It is the policy of the Town of University Park to invest a public fund in a manner designed:
To reasonably match the anticipated cash flow of the Town so that sufficient funds are available to pay obligations upon proper presentation for payment;
So that a reasonable a mount of cash or cash equivalents is available for unanticipated cash needs;
With due regard for minimizing risk while maximizing return; and
To comply with all applicable state and local laws governing the investment of public funds.
This investment policy applies to all financial assets of the Town, and to all transactions involving said financial assets. This investment policy does not apply to retirement funds, or financial assets in the control of any set of trustees.
An investment made pursuant to this chapter shall be made with care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims. This "prudent person" standard of care requires that investments shall be made with judgment and care, under the 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. This standard shall be applied in the context of managing an overall portfolio.
Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence and care shall be relieved of personal responsibility for the credit risk or market price changes of an individual security, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments. Investment officials shall adhere to the requirements of Chapter 12, Public Ethics, of the Code of Ordinances of the Town of University Park.
The primary objectives of the Town's investment activities are:
Safety. Safety of principal is the foremost objective of the investment program. Investments of the Town shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.
Liquidity. The Town's investment portfolio shall be structured to ensure the liquidity necessary to meet all reasonably anticipated obligations as they become due.
Compliance with applicable law. The Town's investment portfolio shall comply with applicable law.
Return on investments. The Town shall seek to optimize the return on its investment within the constraints of this chapter and other applicable law.
As set out in Article VII, Section 701, of the Charter of the Town of University Park, the Clerk-Treasurer shall have custody of all funds belonging to or under control of the Town, except as to funds under the control of any trustees. Town funds may be kept or invested in any manner authorized for municipalities by State law and approved by the Mayor and Common Council.
All Town funds shall be kept or may be invested in any manner authorized by State law, including those types of securities by authorized by Section 6-222(a), State Finance and Procurement Article, and Article 95, Sections 22-22N, Annotated Code of Maryland, as amended, and approved by the Mayor and Common Council. Monies may not be borrowed for the sole purpose of investment. Town investments must comply with the standards set out in Section 6-222(d) of the State Finance and Procurement Article.
All deposits (except funds invested with the Local Government Investment Pool), certificates of deposit, and repurchase agreements shall be secured by pledged collateral with a market value of 102% of principal plus accrued interest at all times. Collateral shall be in conformance with Section 22, Article 95, of the Annotated Code of Maryland, as amended. Collateral will be held by an independent third party. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to and retained by the Town. The right of collateral substitution is granted.
All security transactions, including collateral for repurchase agreements, entered into by the Town shall be conducted on a delivery-versus-payment basis. Securities will be held by a third party custodian designated by the Treasurer and evidenced by safekeeping receipts.
Investments shall be diversified to reduce the risk of loss due to over concentration of assets in a specific maturity, issuer, or class of securities.
To the extent possible, the Town will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the Town will not directly invest in securities maturing more than two years from date of purchase. However, the Town may collateralize its repurchase agreements using longer dated investments.
The Treasurer will maintain a list of financial dealers and institutions authorized to provide investment services. In addition, a list will also be maintained of approved security broker/dealers selected by credit worthiness who are authorized to provide investment services in Maryland. No public deposit shall be made except in a qualified public depository as established by state law.
All financial institutions and broker/dealers who desire to become qualified bidders for investment transactions must supply the Treasurer with any information he/she may request.
An annual review of the financial condition and registrations of qualified bidders will be conducted by the Treasurer.
A current audited financial statement is required to be on file for each financial institution and broker/dealer in which the Town invests.
At least once each year, an independent auditor shall review all Town investments to determine compliance with this Investment Policy.
The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and cash flow needs.
As part of the monthly financial report to the Mayor and Common Council, the Treasurer shall include a market report on investment activity and returns. The report shall include a calculation of any income or loss from investments.