Loading...
HomeMy WebLinkAboutResolution 2000-017 town of marana investment policyMARANA RESOLUTION NO. 2000-17 A RESOLUTION OF THE MAYOR AND TOWN COUNCIL OF THE TOWN OF MARANA, ARIZONA, ADOPTING AN INVESTMENT POLICY FOR THE TOWN'S IDLE CASH RESERVES. WHEREAS, the Town of Marana has generated a surplus in its general fund balance; and WHEREAS, the Town seeks to manage its resources more judiciously and prudently; and WHEREAS, the investment policy sets forth the strategy and parameters that will guide the Town as it seeks to maximize its earning potential. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of Marana, Arizona, that the investment policy attached hereto shall be adopted by the Town Council. PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this15thdayofFebruary, 2000.~~ ff . r. ATTEST: l/Town Clerk APPROVED AS TO FORNJ.:. ./-'"]~)an~el J. Hoc"h'uli As Town Attorney and not personally TOWN OF blAI~ANA INVESTMENT POLICY , POLICY STATEMENT It is the policy of the Town of Marana 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 Town. All investments shall conform to all applicable federal, state and local regulations, governing the investment of public funds. SCOPE This policy applies to all investments of public funds held by the Town of Marana. These funds are defined in the Town's Annual Comprehensive Financial Report and include: a) General Fund b) Special Revenue Fund c) Capital Projects Fund d) Enterprise Fund e) Any new fund created OBJECTIVE The primary objectives, in order of priority, of the Town's investment activities shall be: . - a) Securit-v of Principal Investment Safety of principal is the foremost objective of the investment program. Investments of the Town of Marana shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification of the investments is required. b) Liquidity of Funds The Town of Marana's investment portfolio must remain sufficiently liquid to enable the Town to meet all operating requirements that might be reasonably anticipated. c) Return on Investment The Town of Marana's investment portfolio shall be designed with the objective of attaining the highest possible yield at the lowest risk commensurate with the cash flow characteristics of the portfolio. DELEGATION OF AUTHORITY The Town Manager shall be responsible for investment management decisions and shall monitor, report and recommend investment activities and provide periodic reports to the Mayor and Council. The Town Manager may designate this duty to an appropriate official for implementation who shall be referred to as the Investment Officer. The Investment Officer shall develop and maintain written administrative procedures for the operation of the investment program which are consistent with this policy. Procedures will include reference to safekeeping, wire transfer agreements, collatera[ deposit agreements, banking service contracts, and other investment related activities. No officer of the Town shall engage in an investment transaction except the Town Manager or Investment Officer, acting in accordance with this policy. In the absence of the appointed or designated officer, the Finance Director shall invest in accordance with this policy. PRUDENCE Investments shall be made with judgement and care, under circumstances then prevailing, which investors 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. TOWN OF MA1L4,NA INVESTMENT POLICY , 10. The standard of prudence to be used by investment officials shall be the "prudent investor" standard and shall be applied in the context of managing the overall portfolio. The Town Manager or designated Investment Officer, acting in accordance with written procedures and this policy, shall not be held personally liable for specific security's credit risk or market price changes. The Tow'a Manager or designated Investment Officer shall be liable for losses resulting from a departure from this policy and written administrative procedures, including fraudulent and criminal activity that result in a loss of principal funds. INTERNAL CONTROLS The Town Manager or designated Investment Officer shall establish a system of written internal controls that will be reviewed annually by the Town's independent auditor. The controls shall be designed to prevent loss of funds due to fraud, employee error, misrepresentation by third parties, unanticipated market changes, or imprudent actions. AUTHORIZED INVESTMENTS The Town of Marana is empowered by state statute to invest in any of the following instruments: a) Obligations of the U.S. Government, its agencies, and instrumentalities that carry the full backing of the U.S. Government or by any agency or instrumentality of the United States. b) Fully insured or collateralized Certificates of Deposit in accordance with the bidding procedures of ARS 35-323.B c) State of Arizona Local Government Investment Pool (LGIP) The Town Manager or Investment Officer may not invest in any other security without prior approval from the Town Council and a change in this policy to approve such investment Public funds not otherwise invested shall be placed in an interest bearing account pursuant to ARS 35-323.A.2 or the Town's operating account. PROHIBITED TRANSACTIONS The following n:ansactions are prohibited by this investment policy. a) Borrowing for investment purposes ("Leverage") b) Investment in any instrument which is commonly referred to as a "derivative" c) Inverse floaters d) Interest only securities ETHICS AND CONFLICTS OF INTEREST Officers and employees 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. Employees and investment officials shall report to the Town Manager any girls received from any financial institution, employee of any financial institution, or on behalf of any financial institution. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS The Investment Or'ricer will maintain a list or' financial institutions authorized to provide investment services. In addition, a list will also be maintained of approved security broker"dealers selected by credit worthiness. These may include "primary" dealers or regional dealer that qualify under SEC Rule 15C3-1. TOWN OF MARAaNA INVESTMENT POLICY 1I. DIVERSIFICATION baND MATURITY LE~IITATIONS The policy of the Town of Marana is to diversify its investment portfolio. Invested funds shall be diversified to minimize risk of loss. All investments and deposits shall be made in eligible depositories as that term is used in ARS 35-323.G. The maturity date on the investments shall also be diversified. The Investment Officer shall anempt to match investments with cash flow requirements. No security shall be invested for more than three years. 12, SAFEKEEPING AND COLLATE1L'-kLIZATION All security transactions entered into by the Town of Marana shall be conducted on a delivery-versus- trade basis. If the security is purchased through a broker-dealer firm, the Town must be given a Safekeeping Receipt from the broker. All securities or receipts shall be held in a safe deposit box at a local bank. The Town Manager and the Investment Officer shall keep a log of the Town securities showing rate, maturity, and other pertinent information. Collateralizafion shall be required for all Certificates of Deposit investments in excess of the amount covered by the FDIC insurance. To anticipate market changes and provide a level of additional security for all funds, the collateralizafion level will be 103% of market value of principal and accrued interest. 13. PERFORMANCE EVALUATION The Town Manager or Investment Officer shall submit quarterly reports to the Mayor and Council. The report shall contain sufficient information to permit an informed outside reader to evaluate the performance of the investments. The report should contain, at a minimum, the following information: a) A list of the securities held at the end of the reporting period, by type and maturity date. b) A marking to market of all securities in the portfolio. c) A summary of the return on the portfolio. d) The percentage of the total portfolio which each type of investment represents. e) Comparison of the portfolio returns against a predetermined benchmark. 14. INVESTMENT POLICY ADOPTION The Town of Marana's Investment Policy shall be adopted by the Town Council. The policy shall be reviewed annually by the Finance Committee and the Town Council thereto must approve any changes. TOWN OF MARANA ADMINISTI~4TIVE INVESTMENT PROCEDURES The primary objective of these procedures and controls is to provide investment procedures for all the public funds of the Town. , . , o , o o All investments must have written authorization from the Council and Manager. All investment certificates or receipts of safekeeping must be held in a Town- owned safety deposit box. The safety deposit box must be held at the same financial institution as the Town operating accounts. Quarterly investment reports must be prepared and signed by the Investment Officer and presented to the Manager and Council. All funds to purchase investment instruments must be transferred to and from the Town operating account via electronic wire transfer. Money from various Town funds may be pooled into one investment to maximize overall yield. Investments may be made through primary or secondary dealers and must be conducted on a delivery-versus-payment basis. Safekeeping receipts will be accepted from brokers in place of the original Certificate. All investments must be FDIC insured, or collateralized at 103% of market value of principal and accrued interest, backed by the full faith and credit of the U.S. Government or be considered acceptable investments as defined by ARS 35- 323,324,328.