Town of Southport, NY Investment Policy

This investment policy applies to all moneys and other financial resources available for investment on its own behalf or on behalf of any other entity or individual.

§ 72-2 Objectives.

The primary objectives of the local government's investment activities are, in priority order:

To confirm with all applicable federal, state and other legal requirements (legal);

To adequately safeguard principal (safety);

To provide sufficient liquidity to meet all operating requirements (liability);

To obtain a reasonable rate of return (yield).

§ 72-3 Delegation of authority.

The governing board's responsibility for administration of the investment program is delegated to the Supervisor.

§ 72-4 Prudence.

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 Town of Southport to govern effectively.

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.

All participants involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.

§ 72-5 Diversification.

It is the policy of the Town of Southport to diversify its deposits and investments by financial institution, by investment instrument, and by maturity scheduling.

§ 72-6 Internal controls.

The Chief Financial Officer is responsible for establishing and maintaining an internal control structure to provide reasonable, but not absolute, assurance that deposits and investments are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly, and are managed in compliance with applicable laws and regulations.

§ 72-7 Designation of depositories.

Any bank, trust and investment companies that meet New York State laws governing investments by towns are authorized for the deposit of monies up to the maximum amounts allowed by law. Specific bank, trust and investment companies shall be designated each year by the Town Board at the January Organization Meeting.

§ 72-8 Collateralizing of depositories.

In accordance with the provisions of General Municipal Law § 10, all deposits of the Town of Southport, including certificates of deposit and special time deposits, in excess of the amount insured under the provisions of the Federal Deposit Insurance Act shall be secured:

By a pledge of "eligible securities" with an aggregate "market value" as provided by General Municipal Law § 10.

By an eligible surety bond payable to the government 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.

§ 72-9 Safekeeping and collateralization.

Eligible securities used for collateralizing deposits shall be held by the bank, trust or investment company subject to security and custodial agreements.

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 local government, such securities shall be delivered in a form suitable for transfer or with an assignment in blank to the Town of Southport or its custodial bank.

The custodial agreement shall provide the securities held by the bank, trust or investment company, or agent of and custodian for, the local government will be kept separate and apart from the general assets of the custodial bank, trust or investment 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 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 local government a perfected interest in the securities.

§ 72-10 Permitted investments.

As authorized by General Municipal Law § 11, the Town of Southport authorizes the Chief Financial Officer to invest monies not required for immediate expenditure for terms not to exceed its projected cash flow needs in the following types of investments:

(1)

Special time deposit accounts;

(2)

Certificates of deposit;

(3)

Obligations of the United States of America;

(4)

Obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by the United States of America;

(5)

Obligations of the State of New York;

(6)

Obligations issued pursuant to Local Finance Law § 24.00 or 25.00 (with approval of the State Comptroller) by any municipality, school district or district corporation other than the Town of Southport;

(7)

Obligations of public authorities, public housing authorities, urban renewal agencies and industrial development agencies where the general State statutes governing such entities or whose specific enabling legislation authorized such investments;

(8)

Certificates of participation (COPs) issued pursuant to General Municipal Law § 109-b;

(9)

Obligations of this local government, but only with any monies in a reserve fund established pursuant to General Municipal Law § 6-c, 6-d, 6-e, 6-g, 6-h, 6-j, 6-k, 6-l, 6-m or 6-n.

All investment obligations shall be payable or redeemable at the option of the Town of Southport within such times as the proceeds will be needed to meet expenditures for purposes for which the monies where provided and, in the case of obligations purchased with the proceeds of bonds or notes, shall be payable or redeemable at the option of the Town of Southport within two years of the date of purchase.

§ 72-11 Purchase of investments.

The Chief Financial Officer is authorized to contract for the purchase of investments.