(A) The village may invest its public funds as follows:
(1) In bonds, notes, certificates of indebtedness, treasury bills or other securities now or hereafter issued, which are guaranteed by the full faith and credit of the United States of America as to principal and interest;
(2) In bonds, notes, debentures or other similar obligations of the United States of America or its agencies;
(3) In interest-bearing savings accounts, interest-bearing certificates of deposit or interest- bearing time deposits or any other investments constituting direct obligations of any bank as defined by the Illinois Banking Act, ILCS Ch. 205, Act 5, §§ 1 et seq.;
(4) In short term obligations of corporations organized in the United States with assets exceeding $500,000,000 if:
(a) Such obligations are rated at the time of purchase at one of the three highest classifications established by at least two standard rating services and which mature not later than 180 days from the date of purchase;
(b) The purchases do not exceed 10% of the corporation’s outstanding obligations; and
(c) No more than one-third of the village’s funds may be invested in short term obligations of corporations; or
(5) In money market mutual funds registered under the Investment Company Act of 1940, 15 U.S.C. §§ 80a-1 et seq., provided that the portfolio of any such money market mutual fund is limited to obligations described in subsections (1) or (2) of this division and to agreements to repurchase such obligations.
(B) In addition to any other investments authorized under this subchapter, the village may invest its public funds in interest bearing bonds of any county, township, city, village, incorporated town, municipal corporation or school district. The bonds shall be registered in the name of the village or held under a custodial agreement at a bank. The bonds shall be rated at the time of purchase within the four highest general classifications established by a rating service of nationally recognized expertise in rating bonds of states and their political subdivisions.
(C) Investments may be made only in banks which are insured by the Federal Deposit Insurance Corporation. The village may invest its public funds in short term discount obligations of the Federal National Mortgage Association or in shares or other forms of securities legally issuable by savings banks or savings and loan associations incorporated under the laws of this state or any other state or under the laws of the United States. Investments may be made only in those savings banks or savings and loan associations the shares or investment certificates of which are insured by the Federal Deposit Insurance Corporation. Any such securities may be purchased at the offering or market price thereof at the time of such purchase. All such securities so purchased shall mature or be redeemable on a date or dates prior to the time when, in the judgment of such governing authority, the public funds so invested will be required for expenditure by the village or its governing authority. The expressed judgment of any such governing authority as to the time when any public funds will be required for expenditure or be redeemable is final and conclusive. The village may invest any public funds in dividend-bearing share accounts, share certificate accounts or class of share accounts of a credit union chartered under the laws of this state or the laws of the United States; provided, however, the principal office of any such credit union must be located within the State of Illinois. Investments may be made only in those credit unions, the accounts of which are insured by applicable law.
(D) For purposes of this section, the term AGENCIES OF THE UNITED STATES OF AMERICA includes:
(1) The federal land banks, federal intermediate credit banks, banks for cooperative, federal farm credit banks or any other entity authorized to issue debt obligations under the Farm Credit Act of 1971, 12 U.S.C. §§ 2001 et seq. and Acts amendatory thereto;
(2) The federal home loan banks and the federal home loan mortgage corporation; and
(3) Any other agency created by Act of Congress.
(E) Except for pecuniary interests permitted under Illinois Municipal Code or under Public Officer Prohibited Practices Act § 3.2 (ILCS Ch. 50, Act 105, § 3.2) or under any other applicable state law, no person acting as treasurer or financial officer or who is employed in any similar capacity by or for the village may do any of the following:
(1) Have any interest, directly or indirectly, in any investments in which the agency is authorized to invest;
(2) Have any interest, directly or indirectly, in the sellers, sponsors or managers of those investments;
(3) Receive, in any manner, compensation of any kind from any investments in which the agency is authorized to invest.
(F) The village may also invest any public funds in a Public Treasurers’ Investment Pool created under State Treasurer Act § 17, ILCS Ch. 15, Act 505, § 17. The village may also invest any public funds in a fund managed, operated and administered by a bank, subsidiary of a bank or subsidiary of a bank holding company or use the services of such an entity to hold and invest or advise regarding the investment of any public funds.
(G) To the extent the village has custody of funds not owned by it or another public agency and does not otherwise have authority to invest such funds, the village may invest such funds as if they were its own. The funds must be released to the appropriate person at the earliest reasonable time, but in no case exceeding 31 days, after the private person becomes entitled to the receipt of them. All earnings accruing on any investments or deposits made pursuant to the provisions of this subchapter shall be credited to the public agency by or for which such investments or deposits were made, except as provided otherwise in State Finance Act § 4.1, ILCS Ch. 30, Act 105, § 4.1, or the Local Tax Collection Act, ILCS Ch. 35, Act 720, §§ 1 et seq., and except where by specific statutory provisions such earnings are directed to be credited to and paid to a particular fund.
(H) The village may purchase or invest in repurchase agreements of government securities having the meaning set out in the Government Securities Act of 1986, 15 U.S.C. §§ 78a et seq., subject to the provisions of the Act and the regulations issued thereunder. The government securities, unless registered or inscribed in the name of the village, shall be purchased through banks or trust companies authorized to do business in the State of Illinois.
(I) Except for repurchase agreements of government securities which are subject to the Government Securities Act of 1986, the village shall not purchase or invest in instruments which constitute repurchase agreements and no financial institution may enter into such an agreement with or on behalf of the village unless the instrument and the transaction meet the following requirements:
(1) The securities, unless registered or inscribed in the name of the village, are purchased through banks or trust companies authorized to do business in the State of Illinois;
(2) An authorized public officer after ascertaining which firm will give the most favorable rate of interest directs the custodial bank to purchase specified securities from a designated institution. The custodial bank is the bank or trust company, or agency of government, which acts for the village in connection with repurchase agreements involving the investment of funds by the village. The State Treasurer may act as custodial bank for the village. To the extent the Treasurer acts in this capacity, he or she is hereby authorized to pass through to the village any charges assessed by the Federal Reserve Bank;
(3) A custodial bank must be a member bank of the Federal Reserve System or maintain accounts with member banks. All transfers of book- entry securities must be accomplished on a Reserve Bank’s computer records through a member bank of the Federal Reserve System. These securities must be credited to the village on the records of the custodial bank and the transaction must be confirmed in writing to the village by the custodial bank;
(4) Trading partners shall be limited to banks or trust companies authorized to do business in the State of Illinois or to registered primary reporting dealers;
(5) The security interest must be perfected;
(6) The village enters into a written master repurchase agreement which outlines the basic responsibilities and liabilities of both buyer and seller;
(7) Agreements shall be for periods of 330 days or less;
(8) The Village Comptroller or designee of the village informs the custodial bank in writing of the maturity details of the repurchase agreement;
(9) The custodial bank must take delivery of and maintain the securities in its custody for the account of the village and confirm the transaction in writing to the village. The custodial undertaking shall provide that the custodian takes possession of the securities exclusively for the village; that the securities are free of any claims against the trading partner; and any claims by the custodian are subordinate to the village’s claims to rights to those securities;
(10) The obligations purchased by the village may only be sold or presented for redemption or payment by the fiscal agent bank or trust company holding the obligations upon the written instruction of the Village Comptroller or officer authorized to make such investments;
(11) The custodial bank shall be liable to the village for any monetary loss suffered by the village due to the failure of the custodial bank to take and maintain possession of such securities.
(Ord. 01-25, passed 8-22-01)