(A) Objectives. The following are the objectives of the Town of Cicero investment policy:
(1) The primary objectives of the Town of Cicero's (the town's) investments are in order of priority: safety, liquidity, and yield;
(2) To link long-term financial planning with short-term daily operations;
(3) To maintain the town's stable financial position;
(4) To ensure that the Council's adopted policies are implemented in an efficient and effective manner;
(5) To protect the town from emergency fiscal crisis by ensuring the continuance of service even in the event of an unforeseen occurrence; and
(6) To secure the highest possible credit and bond ratings by meeting or exceeding the requirements of the rating agencies through sound, conservative financial decision making.
(B) Policy.
(1) It is the policy of the town to preserve capital and invest public funds in a manner which provide the highest investment return with maximum security while meeting the daily cash flow demands of the town and conforming to all state statues governing the investment of public funds.
(2) The standard of prudence to be used by the Clerk-Treasurer will be the "prudent person" rule. The "prudent person" concept discourages speculative transactions. It attaches primary significance to the preservation of capital and secondary importance to the generation of income through interest. The Clerk-Treasurer, if acting in accordance with the written procedures and state statutes and exercising due diligence, shall be relieved of personal responsibility for individual security credit risk or market price changes, provided that these deviations are reported immediately, and action is taken to control adverse developments.
(3) Safety of principal is the foremost objective of the investment program. Investments of the town will 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.
(4) The town's investment portfolio will remain sufficiently liquid to enable the town to meet all operating requirements which might be reasonably anticipated using structured maturities and marketable securities.
(5) The town's investment portfolio will be designed with the objective of attaining a market rate of return while minimizing risk and retaining liquidity.
(6) The State of Indiana Statutes delegate management responsibilities for the investment program to the Clerk-Treasurer. The Clerk-Treasurer will establish and maintain written procedures for the operation of the investment program consistent with the investment policy. Such procedures will include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Clerk-Treasurer and approved by the Town Council. The Clerk-Treasurer will be responsible for all transactions undertaken and will establish a system of controls to regulate the activities of deputy clerks.
(7) The Clerk-Treasurer, deputy clerks, and employees involved in the investment process will refrain from personal business activity that could conflict with the proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officials will disclose to the Clerk-Treasurer any material financial interests in financial institutions that conduct business within this jurisdiction, and they will further disclose any large personal financial/investment positions that could be related to the performance of the town's portfolio. Employees and officers will subordinate their personal investment transactions to those of the town, particularly regarding the time of purchase and sales.
(8) The Clerk-Treasurer will maintain a list of financial institutions authorized to provide investment services. Authorized financial institutions include banks maintaining an office in the State of Indiana and securities brokers/dealers classified by the New York Federal Reserve as primary dealers.
(9) The town will invest only in securities authorized by the State of Indiana Statutes pertaining to local government and restricts the purchase of securities to the highest possible ratings whenever particular types of securities are rated. The Clerk-Treasurer may elect to further limit the town's investment security authority.
(10) All transactions entered into by the town will be conducted on a delivery-versus-payment basis. All transactions shall be in the town's name. All recording keeping procedures will be conducted in the Clerk-Treasurer's office. Certificated securities shall be in the custody of the Clerk-Treasurer or their designee.
(11) The town will make every effort to maintain a diversified investment portfolio according to security type and institution.
(12) To the extent possible, the town will attempt to match its investments with the anticipated cash flow requirements. Beyond identified cash flow needs, investments will be purchased so the maturities are staggered to avoid undue concentration of assets in a single maturity range; however, the town will not directly invest in securities maturing more than three years from date of purchase.
(13) It is the town's full intent, at the time of purchase, to hold all investments until maturity to ensure the return of all invested principal dollars. However, economic or market conditions may change which may make it in the town's best interest to sell or trade a security prior to maturity.
(14) All moneys earned and collected from investments of the general accounts other than bond proceed earning will be invested in the General Fund. Enterprise and Impact Funds with earnings will be allocated to the Fund with the earnings. Earnings on bond proceeds will be directly allocated to the same proceeds.
(15) The Clerk-Treasurer or their designee is charged with the responsibility of preparing a monthly investment inventory report that includes investment types, cost, market value, maturity date, yield and average portfolio yield.
(16) The Clerk-Treasurer is responsible for establishing and maintaining a system of internal controls designed to ensure that the assets of the town are protected from loss, theft or misuse.
(17) This investment policy applies to all financial assets in the town's investment portfolio, including debt proceeds.
(Ord. passed 3-5-19)