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HomeMy WebLinkAboutVI (B) Resolution No 95-20, adopting Investment Policy AGENDA 10-17-95 Item VI B "CEI,VTEi OF GOOD LIVING - PRIDE OF WEST ORANGE" MAYOR• COMMISSIONER Ocoee S. SCOTT VANDERGRIF'F 67/, - ,y O + COMMISSIONGKS {`_ CITY OF OCOEE RUSTY JOHNSON 14,4 D. PAUL W.FOSTER O 150 N.LAKESHORE DRIVE SCOTT A.GLASS to (::_ ._]. 4. OCOEE,FLORIDA 34761-2258 JIM GLEASON pv �`� (407)656-2322 fd CITY M ANAGI:K Op G00V ELLIS SHAMRO Date : October 12 , 1995 To : Honorable Mayor and Board of City Commissioners From : Montye Beamer, Director of Administrative Services 7') Re : Investment Policy In response to major problems around the nation involving some huge losses in investments of public funds, numerous groups collectively devised a means of better protecting public funds. In January 1995, the Florida Association of Court Clerks & Comptrollers formed the Investment Policies & Procedures Task Force which met three times. The purpose of the task force was to evaluate county investment practices and make recommendations where applicable for any needed improvement in investment practice or law. The substance of this proposed committee substitute was based on the recommendations of the task force. The bill covers all entities of local government including any municipality of the state. Bill PCS/HB 1795 created s. 218 . 415,F.S. , requiring local governmental entities that have custody of public funds and choose not to deposit these funds in the Local Government Surplus Funds Trust Fund for investment by the State Board of Administration, but instead to invest these monies themselves, to conduct such investment activity in accordance with a written investment plan, or in the alternative to invest in specified low-risk instruments. These low-risk instruments are identified as: 1. The Local Government Surplus Funds Trust Fund 2 . Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency 3 . Savings accounts in state-certified qualified public depositories 4 . Certificates of deposit in state-certified qualified public depositories 5. Direct obligations of the U.S. Treasury 6. Federal agencies and instrumentalities The City has always followed a conservative investment practice in conformance with Resolutions 86-2 and 94-08 ; currently surplus funds are invested in several of the instruments noted above. Resolution 94-08 designates the positions which will be signatories on behalf of the city for investment accounts and the means of transferring funds from such accounts. Staff has developed a revision to Resolution 86-02 with a more detailed investment policy in order to demonstrate that there is no misunderstanding as to the City's practices. Because of all of the various clarifications Resolution 95-20 repeals Resolution 86-02 in its entirety and includes the Investment Policy and Plan as attached to Resolution 95-20 to ensure continued adherence to current practices. Staff recommends approval of Resolution 95-20. RESOLUTION NUMBER 86-2 City of Ocoee, Florida WHEREAS, the Ocoee City Board of Commissioners believes it is in the best interest of the Citizens and the City to establish a formal policy for the investment of the City's monies, and WHEREAS, the City Charter grants the authority to the Commission to make such investments as it believes are in the best interest of the City, and therefore necessarily allows the Commission the perogative of delegating this authority, when said delegation makes the aforesaid investments more efficient and timely; NOW, THEREFORE BE IT RESOLVED BY THE OCOEE CITY BOARD OF COMMISSIONERS The City Finance Director shall have the authority to invest the City public funds, both surplus funds and cash flow monies. The institutions hereby designated as approved depositories for these monies for the 1985-86 Fiscal Year are: the Orange Bank, Sun Bank, Osceola Federal, Tucker State Bank, and First Bankers (also known as First Union) . All deposits and withdrawals must have two approved signatures; i.e. the current Mayor, any current City Commissioner, the current Finance Director, and the current City Manager. ( -Current refers to a per- son in office on the date the investment document is signed. ) Deposits are to be made only at finan- cial institutions- designated as qualified public depositories by the Florida State Treasurer. All deposits must be in compliance with Florida State Statute 166.261. A prudent investment policy will be adhered to and shall include the following investment theories: risk-return relationship, diversification, matching maturities to fund needs and liquidity. All deposits must be fully insured by the Federal Deposit Insurance Corporation (FDIC] , the Federal Savings and Loan Insurance Corporation [FSLIC] , or the U.S. Government, and/or must be collateralized with eligible collateral having a market value equal to 100% of the average daily balance for each month. When accounts are collateralized, the approved depository will provide the City, through the personage of the Finance Director, with a monthly report identifying 1 by CUSIP number, or a similar exclusive identirying number the collateral wnicn is securing tne City s monies. At least annually, at the first regular meeting of each Fiscal Year, i.e. the first Tuesday each October, the City Board of Commissioners is required to review this policy, and this Resolu- tion, to insure that tnis policy is still the intent of tne Commission in seat. Additionally at this review meeting, the Commission snall name tne depositories in wnicn they will allow tne City s monies to be invested, in accordance with the City Charter. DONE AND RESOLVED THIS 5tn day of February, 198b. City of Ocoee, Florida ATTEST: MAYOR CITY CLERK 2 r ESOLUTION NO. 94- 08 A RESOLUTION OF THE CITY OF OCOEE, FLORIDA AUTHORIZING THE MAYOR, CITY MANAGER AND FINANCE MANAGER TO BE SIGNATORIES ON BEHALF OF THE CITY OF OCOEE FOR ALL OF THE CITY'S BANK ACCOUNTS; AUTHORIZING THE USE OF FACSIMILE SIGNATURES FOR TRANSACTIONS WITH RESPECT TO ALL BANK ACCOUNTS OF THE CITY OF OCOEE; AUTHORIZING THE FINANCE MANAGER AND DIRECTOR OF ADMINISTRATIVE SERVICES TO BE SIGNATORIES ON BEHALF OF THE CITY OF OCOEE FOR ALL OF THE CITY'S ACCOUNTS EXCEPT FOR BANK ACCOUNTS; AUTHORIZING THE CITY CLERK TO CERTIFY TO BANKS, FINANCIAL INSTITUTIONS, BROKERAGES AND • OTHER INVESTMENT AND MONEY MANAGEMENT COMPANIES THE PERSONS HOLDING THE POSITIONS OF THE AUTHORIZED SIGNATORIES; PROVIDING FOR SEVERABILITY; PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Commission of the City of Ocoee desires to authorize those persons who presently and hereinafter hold the positions of Mayor, City Manager and Finance Manager to be signatories on behalf of the City of Ocoee for all of the City's bank accounts; and WHEREAS, the City Commission of the City of Ocoee desires to authorize those persons who presently and hereinafter hold the positions of Finance Manager and Director of Administrative Services to be signatories on behalf of the City of Ocoee for all of the City's accounts, except for bank accounts, including but not limited to money market accounts and other accounts with brokerages and other investment and money management companies; and WHEREAS, the City Commission of the City of Ocoee desires to authorize the use of facsimile signatures by the signatories for transactions with respect to the City of Ocoee's bank accounts; and WHEREAS, the City Commission of the City of Ocoee desires to authorize the City Clerk, from time to time as necessary, to certify to banks, financial institutions, brokerages and other investment and money management companies the names of the persons holding the positions of authorized signatories; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA, AS FOLLOWS: SECTION ONE. Authority. The City Commission of the City of Ocoee has the authority to adopt this Resolution pursuant to Article VIII of the Constitution of the State of Florida, Chapter 166, Florida Statutes, and Article VI of the Charter of the City of Ocoee. SECTION TWO. Authorized Sianatories for Bank Accounts. The City Commission of the City of Ocoee, Florida, hereby authorizes those persons who presently and hereinafter hold the positions of Mayor, City Manager and Finance Manager to be signatories on behalf of the City of Ocoee for all of the City's bank accounts. The signatures of any two of the three authorized signatories shall be necessary to authorize a transaction with respect to the City of Ocoee's bank accounts. SECTION THREE. Facsimile Signatures for Bank Accounts. The City Commission of the City of Ocoee, Florida, hereby authorizes the use of facsimile signatures by the authorized signatories for transactions with respect to the City of Ocoee's bank accounts. SECTION FOUR. Authorized Sianatories for All City Accounts, except Bank Accounts. The City Commission of the City of Ocoee, Florida, hereby authorizes those persons who presently and 2 hereafter hold the positions of Finance Manager and Director of Administrative Services to be signatories on behalf of the City of Ocoee for all of the City's accounts, except for bank accounts, including but not limited to money market accounts and other accounts with brokerages and other investment and money management companies. The signatures of any one of the two authorized signatories shall be necessary to authorize a transaction with respect to such accounts of the City of Ocoee; provided, however, that all transfers of funds from such accounts, whether by wire transfer or otherwise, shall be made only to bank accounts of the City of Ocoee. All transfers of funds from such accounts are expressly prohibited except for transfers to bank accounts of the City of Ocoee. SECTION FIVE. Certification by City Clerk. The City Commission of the City of Ocoee, Florida, hereby authorizes the City Clerk, from time to time as necessary, to certify to banks, financial institutions, brokerages and other investment and money management companies the names of the persons holding the positions of Mayor, City Manager, Finance Manager, and Director of Administrative Services. SECTION SIB. Severability. If any section, subsection, sentence, clause, phrase or portion of this Resolution is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portion hereto. 3 SECTION SEVEN. Effective Date. This Resolution shall become effective immediately upon passage and adoption and shall remain in full force and effect until repealed. PASSED AND ADOPTED this /9rx day of APRIL , 1994. APPROVED: ATTEST: CITY OF OCOEE,nFLORIDA ti 0 ''e Xi— L;CO, •SL-p-i' can Gr1111611"afton City Clerk S. Scott Vandergrift, ayor (SEAL) READ FIRST TIME AND ADOPTED Apart. 19 , 1994, UNDER AGENDA ITEM NO. $ [3 . FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED �AS TO FORM LEGALITY � this y day of y n, � f , 1994. FOLEY i LARDNER I By: 'V.)4.164,_, City Attorney C:\WPS1\DOCSIRFSOBANK.2I4RO'94I DEBBIEH I PER:ddh 4 RESOLUTION NO. 95-20 A RESOLUTION OF THE CITY OF OCOEE, FLORIDA, REPEALING RESOLUTION NO. 86-2; ADOPTING IN ACCORDANCE WITH SECTIONS 218 .415, FLORIDA STATUTES, A NEW WRITTEN INVESTMENT POLICY AND PLAN FOR THE INVESTMENT OF THE CITY' S CASH RESERVES, INCLUDING ANY CITY FUNDS IN EXCESS OF THE AMOUNTS NEEDED TO MEET CURRENT EXPENSES; PROVIDING FOR SEVERABILITY; PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Commission of the City of Ocoee, Florida has heretofore adopted Resolution Number 86-2 establishing a formal investment policy for city funds; and WHEREAS, the City Commission desires to repeal Resolution No. 86-2 and adopt a new investment policy and plan for City funds in order to assure that the City is in compliance with the requirements of Section 218 . 415 , Florida Statutes . NOW, THEREFORE, BE IT ENACTED BY THE CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA, AS FOLLOWS: SECTION 1. The City Commission of the City of Ocoee has the authority to adopt this Resolution pursuant to Article VIII of the Constitution of the State of Florida and Chapters 16F and 280, Florida Statutes, and Section 218 . 415 , Florida Statutes . SECTION 2 . Resolution Number 86-2, adopted February 5 , 1986 , is hereby repealed in its entirety. SECTION 3 . The City Commission of the City of Ocoee hereby adopts the following as the written investment policy and plan of the City of Ocoee : See Exhibit "A" attached hereto and by this reference made a part hereof . SECTION 4 . Severability. If any section, subsection, sentence, clause, phrase or portion of this Resolution is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portion hereto . SECTION 5 . Effective Date. This Resolution shall become effective immediately upon passage and adoption. PASSED AND ADOPTED this day of , 1995 . APPROVED: ATTEST: CITY OF OCOEE, FLORIDA Jean Grafton, City Clerk S . Scott Vandergrift, Mayor (SEAL) FOR USE AND RELIANCE ONLY BY APPROVED BY THE CITY OF OCOEE THE CITY OF OCOEE, FLORIDA COMMISSION AT A MEETING APPROVED AS TO FORM AND LEGALITY HELD ON THE ABOVE DATE this day of , 1995 . UNDER AGENDA ITEM NO. FOLEY & LARDNER By: City Attorney C:'WP51\DOCS\OCOE INVESiME.RES110/12/95;DEBBIEH;PER:dh 2 EXHIBIT "A" TO RESOLUTION NO. 95-20 CITY OF OCOEE INVESTMENT POLICY AND PLAN PURPOSE The purpose of this policy is to set forth the policy and objectives governing the investment management of the City's cash reserves, including any public funds in excess of amounts needed by the City to meet current expenses. The City recognizes that liquidity needs must be met and has established cash flow projections for the debt service funds, capital project funds, general operating funds and enterprise funds. SCOPE This investment policy applies to all the investment activity of the City of Ocoee, except for its employees ' pension funds which are organized and administered separately. Funds subject to this policy include: - General Fund - Special Revenue Funds - Capital Project Funds Enterprise Funds - Internal Service Funds - Debt Service Funds - Any new fund created by the City, unless specifically exempt at its inception and/or by state statute or federal law. Oblectives The primary objectives for the City' s cash reserves are first, protection and safety of the City' s funds, second, provision for liquidity, and third, maximized return on the portfolio but minimized risk, in that order. The investment portfolio will maintain sufficient liquidity to ensure cash availability for operating cash flow requirements. Funds of the City will be invested and handled in accordance with sections 166. 261 and 218 . 415 and Chapter 280, Florida Statutes, this policy and City Resolution 94-08 . DELEGATION OF AUTHORITY The Director of Administrative Services and Finance Manager are designated as Investment Officers of the City and are responsible for investment decisions and activities, under the direction of the City Manager. The daily administration of the cash management program is handled by the Director of Administrative Services and the Finance Manager. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures so established. The City may appoint an outside investment manager as "Agent" for the City' s cash reserves. Positions authorized as investment signatories are City Manager, Director of Administrative Services and Finance Manager. The persons holding these positions are also authorized to initiate wire transfers for the City in conformance with Resolution 94-08. Investment transactions shall be approved by any two of the above depositories signatories. PRUDENCE AND ETHICAL STANDARDS The level of prudence and ethical standards to be applied by the investment officers shall be the "Prudent Person Rule" as it appears in the Government Finance Officers Association's Committee on Cash Management's Model Investment Legislation, which states: "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 from the investment. " The "Prudent Person Rule" shall be applied in the context of managing the overall portfolio. The investment officers and staff, acting in accordance with the written procedures and exercising due diligence, shall not be held personally responsible for a specific security' s credit risk or market price changes, provided that any changes in the credit risk or market price are reported immediately to the Financial Advisors and that appropriate action is taken to control adverse developments. INTERNAL CONTROLS The Director of Administrative Services and Finance Manager shall establish and monitor internal and procedural controls designed to protect the City's assets and ensure proper accounting and reporting of the related transactions. Such controls shall include but not be limited to the following: * transfer of all funds (purchases, sales, etc) through a central account only * separation of functions including transaction authority from accounting and record-keeping * custodial safekeeping * avoidance of bearer-form or non wireable securities * delegation of authority to staff members * written confirmation of telephone transactions * supervisory control of employee actions * specific guidelines regarding securities losses and remedial action * documentation of transaction by investment officials * review of selected investment transactions by external Auditors. All securities purchased by and all collateral obtained by the City shall be properly designated as an asset of the City. All securities purchased will be transferred when possible only under the "delivery versus payment" (D.V.P. ) method but on all securities sold on the "payment versus delivery" method to insure that funds for securities are not released until all criteria relating to the specific transaction are met. The investment officers are authorized to accept, on the behalf of and in the name of the City of Ocoee, bank trust receipts or confirmations from a third party custodian in return for investment of temporarily idle funds as evidence of actual delivery of the obligations or securities. Any such trust receipt or confirmation shall fully describe the various obligations or securities held, together with the specific number of each obligation or security held, and that they are held for the City in the City' s name. The actual obligations or securities, whether in book entry or physical form, on which trust receipts or confirmations are issued may be held by a bank /depository chartered by the United States Government or the State of Florida. The internal controls set forth in this policy shall be reviewed by the independent auditors of the City as part of any financial audit periodically required of the City. MONITORING AND ADJUSTING THE PORTFOLIO The investment officers will routinely monitor the contents of the portfolio, the available markets and the relative values of competing instruments and will adjust the portfolio accordingly. AUTHORIZED INSTITUTIONS AND DEALERS The city shall purchase securities only through qualified public depositories of the State of Florida as identified by the State Treasurer, in accordance with Chapter 280 of the State Statutes. Repurchase agreements shall only be entered into with primary securities dealers and financial institutions which are state qualified public depositories. Before engaging in investment transactions with an institution, the investment officers shall receive a signed certification form attesting that the individual responsible for the City' s account with that firm has reviewed the City' s investment policy and that they agree to undertake reasonable efforts to preclude imprudent transactions involving city funds or transactions in violation of the City' s investment policy. SECURITY SELECTION PROCESS When purchasing or selling securities, the investment officers shall select the security which provides the highest rate of return within the parameters of this policy and given the current objectives and needs of the City' s portfolio. These selections shall be made utilizing one of the following methods: 1. Competitive bids, wherein the City solicits quotes from a minimum of three firms. 2 . Comparison to the current market price as indicated by one of the market pricing resources available to the City (such as the City' s financial advisors, the Wall Street Journal, or a comparable nationally recognized financial publication providing daily market pricing. ) In most situations, the City shall utilize the competitive bid process to select the securities to be purchased or sold. Selection by comparison to a current market price, as indicated above , shall be utilized when, in the judgement of the investment staff, competitive bidding would inhibit the process to select the securities to be purchased or sold. AUTHORIZED INVESTMENTS AND MAXIMUM MATURITIES Cash in Bank and cash reserves of the City of Ocoee may be invested only in the following and for the maturities indicated: 1. U.S . Treasury Bills, Notes and Bonds -with maturity dates within five years or less 2 . Insured or fully collateralized Certificates of Deposit of banks -must be a state-certified public funds depository in the State of Florida, as defined in Section 280. 02 , Florida Statutes -maturities of three years or less 3 . Full faith or general faith and credit obligations of the United States Government or United States Government Agency Securities. -maximum maturity shall be five years or less -maximum portfolio mix shall not exceed 25% for these instruments, inclusive of all types 4 . Repurchase Agreements A. Term Repurchase Agreements collateralized by U.S . Treasury Securities and market-to-market. -purchased only from authorized dealers as provided for in this policy -any authorized institution with whom the City transacts repurchase agreements must have on file a fully executed copy of the City' s Master Repurchase Agreement -must adhere to requirements of the City' s Master Repurchase Agreement B. Overnight (sweep) Repurchase Agreements collateralized by full faith or general faith and credit obligations of the United States Government or United States Government Agency securities. -purchased only from the City' s contracted banking service provider -securities used as collateralization for the overnight (sweep) Repurchase Agreement will be held for the benefit of the City with a third party, the Federal Reserve Bank or the contracted bank's correspondent bank in an amount not less than 101% of the overnight amount of the Repurchase Agreement -any authorized institution with whom the City transacts overnight (sweep) repurchase agreements must have on file an executed copy of the City' s Master Repurchase Agreement for overnight repurchases and an executed Sweep Investment Service Agreement -must adhere to requirements of the City's Master Repurchase Agreement 5 . State Board of Administration local government surplus funds investment pool. -portfolio mix shall not exceed 75% at any one time 6 . State Board of Administration intermediate term investment pool . 7 . Money Market Funds placed only with financial institutions qualifying as public depositories as provided for in chapter 280, Florida Statutes. 8 . Securities of, or other interests in, any open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940, provided the portfolio of such investment company or investment trust is limited to United States Government obligations and to repurchase agreements fully collateralized by such United States Government obligations. Investment in derivative products and the use of reverse repurchase agreements or other forms of leverage is prohibited. To the extent• possible, the investment officers shall attempt to match investment maturities with known cash needs and anticipated cash-flow requirements. DEBT SERVICE REQUIREMENTS Any debt service requirements or bond covenants will supersede this investment policy. EXISTING INVESTMENTS Should any investments currently held not meet the guidelines of this policy, said investments shall be exempted from the requirements of this policy. At maturity or liquidation, such monies so invested shall be reinvested only as provided for in this policy. DIVERSIFICATION, LIQUIDITY AND RISK The investment officers shall diversify use of investment instruments to avoid incurring unreasonable risks inherent in over investing in specific instruments, individual financial institutions or maturities. Diversification strategies shall be determined and revised periodically by the investment officers. Liquidity shall be assured through practices ensuring that funds are readily available for current liabilities when due. Minimizing credit risk will be accomplished by limiting the maximum percentage that may be invested in any one entity or instrument at any one time, as outlined in this policy. ACCOUNTING METHOD Investments will be carried at cost. Gains or losses from investments will be credited or charged to investment income at the time of sale. Premiums of discounts on securities may be amortized over the life of the securities. The City shall comply with Government Accounting Standards Board (GASB) requirements. REPORTING The investment officers shall submit quarterly investment reports to the City Commission that summarizes types of investments and quarterly yield. The report shall include securities in the portfolio by class or type, book value, income earned and market value as of the report date. Such reports shall be available to the public.