It is the policy of the Town of University Park to invest a
public fund in a manner designed:
A.
To reasonably match the anticipated cash flow of the Town so that
sufficient funds are available to pay obligations upon proper presentation
for payment;
B.
So that a reasonable a mount of cash or cash equivalents is available
for unanticipated cash needs;
C.
With due regard for minimizing risk while maximizing return; and
D.
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.
A.
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.
B.
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:
A.
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.
B.
Liquidity. The Town's investment portfolio shall be structured
to ensure the liquidity necessary to meet all reasonably anticipated
obligations as they become due.
C.
Compliance with applicable law. The Town's investment portfolio
shall comply with applicable law.
D.
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.
[Effective 11-21-1995]
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.
A.
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.
B.
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.
C.
An annual review of the financial condition and registrations of
qualified bidders will be conducted by the Treasurer.
D.
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.
