(a) Policy statement. It is the policy of the City of Ironton to invest all public funds in a manner which will provide maximum safety and preservation of principal, while meeting all the liquidity and operating demands, at reasonable market interest rates available. All investments made will conform to all applicable laws and regulations governing the investment of public moneys, including Ohio R.C. 135.
(b) Objectives.
(1) To invest all moneys in accordance with the guidelines of Ohio R.C. 135.14, with the priorities being: safety, liquidity, and yield, in that order. Primary objectives are the preservation of capital and the protection of investment principal.
(2) To limit market risk and ensure reliable return on investments through diversity and management of securities held in the investment portfolio.
(3) To safeguard repurchase agreement transactions so as to avoid all security risk, and to limit and track the market risk.
(4) To ensure that all entities conducting business with the investing authority are knowledgeable of Ohio R.C. 135 and this investment policy.
(5) To ensure that the portfolio remain sufficiently liquid to enable the investing authority to meet operating requirements which might be reasonably anticipated.
(6) The portfolio is not for speculation and will not be leveraged under any circumstances.
(c) Maturity guidelines. To the extent possible, the Finance Director will attempt to match its investments with anticipated cash flow requirements to take best advantage of prevailing economic and market conditions. The maximum maturity of any eligible instrument is five years from the settlement date, unless the investment is matched to a specified obligation or debt of the subdivision. Any investment made must be purchased with a reasonable expectation to be held to maturity.
(d) Permissible investments.
(1) The Treasurer may invest in any instrument or security authorized in Ohio R.C. 135.14, as amended. Permissible investments include:
A. United States Treasury bills, notes, bonds, or any other obligation or security issued by the United States Treasury or any other obligation guaranteed as to principal and interest by the United States. Stripped principal or interest obligations of such eligible obligations are strictly prohibited;
B. Bonds, notes, debentures, or any other obligations or securities issued by any federal government agency or instrumentality, including but not limited to, the Federal National Mortgage Association, Federal Home Loan Bank, Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation, Government National Mortgage Association, and Student Loan Marketing Association. All federal agency or instrumentality securities must be direct issuances of the federal agency or instrumentality;
C. STAR Ohio is eligible as long as the fund maintains the highest letter rating provided by at least one nationally recognized standard rating service as outlined in Ohio R.C. 135.45;
D. Bonds and other obligations of this state;
E. Interim deposits (such as certificates of deposit) in the eligible institutions applying for interim moneys as provided in Ohio R.C. 135.08;
F. No-load money market mutual funds consisting exclusively of obligations described in divisions (d)(1)A. or B. of this policy and expressly excluding derivatives in accordance with Ohio R.C. 135.14; and
G. Written repurchase agreements (repos) with any eligible public depository mentioned in Ohio R.C. 135.03, or with any dealer who is a member of the NASD. The market value of the securities subject held as collateral for an overnight repo (including sweep accounts) or term repo must exceed the principal by at least two percent, and the securities must be marked to market daily. Term repurchase agreements may not exceed 30 days. Any repurchase agreement with an eligible securities dealer must be transacted on a delivery versus payment basis. All securities purchased pursuant to a repurchase agreement must be delivered into the custody of the treasurer or an agent designated by the treasurer. Such institution or dealer must agree in writing to unconditionally repurchase any of the securities used for any repo transaction.
(2) Reverse repurchase agreements are strictly prohibited.
(e) Derivatives. Investments in derivatives are strictly prohibited. A “derivative” is defined in Ohio R.C. 135 as a financial instrument or contract or obligation whose value is based upon or linked to another asset or index or both, separate from the financial instrument, contract or obligation itself However, any eligible investment with a variable interest rate payment based upon a single interest payment or single index comprised of other investments consisting of U.S. government or federal agency or instrumentality obligations is not considered a derivative if it matures in two years or less.
(f) Pooling. The pooling of funds by subdivisions is prohibited except as provided in Ohio R.C. 715.02 or § IV, Article XVIII of the Ohio Constitution, and STAR Ohio.
(g) Eligible institutions. Any financial institution located within the State of Ohio as defined by Ohio R.C. 135.03 is eligible to serve as an approved depository and/or investment provider. Only securities dealers and brokers that are members of the National Association of Securities Dealers (NASD) are eligible to be an investment provider. Investment advisors must be an eligible financial institution as defined by Ohio R.C. 135.03, or an advisor that is registered with the Securities and Exchange Commission.
(h) Acknowledgments.
(1) All brokers, dealers, and financial institutions initiating transactions with the Finance Director by giving advice or making investment recommendations must sign the investment policy thereby acknowledging their agreement to abide by the policy.
(2) All brokers, dealers, and financial institutions executing transactions initiated by the Finance Director must sign the investment policy acknowledging their comprehension and receipt of the policy.
(Ord. 96-80, passed 9-12-1996)