(A) Purpose.
(1) This policy is adopted by the City Council of the city pursuant to § 2.5 of the Illinois Public Funds Investment Act, ILCS Ch. 30, Act 235, § 2.5, which requires the city to adopt an investment policy to safeguard the city’s principal and manage the city’s investment portfolio so that it maintains sufficient liquidity to pay the city’s obligations when they come due while maximizing the city’s income from its investment portfolio. The purpose of this investment policy of the city is to establish cash management and investment guidelines for the stewardship of public funds under the jurisdiction of the City Council.
(2) This investment policy applies to the investment activities of all funds under the jurisdiction of the city. This investment policy shall also apply to any new funds or temporary funds placed under the jurisdiction of the city.
(B) Objectives. The specific objectives of this investment policy will be as follows:
(1) Safety of principal;
(2) Diversity of investments to avoid unreasonable risks;
(3) The portfolio shall remain sufficiently liquid to meet all operation costs which may be reasonably anticipated;
(4) The highest interest rate available will always be the objective of this policy combined with safety of principal, which is left to the discretion of the Treasurer of the city, which includes whether or not the city will require collateralization of any deposits;
(5) In maintaining its investment portfolio, the Treasurer of the city shall avoid any transaction that might impair public confidence in the Treasurer of the city;
(6) The Treasurer of the city will give consideration to a financial institution’s positive community involvement when the Treasurer is considering using the financial institution as a depository;
(7) All funds will be invested for a period of 1 day or longer, depending on the requirement for the disbursement of funds; and
(8) All funds shall be deposited within 2 working days at prevailing rates or better in accordance with Illinois Compiled Statutes.
(C) Responsibility. All investment of funds under the control of the city is the direct responsibility of the Treasurer of the city. The Treasurer of the city shall be responsible for all transactions and shall establish a system of controls of the activities of all subordinates who are directly involved in the assistance of such investment activities.
(D) Prudence. The standard of prudence to be used by investment officials shall be the “prudent person rule,” and it shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and exercising due diligence shall be relieved of personal responsibility for any individual securities credit risk or market price changes, provided that deviations from expectation are reported in a timely fashion, and appropriate action is taken to control adverse developments.
(E) Accounting. All investment transactions shall be recorded by the Treasurer of the city or his or her designee. A report will be generated at least monthly, listing all active investments, listing information regarding securities in portfolio by class or type, book value, interest earned, and market value as of report date. This report will be made available to the City of Monticello City Council.
(F) Financial institutions.
(1) The Treasurer of the city will have the sole responsibility to select which financial institutions will be depositories for city funds.
(2) The Treasurer of the city will take into consideration security, size, location, condition, service, fees and the community relations’ involvement of the financial institution when choosing a financial institution.
(3) At no time will the city investments exceed 65% of the financial institution’s capital and surplus.
(4) All financial institutions having any type of financial relationship with the city, such as deposits, investments, loans and the like are required to provide a complete and current “Call Report” required by their appropriate regulatory authority each calendar quarter within 30 days of the “Call” request date.
(G) Investment vehicles. The city may use any such investments approved for governmental units as set forth in the Illinois Public Funds Investment Act, or the Illinois Compiled Statutes.
(H) Collateral. It shall be the discretion of the Treasurer of the city to determine whether or not collateral will be required for financial institutions receiving funds from the city. At all times the Treasurer of the city will require that deposits in excess of 35% of the capital and surplus of a financial institution will be collateralized. The Treasurer of the city may request collateral for any part of deposits in financial institutions when the Treasurer of the city determines it to be necessary to safeguard the funds on deposit.
(1) When collateral is required, 110% of the deposit will be required. Only the following collateral will be accepted:
(a) U.S. Government direct securities;
(b) Obligations of federal agencies;
(c) Obligations of federal instrumentalities;
(d) Obligations of the State of Illinois;
(e) Obligations of the County of Piatt;
(f) Obligations of municipalities located within the County of Piatt, subject to acceptance by the city;
(g) Acceptable collateral as identified in the Illinois Compiled Statutes for use by the Treasurer of the State of Illinois;
(h) Securities or mortgages in an amount equal to at least market value of that amount of funds deposited exceeding the insurance limitation provided by the FDIC or the National Credit Union; or
(i) Administration or other approved share insurer.
(2) 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 possible income to be derived.
(3) The above standard is established as the standard for professional responsibility and shall be applied in the contest of managing the city’s portfolio, and shall be construed consistent with the Illinois Public Funds Investment Act, ILCS Ch. 30, Act 235, §§ 1 et seq. and all other Illinois statutes and Constitutional provisions regarding conflicts of interest and ethical considerations.
(I) Security controls. Only the Treasurer of the city is authorized to establish financial investment accounts for the city. At all times either the Treasurer of the city or other signatory as designated by the Treasurer of the city shall be the only person(s) authorized to sign on investment accounts of the City of Monticello.