local government's ownership of the securities
is properly reflected on the records of the custodial bank.
B.
Payment shall be made by or on behalf of the Town of Verona 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 in the case of a book-entry transaction,
when the purchased securities are credited to the custodial bank's
federal reserve system account. All transactions shall be confirmed,
in writing.
A.
Written contracts are required 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, etc., in which moneys may be invested, the interests of
the Town of Verona will be adequately protected by conditioning payment
on the physical delivery of purchased securities to the Town of Verona
or custodian, or in the case of book-entry transactions, on the crediting
of purchased securities to the custodian's federal reserve system
account. All purchases will be confirmed in writing to the Town of
Verona.
B.
It is, therefore, the policy of the Town of Verona to require written
contracts as follows:
(1)
Written contracts shall be required for all repurchase agreements.
Only creditworthy banks and primary reporting dealers shall be qualified
to enter into a repurchase agreement with the Town of Verona. The
written contract shall provide that only obligations of the United
States may be purchased, and the Town of Verona shall make payment
upon delivery of the securities or appropriate book-entry of the purchased
securities. No specific repurchase agreement shall be entered into
unless a master repurchase agreement has been executed between the
Town of Verona and the trading partners. While the term of the master
repurchase agreement may be for a reasonable length of time, a specific
repurchase agreement shall not exceed 30 days.
(2)
Written contracts shall be required for the purchase of all certificates
of deposit.
(3)
A written contract shall be required with the custodial bank.
National Bank and Trust (NBT Bank), a banking corporation organized
and existing under and by virtue of the laws of the State of New York,
having an office at 160 Main Street, Oneida, New York 13421, is designated
to act as custodial bank of the Town of Verona's investments.
However, securities may not be purchased through a repurchase agreement
with the custodial bank.
A.
All trading partners must be credit worthy. Their financial statements
must be reviewed at least annually by the Chief Fiscal Officer to
determine satisfactory financial strength or the Chief Fiscal Officer
may use credit rating agencies to determine credit worthiness of trading
partners. Concentration of investments in financial institutions should
be avoided. The general rule is not to place more than $100,000 in
overnight investments with any one institution.
B.
Investments in time deposits and certificates of deposit are to be
made with banks or trust companies. Their annual reports must be reviewed
by the Chief Fiscal Officer to determine satisfactory financial strength.
C.
When purchasing eligible securities, the seller shall be required
to deliver the securities to our custodial bank.
D.
Repurchase agreements shall be entered into only with banks or trust
companies or registered and primary reporting dealers in government
securities. Sound credit judgments must be made with respect to trading
partners in repurchase agreements. It is not assumed that inclusion
on a list of the federal reserve is automatically adequate evidence
of credit worthiness.
E.
Repurchase agreements should not be entered into with undercapitalized
trading firms.
F.
A margin of 5% or higher of the market value of purchased securities
in repurchase agreements must be maintained.
A.
The Chief Fiscal Officer or the Deputy Chief Fiscal Officer shall
authorize the purchase and sale of all securities and execute contracts
for repurchase agreements and certificates of deposit on behalf of
the Town of Verona. Oral directions concerning the purchase or sale
of securities shall be confirmed in writing. The Town of Verona shall
pay for purchased securities upon the delivery or book-entry thereof.
B.
The Town of Verona will encourage the purchase and sale of securities
and certificates of deposit through a competitive or negotiated process
involving telephone solicitation of at least three bids for each transaction.
C.
At the time independent auditors conduct the annual audit of the
accounts and financial affairs of the Town of Verona, the independent
auditors shall audit the investments of the Town of Verona for compliance
with the provisions of these investment guidelines.
D.
Within 60 days of the end of each of the first three quarters of
the fiscal year, the Chief Fiscal Officer shall prepare and submit
to the Town Board of the Town of Verona a quarterly investment report
which indicates new investments, the inventory of existing investments
and such other matters as the Chief Fiscal Officer deems appropriate.
E.
Within 120 days of the end of the fiscal year, the Chief Fiscal Officer
shall prepare and submit to the Town Board of the Town of Verona an
annual investment report; recommendations for change in these investment
guidelines; the results of the annual independent audit; the investment
income record; a list of total fees, commissions or other charges,
if any, paid to the custodial bank, and such other matters as the
Chief Fiscal Officer deems appropriate.
F.
The Town Board of the Town of Verona shall review and approve the
annual investment report, if practicable, at its May meeting.
G.
At least annually, and if practicable, at the May meeting of the
Town Board of the Town of Verona, said Town Board shall review and
amend, if necessary, these investment guidelines.
H.
The provisions of these investment guidelines and any amendments
hereto shall take effect prospectively and shall not invalidate the
prior selection of any custodial bank or prior investment.