2-32-500 Interest payments on city funds – Report requirements.

   The treasurer shall make a monthly report to the comptroller, under oath, for each calendar month, of all interest monies received by or credited to the treasurer or to the city by any depositary in which is deposited any interest-bearing monies of the city, including trust funds and special deposits.

   Such report shall show the name of the depositary where any interest-bearing monies are deposited, the average sum of money on deposit in each depositary during the calendar month, the interest paid or credited thereon by each depositary, and the average rate of interest so paid or credited.

   Such report shall he made and verified to the comptroller on or before the fifth day of the month next succeeding the month for which the report is rendered.

(Prior code § 7-38)

2-32-510 Interest on school funds.

   The treasurer shall place to the credit of the school fund all interest that may be earned thereby and be received by him.

(Prior code § 7-39)

ARTICLE VI. INVESTMENT OF CITY FUNDS AND MUNICIPAL BONDS (2-32-515 et seq.)

2-32-515 Investment policy.

   The Treasurer shall adopt a written investment policy which shall address the safety of the principal, liquidity of funds and return on investment. The policy shall be consistent with the provisions of this Code pertaining to investments. Subject to the requirements of this section, the Treasurer may amend the written policy from time to time. Copies of the written policy and any amendments thereto shall be kept on file with the City Clerk and the Comptroller, and shall be submitted annually, or if amended, no later than 30 days after such amendment, to the Chairman of the City Council Committee on Finance and the Chief Financial Officer.

   The written investment policy shall include material, relevant, and decision-useful sustainability factors to be considered by the Treasurer in evaluating investment decisions, including, but not limited to: (1) corporate governance and leadership factors; (2) environmental factors; (3) social capital factors; (4) human capital factors; and (5) business model and innovation factors, as provided under the Illinois Sustainable Investing Act, 30 ILCS 238/1, et seq.

   The written investment policy shall include a list of the top companies that are coal, oil, and gas reserve owners, ranked by the potential carbon emissions embedded in their reserves, which shall be updated by the Treasurer, at least annually. The Treasurer shall annually report to the Committee on Finance any changes, or whether there have been no changes, to the list. The Treasurer shall not invest any City funds in securities or other obligations of the companies on the list and shall divest from all securities or other obligations of the companies on the list, as soon as practicable or in accordance with the written investment policy.

(Added Coun. J. 1-11-05, p. 40561, § 2; Amend Coun. J. 1-15-20, p. 12834, § 1; Amend Coun. J. 3-23-22, p. 45824, § 1)

2-32-520 Authorized investments.

   The Comptroller and Treasurer jointly shall have authority to use any and all funds in the City treasury which are set aside for use for particular purposes and not immediately necessary for such purposes, for the purchase of the following classes of investments:

   (a)   Interest-bearing general obligations of the United States and the State of Illinois;

   (b)   United States treasury bills and other non-interest bearing general obligations of the United States or United States government agencies when offered for sale at a price below the face value of same, so as to afford the City a return on such investment in lieu of interest;

   (c)   Tax anticipation warrants, municipal bonds, notes, commercial paper or other instruments representing a debt obligation issued by the City of Chicago;

   (d)   Commercial paper which: (1) at the time of purchase, is rated in the two highest classifications by at least two accredited ratings agencies; and (2) matures not more than 270 days after the date of purchase;

   (e)   Reverse repurchase agreement if: (1) the term does not exceed 90 days; (2) the maturity of the investment acquired with the proceeds of the reverse repurchase agreement does not exceed the expiration date of the reverse repurchase agreement; and (3) at the time of purchase, the total amount of the reverse repurchase agreements held in all funds does not exceed 5 percent of the total holdings across all funds. Reverse repurchase agreements may be transacted with primary dealers and financial institutions, provided that the City has on file a master repurchase agreement;

   (f)   Certificates of deposit of banks or savings and loan associations designated as municipal depositories which are insured by federal deposit insurance or demand deposits in banks or savings and loan associations designated as municipal depositories which are insured by federal deposit insurance; provided that any amount of the deposit in excess of the federal deposit insurance shall be either: (1) fully collateralized at least 100 percent by: (i) marketable United States government securities marked to market at least monthly; (ii) bonds, notes, or other securities constituting the direct and general obligation of any agency or instrumentality of the United States; or (iii) bonds, notes or other securities constituting a direct and general obligation of any county, township, city, village, incorporated town, municipal corporation, or school district of the State of Illinois or of any other state, or of any political subdivision or agency of the State of Illinois or of any other state which are rated in either the AAA or AA rating categories by at least two accredited ratings agencies and maintaining such rating during the term of such investment; or (2) secured by a corporate surety bond issued by an insurance company licensed to do business in Illinois and having a claims-paying rating in the top rating category as rated by a nationally recognized statistical rating organization and maintaining such rating during the term of such investment; or (3) fully collateralized at least 100 percent by an irrevocable letter of credit issued in favor of the City of Chicago by the Federal Home Loan Bank, provided that the Federal Home Loan Bank's short-term debt obligations are rated in the highest rating category by at least one accredited ratings agency throughout the term of the certificate of deposit or deposit;

   (g)   Bankers acceptance of banks whose senior obligations, at the time of purchase, are rated in either the AAA or AA rating categories by at least two accredited ratings agencies;

   (h)   Tax-exempt securities exempt from federal arbitrage provisions applicable to investments of proceeds of the City's tax-exempt debt obligations;

   (i)   Domestic money market mutual funds regulated by and in good standing with the Securities and Exchange Commission; provided that such money market mutual funds' portfolios are limited to investments authorized by this section;

   (j)   Any other suitable investment instrument permitted by state laws governing municipal investments generally, subject to the reasonable exercise of prudence in making investments of public funds;

   (k)   Except where otherwise restricted or prohibited, a non-interest-bearing savings account, non-interest-bearing checking account or other non-interest bearing demand account established in a national or state bank, or a federal or state savings and loan association, when, in the determination of the Treasurer, the placement of such funds in the non-interest bearing account is used as compensating balances to offset fees associated with that account that will result in cost savings to the City;

   (l)   (1)   Bonds of companies with assets exceeding $500,000,000 that, at the time of purchase, are rated investment grade by at least two accredited ratings agencies. Investments authorized by this subsection (1) shall, at the time of purchase, not exceed 35 percent of the total holdings across all funds (with no more than 35 percent of the total portfolio authorized by this subsection (l)(1) invested in any one market sector, out of a total market sector pool consisting of finance, energy, technology, consumer products, manufacturing, healthcare and transportation) and the maturity shall not exceed 30 years;

      (2)   Bonds authorized by subsection (l)(1) where the principal is guaranteed with underlying assets such as bonds, currencies, and commodities. Bonds authorized by this subsection (l)(2) shall, at the time of purchase, not exceed 5 percent of the total holdings across all funds;

   (m)   Debt instruments of international financial institutions, including but not limited to the World Bank and the International Monetary Fund, that, at the time of purchase, are rated within 4 intermediate credit ratings of the United States sovereign credit rating by at least two accredited ratings agencies, but not less than an A- rating, or equivalent rating. Investments authorized by this subsection (m) shall, at the time of purchase, not exceed 10 percent of the total holdings across all the funds, including principal and interest, and the maturity shall not exceed 10 years. For purposes of this subsection (m), an "international financial institution" means a financial institution that has been established or chartered by more than one country and the owners or shareholders are generally national governments or other international institutions such as the United Nations;

   (n)   United States dollar denominated debt instruments of foreign sovereignties that, at the time of purchase, are rated within 4 intermediate credit ratings of the United States sovereign credit rating by at least two accredited ratings agencies, but not less than an A- rating or equivalent rating. The investments authorized by this subsection (n) shall, at the time of purchase, not exceed 10 percent of the total holdings across all funds, and the maturity shall not exceed 30 years;

   (o)   Interest-bearing bonds of any county, township, city, village, incorporated town, municipal corporation, or school district, of the State of Illinois, of any other state, or of any political subdivision or agency of the State of Illinois or of any other state, whether the interest earned thereon is taxable or tax-exempt under federal law. The bonds shall be registered in the name of the City or held under a custodial agreement at a bank. The bonds shall be rated, at the time of purchase, not less than A-, or equivalent rating, by at least two accredited rating agencies with nationally recognized expertise in rating bonds of states and their political subdivisions. The bonds authorized by this subsection shall, at the time of purchase: (1) not have a maturity of more than 30 years from the date of purchase; and (2) not exceed 25 percent of the total holdings across all funds; provided that bonds linked to infrastructure projects shall not exceed 5 percent of the total holdings across all funds;

   (p)   Bonds registered and regulated by the Securities and Exchange Commission and for which the full faith and credit of the State of Israel is pledged for payment; provided that the bonds have an A- rating or above or equivalent rating by at least two accredited ratings agencies. The bonds authorized by this subsection (p) shall, at the time of purchase, not exceed 1 percent of the total holdings across all funds, and the maturity shall not exceed 30 years;

   (q)   Bonds, notes, debentures, or other similar obligations of agencies of the United States;

   (r)   Interests in the CCCF as established by Section 2-32-622 of this Code that inure to the benefit of neighborhood economic development and which, in the aggregate, generate returns that are commensurate with the City's overall investment portfolio returns; provided that the amount of City funds invested in interests in the CCCF pursuant to this subsection shall not exceed the limits specified in Section 2-32-622(e) of this Code.

      (1)   For the purposes of this subsection, the following definitions shall apply:

         "Annual Limit" shall mean the positive difference, if any, between the actual amount of investment earnings for the prior year on funds in the Corporate Fund not subject to Other Investment Restrictions and the budgeted amount of such investment earnings.

         "Eligible Funds" shall mean: (1) any funds in the Corporate Fund and/or in the Service Reserve and Concession Fund which are not subject to Other Investment Restrictions as determined jointly by the Comptroller and the Treasurer; and (2) any funds in the Corporate Fund or in the Service Reserve and Concession Fund, in either case which are subject to Other Investment Restrictions but only to the extent permitted by the applicable Other Investment Restrictions. Eligible Funds shall not include any proceeds of City debt obligations or any monies in any City enterprise fund.

         "Other Investment Restrictions" shall mean restrictions on eligible investments for City funds pursuant to federal law, state law, City ordinances (other than this section), or existing City contracts as determined jointly by the Comptroller and the Treasurer.

      (2)   Commencing in 2020, in each year, Eligible Funds may be transferred to the CCCF from time to time, provided that the aggregate amount of such transfers during a year shall not exceed the Annual Limit for such year.

   All securities so purchased, excepting the bonds authorized in subsection (o), investments authorized in subsection (r) and tax anticipation warrants, municipal bonds, notes, commercial paper or other instruments representing a debt obligation of the City purchased under subsection (c), shall show on their face that they are fully payable as to principal and interest, where applicable, if any, within 30 years from the date of purchase.

   Except as provided in subsection (l)(2), neither the Comptroller nor Treasurer shall have authority, without the approval of the City Council, to (i) invest in financial agreements whose returns are linked to or derived from the performance of some underlying asset such as bonds, currencies or commodities, or (ii) borrow against or otherwise obligate City investments for the purpose of investment, other than for purposes of a security lending transaction conducted under Section 2-32-575.

(Prior code § 7-41; Amend Coun. J. 1-11-91, p. 28759; Amend Coun. J. 7-29-92 p. 19377; Amend Coun. J. 12-21-94, p. 63416; Amend Coun. J. 11-5-03, p. 9539, § 1; Amend Coun. J. 11-7-07, p. 12472, § 1; Amend Coun. J. 11-3-10, p. 103032, § 1; Amend Coun. J. 10-5-11, p. 7950, § 1; Amend Coun. J. 11-15-12, p. 40470, § 1; Amend Coun. J. 2-5-14, p. 73625, § 1; Amend Coun. J. 9-24-15, p. 4761, § 1; Amend Coun. J. 11-16-16, p. 38042, Art. X, § 1; Amend Coun. J. 9-6-17, p. 54180, § 1; Amend Coun. J. 7-21-21, p. 32715, § 1)