Skip to code content (skip section selection)
It is the policy of the City of Campbell, Ohio to invest public funds in a manner which will provide the highest investment return with the maximum security, safety and preservation of principal while meeting the daily cash flow demands of the City and conforming to all applicable statutes governing the investment of public funds by a municipality in the State of Ohio.
(a) Scope. This Investment Policy applies to all financial assets of the City, including State and Federal funds held by it. The Finance Director shall routinely monitor the contents of the City's investment portfolio, the available markets and relative value of competing investments and will adjust the portfolio accordingly.
(1) Investments shall be made with judgment and care - under circumstances then prevailing - which 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.
(2) The standard of prudence to be used by the Finance Director shall be the "prudent person" standard and shall be applied in the context of managing the overall portfolio. Acting in accordance with this Investment Policy and exercising due diligence shall relieve the Finance Director of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported to the Mayor and Council in a timely fashion and appropriate action is taken to control adverse developments.
(c) Objectives. The primary objectives, in priority order, of the City's investment activities shall be:
(1) Safety: Safety of principal is the foremost objective of the investment program. Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.
(2) Liquidity: The City's investment portfolio will remain sufficiently liquid to enable it to meet all operating requirements which might be reasonably anticipated.
(3) Return on investment: The City's investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account this Investment Policy and the cash flow characteristics of the portfolio.
(d) Ethics and Conflict of Interest. Persons involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Employees and investment consultants shall disclose to the Mayor and Council any material financial interests in financial institutions that conduct business within the City and any large personal financial or investment positions that could be related to, or affected by, the performance of the City's portfolio. All employees, officers and investment consultants to the City shall subordinate their personal investment transactions to those of the City, particularly with regard to the timing of purchases and sales.
(e) Authorized Financial Dealers and Institutions.
(1) The Finance Director will maintain a list of financial institutions and approved security broker/dealers selected by creditworthiness who are authorized to provide investment services and which qualify under Section 135.14(M)(1) of the Revised Code. These may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission Rule 15C3-1 and are registered with Ohio Department of Commerce to do business in the State.
(2) All financial institutions and brokers/dealers which desire to become qualified suppliers of investment transactions to the City must provide the Finance Director with audited annual financial statements, proof of good standing with the Comptroller of Currency or State banking regulators or National Association of Security Dealers certification, proof of Ohio registration and biographical and regulatory information on the persons who are the primary contact for the entity. All financial institutions, broker/dealers and consultants which desire to conduct investment business with the City must sign this Investment Policy, certifying they have read it, understand it and agree to abide by its contents.
(f) Authorized Investments. The City is empowered by statute to invest in the following types of securities:
(1) United States Treasury bills, notes, bonds 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) Bonds, notes, debentures, or other obligations or securities issued by any federal government agency or instrumentality, including but not limited to the Federal National Mortgage Association, Federal Home Loan Bank, Federal Farm Credit Bank, Federal Home Loan Mortgage Association, Government National Mortgage Association and Student Loan Marketing Association. All such securities shall be a direct issuance of federal government agencies or instrumentalities;
(3) Interim deposits in duly authorized depositories of the City, provided those deposits are properly insured or collateralized as required by law;
(4) Bonds and other obligations of the State of Ohio;
(5) No-load money market mutual funds consisting exclusively of securities described in subsections (f)(1) and (2) and repurchase agreements secured by such obligations, provided all such investments under this subsection (f)(5) shall be made with a bank or savings and loan association eligible to be a depository for public funds of Ohio subdivisions and provided further that any such fund meets the requirements of Chapter 135 of the Revised Code, including that such fund not include any investment in a"derivative";
(7) Overnight or term (not exceeding 30 days) repurchase agreements meeting the requirements of Section 133.14 (C) of the Revised Code, with a bank or savings and loan association eligible to be a depository for public funds of Ohio subdivisions or a member of the National Association of Securities Dealers; and
(8) Bankers acceptances and commercial paper notes, each with a maturity not exceeding 180 days and meeting all of the requirements of Section 135.142 of the Revised Code, but only upon specific authorization of the Mayor and Council required by law and completion of the required training by the Finance Director.
(g) Diversification. The City will diversify its investments by security, type and institution. With the exception of direct obligations of the U.S. Treasury and STAR Ohio, no more than fifty percent (50%) of the City's total investment portfolio will be invested in a single security type or with a single financial institution.
(h) Maximum Maturities. To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. No investment shall be made unless the Finance Director, at the time of making the investment, reasonably expects it can be held to its maturity. Unless matched to specific obligation or debt of the City, the City will not directly invest in securities listed as subsection (f)(1) through (5) above maturing more than five years from the date of settlement.
(i) Safekeeping and Custody. All security transactions, including collateral for repurchase agreements, entered into by the City shall be conducted on a delivery- versus-payment basis. Securities will be held by a third party custodian designated by the Finance Director and evidenced by safekeeping receipts. Securities shall be pledged at the Federal Reserve Bank to collateralize all repurchase agreements with financial institutions. Pledge collateral will only be released by the City after verification that the principal and interest have been credited to City's account.
(j) Prohibited Investment Practices. In addition to any other prohibitions in the Revised Code, the City shall not:
(1) Contract to sell securities that have not yet been acquired on the speculation that prices will decline;
(2) Make any investment in derivatives;
(3) Invest in a fund established by another public body for the purpose of investing public money of other subdivisions (other than STAR Ohio);
(4) Enter into reverse repurchase agreements; or
(5) Leverage current investments as collateral to purchase other assets.
(k) Internal Controls. The Finance Director shall develop and maintain procedures for the operation of the City's investment program in accordance with this Investment Policy. These procedures shall be designed to prevent loss of the City's funds due to fraud, error, misrepresentation, unanticipated market changes or imprudent actions.
(l) Reporting. The Finance Director shall maintain a current inventory of all investments including:
(1) Description of each security;
(3) Par value;
(4) Dates (beginning, settlement and maturity);
(5) Rates; and
The Finance Director shall also prepare and distribute quarterly (or more frequently if requested by the Mayor and Council) a list of all investments and a report on investment activity and returns.
(m) Non-Binding Arbitration. The Finance Director may enter into a written investment or deposit agreement that includes a provision under which the parties agree to submit to non-binding arbitration (but not binding arbitration) to settle any controversy that may arise out of that agreement so long as such provision meets the requirements of the Revised Code and is specifically approved by the Mayor and Council.
(n) Investment Policy Adoption. This Investment Policy shall be adopted by the Mayor and Council and, upon adoption, filed in the office of the Auditor of State. The policy shall be reviewed on an annual basis by the Mayor and Council or a committee designated by them and any modifications made thereto must be approved by the Mayor and Council and, upon adoption, filed in the office of the Auditor of State.
(Ord. 97-9113. Passed 12-17-97.)