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A. Policy Adopted: It is the policy of the Village of Heyworth, Illinois, to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the Village and conforming to all Federal, State and local Statutes governing the investment of public funds.
B. Scope: This policy includes all funds governed by the Village Board of Trustees of Heyworth.
C. Prudence: Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital, as well as the probable income to be derived.
The standard of prudence to be used by investment officials shall be the "prudent person" standard, when applicable and when not prevented by law, and shall be applied in the context of managing an overall portfolio.
Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
D. Objectives: The primary objectives of investments, in order of priority, shall be:
1. Legality: Conformance with Federal, State, and other legal requirements.
2. Safety: Preservation of capital and protection of investment principal.
3. Liquidity: Maintenance of sufficient liquidity to meet operating requirements.
4. Return On Investment: Attainment of market rates of return.
The portfolio should be reviewed periodically as to its effectiveness in meeting the Village's needs for safety, liquidity, rate of return, diversification and its general performance.
E. Delegation Of Authority: Management and administrative responsibility for the investment program is hereby delegated to the Village Treasurer who, under the delegation of the Village Board of Trustees, shall establish procedures for the operation of the investment program.
F. Ethics And Conflicts Of Interest: Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions.
G. Authorized Financial Dealers And Institutions: The Treasurer will maintain a list of financial institutions authorized to provide investment services. In addition, a list will also be maintained of approved security brokers/dealers selected by credit worthiness.
H. Authorized And Suitable Investments: Investments may be made in any type of security allowed for in Illinois Statutes regarding the investment of public funds. Investments shall be made that reflect the cash flow needs of the fund type being invested.
I. Collateralization: Funds on deposit (i.e., checking accounts, certificates of deposit, etc.) in excess of FDIC limits must be secured by some form of collateral.
J. Safekeeping And Custody: All security transactions, including collateral for repurchase agreements, entered into by the Village shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by the Treasurer.
K. Diversification: The Village shall diversify its investments to the best of its ability based on the type of funds invested and the cash flow needs of those funds. Diversification can be by type of investment, number of institutions invested in, and length of maturity.
L. Maximum Maturities: To the extent possible, the Village shall attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the Village shall not directly invest in securities maturing more than three (3) years from the date of purchase. Reserve funds may be invested in securities exceeding three (3) years if the maturity of such investments are made to coincide as nearly as practical with the expected use of the funds.
M. Internal Control: The Treasurer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft, or misuse. The internal control structure shall be designated to provide reasonable assurance that these objectives are met. The internal controls shall address the following points:
1. Control of collusion;
2. Separation of transaction authority from accounting;
3. Custodial safekeeping; and
4. Written confirmation of telephone transactions for investments and wire transfers.
N. Performance Standards: This investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a comparable rate of return during a market/economic environment of stable interest rates. Portfolio performance should be compared to benchmarks with similar maturity, liquidity and credit quality as the portfolio. Such benchmarks will include comparable maturities of U.S. Treasury bills or notes, an Illinois Public Treasurers' Investment Pool (”Illinois Funds”) investment, and any other investments allowed under State law that satisfy the investment objectives of the Village.
O. Reporting: The Treasurer shall prepare an investment report at least quarterly. The report should be provided to the Village Board of Trustees and administration and be available upon request. The report should be in a format suitable for review by the general public.
P. Exemptions: Any investment currently held that does not meet the guidelines of this policy shall be exempted from the requirements of this policy. At maturity or liquidation, such monies shall be reinvested only as provided for by this policy.
Q. Exceptions: Any exception to this policy shall be reported immediately to the Mayor and Village Clerk in writing and shall be reported to the Board of Trustees at the next regularly scheduled Village Board of Trustees' meeting.
R. Review And Amendment Of Policy: This policy shall be reviewed on an annual basis by the Treasurer and any modifications made hereto must be approved by the Village Board of Trustees. (Ord. 2018-19, 4-19-2018; amd. Ord. 2021-23, 4-15-2021)