[Adopted 8-16-1999 by Ord. No. 562 (Title 1, Ch. 15, § 1-15-5,
of the 1978 Code); amended in its entirety 12-7-2020 by Ord. No. 755]
It is the policy of the Village to invest public funds in a
manner which will provide the highest investment return with the maximum
security while meeting the daily cash flow demands of the entity and
conforming to all state and local statutes governing the investment
of public funds.
This policy includes all funds governed by the Board of Trustees.
A. 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 probable safety of their capital,
as well as the probable income to be derived.
B. The standard of prudence to be used by investment officials shall
be the "prudent person" standard and shall be applied in the context
of managing an overall portfolio.
A. The primary objectives, in order of priority, shall be:
(1) Legality. Conformance with federal, state and other legal requirements;
(2) Safety. Preservation of capital and protection of investment principal;
(3) Liquidity. Maintenance of sufficient liquidity to meet operating
requirements;
(4) Yield. Attainment of market rates of return.
B. The portfolio should be reviewed periodically as to its effectiveness
in meeting the Village's needs for safety, liquidity, rate of return,
diversification and its general performance.
Management and administrative responsibility for the investment
program is hereby delegated to the Finance Committee who, under the
delegation of the Board of Trustees, shall establish written procedures
for the operation of the investment program.
Officers and employees involved in the investment process shall
refrain from personal business activity that could conflict with the
proper execution and management of the investment program or that
could impair their ability to make impartial decisions.
The Finance Committee will maintain a list of financial institutions
authorized to provide investment services. In addition, a list will
also be maintained of approved security brokers/dealers selected by
creditworthiness.
Investments may be made in any type of security allowed for
in Illinois statutes regarding the investment of public funds. Investments
shall be made that reflect the cash flow needs of the fund type being
invested.
Funds on deposit (checking accounts, certificates of deposit,
etc.) in excess of FDIC limits must be secured by some form of collateral,
witnessed by a written agreement and held at an independent third-party
institution in the name of the Village.
All security transactions, including collateral for repurchase
agreements, entered into by the Village shall be conducted on a delivery-versus-payment
(DVP) basis. Securities will be held by an independent third-party
custodian designated by the Finance Committee and evidenced by safekeeping
receipts and a written custodial agreement.
The Village shall diversify its investments to the best of its
ability based on the type of funds invested and the cash flow needs
of those funds. Diversification can be by type of investment, number
of institutions invested in and length of maturity.
[Amended 6-7-2021 by Ord.
No. 764]
A. To the extent possible, the Village shall attempt to match its investments
with anticipated cash flow requirements. Unless matched to a specific
cash flow, the Village will not directly invest in securities maturing
more than one year from the date of purchase.
B. Reserve funds may be invested in securities exceeding one year if
the maturity of such investments are made to coincide as nearly as
practicable with the expected use of the funds.
The Finance Committee is responsible for establishing and maintaining
an internal control structure designed to ensure that the assets of
the Village are protected from loss, theft or misuse. The internal
control structure shall be designed to provide reasonable assurances
that these objectives are met. The internal controls shall address
the following points:
B. Separation of transaction authority from accounting.
D. Written confirmation of telephone transactions for investments and
wire transfers.
This investment portfolio will be managed in accordance with
the parameters specified within this policy. The portfolio should
obtain a comparable rate of return during a market/economic environment
of stable interest rates. Portfolio performance should be compared
to bench marks with similar maturity, liquidity and credit quality
as the portfolio. Bench marks may include ninety-day Treasury Bills,
Illinois Funds, and similar investments.
The Chair of the Finance Committee, or his or her designee,
shall prepare an investment report at least monthly. The report should
be provided to the Board of Trustees and available on request. The
report should be in a format suitable for review by the general public.
An annual report should also be provided to the Board.
A statement of the market value of the portfolio shall be issued
to the Board of Trustees quarterly.
The investment policy shall be adopted by the Board of Trustees.
The policy shall be reviewed on an annual basis by the Finance Committee
and any modifications made thereto must be approved by the Board of
Trustees.