(a) Policy. It is the policy of the City of Fairlawn to invest public funds in a manner that will safeguard the City's assets providing maximum security while maintaining a competitive interest rate and sufficient liquidation to meet daily cash flow demands, and conforming to all requirements of the Ohio Revised Code governing the investment of public funds.
(b) Scope. This investment policy applies to all financial assets of the City. These funds are accounted for in the City's Basic Financial Statement.
(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 such a manner that seeks to ensure the preservation of the capital.
(2) Liquidity. The City's investment portfolio will remain sufficiently liquid to enable the City 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 rate of return throughout budgetary and economic cycles commensurate with the City's investment risk constraints and the cash flow requirements of the portfolio.
(d) Delegation of Authority. Authority to manage the City's investment program is derived from the Charter of the City of Fairlawn. Management responsibility is designated to the Director of Finance, who shall establish written procedures for the operation of the investment program consistent with this investment policy. Procedures shall include provisions for safekeeping, wire transfers, banking service contracts and collateral/depository agreements. Such procedures shall also include explicit delegation of authority to any person responsible for investment transactions. No person shall engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Director of Finance. The Director of Finance shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.
(e) Conflict of Interest. Officers and employees 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. Investment officials and employees shall disclose to the Mayor any material financial interests in any financial institutions that conduct business within this jurisdiction, and shall further disclose any personal/investment positions that could be related to the performance of the City's investments.
(f) Authorized Financial Dealers and Institutions. The Director of Finance shall utilize eligible financial institutions that have been designated as public depositories by City Council in accordance with Ohio R.C. 135.12.
All financial institutions which desire to become qualified for investment transactions must supply the Director of Finance with an audited financial statement, and certification of having read the City's investment policy and current depository contracts.
(g) Authorized and Suitable Investments. The City of Fairlawn is empowered by statute to invest in the following types of securities:
(1) U.S. Treasury bills, notes, bonds or other obligations guaranteed as to principal and interest by the United States.
(2) Bonds, notes, debentures or any other obligations or securities issued by any Federal Government agency or instrumentality.
(3) Interim deposits in eligible institutions applying for interim moneys as provided in Ohio R.C. 135.08.
(4) Bonds or other obligations of the State of Ohio.
(5) No-load money market mutual funds consisting exclusively of eligible obligations, and purchased through eligible institutions per Ohio R.C. 135.03.
(6) Repurchase agreements purchased through eligible institutions, provided that:
A. The market value of securities subject for overnight repurchase agreement must exceed the principal value by at least two percent (2%).
B. Term repurchase agreements shall not exceed thirty (30) days, the market value of securities subject for term repurchase agreements must exceed the principal by at least two percent (2%), and securities must be marked to market daily.
C. All repurchase agreements must be transacted on a delivery versus payment basis.
(7) The Ohio Subdivision's Fund (STAR Ohio), as provided in Ohio R.C. 135.45.
(8) Investments with variable interest rate payment, based upon single interest payment or single index comprised of other eligible investments, provided that the security has a maximum maturity of two (2) years.
(h) Maximum Maturity. Investments may be purchased only when there is reasonable expectation of holding the investment until it matures. To the extent possible, the City will match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing more than five (5) years from the date of settlement.
The Director of Finance may sell securities prior to their maturity when necessary to maintain adequate liquidity or when the transaction is beneficial to the overall investment portfolio.
(i) Collateralization. The Director of Finance, before making an initial deposit in a public depository, shall require the institution to pledge to and deposit with him or her, or with a third party custodian, eligible securities to ensure the repayment of public moneys, in accordance with Ohio R.C. 135.18, 135.181, or 135.182.
(j) Safekeeping and Custody. All security transactions shall be conducted on a delivery versus payment basis. Securities will be held by a third party custodian designated by the Director of Finance and evidenced by safekeeping receipts.
(k) Diversification. The City's investment portfolio shall be sufficiently diverse to minimize investment risk, maintain competitive returns and ensure adequate cash flows to meet daily requirements.
(l) Internal Control. The Director of Finance will establish a system of internal control within the investment procedures to assure compliance with this policy.
(m) Investment Policy Adoption. The City's investment policy shall be adopted by ordinance of the City Council. The policy shall be reviewed annually by the Director of Finance and any modification to the policy must be approved by City Council.
All brokers, dealers and financial institutions giving advice or making recommendations to the City shall sign the investment policy acknowledging their agreement to abide by the policy's content.
All brokers, dealers and financial institutions transacting business with the City must sign the policy indicating that they received, read and comprehended the policy.
(Res. 1996-128. Passed 12-2-96; Ord. 2018-019. Passed 5-21-18.)