(a) Introduction. It is the policy of the City of New Carlisle to invest public funds in a manner which will provide the maximum safety and preservation of principal, while meeting all the liquidity and operating demands, at reasonable, market interest rates available.
(b) Governing Authority. All investments made will conform to all applicable laws and regulations governing the investment of public moneys, including all federal, state and other legal requirements including Ohio Revised Code, Chapter 135.
(c) Scope. All public funds of the City of New Carlisle, as may be prescribed by the Finance Director, may be invested by the Finance Director in the eligible investments described in this policy. The Finance Director is authorized to pool cash balances of multiple funds of the City for investment hereunder.
(d) Objectives. The achievement of sound fiscal management for the City of New Carlisle requires effective investment of the public moneys of the City. To that effect, the following investment objectives shall be applied in the investment of public moneys.
(1) Safety. Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk.
(2) Liquidity. The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.
(3) Yield. The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, considering the investment risk constraints of safety and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above.
(e) Standards of Care.
(1) Authority to Manage Investment Program. Authority to manage the investment program is granted to the Finance Director of the City of New Carlisle, who shall act in accordance with established written procedures and internal controls for the operation of the investment program consistent with this investment policy.
(2) Prudence. The standard of prudence to be used by investment officials shall be the "reasonably prudent person" standard and shall be applied in the context of managing an overall portfolio of an Ohio municipal corporation of like size and resources. The Finance Director acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal liability for an individual security's credit risk or market price changes, provided that deviations from expectations are reported on a timely fashion and appropriate action is taken to control adverse developments.
(3) 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 or objective investment decisions. The Finance Director shall disclose any material interests in financial institutions with which they conduct business. Officers and employees of the City of New Carlisle shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the City.
(f) Authorized Investments. The City may invest in any instrument or security authorized in Ohio R.C. Chapter135 as amended and such other securities as approved by the Council of the City. Eligible investments, as defined in Ohio R.C. Chapter 135 are attached to Ordinance 2021-12 as Exhibit A, which is incorporated herein by reference as if set out in full.
(g) Maturity. To the extent possible, the City will attempt to match the term to maturity of its investments with anticipated cash flow requirements. Unless matched to a specific cash flow requirement, the City will not directly invest in securities maturing more than five (5) years from the date of settlement, except as provided by Ohio R.C. Chapter 135.
(h) Diversification. The investment portfolio shall be diversified by:
(1) Avoiding over-concentration in securities from a specific issuer or business sector.
(i) Prohibited Investments. Investments in derivatives are strictly forbidden. A derivative is defined in Chapter 135 of the Ohio Revised Code as a financial instrument, 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. Additionally, any security, obligation, trust account, or instrument that is created from an obligation of a federal agency or instrumentality or is created from both is considered a derivative instrument.
(j) Authorized Financial Institutions and Dealers.
(1) The Director of Finance will maintain a listing of financial institutions authorized to provide investment services to the City. No public deposit shall be made except in a qualified public depository as established by Chapter 135 of the Ohio Revised Code.
(2) All financial institutions, broker/dealers and investment advisors who desire to become qualified bidders for investment transactions must supply the Director of Finance with the following when requested, if applicable:
A. Certification of having received and understood the City's Investment Policy, and agreeing to comply with the policy; and
B. Depository agreement (if applicable); and
C. Other relevant information as requested.
(k) Collateralization Requirements. Collateralization will be required on all demand deposit accounts, including checking accounts, as well as non-negotiable certificates of deposit and repurchase agreements. The collateralization level will be defined by Ohio Revised Code. Collateral is limited to eligible securities defined in Ohio R.C. 135.18 and 135.181. Each financial institution with which the City has deposits shall provide a quarterly statement reflecting the securities pledged including the market values of such securities.
(l) Safekeeping and Custody. All security transactions, including collateral for repurchase agreements, entered into by the City shall be conducted on a delivery-versus-payment basis. Should an Investment Company/Manager be utilized, securities will be held by an independent third-party custodian designated by the Investment Company/Manager and evidenced by safekeeping receipts and a written custodial agreement.
(m) Internal Control, Reporting and Continuing Education.
(1) Internal Control. The Director of Finance is responsible for establishing and maintaining an internal control structure designed to reasonably ensure that the assets of the City are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. Compliance with policies and procedures will be independently reviewed during required audits by or on behalf of the Auditor of the State of Ohio.
(2) Reporting. The Director of Finance is charged with the responsibility of providing reports on investment activity and returns on the pooled balance of the funds. These reports will be prepared on a monthly or quarterly basis and submitted to the City Council.
(3) Continuing Education. The Director of Finance will annually complete the public investing continuing education program provided by the Treasurer of the State of Ohio. Furthermore, no investment shall be made in commercial paper or bankers acceptances unless the Director of Finance has completed additional training approved by the Auditor of the State of Ohio.
(n) Policy Considerations.
(1) The City's Investment Policy shall be adopted by Ordinance of the City Council. City Council shall review and reaffirm this policy every five (5) years at a minimum; and
(2) Any investment currently held that does not meet the guidelines of this policy shall be exempted from the requirements of this policy. However, at maturity or liquidation, such monies shall be reinvested only as provided by this policy; and
(3) The policies as stated herein may be changed only with the approval of City Council.
(Ord. 2021-12. Passed 5-17-21.)