(a) All public monies of the City not deposited in active deposits, or kept by the City Treasurer as a cash reserve as may be prescribed by the Director of Finance, shall be invested by the City Treasurer pursuant to this section and the Cash Management and Investment Policy promulgated pursuant to Section 178.14. All securities shall be purchased through eligible depositories or securities dealers or brokers designated pursuant to Section 178.11. All security transactions shall occur on a delivery versus payment basis.
(b) The City Treasurer may invest in any of the following classifications of obligations, which are hereby determined to be eligible investments:
(1) Bonds, notes or other obligations of the United States, or those for which the full faith and credit of the United States is pledged for the payment of principal and interest thereon, including without limitation Treasury Bills, Treasury Notes, Treasury Bonds, Farmers Home Administration Insured Notes (FHAs) and securities issued by the Government National Mortgage Association (GNMAs);
(2) Bonds, notes, debentures or other obligations or securities issued by any U.S. government agency fully guaranteed as to principal and interest by the full faith and credit of the United States;
(3) Bonds, notes, debentures or other obligations or securities, issued by any U.S. government agency, which are not fully guaranteed as to principal and interest by the full faith and credit of the United States but which have a sufficiently broad and orderly marketplace to ensure easy and cost- effective liquidation, such as the debt of the Federal Home Loan Bank (FHLBs) and the Federal National Mortgage Association (FNMAs);
(4) Bonds and notes of the State of Ohio;
(5) The State of Ohio Treasurer’s Investment Pool established pursuant to RC 135.45;
(6) Bonds and notes of any municipal corporation, village, county, township or other political subdivision of Ohio (including the City of Cleveland to the extent permitted by law), for which the full faith and credit of the subdivision is pledged, so long as such subdivision has not defaulted in the payment of principal or interest on its bonds or notes within the last ten (10) years;
(7) A specific repurchase agreement with a term of not to exceed one (1) year with any eligible depository or securities dealer or broker designated pursuant to Section 178.11 which has entered into a master repurchase agreement pursuant to division (c) of this section, under the terms of which agreement the City Treasurer purchases for the City, and such eligible depository or securities dealer or broker agrees to unconditionally repurchase, any of the securities listed in divisions (b)(1), (b)(2) or (b)(3) of this section;
(8) Fully insured and/or fully collateralized certificates of deposit of eligible depositories; and
(9) U.S. government money market mutual funds, as defined in the Cash Management and Investment Policy promulgated pursuant to Section 178.14, issued by open ended investment companies registered with the U.S. Securities and Exchange Commission which have the objective of maintaining a constant net asset value per share, and which have portfolios limited to fully delivered repurchase agreements or securities described in division (b)(1) and (b)(8) of this section with an average maturity of one hundred twenty (120) days or less.
(c) Specific repurchase agreements authorized by division (b)(7) of this section shall be governed by the requirements of the Master Repurchase Agreement entered into between the City and all eligible depositories or securities dealers or brokers designated pursuant to Section 178.11. The City Treasurer may enter into a specific repurchase agreement only if:
(1) The Director of Finance and the eligible depository or securities dealer or broker designated pursuant to Section 178.11 has entered into a Master Repurchase Agreement on a continuing basis during a specified period which shall not extend beyond the end of the period of designation of the eligible depository pursuant to Section 178.03 or of the securities dealer or broker pursuant to Section 178.11;
(2) The market value of purchased securities on the purchase date shall be at least as follows:
A. One hundred and one percent (101%) of the purchase price if the purchased securities are U.S. Treasury Bills, Notes, or Bonds which mature in one (1) year or less from the purchase date;
B. One hundred and two percent (102%) of the purchase price if the purchased securities are U.S. Treasury Bills, Notes, or Bonds which mature in more than one (1) year but not more than ten (10) years from the purchase date; and
C. One hundred and two percent (102%) of the purchase price if the purchased securities are U.S. government agency securities which mature not more than ten (10) years from the purchase date.
(3) There shall be a simultaneous delivery of purchased securities and payment of the purchase price through a custodial bank pursuant to a separate agreement by and between the City and the custodial bank;
(4) In the event the eligible depository or securities dealer or broker fails to perform any of its obligations under the specific repurchase agreement, the eligible depository or securities dealer or broker shall be liable for the repurchase price and interest thereon at the same rate as the specific repurchase agreement plus reasonable counsel’s fees and other costs and expenses incurred by the City as a result of the default and, further, the custodial bank shall remit to the City all purchased securities, margin securities and cash delivered to satisfy the margin requirement, and the City may sell any or all purchased securities and/or margin securities to any purchaser at private or public sale and apply the proceeds thereof to the eligible depository’s or securities dealer or broker’s liability;
(5) In the event the City fails to perform any of its obligations under the specific repurchase agreement, the City’s interest in purchased securities and any margin securities and/or cash delivered to satisfy the margin requirement shall be deemed released, and the eligible depository or securities dealer or broker is irrevocably authorized to instruct the custodial bank to deliver all such securities and cash to the eligible depository against simultaneous credit to the City’s account of the purchase price;
(6) The master repurchase agreement may be terminated by either party on ten (10) business days written notice to the other party and the custodial bank, provided, however, that such termination shall not affect any specific repurchase agreement outstanding.
(d) The City Treasurer may sell any eligible investments or close any accounts held as investments for cash for a sum not less than their current market price.
(e) The Director of Finance and his or her designees, the City Treasurer, the Mayor, the Director of Law and the members of City Council shall not be held accountable or personally liable for any loss occasioned by the sale of eligible investments or by the closing of insured deposit accounts authorized pursuant to division (d) of this section at a price lower than their cost or balance. Any loss or expense in making such sales or closings shall be payable as other expenses of the City.
(f) Except as provided in this division (f), investments authorized by division (b) of this section shall not be made at a price in excess of the current market price or at a yield below the current market yield. In furtherance of the public purposes of (i) creating or preserving jobs and employment opportunities in the City, and to improve the economic welfare of the people of the City, through the acquisition, construction, improvement or equipping of facilities for industry, commerce, distribution and research, and (ii) to enhance the availability of adequate housing, and to improve the economic and general well-being of the people of the City, by providing, or assisting in providing, housing, including shelters to provide temporary housing for individuals and families, the Director of Finance may invest public monies at a price in excess of the current market price or at a yield below the current market yield, subject, in the case of providing housing, to RC 176.04; provided, that at no time shall public monies invested pursuant to this division (f) exceed five percent (5%) of all of the public monies of the City.
(g) If any eligible investments purchased under the authority of this section are issuable to a designated payee or to the order of a designated payee, the name of the City Treasurer and the title of the City Treasurer’s office shall be so designated. If any such eligible investments are registrable either as to principal or interest or both, then such securities shall be registered in the name of the Director of Finance as such.
(h) Interest earned on any eligible investments authorized by this section shall be collected by the City Treasurer and credited by the Director of Finance or the Director’s designee to the proper fund of the City as required by law.
(i) Whenever eligible investments acquired pursuant to this section mature and become due and payable, the City Treasurer shall present them for payment according to their tenor, and shall collect the monies payable thereon. The monies so collected shall be treated as public monies subject to the provisions of this chapter.
(j) The Director of Finance or the Director’s designee shall maintain accounts on which shall be made appropriate entries of all transactions relating to the investment of public monies. The City Treasurer shall keep a record of the number and maturity of interest coupons on instruments in which the City has invested.
(k) The Director of Finance shall, upon request of the Mayor or the City Council, provide periodic reports in such detail as required by the Mayor or the City Council of all investments purchased, sold and held by the City.
(l) The members of City Council, the Director of Finance, the Director of Law and the City Treasurer shall not be personally liable for or with respect to investments pursuant to this section and the members of City Council, the Director of Finance and the Director of Law shall not be personally liable for any unauthorized investment by the City Treasurer.
(Ord. No. 2353-93. Passed 2-14-94, eff. 2-23-94)