(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 234.031 hereof, which Eligible Investments shall be purchased only through or from Eligible Depositories designated pursuant to the Uniform Depository Act or Qualified Securities Dealer; provided, however, that Public Moneys specifically exempted by ordinance from this Section 234.03 and Section 234.031 may be invested as permitted in such ordinance or other ordinance related 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 the 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 subsection (c)(2) hereof, each investment transaction shall seek to first ensure that capital losses measured against each investment are avoided, whether they be from securities' defaults or 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 Eligible Investments with active secondary or resale markets.
(3) Yield. In the investment of the 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 (1) above, 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 234.031 hereof, except as otherwise permitted under subsection (a) hereof.
B. The amount of Public Moneys of the City to be invested in any one type of Eligible Investment, with any one Eligible Depository or through any one Qualified Securities Dealer shall be limited based upon guidelines developed by the Director of Finance taking into account the objectives set forth in subsection (b) hereof.
C. 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.
D. 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.
E. The issuance of taxable notes by the City solely for the purpose of arbitraging their proceeds is prohibited under this Investment Policy.
F. 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 Section 234.03 and 234.031 hereof 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 with respect to any investment of the City's Public Moneys in STAR OHIO, the limitation of this subparagraph A. shall not be construed as restricting the maturity date of any individual asset held by STAR OHIO.
B. Notwithstanding anything herein to the contrary nothing in this subsection (c)(2) or (b)(1) shall be construed to prohibit such Director of Finance or such designee from selling such Eligible Investment prior to its maturity, or to impose liability on such Director of Finance or such designee for any loss occasioned by the sale of any Eligible Investment otherwise made in accordance with Sections 234.03 and 234.031 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 the 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 each Eligible Investment of the City in the its investment portfolio.
(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 Sections 234.03 and 234.031 hereof. 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 filed with the City Manager, and such a delegation shall be effective for all purposes of this section unless the City Manager disapproves such a delegation within ten days of receipt of such written delegation. 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 writing 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.
(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 or company 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 City Manager:
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 at least quarterly an investment report, including a management summary describing the investment portfolio at the end of the quarterly or other period and the transactions made over such period. Such report shall include: a list by maturity date of all Eligible Investments (including, without limitation, a description of the obligation or security that includes the type, original cost, par value, maturity date, coupon interest rate and yield to maturity) for the period covered by such report and held at the end of such period; unrealized gains or losses on any Eligible Investment over one-year duration that may have to be sold prior to its maturity; the average weighted yield to maturity of the investment portfolio; and the percentage of the total portfolio that each type of investment represents. A copy of such report shall be attached to the City's monthly bank reconciliations and be made available to City Council and the City Manager upon request.
(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, which in either case has acknowledged to the City in writing that in the case of such a party that initiates investment transactions with the City, it has received a copy of this section, and it will not sell to the City any investment security prohibited hereunder or not included as an Eligible Investment within the investment securities described in Section 234.031 hereof or in the case of such a party that executes investment transactions initiated by the City, it has received a copy of this section, and it comprehends the investment policy stated in this section. The Director of Finance shalt annually review the past performance, if any, financial condition, rating, if any, and registration of each Eligible Depository and Qualified Securities Dealer with or through whom the Public Moneys of the City are invested.
(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 shalt be deemed to be the best price as determined hereunder and shall sell any Eligible Investments for cash and for a sum not less than their current market price, which price shall be deemed to be the best price as determined hereunder. Except as otherwise provided in subsection (j)(2) below with respect to an overnight repurchase agreement, all purchases and sales of Eligible Investments hereunder shalt be made only on a delivery versus payment basis. With respect to the purchase or sale of any Eligible Investment other than the Eligible Investments described in Sections 234.031(a)(8) and (9) hereof, 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 (i), shall purchase or sell any Eligible Investment at the best price based upon preferably three bids, but not less than two bids, if the Eligible Investment is offered as such from any of the parties described in subsection (h) hereof. If there is no readily available competitive offering on the same specific Eligible Investment, then quotations from comparable or alternative Eligible Investments shall be obtained. When purchasing an Eligible Investment as an original or new issue, no competitive offerings will be required as all Qualified Securities Dealers offer the security at the same original issue price. 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 constitute 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 Section 234.03 and Section 234.031 hereof 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 conforming, 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 Section 234.03 and Section 234.031 hereof by the Director of Finance on behalf of the City, whether in certificated or book-entry form, shall be held on behalf of the City by a Qualified Trustee under a written custodial agreement. Any investment advisor, consultant or Qualified Securities Dealer doing business with the City cannot serve as custodian or safekeeping agent. 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 Director of Finance, the Director of Law, the City Manager or persons duly authorized as Acting Director of Finance or Acting Director of Law or Acting City Manager. 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 (j).
(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.
(I) Exemptions from this Section and General Law.
(1) Any investment of Public Moneys which on the effective date of this section does not qualify as an Eligible Investment under this section (each an "Ineligible Investment") may, notwithstanding anything herein to the contrary, be held until the first to occur of its maturity or its sale; 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 and 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, 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) Annual Review of Section: Amendments. This section shall be reviewed on an annual basis by the Director of Finance and the City Manager 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. 67-18. Passed 10-22-18.)