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HomeMy WebLinkAbout2317 RESOLUTION NO. 2317 A RESOLUTION of the City Council of the City of Bremerton Adopting a Policy for the Investment of City Funds. WHEREAS, the present investment policy of the City was adopted in 1986; and WHEREAS, since that time, the Washington Municipal Treasurers Association, in conjunction with its national counterpart, has developed a comprehensive model investment policy; and WHEREAS, the City is desirous of adopting this model policy to meet local needs in order to provide for sound management of its financial assets; NOW, THEREFORE, BE IT RESOLVED: That the Bremerton City Council does hereby adopt the City of Bremerton Investment Policy providing for the management of its financial assets. ADOPTED by the City Council of the City of Bremerton this 26 day of September, 1990. LYNN HORTON, President Bremerton City Council ADOPTED this 26 day of September, 1990. LOUIS MENTOR, Mayor ATTEST: KATHLEEN L. McCLUSKEY, City Clerk CITY OF BREMERTON INVESTMENT POLICY TABLE OF CONTENTS 1. Policy 2. Scope 3. Prudence 4. Objective 5. Delegation of Authority 6. Ethics and Conflict of Interest 7. Authorized Financial Dealers and Institutions 8. Authorized Investments 9. Safekeeping and Custody 10. Diversification 11. Maturities 12. Internal Control 13. Performance Standards 14. Reporting 15. Investment Policy Adoption INVESTMENT POLICY 1.0 POliCY: It is the policy of the City of Bremerton 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 on the Treasury and conforming to all Washington statutes governing the investment of public funds. 2.0 SCOPe: This investment policy applies to all financial assets of the City with the specific exemption of the Employee Retirement Fund. These funds are accounted for in the City's Annual Financial Report and include: 2.1 Funds: 2.11 General Fund 2.12 Special Revenue Funds 2.13 Capital Project Funds 2.14 Enterprise Funds 2.15 Trust and Agency Funds 2.16 Any new fund created by Council, unless specifically exempted by Council 3.0 Prudence: Investments shall be made with judgement 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. 3.1 The standard of prudence to be used by investment officials shall be the "prudent person" and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments. 4.0 Objective: The primary objectives, in priority order, of the City's investment activities shall be: 4.1 Safety: Safety of principal is the foremost objective of the City. Investments of the City of Bremerton shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. 4.2 Liquidity: The City's investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. 4.3 Return on investment: The City's investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the City's investment risk constraints and the cash flow characteristics of the portfolio. 5.0 Delegation of Authority: Management responsibility for the investment program is hereby delegated to the Treasurer, who shall establish written procedures for the operation of the investment program, consistent with this investment policy. The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. 6.0 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 disclose to the Mayor any material financial interests in financial institutions that conduct business within this jurisdiction, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the City's portfolio. Employees and officers shall subordinate their personal investment transactions to those of the City of Bremerton, particularly with regard to the time of purchases and sales. 7.0 Authorized Financial Dealers and Institutions: The Treasurer will maintain a list of financial institutions as required by the Public Deposit Commission, authorized to provide investment services (R.C.W. 39.58.080). In addition, a list will also be maintained of approved security broker/dealers, who maintain an office in the State of washington. These may include "primary" dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C-31 (uniform net capital rule). No public deposit shall be made except in a qualified public depository in the State of Washington. 8.0 Authorized Investments: All municipal corporations in Washington State, including the City of Bremerton, are empowered by statute to invest in the following types of securities. 8.1 Investment deposits, including certificates of deposit, with qualified public depositories as defined in Chapter 39.58 RCW. 8.2 Certificates, notes, Or bonds of the United States, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States. 8.3 Obligations of government-sponsored corporations which are eligible as collateral for advances to member banks as determined by the Board of Governors of the Federal Reserve System. 8.4 Ballker's acceptances purchased on the secondary market. 8.5 Repurchase agreements for securities listed in 2,3, and 4 above, provided that the transaction is structured so that the City of Bremerton obtains control over the underlying securities and a Master Repurchase Agreement has been signed with the bank or dealer. 9.0 Safekeeping and Custody: All security transactions, including collateral for repurchase agreements, entered into by the City of Bremerton shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by a third party custodian designated by the Treasurer. 10.0 Diversification: The City will diversify its investments by security type and institution. With the exception of U. S. Treasury securities and the State Investment Pool, no more than 30% of the City's total investment portfolio will be invested in a single security type or with a single financial institution. 11.0 Maturities: To the extend possible, the City will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing more than five years from the date of purchase. However, the City may collateralize its repurchase agreements using longer-dated investments. 12.0 Internal Control: The Treasurer shall establish a process of independent review byan external auditor. This review will provide internal control by assuring that policies and procedures are being complied with. Such review may also result in recommendations to change operating procedures to improve internal control. 13.0 Performance Standards: The City of Bremerton investment portfolio will be designed to obtain a market average rate of return during budgetary and economic cycles, taking into account the City's investment risk constraints and cash flow needs. 13.1 Market Yield: The basis used by the Treasurer to determine whether market yields are being achieved shall be the six-month U. S. Treasury Bill. 14.0 Reporting: The Treasurer is charged with the responsibility of including a report on investment activity and returns in the City's Quarterly Financial Report. 15.0 Investment Policy Adoption: The City of Bremerton investment policy shall be adopted by resolution of the City Council. The policy shall be reviewed on an annual basis by the Fiscal and Budget Committee and any modifications made thereto must be approved by the City Council.