(A) The city hereby authorizes the Mayor to invest the city’s funds, pursuant to the following terms and conditions:
(1) Funds not needed for current expenses may be invested in any of the following:
(a) Obligations of the United States and of its agencies and instrumentalities, including obligations subject to repurchase agreements, provided the delivery of these obligations subject to a repurchase agreement is taken either directly or through an authorized custodian. The investments may be accomplished through repurchase agreements reached with sources including, but not limited to, national or state banks chartered by the Commonwealth of Kentucky;
(b) Obligations and contracts for future delivery or purchase of obligations backed by the full faith and credit of the United States or a United States government agency, including, but not limited to, the United States Treasury, Export-Import Bank of the United States, Farmer’s Home Administration, Government National Mortgage Corporation and Merchant Marine Bonds;
(c) Obligations of any corporation of the United States government, including, but not limited to, Farmers Home Loan Mortgage Corporation, Federal Farm Credit Banks, Bank of Cooperatives, Federal Intermediate Credit Banks, Federal Home Loan Banks, Federal National Mortgage Association and Tennessee Valley Authority;
(d) Certificates of deposit issued by or other interest bearing accounts of any banks or savings and loan institute which are insured by the Federal Deposit Insurance Corporation or similar entity or which are collateralized to the extent uninsured by any obligations permitted by KRS 41.240(4);
(e) Bonds or certificates of indebtedness of this state and of its agencies and instrumentalities; and
(f) Securities issued by a state or local government, or any instrumentality or agency thereof in the United States, and rates in one of the three highest categories by a nationally recognized rating agency.
(2) The city shall not purchase any investment on a margin basis or through the use of any similar leveraging technique.
(B) The city hereby adopts the following procedures for monitoring controls, deposit or retention of investments and collateral:
(1) The bank that the city invests with will be required to report periodically the collateral they deposited over the FDIC amount they are pledging;
(2) Working with the city’s investment advisor, the city should make such determinations as to:
(a) How often a report will be received on the deposits;
(b) Where the deposits or investments will be physically located;
(c) Whether a third party custodian is desired or required for the collateral; and
(d) Whether the city actually wants to take possession and control of the investment security or if that will be left with the city’s bank/trustee.
(3) The city should include any additional controls recommended by the investment advisor or the city’s auditor.
(Ord. 13-95, passed 9-5-1995)