[HISTORY: Adopted by the Common Council of the City of Middletown
11-5-1990; amended in its entirety 12-2-2002. Subsequent amendments noted
where applicable.]
This investment policy applies to the investment activities of the City
of Middletown, except for its employee retirement system funds, which are
organized and administered separately. All City funds under the control of
the Department of Finance, including the General Fund, Special Revenue Funds,
Capital Projects Fund, Trust and Agency Funds, and other funds that may be
created from time to time, shall be administered in accordance with the provisions
of this policy.
The investment policy shall be reviewed periodically and updated at
least once every two years by the Director of Finance.
The terms of the policy are as follows:
A.
The City seeks to attain market rates of return on its
investments, consistent with constraints imposed by its safety objectives,
cash flow consideration and state laws that restrict the investment of certain
public funds;
B.
The Finance Director, City Treasurer, and such other
staff as directed by the Director of Finance shall act responsibly as custodians
of the public trust and avoid any transaction that might impair public confidence;
C.
Management responsibility for the investment program
is invested in the Director of Finance, who shall be responsible for all transactions
undertaken and who shall establish written procedures for the operation of
the investment program consistent with the investment policy, and/or such
other staff as directed by the Director of Finance and set forth in the written
procedures;
D.
The "prudent person" standard shall be used by investment
officials in this investment policy in managing an overall investment portfolio
for the City of Middletown;
E.
Employees of the City and investment officials shall
disclose to the Mayor and City Treasurer any material financial interests
in financial institutions that conduct business within the City, and they
shall further disclose any material personal financial investment positions
that could be related to the performance of the City's portfolio;
F.
The Director of Finance shall prepare a periodic investment
report that summarizes and describes the City's investment portfolio in terms
of investment securities, maturities, risk characteristics and other features;
G.
Funds may be invested in:
(1)
United States Treasury Bills;
(2)
Treasury notes or bonds maturing within one year;
(3)
Certificates of deposit of banks and savings and loan
associations maturing within one year;
(4)
Repurchase agreements collateralized by United States
Treasury securities; and
(5)
The State Short Term Investment Fund, hereinafter referred
to as the STIF;
H.
Investment depositories shall be approved by the Common
Council after the Director of Finance and City Treasurer have conducted a
review of the prospective depositories' credit characteristics and financial
history;
I.
City funds shall be invested in instruments whose maturities
do not exceed one year at the time of purchase, unless a temporary extension
of maturities is approved by the Director of Finance; however, in no event
will the average maturity exceed one year;[1]
J.
The following general policies and constraints shall
apply so that invested funds shall be diversified to eliminate the risk of
loss from overconcentration of funds in a specific maturity or a specific
issuer:
(1)
Maturities shall be staggered to avoid undue concentration
of funds in a specific maturity;
(2)
For case management funds, liquidity shall be assured
through practices ensuring that the next disbursement date and payroll date
are covered through maturing investments or marketable United States Treasury
Bills; and
(3)
Approximately 3% of the City's investment portfolio shall
be invested in overnight instruments or in marketable securities which can
be sold to raise cash in one day's notice;
K.
Bearer instruments shall be held only through third-party
institutions;
L.
Collateralized securities such as repurchase agreements
shall be purchased using the delivery versus payment procedure; and
M.
Ownership shall be protected through third-party custodial
safekeeping unless prevailing practices or economic circumstances dictate
otherwise.
