(A) It is the policy of the city to invest public funds in a manner which will provide the highest investment return with the maximum security of principal which meet the daily cash flow demands of the city and conform to all state statutes and other regulations.
(B) This investment policy applies to all financial assets held directly by the city. City funds held by trustees or fiscal agents are excluded from this order.
(C) The Mayor shall have the authority to invest and reinvest funds held by the city and may designate, by executive order, the person or persons responsible for investment transactions. The Mayor may, subject to disapproval by City Council, establish additional specific written procedures for investing of city funds and controls to prevent the loss of city funds. The Mayor shall maintain all records relating to the investment of city funds.
(D) City funds may be invested in:
(1) Obligations of the United States and of its agency and instrumentalities;
(2) Obligations backed by the full faith and credit of the United States or a U.S. government agency such as the U.S. Treasury, Export-Import Bank of the U.S., Farmers Home Administration, Government National Mortgage Corporation and Merchant Marine Bonds;
(3) Obligations of any corporation of the United States government, such as the Federal Home Loan Mortgage Corporation, Federal Farm Credit Banks, Bank for Cooperatives, Federal Intermediate Credit Banks, Federal Land Banks, Federal Home Loan Banks, Federal National Mortgage Association and the Tennessee Valley Authority;
(4) Certificates of deposit or other interest bearing accounts of any bank or savings and loan institution which are insured by the Federal Deposit Insurance Corporation or similar entity; or
(5) Bonds or certificates of indebtedness of the Commonwealth of Kentucky and of its agencies or instrumentalities. No investment shall be purchased for the city on a margin basis or through any similar leveraging technique. With the exception of fully insured or fully collateralized investment, no more than 10% of the city’s total investments shall be invested in a single security type or with a single financial institution.
(E) The Mayor shall maintain a list of financial institutions authorized to provide investment services to the city. All such institutions shall supply the Mayor with information sufficient to adequately evaluate the institution and answer all inquiries posed by the Mayor, including audited financial statements, regulatory reports on financial condition, written memorandum of agreement for the deposit of funds, and any additional information considered necessary to allow the Mayor to evaluate the creditworthiness of the institution. No financial institution shall be selected as a depository of city funds if those funds would exceed 5% of the institution’s capital stock and surplus. The Mayor shall annually evaluate the financial capacity and creditworthiness of each institution and remove any institution not meeting the standards set. Investments shall be held only by bonded city officers or through third party custody and safekeeping procedures.
(F) The Mayor shall submit to City Council an annual report regarding the status of the city’s investment program detailing the name
of the financial institution, type, amount, percentage, purchase date, purchase price, maturity date and current market value of each investment.
(G) Each year, the city auditor shall conduct a review of the city’s investment program, including internal controls and procedures, and the results of the review, including recommended changes, shall be included in the city’s audit.
(Mun. Order 1994-19R, passed 10-18-94)