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(1) "Derivative security" shall mean a financial instrument, shall contract or obligation whose value or return is based upon or linked to another asset or index, or both, separate from the financial instrument, contract or obligation itself, but shall not include a written repurchase agreement that satisfies the provisions of Section 238.055(a)(2).
(2) "Eligible depository" shall mean any institution described in Ohio R.C. 135.03.
(3) "Eligible investment" shall mean any investment described in Section 238.055(a).
(4) "Investment pool" shall mean a fund established by another subdivision (including a county), the Director of Finance, the governing board or the investing authority (as each of those terms is defined in Ohio R.C. 135.01), if that fund was established for the purpose of investing the public moneys of other subdivisions, but shall not include STAR Ohio.
(5) “Investment Advisor” shall mean any person qualified to act as an investment advisor under Ohio R.C. 1707.141.
(6) “Public moneys” shall mean all moneys in the Treasury of the City or moneys coming lawfully into the possession of the Director of Finance.
(7) “Qualified securities dealer” shall mean the Treasurer of the State of Ohio for the purposes of investments in STAR Ohio.
(8) “Qualified Trustee” shall mean a qualified trustee as described in Ohio R.C. 135.18.
(9) “Reverse repurchase agreement” shall mean a repurchase agreement under the terms of which the Director of Finance or such Director of Finance's designee agrees to sell securities owned by the City to a purchaser and agrees with that purchaser to unconditionally repurchase such securities.
(10) “STAR Ohio” shall mean the Ohio Subdivision's Fund created pursuant to Ohio R.C. 135.45 and currently designated as “Star Treasury Asset Reserve of Ohio”.
(11) “Uniform Depository Act” shall mean Ohio R.C. Chapter 135 and all amendments thereto.
(b) Nothing in this section shall be construed as permitting the investment of the public moneys of the City in any of the obligations defined in subsection (a) hereof if investment in such obligations is otherwise prohibited by the City's investment policy.
(Ord. 51-97. Passed 3-24-97; Ord. 66-16. Passed 5-23-16.)
(a) Council hereby makes the following findings with respect to the authorization and establishment of policies and procedures for the deposit and investment of public moneys in the City's Treasury:
(1) The authorization and establishment of such policies and procedures are powers of local self-government that may be exercised by the City through its ordinances under Sections 3 and 7 of Article XVIII of the Ohio Constitution and Article II of the City Charter.
(2) The authorization and establishment of such policies and procedures are in the best interests of the City and its residents:
A. To provide a more efficient management of the City's moneys and investments; and
B. To enable the City to earn a greater yield on its investments and provide safeguards of the City's moneys.
(b) It is hereby determined that the Uniform Depository Act shall not apply to the City, except as it may be adopted by reference under this chapter, provided that Ohio R.C. 135.11, pertaining to exemption from conflict of interest laws, shall apply to the City.
(c) Ohio R.C. 731.56 to 731.59, inclusive, shall not apply to the City, except as Ohio R.C. 731.59 is incorporated in part in Section 238.05(h).
(d) Unless incorporated by reference or otherwise made applicable in this chapter, no other provision of the Ohio Revised Code which is inconsistent or in conflict with this chapter shall apply to the City.
(Ord. 86-81. Passed 11-9-81.)
(a) The Mayor shall determine the amount of public moneys which shall be available in active deposits to provide the needed cash flow to pay warrants and checks issued and outstanding, to provide for a reasonable surplus in addition to the amount needed to pay such warrants and checks and to maximize the interest received on public moneys of the City. Interest on active deposits shall be paid or credited by the City's designated eligible depositories at least quarterly and when funds are withdrawn, computing the time of payment from the date of deposit. No service charge shall be made by a designated eligible depository against an active deposit or collected from or paid by the Director of Finance, unless such service charge is the same as is customarily imposed by institutions receiving money on deposit subject to check, in the City, in which event the Director of Finance may pay such charge. All public moneys of the City not deposited in active deposits shall be invested pursuant to Section 238.05.
(b) The Mayor shall, by a writing filed with the Clerk of Council, designate one or more eligible depositories as the depository or depositories of the City's active deposits. In making such designation the Mayor shall consider the following:
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(1) The convenience of the location of the depositor's offices;
(2) The rate or rates of interest, if any, which the depository will pay on the active deposits;
(3) The service charges, if any, that will be made for the services of the depository; and
(4) Any other terms or conditions with respect to the depository's acceptance of the City's active deposit.
(c) The initial designation of depositories for the City's active deposits shall be for a period not to exceed six months and may be made without giving the notice provided for in this subsection. Subsequent designations of depositories for the City's active deposits shall be for a period specified in the Mayor's written designation of depositories pursuant to subsection (b) hereof, which period shall be not less than six months nor longer than five years, and shall be made after the Director of Finance has provided written notice by first class mail to the eligible depositories having an office in the City, and such other eligible depositories as determined by the Director, at least sixty days prior to the date of the action of the Mayor designating depositories for the City's active deposits. Such notice shall:
(1) Provide an estimate of the maximum amount of such active deposits at any time during the period of designation, and the proposed period of designation or alternative proposed periods of designation;
(2) Request such depositories to apply, in writing, for all or part of the City's active deposits on or before a date and time specified in the notice;
(3) Request each such depository to state in its application the amount of such active deposits that will be accepted by it, the rate or rates of interest, if any, that will be paid on such active deposits, the service charges, if any, that will be made for its services, other terms or conditions with respect to the depository's acceptance of all or part of the City's active deposits and the location of its offices in the City, or if none are located in the City, the location of its nearest offices; and
(4) Include or request any other information to or from such depositories which the Director of Finance deems relevant.
The request for written applications or their receipt does not constitute a bidding procedure. Rather, such request and application are intended to provide relevant information to the Mayor for his or her designation pursuant to subsection (b) hereof and to provide notice to eligible depositories that the City will receive applications and proposals for its active deposits.
(d) The Mayor shall enter into a contract, approved as to form and content by the Director of Law, with such depositories for the appropriate period determined pursuant to subsection (c) hereof. Such contract shall establish the rate or rates of interest, if any, to be paid by the depository on the City's active deposits, the service charges, if any, the depository may make for its services, and other terms or conditions of the depository's acceptance of the City's active deposits.
(e) The limitations on the aggregate amounts of public moneys that may be on deposit with eligible depositories, as set forth in the Uniform Depository Act, shall apply under this chapter.
(Ord. 86-81. Passed 11-9-81; Ord. 16-10. Passed 2-22-10.)
(a) The Director of Finance, before making the initial deposit in a public depository pursuant to an award made under Section 238.03, or pursuant to an investment in a certificate of deposit under Section 238.05(b)(7), shall require the institution designated as the depository to pledge to and deposit with him or her, as security for the repayment of all public moneys to be deposited in the depository during the period of designation pursuant to the award, eligible securities of aggregate market value equal to the excess of the amount of public moneys to be at the time so deposited, over and above such portion or amount of such moneys as is, at such time, insured by the Federal Deposit Insurance Corporation or by any other agency or instrumentality of the Federal Government or of the State as may be approved by the Mayor and the Director of Law, or the Director of Finance may require such institution to deposit with him or her surety company bonds or other insurance policies approved by the Mayor and the Director of Law which, when executed, shall be for an amount equal to such excess amount. In the case of any deposit, other than the initial deposit made during the period of designation, the amount of the aggregate market value of securities required to be pledged and deposited, or of the surety company bonds required to be deposited, or the insurance coverage required, shall be equal to the difference between the amount of public moneys on deposit in such public depository, plus the amount to be so deposited, minus such portion or amount of the aggregate as is, at the time, insured as provided in this section. The Director of Finance may require additional eligible securities to be deposited to provide for any depreciation which may occur in the market value of any of the securities so deposited.
(b) The following securities shall be eligible for the purposes of this section:
(1) Bonds, notes or other obligations of the United States, or bonds, notes or other obligations guaranteed as to principal and interest by the United States or those for which the faith of the United States is pledged for the payment of principal and interest thereon, by language appearing in the instrument specifically providing such guarantee or pledge and not merely by interpretation or otherwise;
(2) Bonds, notes, debentures or other obligations or securities issued by any Federal Government agency, or the export-import bank of Washington, or bonds, notes or other obligations guaranteed as to principal and interest by the United States or those for which the faith of the United States is pledged for the payment of principal and interest thereon, by interpretation or otherwise and not by language appearing in the instrument specifically providing such guarantee or pledge;
(3) Bonds and other obligations of the State; Bonds and other obligations of any county, township, school district, municipal corporation, including the City, or other legally constituted taxing subdivision of the State, which is not, at the time of such deposit, in default in the payment of principal or interest on any of its bonds or other obligations, for which the full faith and credit of the issuing subdivisions are pledged; Bonds of other states of the United States which have not, during the ten years immediately preceding the time of such deposit, defaulted in payment of either interest or principal on any of their bonds; and Obligations guaranteed as to principal and interest by the Ohio Student Loan Commission.
(c) If the depository fails to pay over any part of the deposit made therein as provided by law, the Director of Finance shall sell at public sale any of the bonds or other securities deposited with him or her pursuant to this section or Ohio R.C. 131.09. Thirty days notice of such sale shall be given in a newspaper of general circulation in the county seat of Lorain County. Pursuant to Ohio R.C. 135.18(C), when a sale of bonds or other securities has been so made, and upon payment to the Director of Finance of the purchase money, the Director shall transfer such bonds or securities, whereupon the absolute ownership of such bonds or securities shall pass to the purchasers, and any surplus remaining, after deducting the amount due the State or subdivision and the expenses of the sale, shall be paid to the depository.
(d) An institution designated as a depository may, by written notice to the Director of Finance, designate a qualified trustee and deposit the eligible securities required by this section with the trustee for safekeeping for the account of the Director and the institution as a depository, as their respective rights to and interests in such securities under this section may appear and be asserted by written notice to or demand upon the trustee pursuant to Ohio R.C. 135.18(D). In such case, the Director shall accept the written receipt of the trustee describing the securities which have been deposited with the trustee by the depository, a copy of which shall also be delivered to the depository. Thereupon all such securities so deposited with the trustee are, pursuant to Ohio R.C. 135.18(D), deemed to be pledged with the Director and to be deposited with him or her, for all the purposes of this section.
(e) Council may make provision for the exchange and release of securities and the substitution of other eligible securities therefor, except where the depository has deposited eligible securities with a trustee for safekeeping as provided in this section.
(f) When the depository has deposited eligible securities described in paragraph (b)(1) hereof with a trustee for safekeeping, the depository may, at any time, substitute or exchange eligible securities described in paragraph (b)(1) hereof having a current market value equal to or greater than the current market value of the securities then on deposit and for which they are to be substituted or exchanged, without specific authorization from Council or the Director of Finance of such substitution or exchange.
(g) When the depository has deposited eligible securities described in paragraphs (b)(2) to (6) hereof with a trustee for safekeeping, the depository may, at any time, substitute or exchange eligible securities having a current market value equal to or greater than the current market value of the securities then on deposit and for which they are to be substituted or exchanged, without specific authorization from Council or the Director of Finance of any such substitution or exchange, only if:
The Director of Finance has authorized the depository to make such substitution or exchange on a continuing basis during a specified period without prior approval of each substitution or exchange. Such authorization may be effected by the Director sending to the trustee a written notice stating that substitution may be effected on a continuing basis during a specified period which shall not extend beyond the end of the period of designation during which the notice is given. The trustee may rely upon such notice, upon the period of authorization stated therein and upon the period of designation stated therein.
No continuing authorization for substitution has been given by the Director of Finance, the depository notifies the Director and the trustee of an intended substitution or exchange, and the Director fails to object to the trustee as to the eligibility or market value of the securities being substituted within ten calendar days after the date appearing on the notiuce of proposed substitution. The notice to the Director and to the trustee shall be given in writing and delivered personally or be certified or registered mail with a return receipt requested. The trustee may assume, in any case, that the notice has been delivered to the Director. In order for objections of the Director to be effective, receipt of the objections must be acknowledged, in writing, by the trustee.
The Director of Finance gives written authorization for a substitution or exchange of specific securities.
(h) The depository shall notify the Director of Finance of any such substitution or exchange under paragraph (g)(1) or (2) hereof. Upon request from the Director, the trustee shall furnish a statement of the securities pledged against such public deposits.
(i) Pursuant to Ohio R.C. 135.18(I), any Federal Reserve Bank or branch thereof located in the State, without compliance with Ohio R.C. 1109.03, 1109.04, 1109.17 and 1109.18 or this chapter, and without becoming subject to Ohio R.C. 1109.15 or any other law of the State relative to the exercise by corporations of trust powers generally, is qualified to act as trustee for the safekeeping of securities under this section. Pursuant to Ohio R.C. 135.18(I), any institution mentioned in Ohio R.C. 135.03 which holds a certificate of qualification issued by the Superintendent of Banks or any institution complying with Ohio R.C. 1109.03, 1109.04, 1109.17 and 1109.18 is qualified to act as trustee for the safekeeping of securities, other than those belonging to itself, under this section and Ohio R.C. 135.18. Pursuant to Ohio R.C. 135.18, upon application to him or her in writing by any such institution, the Superintendent of Banks shall investigate the applicant and ascertain whether or not it has been authorized to execute and accept trusts in the State and whether or not it has safe and adequate vaults and efficient supervision thereof for the storage and safekeeping within the State of such securities. If the Superintendent finds that the applicant has been so authorized and does have such vaults and supervision thereof, he or she shall, pursuant to Ohio R.C. 135.18, approve the application and issue a certificate to that effect, the original or any certified copy of which shall be conclusive evidence that the institution therein named is qualified to act as trustee for the purposes of this section with respect to securities other than those belonging to itself. Notwithstanding the fact that a depository is required to pledge eligible securities in certain amounts to secure deposits of public moneys, a trustee shall have no duty or obligation to determine the eligibility, market value or face value of any securities deposited with the trustee by a depository. This applies in all situations, including, without limitation, a substitution or exchange of securities.
Pursuant to Ohio R.C. 135.18, any charges or compensation of a designated trustee for acting as such under this section shall be paid by the depository and in no event shall be chargeable to the City, to the Director of Finance or to any other officer of the City. Pursuant to Ohio R.C. 135.18, such charges or compensation shall not be a lien or charge upon the securities deposited for safekeeping prior or superior to the rights to and interests in such securities of the City or of the Director. Pursuant to Ohio R.C. 135.18, the Director and his or her bondsmen or surety shall be relieved from any liability to the City or to the depository for the loss or destruction of any securities deposited with a qualified trustee pursuant to this section.
(Ord. 86-81. Passed 11-9-81.)
(a) Scope. All public moneys of the City not kept as a cash reserve in the vault of the Treasury of the City as may be prescribed by the Director of Finance, except as otherwise hereinafter provided, may be invested by the Director of Finance or the Director's designee in the eligible investments described in Section 238.055, which eligible investments shall be purchased only through or from eligible depositories designated pursuant to the Uniform Depository Act, or a qualified securities dealer, provided, however, that public moneys specifically exempted by ordinance from this section and Section 238.055 may be invested as permitted in such ordinance or another ordinance relating to such public moneys. The Director of Finance is authorized to pool cash balances of the several funds of the City for investment hereunder.
(b) Objectives. The achievement of sound fiscal management for the City requires effective investment of public moneys of the City. To that effect, the following investment objectives shall be applied in the investment of public moneys:
(1) Safety. The primary objective of the City's investment policy is the preservation of capital and the protection of investment principal. Subject to the provisions of paragraph (c)(2) hereof, each investment transaction shall seek to first ensure that capital losses measured against the City's investment portfolio as a whole are avoided, whether they are from securities defaults or the erosion of market value.
(2) Liquidity. The City's investments shall remain sufficiently liquid to enable the City to meet its operating requirements that might reasonably be anticipated. In order to achieve this objective, the investment portfolio shall include in greater part a combination of eligible investments consisting of overnight repurchase agreements, deposits to STAR Ohio or investments with active secondary or resale markets.
(3) Yield. In the investment of public moneys of the City, the Director of Finance and any designee of the Director of Finance as permitted hereunder, shall strive to attain, subject always to paragraph (b)(1) hereof, a market-average 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, but shall avoid assuming unreasonable investment risks. Yield as an objective of this policy is of least importance compared to safety and liquidity.
(c) Minimizing Investment Risk. The City acknowledges that investment risk can result from a default by the issuer of the investment, changes in the market price of the investment or technical complications leading to temporary illiquidity of an investment. The following investment limitations are directed at minimizing the effect of such investment risks:
(1) To minimize the risk of default by the issuer of the investment:
A. Public moneys of the City shall be invested only in eligible investments permitted under Section 238.055, except as otherwise permitted under subsection (a) hereof.
B. No public moneys of the City shall be invested in any derivative security, reverse repurchase agreement or investment pool, or in any stripped principal or interest obligation of any eligible investment.
C. The use of leveraging by the City solely as a speculative investment strategy is prohibited under this investment policy. As used herein, "leveraging" shall mean the use of any of the City's current assets as collateral for the purpose of purchasing other assets.
D. The issuance of taxable notes by the City solely for the purpose of arbitraging their proceeds is prohibited under this investment policy.
E. Contracting for the sale of securities that have not yet been acquired by the City, for the purpose of purchasing such securities at a later date on the speculation that their price will decline, is prohibited under this investment policy.
(2) To minimize the risk of changes in the market price of an eligible investment:
A. Any eligible investment made pursuant to this section and Section 238.055 shall mature within five years from the date of settlement unless the eligible investment is matched to a specific obligation or debt of the City and will be held until its maturity, provided, however, that no investment shall be made in any eligible investment hereunder unless the Director of Finance or the authorized designee of such Director of Finance reasonably expects that the eligible investment can be held until its maturity, and provided, further that with respect to any investment of the City's public moneys in STAR Ohio, the limitation of this paragraph shall not be construed as applicable to the maturity date of any individual asset held by STAR Ohio.
B. Notwithstanding anything herein to the contrary, nothing in this subsection or paragraph (b)(1) hereof shall be construed to prohibit the Director of Finance or his or her designee from selling such eligible investment prior to its maturity, or to impose liability on the Director of Finance or his or her designee for any loss occasioned by the sale of any eligible investment otherwise made in accordance with this section and Section 238.055 at a price or prices lower than its cost or balance, if the liquidity needs of the City required such a sale or if the yield on the reinvestment of the sale proceeds of such eligible investment, after taking into account the loss incurred in connection with such sale, will exceed the yield that the City otherwise would have earned if it had held the original eligible investment to the earlier of its maturity date or the maturity date of the eligible investment purchased with such sale proceeds.
(d) Standard of Care. Investment of public moneys of the City shall be made with the exercise of that degree of judgment and care, under circumstances then prevailing, that 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. The foregoing standard shall be applied to the investment portfolio of the City as a whole, and not to each individual investment.
(e) Authority to Invest Public Moneys. The Director of Finance is hereby authorized and directed to invest the public moneys of the City in accordance with the provisions of this section and Section 238.055
. The Director of Finance may delegate the authority to invest the public moneys of the City hereunder to another employee or employees of the City, provided that any such delegation shall be in a writing that shall be approved by the Mayor and the Council of the City. Such a delegation may be for a limited or unlimited period of time, provided that if such delegation is for an unlimited period of time, revocation of such delegation shall be effective only if made in a written instrument signed by the Director of Finance, and termination of the employment by the City of such employee shall automatically terminate such employee's authority to invest the public moneys of the City hereunder without the need for a written instrument. The Director of Finance is further authorized to retain the services of an investment advisor as defined in § 238.015(e) herein who must possess experience in public funds investment management specifically in the area of state and local government investment portfolios or in an eligible depository as defined in § 238.01(b) and Ohio R.C. 135.03. Council shall approve the contract of said investment advisor.
(f) Conflicts of Interest.
(1) Officers and employees of the City involved in making investment decisions shall refrain from:
A. Personal business activity that could conflict with the proper execution and management of the investment program of the City, or that could impair their ability to make impartial decisions regarding the City's investments; and
B. Undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the City.
(2) Officers and employees of the City involved in making investment decisions shall disclose to the Mayor and the City Council:
A. Any material interests in eligible institutions or qualified securities dealers with which they conduct investment business on behalf of the City; and
B. Any personal investment positions that could materially affect, or be materially affected by, the performance of the investment portfolio of the City.
(g) Periodic Reports With Respect to Eligible Investments. The Director of Finance shall prepare and provide to the Mayor and each member of Council monthly statements showing the deposits, withdrawals and balances in the various eligible depositories of the City and, upon the request of the Mayor or Council, shall prepare and provide periodic reports, in such detail as requested by the Mayor or Council, of all investments purchased, sold and held during or at the end of such period.
(h) Authorized Purchasers From and Sellers to the City of Eligible Investments. Purchases and sales of eligible investments hereunder shall be made only from or to, as the case may be, an eligible depository or a qualified securities dealer.
(i) Purchases and Sales of Eligible Investments by the City. The Director of Finance or such Director of Finance's designee shall purchase an eligible investment hereunder for cash at a price not in excess of the current market price, which price shall be deemed to be the best price as determined hereunder, and shall sell any eligible investment for cash and for a sum not less than its current market price, which price shall be deemed to be the best price as determined hereunder. All purchases and sales hereunder of eligible investments described in Section 238.055(a)(1) shall be made only on a delivery-versus-payment basis. With respect to the purchase or sale of any eligible investment described in Section 238.051(a)(1), the Director of Finance or such Director of Finance's designee, subject to the provisions of subsection (h) hereof and except as otherwise provided in this subsection, shall purchase or sell any eligible investment at the best price based upon preferably three bids, but not less than two bids, from any of the parties described in subsection (h) hereof. As used in the immediately preceding sentence, in connection with any purchase of an eligible investment, the "best price" shall mean that price which produces the highest yield to maturity with respect to such eligible investment and, in connection with the sale of an eligible investment, the "best price" shall mean the highest price with respect to such eligible investment, provided, however, that in any case where there are two or more bids at the best price, the Director of Finance or such Director of Finance's designee may, in their absolute discretion, determine which of such bids constitutes the best price. The Director of Finance or the designee shall keep a written record of the bids taken with respect to each purchase or sale of an eligible investment.
(j) Registration, Custody and Safekeeping of Eligible Investments.
(1) If any eligible investments purchased pursuant to this section and Section 238.055 are to be issued to a designated payee or to the order of a designated payee, the name of the Director of Finance and the title of the Director's office shall be so designated. If any such eligible investments are registrable, either as to principal or interest, or both, then such eligible investments shall be registered in the name of the Director of Finance as such.
(2) With respect to each eligible investment, the Director of Finance shall obtain a document evidencing, in the case of a book-entry security, and confirming, in the case of a certificated security held by other than the Director of Finance, each such investment. The Director of Finance is responsible for the safekeeping of all eligible investments and documents evidencing such eligible investments acquired by such Director of Finance. All eligible investments acquired as investments under this section and Section 238.055 by the Director of Finance on behalf of the City, whether in certificated or book-entry form, may be held on behalf of the City by a qualified trustee. Such qualified trustee shall provide to the Director of Finance a copy of each document evidencing or confirming such eligible investments which such qualified trustee receives and shall be required to report to the Director of Finance or to the Auditor of the State of Ohio or a duly authorized independent auditor of the City, at any time, upon request of such party, the identity and location of the document evidencing each eligible investment made hereunder and held by such qualified trustee. In lieu of such custody, such eligible investments or documents evidencing or confirming such eligible investments may be held in a safe deposit box or vault belonging to an eligible depository or in a safe or other secure place at the office of the Director of Finance. Such safe deposit box or vault shall be opened only upon the order of the Director of Finance, such Director of Finance's designee hereunder or a person duly authorized as the Acting Director of Finance in the presence of one or more of the following officials: the Director of Finance, the Director of Law, the Mayor, or persons duly authorized as the Acting Director of Finance, the Acting Director of Law or the Acting Mayor. With respect to any repurchase agreement that matures on the business day that immediately succeeds the business day on which such repurchase agreement was entered into, if the participating institution is a designated depository of the City for the current period of designation, the securities that are the subject of the repurchase agreement may be held in trust by the participating institution on behalf of the City, notwithstanding anything to the contrary in this subsection.
(k) Internal Controls With Respect to Eligible Investments. The Director of Finance shall establish and maintain an internal control structure designed to ensure that the assets of the City are protected against theft, loss or misuse, and, in connection therewith, shall maintain written procedures relating to such internal control.
(l) Exemptions From This Section and General Law.
(1) Any investment of public moneys which, on the effective date of this section (Ordinance 51-97, passed March 24, 1997), does not qualify as an eligible investment under this section (each an ineligible investment) may, notwithstanding anything herein to the contrary, be held until its maturity or its sale, whichever occurs first, provided, however, that if the investment does not have a maturity date, it may be held no later than five years from the effective date of this section. The proceeds of any sale of an ineligible investment shall be reinvested, if at all, only in an eligible investment.
(2) The City, the Director of Finance, any designee of the Director of Finance pursuant to this section, and any other official of the City, being governed by a charter adopted under Article XVIII of the Ohio Constitution, and special provisions regarding the investment of the City's public moneys having been made through the passage of this section, are hereby exempted, except as otherwise expressly provided herein, from the provisions of the general laws of the State of Ohio, including, without limitation, the Uniform Depository Act, applicable to the investment of public moneys, as defined in the Uniform Depository Act.
(m) Biannual Review of Investment Policy; Amendments. This section shall be reviewed on a biannual basis by the Director of Finance and the Mayor to determine if amendments to this section are required in order to further the best interests of the City in connection with the management of its investment portfolio.
(Ord. 51-97. Passed 3-24-97; Ord. 66-16. Passed 5-23-16.)
(a) The Director of Finance or the Director's designee may invest in any of the following classifications of obligations which are hereby determined to be eligible for investment of the public moneys of the City ("eligible investments"):
(1) United States Treasury bills, notes and bonds (excluding stripped principal or interest obligations of such issuances), or any other obligation or security issued by the United States Treasury, or any other obligation guaranteed as to principal and interest by the United States;
(2) A written repurchase agreement between the Director of Finance or such Director of Finance's designee and any eligible depository if, and only if, under the terms of such agreement, the Director of Finance or such Director of Finance's designee purchases for the City and such institution agrees unconditionally to repurchase, within a period of not more than thirty days, securities described in paragraph (a)(1) hereof that will mature or are redeemable within five years from the date of purchase, provided that:
A. The market value of such securities, subject to a repurchase agreement that matures on the business day immediately succeeding the business day on which such repurchase agreement was entered into, shall be at least 102 percent of the principal amount of the repurchase agreement, and, on any other business day after the business day described in the immediately preceding item, shall be at least 102 percent of the principal amount of the repurchase agreement; and
B. The repurchase agreement shall contain the requirement that, for each transaction pursuant to such agreement, the eligible depository shall provide all of the following information:
1. The par value of the securities subject to such agreement;
2. The type, coupon rate, if any, and maturity date of the securities; and
3. A numerical identifier generally accepted in the securities industry that designates the securities; and
(3) Bonds, notes, debentures, or other obligations or securities issued by any federal government agency or instumentality, including but not limited to Federal National Mortgage Association (FNMA), Federal Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), and Federal Home Loan Mortgage Corporation (FHLMC). All such securities shall be direct issuances of federal government agencies or instrumentalities; and
(4) STAR Ohio; and
(5) Deposits or savings accounts in duly authorized depositories which have an executed and approved depository agreement in effect with the City, provided those deposits and accounts are properly insure or collateralized pursuant to Ohio R.C. 135.18 and other sections as appropriate. Deposits in the Certificate of Deposit Account Registry Service (CDARS) and any other program that is deemed to meet the requirements of Ohio R.C. 135.144 or 135.145 are also authorized.
(6) No-load money market mutual funds consisting exclusively of obligations described in divisions (1) and (3) of this section and repurchase agreements secured by such obligations, provided that investments in securities described in this division are made only through eligible institutions mentioned in Ohio R.C. 135.03; and
(7) General obligation bonds and notes of the State of Ohio; and
(8) General obligation bonds and notes of any municipal corporation, including the City of Avon, or any county, township or other political subdivisions of the State of Ohio rated Aa2 or better by a nationally recognized rating agency with respect to such bonds or notes as to which there is no default of principal, interest or coupons, provided, however, that bonds and notes of the City of Avon shall not be required to have a rating in order to be an eligible investment of the City of Avon's Investment Policy; and
(9) STAR Plus.
(b) The Director of Finance, the Director's designee, the Mayor and members of Council shall not be held accountable or personally liable for any loss occasioned by the sale of any eligible investment authorized pursuant to subsection (a) hereof at prices lower than its cost or balance. Any loss or expense in making such sale shall be payable as other expenses of the City.
(c) The members of Council, the Mayor, the Director of Finance and such Director of Finance's designee shall not be personally liable for or with respect to the purchase of any eligible investment authorized as investments pursuant to subsection (a) hereof, and the members of Council and the Mayor shall not be personally liable for any unauthorized deposit or investment by the Director of Finance or such Director of Finance's designee.
(d) In the event of a vacancy in the office of the Director of Finance by reason of death, resignation, removal from office or otherwise, the Director of Finance or any acting or interim Director shall transfer and deliver to the Director's successor all eligible investments held by the Director or, in the case where the Eligible Investments are held in safekeeping by a qualified trustee, all records held by the Director evidencing ownership of such eligible investments and information describing the location of such eligible investments. For the eligible investments so transferred and delivered, such Director of Finance shall be credited with, and the Director's successor shall be charged with, the amount of money invested in such eligible investments.
(e) Whenever eligible investments acquired under this section mature and become due and payable, the Director of Finance shall present them for payment according to their tenor and shall collect the moneys payable thereon. The moneys so collected shall be treated as public moneys subject to the provisions of this section with respect to their reinvestment.
(f) The Director of Finance or the Director's designee shall maintain accounts in which the Director or the Director's designee shall make appropriate entries of all transactions relating to the investment of public moneys.
(g) Interest earned on any eligible investments authorized by this section shall be collected by the Director of Finance and credited by the Director to the proper fund of the City as required by law.
(h) Diversification and Investment Choices. The City purchases investments through Fifth Third Securities, Huntington Investments, KeyBank Capital Markets and Vining-Sparks IBG, L.P. The Director of Finance and the Assistant Director of Finance base purchases on the best interest rates available while keeping an even distribution of monies between banks.
(i) Internal controls. A listing by bank of investments purchased, with dates of maturity, serial numbers/cusip numbers, interest rates and length of investment is maintained and updated for all changes in investments. This schedule is prepared by the Director of Finance. The Treasurer reviews this schedule monthly, along with the related bank statements as part of the monthly bank reconciliations. in addition, investment balances by bank are reconciled monthly by the Assistant Director of Finance.
(Ord. 51-97. Passed 3-24-97; Ord. 97-08. Passed 8-11-08; Ord. 16-11. Passed 2-28-11; Ord. 65-12. Passed 6-11-12; Ord. 93-12. Passed 8-13-12; Ord. 66-16. Passed 5-23-16; Ord. 84-17. Passed 9-25-17.)
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