HomeMy WebLinkAbout2013-07 Investment Policy Revision•
ORDINANCE NO. 2013-07
AN ORDINANCE OF THE VILLAGE COUNCIL OF THE VILLAGE OF
NORTH PALM BEACH, FLORIDA, AMENDING ARTICLE 1, "IN GENERAL,"
OF CHAPTER 2, "ADMINISTRATION," OF THE VILLAGE CODE OF
ORDINANCES BY AMENDING SECTION 2-4, "INVESTMENT POLICY OF
THE VILLAGE," TO EXPAND THE LIST OF AVAILABLE INVESTMENT
OPTIONS AND TO CLARIFY THAT THE QUARTERLY INVESTMENT
REPORT MAY BE PREPARED BY THE FINANCE DIRECTOR OR THE
DIRECTOR'S DESIGNEE; PROVIDING FOR CODIFICATION; PROVIDING
FOR SEVERABILITY; PROVIDING FOR CONFLICTS; AND PROVIDING
FOR AN EFFECTIVE DATE.
WHEREAS, after consultation with the Village Audit Committee, Village Administration
recommended revising the Village's Investment Policy, as set forth in Section 2-4 of the Village
Code of Ordinances, to provide additional investment options, namely, Commercial Paper and
State/Local Government Taxable/Tax-Exempt Debt, and to clarify that quarterly investment
reports shall be prepared by the Finance Director or his or her designee; and
WHEREAS, Village Council has determined that the adoption of this Ordinance revising the
Village's Investment Policy is in the best interests of the health, safety and welfare of the Village
and its residents.
NOW, THEREFORE, BE IT ORDAINED BY THE VILLAGE COUNCIL OF THE VILLAGE
OF NORTH PALM BEACH, FLORIDA as follows:
Section 1. The foregoing recitals are ratified as true and correct and are incorporated herein.
Section 2. The Village Council hereby amends Chapter 2, "Administration," Article I, "In General,"
of the Village Code of Ordinances by amending Section 2-4, "Investment Policy of the Village,"
to read as follows (additional language is underlined and deleted language is stricken through):
Sec. 2-4. Investment policy of the village.
***
(d) Performance measurements. In order to assist in the evaluation of
the portfolio's performance, the village shall use . nationally recognized
benchmarks for the short term and long term portfolios: Performance calculations
will not include any balances invested in overnight sweep accounts.
(1) Short term portfolio. A nationally recognized Money Market Fund
Index, such as Standard and Poor's Government Investment Pool
Index/Government 30 days gross of fees yield will be used as
a benchmark.
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(2) Long term portfolio. Investment performance of the village portfolio
will be compared to the Merrill Lynch 1-3 year United States
Treasury Note iilndex or the equivalent composed of U.S. Treasury
or government securities, with duration and asset mix that
approximates the village portfolio.
***
(f) Authorized investments and pre -qualification. The village may
invest and reinvest, in accordance with the objectives stated in subsection (c), in
the financial instruments noted in the table inset below. When considering such
investments, the village shall use the following pre -qualification parameters for
specific institutions:
(1) Banks. The Village shall only select a QPD (Qualified Public
Depository) with a collateral pledge level of twenty-five percent
(25%) or fifty percent (50%) as established by the State Chief
Financial Officer pursuant to Section 280.04, Florida Statutes.
(2) SEC registered money/market mutual funds.
S&P: AAAm Minimum or
Moody's: AAA Aaa-mf Minimum.
(3) Insurance companies. A.M. Best Rating: Minimum aaa.
(4) Corporate interest notes.
S&P: AAA A Minimum.
Moody's: AAA A. Minimum.
Commercial paper.
S&P: A-1 Minimum.
Moody's: P-1 Minimum.
Sate and/or Local Government Taxable and/or Tax -Exempt Debt.
S&P: A- Minimum for long term debt or A-2 for short term debt.
Moody's: A3 Minimum for long term debt or VMIG2 for short
term debt.
(. 7) Local government investment pools. All components in each pool
must satisfy the appropriate pre -qualification parameters noted for
that institution.
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(g) Maturity and liquidity requirements. The village's investment
portfolio shall be structured to provide sufficient liquidity to pay obligations as
they come due. Furthermore, to the extent possible, an attempt will be made to
match investment maturities with known cash needs and anticipated cash flow
requirements. Unless matched to a specific cash flow, the village will not directly
invest in securities maturing more than three years from the date of purchase.
(h) Portfolio composition. The following are the limits for investments
and limits on security issues, and maturities in the portfolio. The chief financial
officer has the option to further restrict investment in selected instruments, to
conform to the present market conditions.
Note: The table below defines two (2) types of village investments, "operating"
and "core":
Operating: Those liquid funds necessary to conduct routine village activity,
in addition to an amount determined by the village council and administration
sufficient to cover emergency situations and unforeseen capital expenditures.
Core: All funds not included in operating funds. In general, these funds
can be invested in issues with longer -term maturities.
These terms shall be defined and the amounts will be designated at least once a
year during the village budget discussions. Changes during a year shall only be
made by resolution of the village council. These changes will apply to the end of
the current fiscal year and must be reconfirmed or changed as needed during the
next annual budget process.
Table Inset:
Authorized Investments Type of Funds
Interest -bearing Operating
checking or savings
accounts
Interest —bearing time
deposits
Core
Maturity Minimum %
Range
N/A
N/A
Operating 30 days
Core 3 years
The Local Government Operating N/A
Surplus Funds Trust
Fund/intergovernmental Core N/A
investment pool
8.33%
(1/12 of annual
Village operating
budget)
0%
0
0
0
0
Maximum %
100
(no more than 50%
with any one
depository
institution)
100
(no more than 50%
with any one
depository
institution)
91.67
(11/12t of annual
Village operating
budget)
(no more than
33.33% with any one
issuer)
100
(no more than
33.33% with any one
issuer)
25
25
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•
•
Securities and
Exchange Commission
registered money
market funds
Direct obligations of
the United States
Treasury
Federal Agencies
Corporate Notes
Commercial Parser
State and/or Local
Government Taxable
and/or Tax -Exempt
Debt
Operating N/A 0 50
(no more than
33.33% with any one
issuer.)
Core N/A 0 50
(no more than
33.33% with any one
issuer.)
Operating 30 days 0 50
Core 5 years 0 100
Operating N/A 0 0
Core 5 years 0 50
(no more than 10%
with any one issuer)
Operating N/A 0 0
Core 3 years 0 25
(no more than 33.3
5% with any one
issuer)
Operating 30 days 0 5
Core 270 days 0 15
(no more than 5%
with anv one issuer)
Operating N/A 0 0
Core 3 years 0 20
(no more than 5%
with anv one issuer)
(p) Reporting. The chief financial officer or his or her respective designee
shall prepare a quarterly investment report, which shall include securities in the
portfolio by class and type, acquisition cost, income earned, yield, maturity date
and market value as of the report date. The report will be provided to the
legislative and governing body of the village and shall be available to the public.
***
Section 3. The provisions of this Ordinance shall become and be made a part of the Code of
the Village of North Palm Beach, Florida.
Section 4. If any section, paragraph, sentence, clause, phrase or word of this Ordinance is for
any reason held by a court of competent jurisdiction to be unconstitutional, inoperative or void,
such holding shall not affect the remainder of this Ordinance.
Section 5. All ordinances or parts of ordinances and resolutions or parts of resolutions in
conflict herewith are hereby repealed to the extent of such conflict.
Section 6. This Ordinance shall take effect immediately upon adoption.
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PLACED ON FIRST READING THIS 28th DAY OF MARCH, 2013.
• PLACED ON SECOND, FINAL READING AND PASSED THIS l lth DAY OF APRIL, 2013.
(Village Seal)
ATTEST:
VILLAGE CLERK
APPROVED AS TO FORM AND
LEGAL SUFFICIENCY:
VILLAGE ATTORNEY
•
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