HomeMy WebLinkAbout1980-27 Adopting an Investment PolicyRESOLUTION N0, 27-80
A RESOLUTION OF THE VILLAGE COUNCIL OF NORTH PALM BEACH,
FLORIDA, ADOPTING AN INVESTMENT POLICY FOR THE VILLAGE.
BE IT RESOLVED BY THE VILLAGE COUNCIL OF NORTH PALM BEACH,
FLORIDA:
Section 1. The Investment Policy attached to this Resolution
as Exhibit No. 1 is hereby adopted and shall apply to the investment
of funds controlled by the Village of North Palm Beach.
Section 2. This Resolution shall take effect immediately
upon passage.
PASSED AND ADOPTED THIS 22ND DAY OF MAY, 1980,
/27,,67
VILLAGE CLERK
V I Idl1Cl: 01' NORTH l'/VM BEACH
FLORIDA
11 NVI;STMI;N'1' 1'On CY
1'EBRUARY 12, :1980
1 N OI:X
INVESTMENT POLICY
PARAGRAPH
NUMBER T'1TI,1: PACT: NO.
1 . ill Purpose 1-
2,.01 Premise 1
2.02 Types 1.
3.(11 Responsibi:I :ity 2
3. 02 1'roe e dure s 2
3.03 12igib i].ity 2
3.04 Tie Quota - Li on 3
II . 0] I'o] icy Review 3
II.(12 Type of Investments 3
I{.03 Quint at:toil l'roeednres 3
1. SUMMARY 1
1.(11 Purpose: Generally , this policy describes a program for short-term
cocmg-term investments of lage Ponds not needed for current governmental
operat i ins.,
historically, it has been the practice of the Village to .invest ".idle"
funds based not on the highest current yield, but rather "idle" funds wore
invested .1n ]oca] banks, that happened at the time, to (told the demand accounts.
The program adopted herein is based on a single premise: Rtbl.ie money
should be used for the people's benefit. (the very important way , certwin] y,
Inaxinliz(' the earnings on public funds, tlnis reducing the need for
td(litional tax revenue.
owing is a short outline of some of the important components of our
investment poi.icy.
2. TYPES 0]' LEGAL INVESTMENTS
7.0.1 1'rem:ise: 1'or guidance and clarification , the only types of invest-
aunts to be mule will be ne1;n't i ab] e direct' oh] i gati ens o I', nr old .i gat i ng the
principal and Interest of which are unconditionally guaranteed by the United
States Government at the then prevailing market priee for such securi ty
J'or further c]ar.i_f.ieat':ion, Exhibits 30 and ]1, "Analysis of Primary
I nVe tifinent 1 nstrtunents," taken from the Municipal finance Officers Assoc.-i at.i on
Treasury Mangaement ]lundbook, will. also be used. Copies of both exhibits are
-hereby made part of tli.is po].icyo
L.02 Tb/pcs: 'J7cc three (3) basic types are as fo]]ows:
a) Certi1'icatc of Deposit - Issued by any financial .111stittcti011
with it title date certain (30 days or more)
b) Repurchase Agreements - A contract agreement between a financial
institution or :investment banker and the Vi]1age whereby the Village purchases
a contract that the bank will buy back at a predetermined date , 11. S. Government
Securities or agencies. 1'or the use of these fluids, the Village receives an
amMari of :interest from the bank negotiated by the Director of Finance and the
haul. at the time of purchase (2-29 clays)
e) Daily Savings Accounts - Consistent- with Federal Reserve guide-
lines, the Village will maintain savings aecotntts at its bank of deposit.*
3. QUOTATION PROCEDURES FOR INVESTMENTS
3.03 Responsib.iliiy: Under the supervision of the Village Manager,
the Director of Finance shall obtain competitive quotations for all
Cer'tii'ic•ates of Deposit and Repo's.
3.02 Procedures: The following procedures will be used:
a) Al] Financial institutions will be notified by telephone, each
I imo that .invest)ncnts are to be made. The Director of Finance or a duly
appointed staff member will solicit quotes for investments, detailing amount
and maturity date for investment. All quotes must he received no later than
LI :30 A. M.
b) The institution providing the highest interest yield will be
awarded the :investment. Transfer instructions will be issued by the Director
n1 finance after award.
e) Quotations of financial :institutions will he available for
public inspec(ion by all _interested parties at the finance Department. All
participating institutions will be supplied copies of quotes received for
that date upon recptest.
3,03 Eligibility: Participation :in quotes will be based on the following:
a) inst:itttion must have 100 percent collateral for the amount of
*11;u)ks of deposit to he established by the Village Council
investments. Go1]atera] Hirst he i.n the .form of approved securities
unc•ondit:innal3y l!uaranteed by the 11. S. Government as to prine.ipal and
interest at the preva.il:ing market price of :investment.
b) lias.is used by institution to compute :interest mast be on 3(0 days.
3.(l4 T:ie puotaticros: Tie cptotati(»is will he awarded using the
I'ullowing criteria:
a) ]lank of deposit wi 1 1 be given preference over non- depos:itor.ies
thus eliminating transfer of funds.
1)) 1nvestmc:it may be split if more than one fund or various maturity
elates arc :involved.
II. ANNUAL R1:VII:w
II .01 Po] icy Review : Annually , thi s poi icy should be reviewed pri or to
September 3Oil) each year and updated as necessary
11.02 Type of 1nvestnumtt: As the Village expands :its revenue and state
.laws ch[nige. other methods of investment will be reviewed.
II .Ili (yuotat ion I'rnccdur•es : As a greater number o f• banks move .into
the area and the increased need for better and bigger investments, the
gont-at ion procedure may have to he ntctd.i fled to accommodate unforeseen
developments.
EXHIBIT 10
Analysis of Primary Investment
Instruments
Instruments
1 Bank Deposits
1. Time Certificatesol
Deposit (CDs)
A Negotiable
B. Non -Negotiable
2 Tune Deposits- 30 Day
3. Pass Book Savings
II Savings 8 Loan Assn.
1. Savings or Investment
Certificates Shares. Deposits
2- Pass Book Savings
111 U.S- Treasury Securities
1. Treasury Bills
2. Treasury Notes
3. Treasury Bonds
IV U.S. Agency Securities
Fully Guaranteed
1 Eaport - Import Bank
Debentures 8 Participation
Certificates
2 Farmers Home Admin.
Insured Notes
3 GNMA - Federal Home Loan
Mortgage Corporation
4 GNMA- FNMA, Bonds
5 GNMA, Participation
Certificates
V U.S. Agency Securities
Not Fully Guaranteed
1 Banks for Cooperatives
Bonds
2 Federal Home Loan
Bank Bonds
3 FHLB Consolidated Notes
4 Federal intermediate
Credit Bank Bonds
5 Federal Land Bank Bonds
6 FNMA Capital Debentures
7. FNMA Debentures
8. FNMA Discount Notes
9. TVA Bonds
10 TVA Discount Notes
VI SW, 8 Local Government
Securities
1. General Obligation Bonds
2 Tax Anticipation Notes
3 Revenue Anticipation Notes
4 Revenue Bonds
5 Warrants
VII Repurchase Agreements
Legality Safety
According to
Stale 8 Local Law
Stale 8 Local Law
Stale 8 Local Law
State 8 Local Law .
According to
Stale 8 Local Law:
Stale & Local Law.
Generally Available
Generally Available
Generally Available
According to State
8 Local Law
According to State
8 Local Law
According to State
8 Local Law
According to State
8 Local Law
According to State
8 Local Law
According to Stale
8 Local law
According to State
8 Local Law
According to State
8 Local Law
According to Stale
8 Local Law
According to State
a Local Law
According to State
8 Local Law
According to Stale
a Local Law
According to Stale
8 Local Law
According to Stale
8 Local Law
According to Stale
8 Local Law
Full Faith a
Credit - U.S. Gov.
Full Faith 8
Credit - U.S. Govt.
Full Faith 8
Credit - U S. GOP.
Full Faith 8
Credit - U.S. Gov.
Full Faith 8
Credit - U.S. Govt.
Full Faith 8
Credit - U.S. Govt.
Fun Faith 8
Credit - U.S. Govt.
Full Faith 8
Credit -US Govt.
Guaranteed by
Agency Only
Guaranteed by
Agency Only
Guaranteed by
Agency Only
Guaranteed by
Agency Only
Guaranteed by
Agency Only
Guaranteed by
Agency Only
Guaranteed by
Agency Only
Guaranteed by
Agency Only
Guaranteed by
Agency Only -
Guaranleed by
Agency Only
Maturity
, 1 • 12 Months
1 . 12 Months
1 Mo. Minimum
No Minimum
1 - 12 Months
No Minimum
91. 182, 270,
385 Days
1 - 7 Years
5 • 30 Years
3 • 5 Years
5 - 15 Years
2 - 25 Years
5 • 20 Years
8 - 20 Years
6 Months or
3N Years
1 - 20 Years
1 Year or less
9 Months to
4 Years
18 Months to
15 Years
5 • 25 Years
18 Months to
25 Years
30. 270 Days
5 - 25 Years
4 Months
Secondary
Markel
Active
Non -Negotiable
NonNegotiable
Non -Negotiable
NonNegoliabte
Non -Negotiable
Most Active
Active
Active
Active
Active
Active
Actve
Ache
Active
Active
Active
Active
Active
Generally Available Guaranteed by 5 - 40 Years Active
Issuer Only
Generally Available Guaranteed by 1 Year 01 Less
Issuer Only
Generally Available Guaranteed by 1 Year or Less
Issuer Only
Generally Available Guaranteed by 5. 40 Years Active
Issuer Only
Generally Available Guaranteed by Upon Redemption
Issuer Only
According to State Cbnlractually Contract
8 Local Law Secure Negotiated
The FDIC insures bank deposits up to S40,000. Most stales require all deposits above that
amount to be secured by collateral placed in trust.
The FSLIC Insures deposits in Savings and Loan Association up to $100.000. Most stales
require all deposits above that amount to be secured by collateral placed in trust.
Liquidity .
Moderate
low
Moderate
High
Low
High
High
Moderate
Moderate
Moderate
Low
Low
Low
Low
High
Moderate
High
High
High
Moderate
Moderate
High
Moderate
Hph
Moderate
Moderate
Moderate
UNDERSTAND INVESTMENT SECURITIES 45
T
•d
1
7
1
EXHIBIT 11
Technical Analysis of
Primary Investment Instruments
Instruments
1 Bank Time Deposits
1. Time Certificate of
Deposits (C0s)
A Negotiable
B Non -Negotiable
2 Time Deposits -30 Days
3 Savings Deposits -
Immediate withdrawal
11 Savings & Loan Assn.
1 Savings or Investment
Certificates. Shares,
or Deposits
III U.S. Treasury Securities
1 Treasury Bills
2 'treasury Notes
3 Treasury Bonds
IV U.S. Agency Secudlies
Fully Guaranteed
1 Export -Import Bank
Debentures & Participation
Certificates
2 F N A Insured Notes
3 CNM& -Federal Home Loan
Mortgage Cotp
4 GNMA- FNMA. Bonds
5 GNMA, Partcipatron
Certificates
V U.S. Agency Securities —
Not Fully Guaranteed
1. Banks for Cooperatives
Bonds
2. F H L 8 Bonds
3 F H L 8 Notes
4 Fed Int Geed Bank
Bonds
5 Fed land Bank -Bands
6 FNMA Capital Debentures
7 FNMA -Debentures
8 FNMA -Discount Notes
9. T.V A -Bonds
10 T V.A.-Discount Notes
Bonds
VI Stale a Local Government
Securities
1. General Obligation Bonds
2 Tax Anticipation Notes
3 Revenue Antaipation Notes
4 Revenue Bonds
5 Warrants
VII Repurchase Ageeements
Markets
Primary Secondary
On Demand None
On Demand None
On Demand None
On Demand. None
On Demand None
Form'
Issue Life
Interest '
Payment
Schedule
Round lot
or Minimum
Denomination
Agency Name 1-12 Months Duarteely toe S100.000 and up
4 Agency Treawrer Maturity Dale
•' 1-12 Months Duarledy for Up to S100.000
Malunty Dale
1 Mo. Minimum At Withdrawal No Minimum•
No Minimum At Withdrawal No Minimums
Weekly 914 Aclrve 8
182 Day Bills
Monthly. 271+
365 Day Bills
Periodic Active R or B
Periodic Active R or B
Irregular
Irregular
Irregular
Irregular
Irregular
Monthly
Monthly
Monthly
Monthly
Not Very
Active
Not Very
Active
Not Very
Active
R orB
R or B
R
R
Active B
Active B
Active 8
Aclrve 8
Monthly Active
Irregular Active
Monthly
R or B
R orB
B
Daily Active B
Yearly
Monthly
Irregular
Ntesore'
Irregular
Irregular
Irregular
Active R or B
Active 8
Acme
None
None
Active
None
On Demand' None
R orB
No Minimum AI Withdrawal No Minimums
91. 182, 270, Discounted S10.000
360 Days at Purchase
1.7 Years Semiannual $1,0005
510,000
5-40 Years Semiannual 51.000 8
$10.000
3-15 Vears Semi-annual 55.000
5-15 Years Annual $25M. S100M
S500M, $1 000AI
2-25 Years Semiannual 525.000
5-20 Years Semiannual $25.000
8-20 Years Semiannual $5,000 8
S10.000
6 Months or At Maturity 55.000
3're Years (6 Mo 1. Semiannual
1-20 Years Semiannual S5.0008
510.000
Up to 1 Year Discounted $100.000
al Purchase
9 Mos.-4 Years Al Maturity (9 Mot 55 000
Semiannual
I y.-15 Years Semiannual 51.000
5-25 Years Semiannual $10.000
lye-25 Years Semiannual SIM. SSM.
8 $10M
27-30 Days Discounted S15.000
at Purchase
5-25 Years Sem.-nnuat SI 000
4 Months Discounted 55,000
al Purchase
40 Years Semi-annual 315.000
B or C 5-a0 Years
(Commonly)
B 3 Mos-1 Year
(Generally)
B Up to 1 Year
(Generally)
B on C 5-40 Vears
(Commonly)
Vendor or Until Cash
Payroll Demand es Available
Name of Agency 1-7 Days
+ Agency Treasurer Usually
Semiannual $5,000
AI Maturity 55,000
(Generally) (Generally
Al Maturity 55,000
(Generally) (Generally)
Semannual 55,000
(Generally)
Upon Redemplion Any
At Agreed Varies, Many
on Date States Redure
$100.000
It permitted by bank. Not all banks accept This account.
a B, Bearer R- Registered C- Convertible
a Up to $100,000 secured by FDIC, beyond This bank or savings and loan muss hold collateral
securities in escrow.
46 A TREASURY MANAGEMENT HANDBOOK