[HISTORY: Adopted by the Town Board of the Town of Alden 12-6-1993. Amendments noted where applicable.]
This investment policy applies to all moneys and other financial
resources available for investment on its 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 Town Board's responsibility for administration of the
investment program is delegated to 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 data base or records incorporating description
and amounts of investments, transaction dates and other relevant information
and to 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 of Alden to govern
effectively.
B.
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.
C.
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 Alden 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 Alden for all moneys collected by
any officer or employee of the government to transfer those funds
to the Town Supervisor as required by law or if not set by law within
three days, said remittance to be as soon as possible from all collectors.
B.
The Town Supervisor, or other officer having custody of money, 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 and 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 following maximum amounts are:
|
Depository Name
|
Maximum Amount
|
Officer
|
|---|---|---|
|
Alden State Bank
|
$5,000,000
|
Town Supervisor
|
|
Alden State Bank
|
$5,000,000
|
Receiver of Taxes
|
|
Alden State Bank
|
$100,000
|
Town Justices
|
|
Alden State Bank
|
$100,000
|
Town Clerk
|
In accordance with the provisions of General Municipal Law § 10,
all deposits of the Town of Alden, 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:
A.
By a pledge of "eligible securities" with an aggregate market value,
or provided by General Municipal Law § 10, equal to the
aggregate amount of deposits from the categories designated in Appendix
A[1] to the policy;
[1]
Editor's Note: Appendix A is included at the end of this chapter.
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; or
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.
Eligible securities used for collateralizing deposits shall
be held by a third-party bank or trust company subject to security
and custodial agreements.
A.
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 right 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 or
its custodial bank.
B.
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
Alden authorizes the Town Supervisor 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 [treasuries, one
year or less].
(4)
Obligations guaranteed by agencies of the United States of America
where the payment of principal and interest are guaranteed by the
United States of America.
(5)
Obligations of the State of New York.
B.
All investment obligations shall be payable or redeemable at the
option of the Town of Alden 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 Alden within two years of the date of purchase.
The Town of Alden 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 Alden. 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 Town Supervisor 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 Town Supervisor is authorized to contract for the purchase of
investments:
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 Alden 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.
