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Home My WebLink About95-16(30. k • RESOLUTION N0. 95-16 ADOPTION OF A POLICY FOR INVESTMENT aF TOWN FUNDS WHEREAS, the Town of Pulaski has a fiduciary role in the management of all public funds entrusted to its care; and WHEREAS, the Town of Pulaski has been provided statutes and guidelines governing the investment of public funds in Virginia, including the Investment Code of Virginia and guidelines established by the State Treasury Board and the Governmental Accounting Standards Board (GASB); and WHEREAS, the Town Manager~.of the Town of Pulaski, Virginia did present to the Finance Committee of the Town Council of the Town of Pulaski an Investment Policy for investment of the Town's idle cash balances; and WHEREAS, the refinements of the_~Finance Committee have been incorporated into that Investment Policy. NOW, THEREFORE, BE IT RESOLVED. by the Town Council of the Town of Pulaski, Virginia, sitting in regular session on July 18, 1995, that the Town of Pulaski investment policy, as revised, be and hereby is approved for the Town of Pulaski.. This Resolution is effective upon adoption and is adopted this 18th day of July, 1995, by recorded vote of the Town Council as follows: John A. Johnston Aye John W. Stone Aye Roy H. D'Ardenne, Jr. Aye W . H . Schrader Absent ATTEST: ' '~ `t JV • Ru A. Harrell Clerk of Council Bettye H. Steger Aye E. G. Black, Jr. _~ye Alma Holston Aye W . Edgar Hale Aye TOWN OF PULASKI, VIRGINIA TOWN OF PULASKI Investment Policy I. PURPOSE AND SCOPE In recognition of its fiduciary role in the management of all public funds entrusted to its care, it shall be the policy of the Town that all its investable balances be invested with the same care, skill, prudence and diligence what a prudent and knowledgeable person would exercise when undertaking an enterprise of like character and aims. Further, it shall be the policy of the Town that all investments and investment practices meet or exceed all statutes and guidelines governing the investment of public funds in Virginia, including the Investment Code of Virginia and the guidelines established by the State Treasury Board and the Governmental Accounting Standards Board (GASB). II. OBJECTIVES The primary objectives of the Finance Director's/Treasurer's investment activities, in priority order are: SAFETY, LIQUIDITY, and YIELD. A. SAFETY: The safeguarding of principal shall be the foremost objective of the investment program, and other objectives shall be subordinated to the attainment of this objective. B. LIQUIDITY: The investment ..portfolio shall be managed at all times with sufficient liquidity to meet all daily and season needs, as well as special projects and, other operational requirements either known or which might be reasonably anticipated. C. YIELD: The investment portfolio shall be managed with the objective of obtaining no worse than a market rate of return over the course of budgetary and economic cycles, taking into account the constraints contained herein and the cash flow patterns of the Town. III. DELEGATION OF AUTHORITY The Town Manager delegates management responsibility and authority for the investment program to the Finance Director/Treasurer who in consultation with the Town Manager shall have the authority to invest all available funds. Investment of Cemetery Funds requires the advice and consent of that Fund's • trustees. :~ Page 2 Town of Pulaski Investment Policy IV. PRUDENCE STANDARDS The standard of prudence to be applied by the Finance Director/Treasu•rer shall be the "prudent investor" rule, which states, "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercised 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." The prudent investor rule shall be applied in the context of managing the overall portfolio. V. ALLOWABLE INVESTMENTS AND QUALITY Asa unit of local government in the Commonwealth of Virginia, the Town is governed by the GASB Statement #3, the Virginia Security for Public Deposits Act, Secs 2:1-359 through 2.1-370, the Government Non-Arbitrage Investment Act as to restrictions for engaging in arbitrage as covered in•Secs 2.1-234.9:1 through_2.1- 234.9:7, and the Investment of•Public Funds as to the types of securities described in Secs 2.1-327 through 2.1 329.01, Code of Virginia. The following securities•may be purchased for the Town's investment portfolio: A. Bonds, notes and other evidences of indebtedness of the Commonwealth of Virginia and of its local governments and public bodies, provided such obligations have a debt rating of at least "AA" or .equivalent by Moody's and/or Standard & Poor's ratings. B. U.S. Treasury Bills, Notes, Bonds and other direct obligations of the United States Government, and obligations of Agencies of the Federal Government including but not limited to the Federal Farm Credit Bank, Federal Home Loan Bank, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation and Student Loan Marketing Association. C. Certificates of deposit and time deposits of national banks located within the Commonwealth and state chartered banks under Commonwealth supervision provided such deposits are insured or collateralized up to 100% of the amount of the deposit in excess of federal insurance coverage. D. Local Government Investment Pool (LGIP) operated by the State Treasurer. It is noted that the LGIP may invest in instruments not allowable for direct investment by the Town. Page 3 Town of Pulaski Investment Policy E. Repurchase Agreements executed through national banks located within the Commonwealth and state chartered banks under Commonwealth supervision, collateralized 'by U.S. Treasury/Agency securities the market value of which is at least 102%. of the purchase price of the repurchase agreement. VI. PROHIBITED SECURITIES A. CMOs, inverse floating rate securities, floating rate securities tied to a non-money market instrument, IS's, PO's, Z- tranche securities, residuals, and other securities not allowable in Section V, above. B. Transactions in options, futures, .options on futures, margin buying and commodities are prohibited. VII. MATURITY LIMITATIONS The Average Maturity of investment may not exceed the fallowing for respective fund types: - General/Enterprise~Funds: 90 days. -- UDAG/CDBG: 6 months. -- Cemetery: 90% up to 5°years. -- Other Special Funds: 6 months. VIII. REPORTING A. The Finance Director/Treasurer shall submit an investment report quarterly to the Town Manager that summarizes recent market conditions, economic developments, liquidity and anticipated investment conditions. The report shall summarize the investment strategies employed in the most recent period, an describe the portfolio in terms of typed of funds invested (General, UDAG, etc.}, investment securities, maturities, risk characteristics and other features. The report will explain the year-to-date total investment return in comparison with budgetary expectations. The report will include an appendix that discloses all transactions during the reporting period. In addition to monthly comparisons, the annual report shall include a 12-month analysis of results and will include suggested policy changes and procedural improvements that might be made to the investment program. The Finance Director/Treasurer will submit to the Town Manager a final report including any audit adjustments within 30 days after the completion of the annual audit. / • B. The Town Manager shall submit an investment report quarterly and annually to Town Council at a regularly scheduled Council meeting. L Page 4 Town of Pulaski Investment Policy IX. ADDITIONAL REQUIREMENTS A. All securities purchased will be in the name of the Town of Pulaski and will name the specific fund from which the instrument was purchased.' Safekeeping of account receipts will be accomplished by the Finance Director/Treasurer. B. A list of all individuals authorized to transfer funds or otherwise conduct investment transactions on behalf of the Town shall be maintained and communicated to all affected parties.. ~~