This investment policy applies to all moneys and other financial
resources available for investment by the Village or by any other
entity or individual on behalf of the Village.
The primary objectives of the Village's investment activities
are to:
A. Conform
with all applicable federal, state and other legal requirements;
B. Adequately
safeguard principal;
C. Provide
sufficient liquidity to meet all operating requirements; and
D. Obtain
a reasonable rate of return.
The responsibility of the Board of Trustees for administration
of the Village's investment program is delegated to the Village Administrator,
who shall establish written procedures for the operation of the investment
program consistent with these program 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 regulate the activities
of subordinate employees.
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 Village of
North Hills to govern effectively.
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 safety of the principal as well as the
probable income to be derived.
B. All
participants in the investment process shall refrain from personal
business activity which 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 Village to diversify its deposits and
investments by financial institution, by investment instrument, and
by maturity scheduling.
The banks and trust companies authorized for the deposit of
moneys up to the maximum amounts are: Fleet Bank, North Fork Bank,
European American Bank, and State Bank, each to the maximum amount
for which Federal Deposit Insurance Act insurance is available, or
other maximum amount as set forth in an approved collateral agreement
between the Village and such institution.
In accordance with the provisions of General Municipal Law § 10,
all deposits of the Village, including certificates of deposit and
special time deposits, in excess of the amounts insured under the
provisions of the Federal Deposit Insurance Act shall be secured by
one or more of the following:
A. By a pledge of eligible securities with an aggregate market value as provided by General Municipal Law § 10, equal to the aggregate amount of deposits from the categories designated in
Appendix A of this policy; or
B. By
an irrevocable letter of credit, issued by a qualified bank other
than the bank with the deposits, in favor of the Village for a term
not to exceed 90 days with an aggregate value at least equal to 104%
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
[Amended 4-16-2014]
C. By
an eligible surety bond payable to the Village 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; or
D. By an irrevocable letter of credit issued in favor of the Village
by a federal home loan bank whose commercial paper and other unsecured
short-term debt obligations are rated in the highest rating category
by at least one nationally recognized statistical rating organization,
as security for the payment of 100% of the aggregate amount of deposits
and the agreed-upon interest, if any; or
E. By any other security authorized by law as collateral for municipal
deposits and acceptable to the Board of Trustees.
Eligible securities used for collateralizing deposits shall
be held by a third-party bank or trust company subject to security
and custodial arrangements.
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 rights against the pledged securities. In the event
that the securities are not registered or inscribed in the name of
the Village, such securities shall be delivered in a form suitable
for transfer, or with an assignment in blank, to the Village 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 Village a perfected
interest in the securities.
The Village 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 Village
conducts business must be creditworthy. Banks shall provide their
most recent Consolidated Report of Condition (Call Report) at the
request of the Village. 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 Village
Administrator is responsible for evaluating the financial position
and maintaining a listing of proposed depositories, trading partners,
and custodians. Such listing shall be evaluated at least annually.
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 person other than the trading partner.