(A) Policy. 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, while meeting the daily cash flow demands of the city and conforming to all state statutes and city ordinances governing the investment of public funds.
(B) Scope. This policy includes all public funds governed by the City Council.
(C) Procedures. All 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 capital, as well as the probable income to be earned.
(D) Objective.
(1) The primary objective, in order of priority, shall be:
(a) Legality. Conformance with federal, state and other legal requirements;
(b) Safety. Preservation of capital and protection of investment principal;
(c) Liquidity. Maintenance of sufficient liquidity to meet operating requirements; and
(d) Yield. Attainment of market rates of return.
(2) The portfolio should be reviewed periodically to determine its effectiveness in meeting the city’s needs for safety, liquidity, rate of return, diversification and overall general performance.
(E) Delegation of authority. Management and administrative responsibility for the investment program is hereby delegated to the Treasurer, who under the delegation of the City Council shall establish written procedures for the operations of the investment policy.
(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. A list will also be maintained of approved security brokers/dealers selected by credit worthiness.
(H) Authorized investments. Investments may be made in any type of security allowed by the Public Funds Investment Act (30 ILCS 235). Investments shall be made that reflect the cash flow needs of the fund type being invested.
(I) Collateralization. Funds on deposit (checking accounts, certificates of deposits and the like) in excess of FDIC limits shall be secured by some form of collateral, documented by written agreement and held at an independent third party institution in the name of the city.
(J) Safekeeping and custody. All security transactions, including collateral for repurchase agreements, entered into by the city, shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by an independent third party custodian designated by the Treasurer and evidenced by safekeeping receipts and written custodial agreements.
(K) Diversification and maturity limitations. The city 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 city shall attempt to 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 three years from the date of purchase. Reserve funds may be invested in securities exceeding three years if such investments are made to coincide as nearly as practicable with the expected use of the funds.
(M) Internal control.
(1) The Treasurer is responsible to establish and maintain an internal control system designed to ensure that the assets of the city are protected from loss, theft or misuse.
(2) The internal control system shall be designed to provide reasonable assurance that these objectives are met.
(3) The internal control system shall address the following:
(a) Control of collusion;
(b) Detailed monthly reporting of all transactions to the City Council;
(c) Custodial safekeeping; and
(d) Written confirmation of telephone transactions for investments and wire transfers.
(N) Performance standards.
(1) This investment portfolio will be managed in accord with the parameters specified within this policy.
(2) The portfolio should obtain a comparable rate of return during a market/economic environment of stable interest rates.
(3) Performance should be compared to benchmark with similar maturity, liquidity and credit quality as the portfolio.
(O) Reporting. The Treasurer shall prepare an investment report at least monthly. The report should be provided to the City Council and available upon request. The report should be in a format suitable for review by the general public. An annual report shall also be provided to the City Council. A statement of the market value of the portfolio shall be issued to the City Council.
(P) Review. The investment policy shall be adopted by the City Council and reviewed on an annual basis by the Treasurer. Any modifications made thereto shall be approved by the City Council.
(1999 Code, § 1-2-85) (Ord. 18-99, passed 12-14-1999)