(A) The funds of the city available for investment shall be invested in accordance with this policy and all applicable state statutes only in the following types of investments instruments.
(1) Authorized investments instruments.
(a) Obligations of the United States and its agencies and instrumentalities, including obligations subject to repurchase agreements, provided that delivery of these obligations subject to repurchased agreements is taken either directly or through an authorized custodian.
(b) Obligations and contracts for future delivery or purchase of obligations based by the full faith and credit of the United States or a United States government agency, including, but not limited to, United States Treasury;
(c) Obligations of any corporation of the United States government, including, but not limited to:
1. Federal Home Loan Mortgage Corporation;
2. Federal Farm Credit Banks;
3. Bank for Cooperatives;
4. Federal Intermediate Credit Banks;
5. Federal Land Banks;
6. Federal Home Loan Banks;
7. Federal National Mortgage Association; and
8. Tennessee Valley Authority.
(d) Certificates of deposit issued by or other interest bearing accounts of any bank which are insured by the Federal Deposit Insurance Corporation and which are collateralized, to the extent uninsured, by any obligations permitted by KRS 41.240(4).
(e) Bankers’ acceptances for banks rated in one of the three highest categories by a nationally recognized rating agency.
(f) Commercial paper rated in the highest category by a nationally recognized rating agency.
(g) Bonds or certificates of indebtedness of the commonwealth and of its agencies and instrumentalities.
(h) Securities issued by a state or local government, or any instrumentality or agency thereof, in the United States, and rated in one of the three highest categories by a nationally recognized rating agency.
(I) Shares of mutual funds, each of which shall have the following characteristics.
1. The mutual fund shall be an open-end diversified investment company registered under the Federal Investment Company Act of 1940, as amended.
2. The management company of the investment company shall have been in operation for at least five years.
3. All of the securities in the mutual fund shall be eligible investments under this section.
(2) Limitations on investment transactions. With regard to the investments authorized in this section, the following limitations shall apply.
(a) The amount of the city’s funds invested at any one time in the categories of investments authorized in divisions (A)(1)(e), (A)(1)(g) and (A)(1)(g) and (A)(1)(I) above shall not exceed 20% of the total amount of funds invested on behalf of the city.
(b) No investment shall be purchased for the city on a margin basis or through the use of any similar leveraging technique, including so-called “derivatives”, which accrue value from some underlying asset(s).
(c) The city will prior to the beginning of each fiscal year, solicit quotes from every bank who has a local office in Franklin for the maintenance of a master clearing, or sweep account. The Bank who provides the highest percentage quote of the Federal Fund Rate (i.e., 105% of ------ and the like) will be awarded the sweep account for the next fiscal year.
(B) The account’s rate of interest shall be pegged to the Federal Funds Rate, as reported by the Wall Street Journal each Friday, from the following Thursday’s “near closing rate”. The account’s interest shall be calculated each week based on an average daily balance of the account and applied from the prior Friday’s posted interest rate from the Wall Street Journal.
(C) It is the intent of the city to transfer said funds to operating and reserve accounts of the various funds maintained by the city, as become necessary for current operations. The city should average ten checks or less each month in withdrawals from the account.
(Ord. 210.3-12-94, passed 12-29-1994)