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(A) This Policy applies to depositing and investing available cash assets of the Commuter Rail Division of the Regional Transportation Authority and the Northeast Illinois Regional Commuter Railroad Corporation, both d/b/a Metra. Excluded from this Policy are investment activities pertaining to pension or deferred compensation funds.
(B) Investments authorized under this Policy will be referred to as “permitted investments”. Financial institutions and brokerages that have been approved for investment transactions will be referred to as “qualified institutions”.
(Ord. NIRC 99-2, passed 12-17-1999)
(A) Funds will be invested in accordance with 30 ILCS 235/1-7 et al.; the Public Funds Investment Act (30 ILCS 235/0.01 et seq.), as supplemented by this Policy; and written administrative procedures.
(B) If any part of this Policy is inconsistent with or violates the Act, this Policy shall:
(1) Be deemed amended in order to comply with the Act; or
(2) The inconsistent or violating part will be deemed eliminated with the rest of the Policy remaining in full force and effect, at the Board of Directors’ and Executive Director’s choice.
(C) Metra staff will manage the investment portfolio to attain a market rate of return while preserving and protecting capital.
(D) Metra’s investment objectives include the following.
(1) Safety of principal. The security of monies and the investment of funds will be made with safety as a primary and overriding concern. Each investment transaction shall ensure that loss of capital, whether from credit or market risk, is minimized.
(2) Liquidity. Maturity and marketability aspects of investments should be coordinated with the anticipated cash flow needs of Metra. The investment portfolio shall remain sufficiently liquid to meet all operating requirements which might be reasonably anticipated.
(3) Rate of return. The Chief Financial Officer (CFO), or his or her designate, the Director, Treasury shall seek to attain a market average or better rate of return throughout budgetary and economic cycles, taking into account risk, constraints, cash flow and legal restriction on investment.
(4) Public trust. Metra and its officers should avoid any investment transaction or practice which in appearance or fact might impair public confidence in its stewardship of public funds.
(Ord. NIRC 99-2, passed 12-17-1999)
(A) The Board of Directors is responsible for approving the Metra investment policies.
(B) The Executive Director is responsible for reviewing and approving the investment practices and strategies of Metra.
(C) The Assistant Treasurer of Metra, who is appointed by the Board of Directors, shall report to the Executive Director. The Assistant Treasurer, who is the Chief Financial Officer (“CFO”), is responsible for developing investment procedures, complying with investment policies and reporting investment activities to the Executive Director.
(1) The CFO may designate the Director, Treasury, who will be responsible for investment decisions and activities under the direction of the CFO.
(2) The CFO shall be responsible for all transactions and shall establish a system of controls for all authorized subordinates who are directly involved in the assistance of such investment activities.
(Ord. NIRC 99-2, passed 12-17-1999)
(A) The standard of care to be applied by the CFO and theDirector, Treasury, shall be the “prudent person” rule. “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 the capital as well as the probable income to be derived”. The prudent person rule shall be applied in the context of managing the overall portfolio.
(B) The officers of Metra are authorized and encouraged by the Board of Directors to maximize the rate of return on cash to be invested to the extent allowed by “the Act”. Specifically, this means that qualified investments need not be collateralized except when required by “the Act”. The CFO, his or her designee or the Executive Director may, at their discretion, require collateral based upon their assessment of market conditions.
(C) The Executive Director, the CFO and the Director, Treasury, shall not be held personally responsible for a specific security’s credit risk or market price changes, provided that all such investments were made in accordance with the Act, this Policy and applicable Metra procedures.
(D) The CFO or Director, Treasury, under the direction of the CFO, shall routinely monitor the contents of the portfolio, the available markets and the relative value of competing instruments, to assess the effectiveness of the portfolio in meeting the safety, liquidity, rate of return, diversification and general performances objectives, and shall adjust the portfolio accordingly.
(Ord. NIRC 99-2, passed 12-17-1999)
(A) Investment and reinvestment of cash assets, except those specifically excluded from this Policy, are authorized for public agencies under the provisions of the Public Funds Investment Act, as amended, (30 ILCS 235/0.01 et seq.) and subject to the terms and conditions provided (see Exhibit A).
(B) (1) Contained in the Act are specific requirements pertaining to investment instruments, maturities, quality, collateral and safekeeping to which Metra must adhere.
(2) In addition, the following restrictions apply to Metra investments.
(a) Investment in savings and loan associations shall only be to the maximum amount insured by the Federal Deposit Insurance Corporation (FDIC).
(b) No investments shall be made in any credit union.
(Ord. NIRC 99-2, passed 12-17-1999)
In addition to the limitations imposed by law and this Policy, Metra will diversify its investments permitted by “the Act” to avoid incurring unreasonable risks associated with over-investing in specific instruments, individual qualified institutions or certain maturities in accordance with the following guidelines.
(A) Diversification of permitted investments. See the following table.
Diversification of Permitted Investments | Maximum Percent of Portfolio |
Diversification of Permitted Investments | Maximum Percent of Portfolio |
Bonds, notes, certificates of indebtedness, treasury bills or other securities which are guaranteed by the full faith and credit of the United States | 100% |
Bonds, notes, debentures and similar obligations of United States Government Agencies. Includes Federal Land Bank, Federal Intermediate Credit Bank, Banks for Cooperatives, Federal Farm Credit Bank, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation and any other agency created by an Act of Congress | 25% |
Interest-bearing accounts, certificates of deposit, interest bearing time deposits or other direct obligations of any FDIC insured bank, as defined in the Illinois Banking Act, or savings and loan associations permitted by this Policy | 100% |
Commercial paper, as limited by paragraph 2 (a)(4) of the Act (short term obligations of corporations organized in the United States with assets exceeding $500 million with obligations rated at time of purchase by 1 of the 3 highest classifications established by at least 2 standard rating services, do not mature more than 180 days from date of purchase, do not exceed 10% of the corporation’s outstanding obligations and no more than 1/3 of the agency’s funds may be invested in short term obligations of corporations) | 33-1/3% |
Money Market Mutual Funds registered under the Investment Company Act of 1940, as limited by paragraph 2 (a)(5) of the Act | 20% |
Short term obligations of the Federal National Mortgage Association | 25% |
The Illinois Fund | 25% |
Repurchase Agreements (Repos), as limited by paragraph 2 of the Act | 50% |
(B) Diversification by qualified institution.
(1) Certificates of deposit (CDs) - commercial banks. No more than 20% of the total portfolio with any one institution; and, the amount of the CDs over FDIC insurance coverage shall not exceed 15% of the combined capital stock and surplus of the institution.
(2) Commercial paper. No more than 10% of the total portfolio invested in any one issuer.
(3) Repurchase agreements. No more than 25% of the total portfolio at any one institution.
(Ord. NIRC 99-2, passed 12-17-1999)
The CFO or Director, Treasury, will arrange investment maturities to coincide with projected cash flow needs, taking into account expenditures as well as considering anticipated revenues. The CFO and the Director, Treasury, shall prepare and review a projected cash flow schedule quarterly and submit a report to the Executive Director.
(Ord. NIRC 99-2, passed 12-17-1999)
(A) Before liquid cash assets of Metra are invested or reinvested, or portfolio investments sold, quotes or proposals from qualified institutions will be solicited orally or in writing, as appropriate.
(B) Metra will seek to attain the quotes or proposals which provide a market average or better rate of return for the maturity required taking into account risk, constraints and cash flow, within the parameters of “the Act”, this Policy and Metra procedures.
(Ord. NIRC 99-2, passed 12-17-1999)
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