(A) As used in this section "Other obligations" includes notes whether or not issued in anticipation of the issuance of bonds.
(B) The City may invest or deposit any part or all of the inactive and/or interim moneys. The following classifications of obligations shall be eligible for such investment or deposit:
(1) 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.
Nothing in the classification of eligible obligations set forth in division (B)(1) of this section or in the classifications of eligible obligations set forth in divisions (B)(2) to (7) of this section shall be construed to authorize any investment in stripped principal or interest obligations of such eligible obligations.
(2) Bonds, notes, debentures, or any other obligations or securities issued or guaranteed 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 and government national mortgage association. All federal agency securities shall be direct issuances of federal government agencies or instrumentalities or guaranteed thereby.
(3) Bonds and other obligations of this state;
(4) Bonds, notes and any other obligations of the City of Moraine, Ohio, without regard to term-to-maturity or interest rate.
(5) No-load money market mutual funds consisting exclusively of obligations described in division (B)(1) or (2) of this section and repurchase agreements secured by such obligations, provided that investments in securities described in this division are made only through eligible institutions as defined herein;
(6) The Ohio subdivision's fund (STAR Ohio) as provided in Section 135.45 of the Revised Code;
(7) Up to twenty-five per cent of moneys available for investment in either of the following:
(a) Commercial paper notes issued by an entity that is defined in division (D) of Section 1705.01 of the Revised Code and that has assets exceeding five hundred million dollars, to which notes all of the following apply:
(i) The notes are rated at the time of purchase in the highest classification established by at least two nationally recognized standard rating services.
(ii) The aggregate value of the notes does not exceed ten per cent of the aggregate value of the outstanding commercial paper of the issuing corporation.
(iii) The notes mature not later than one hundred eighty days after purchase.
(b) Bankers’ acceptances of banks that are insured by the federal deposit insurance corporation and to which both of the following apply:
(i) The obligations are eligible for purchase by the Federal Reserve System.
(ii) The obligations mature not later than one hundred eighty days after purchase.
No investment shall be made pursuant to division (B)(6) of this section unless the Finance Director has completed additional training for making the investments authorized by division (B)(6) of this section. The type and amount of additional training shall be approved by the auditor of state and may be conducted by or provided under the supervision of the auditor of state.
(C) Nothing in the classifications of eligible obligations set forth in divisions (B)(1) to (7) of this section shall be construed to authorize any investment in a derivative, and no investments shall be made in a derivative. For purposes of this division, "derivative" means a financial instrument or contract or obligation whose value or return is based upon or linked to another asset or index, or both, separate from the financial instrument, contract, or obligation itself. Any security, obligation, trust account, or other instrument that is created from an issue of the United States Treasury or is created from an obligation of a federal agency or instrumentality or is created from both is considered a derivative instrument. An eligible investment described in this section with a variable interest rate payment, based upon a single interest payment or single index comprised of other eligible investments provided for in division (B)(1) or (2) of this section, is not a derivative, provided that such variable rate investment has a maximum maturity of two years.
Notwithstanding the foregoing, however, bonds, notes, debentures, or any other obligations or securities issued or guaranteed by any federal government agency or instrumentality as described in division B(2) shall not be considered "derivatives".
(D) Except as provided in division (E) of this section, any investment made pursuant to this section must mature within five years from the date of settlement, unless the investment is matched to a specific obligation or debt of the subdivision.
(E) The City may also enter into a written repurchase agreement with any eligible institution or any eligible dealer pursuant to division (M) of this section, under the terms of which agreement the City purchases, and such institution or dealer agrees unconditionally to repurchase any of the securities listed in divisions (B)(1) to (6), except letters of credit described in division (B)(2), of Section 135.18 of the Revised Code. The market value of securities subject to an overnight written repurchase agreement must exceed the principal value of the overnight repurchase agreement by at least two per cent. A written repurchase agreement shall not exceed thirty days and the market value of securities subject to a written repurchase agreement must exceed the principal value of the written repurchase agreement by at least two per cent and be marked to market daily. All securities purchased pursuant to this division shall be delivered into the custody of the Finance Director or an agent designated by the Finance Director or Treasury Investment Committee. A written repurchase agreement with an eligible securities dealer shall be transacted on a delivery versus payment basis. The agreement shall contain the requirement that for each transaction pursuant to the agreement the participating institution or dealer shall provide all of the following information:
(1) The par value of the securities;
(2) The type, rate, and maturity date of the securities;
(3) A numerical identifier generally accepted in the securities industry that designates the securities.
The City shall not enter into a written repurchase agreement under the terms of which the City agrees to sell securities to a purchaser and agrees with that purchaser to unconditionally repurchase those securities.
(F) The City shall not make an investment under this section, unless the City, at the time of making the investment, reasonably expects that the investment can be held until its maturity.
(G) The City shall not pay interim moneys into a fund established by another subdivision, treasurer, governing board, or investing authority, if that fund was established for the purpose of investing the public moneys of other subdivisions. This division does not apply to the payment of public moneys into either of the following:
(1) The Ohio subdivision's fund pursuant to division (B)(5) of this section;
(2) A fund created solely for the purpose of acquiring, constructing, owning, leasing, or operating municipal utilities pursuant to the authority provided under Section 715.02 of the Revised Code or Section 4 of Article XVIII, Ohio Constitution.
For purposes of division (G) of this section, "subdivision" includes a county.
(H) The use of leverage, in which the City uses its current investment assets as collateral for the purpose of purchasing other assets, is prohibited. The issuance of taxable notes for the purpose of arbitrage is prohibited. Contracting to sell securities that have not yet been acquired by the City, for the purpose of purchasing such securities on the speculation that bond prices will decline, is prohibited.
(I) Whenever, during a period of designation, the Finance Director classifies public moneys as interim or inactive moneys, the Finance Director shall notify the Treasury Investment Committee of such action. The notification shall be given within thirty days after such classification and in the event the Treasury Investment Committee does not concur in such classification or in the investments or deposits made under this section, the Treasury Investment Committee may order the Finance Director to sell or liquidate any of such investments or deposits, and any such order shall specifically describe the investments or deposits and fix the date upon which they are to be sold or liquidated. Investments or deposits so ordered to be sold or liquidated shall be sold or liquidated for cash by the Finance Director on the date fixed in such order at the then current market price. Neither the Finance Director nor the members of the Treasury Investment Committee shall be held accountable for any loss occasioned by sales or liquidations of investments or deposits at prices lower than their cost. Any loss or expense incurred in making such sales or liquidations is payable as other expenses of the Department of Finance.
(J) If any investments or deposits purchased under the authority of this section are issuable to a designated payee or to the order of a designated payee, the name of the City of Moraine shall be so designated. If any such securities are registrable either as to principal or interest, or both, then such securities shall be registered in the name of the City of Moraine as such.
(K) The Finance Director is responsible for the safekeeping of all documents evidencing a deposit or investment acquired by the City under this section. Any securities may be deposited for safekeeping with a qualified trustee as provided in Section 135.18 of the Revised Code, except the delivery of securities acquired under any repurchase agreement under this section shall be made to a qualified trustee, provided, however, that the qualified trustee shall be required to report to the Finance Director. Treasury Investment Committee, auditor of state, or an authorized outside auditor at any time upon request as to the identity, market value, and location of the document evidencing each security, and that if the participating institution is a designated depository of the City of Moraine for the current period of designation, the securities that are the subject of the repurchase agreement may be delivered to the City or held in trust by the participating institution on behalf of the City. Interest earned on any investments or deposits authorized by this section shall be collected by the Finance Director and credited to the proper fund of the subdivision.
(L) Whenever investments or deposits acquired under this section mature and become due and payable, the Finance Director shall present them for payment according to their tenor, and shall collect the moneys payable thereon. The moneys so collected shall be treated as public moneys.
(M) (1) All investments, except for investments in securities described in divisions (B)(4) and (5) of this section and for investments by the City in the issues of the City of Moraine, shall be made only through a member of the national association of securities dealers, through a bank, savings bank, or savings and loan association regulated by the superintendent of financial institutions, or through an institution regulated by the comptroller of the currency, federal deposit insurance corporation, or board of governors of the federal reserve system.
(2) Payment for investments shall be made only upon the delivery of securities representing such investments to the Finance Director. If the securities transferred are not represented by a certificate, payment shall be made only upon receipt of confirmation of transfer from the custodian by Finance Director, or qualified trustee.
(N) In making investments authorized by this section, the Finance Director may retain the services of an investment advisor, provided the advisor is licensed by the division of securities under Section 1707.141 of the Revised Code or is registered with the securities and exchange commission, and possesses experience in public funds investment management, specifically in the area of state and local government investment portfolios, or the advisor is an eligible institution mentioned in Section 135.03 of the Revised Code.
(O) (1) Except as otherwise provided in divisions (O)(2) and (3) of this section, the Finance Director shall not make an investment or deposit under this section, unless there is on file with the auditor of state a written investment policy approved by the Treasury Investment Committee and City Council. The policy shall require that all entities conducting investment business with the City of Moraine shall acknowledge receipt and understanding of the City's investment policy. All brokers, dealers, and financial institutions, described in division (M)(1) of this section, initiating transactions with the Finance Director by giving advice or making investment recommendations shall sign the investment policy thereby acknowledging their agreement to abide by the policy's contents. All brokers, dealers, and financial institutions, described in division (M)(1) of this section, executing transactions initiated by the Finance Director, having read the policy's contents, shall sign the investment policy thereby acknowledging their comprehension and receipt.
(P) The City may enter into a written investment or deposit agreement that includes a provision under which the parties agree to submit to nonbinding arbitration to settle any controversy that may arise out of the agreement, including any controversy pertaining to losses of public moneys resulting from investment or deposit. The arbitration provision shall be set forth entirely in the agreement, and the agreement shall include a conspicuous notice to the parties that any party to the arbitration may apply to the court of common pleas of the county in which the arbitration was held for an order to vacate, modify, or correct the award. Any such party may also apply to the court for an order to change venue to a court of common pleas located more than one hundred miles from the county in which the City of Moraine is located.
For purposes of this division, "investment or deposit agreement" means any agreement between the City and a person, under which agreement the person agrees to invest, deposit, or otherwise manage a subdivision's interim moneys on behalf of the City, or agrees to provide investment advice to the Finance Director.
(Q) An investment made by the City prior to enactment of this revised Investment Policy may be held until maturity, or if the investment does not have a maturity date, it may be held until five years from the effective date hereof, regardless of whether the investment would qualify as a legal investment under the terms of this section as amended.