(a) Definitions.
(1) "Account representative" means the individual assigned by an institution to facilitate the investment activities of the City.
(2) "Active funds" means public deposits necessary to meet the current demands on the Treasury, which are deposited in an account that is payable or withdrawable, in whole or in part, on demand.
(3) "Certificate of deposit" means a time deposit with a specific maturity evidenced by a certificate.
(4) "Collateral" means securities pledged by an institution to secure deposits of public funds.
(5) "Delivery versus payment" means a delivery of securities concurrent with an exchange of money for securities.
(6) "Diversification" means dividing investment funds among a variety of securities, institutions and maturity dates.
(7) "Financial institution" means any bank insured by the Federal Deposit Insurance Corporation (FDIC), or a primary dealer for government securities, which is eligible to hold or invest the active, interim or inactive funds of the City.
(8) "Inactive funds" means all public funds or deposits other than interim and active funds.
(9) "Interim funds" means all public funds which are not needed for immediate use, but will be needed within two years.
(10) "Investment official" means the Treasurer or Deputy Treasurer and members of the Treasury Investment Board.
(11) "Liquidity" means the ability to easily and rapidly convert an investment into cash without a substantial loss of value.
(12) "Maturity" means the date upon which the principal or stated value of an investment becomes due and payable.
(13) "Primary dealer" means a dealer who submits daily reports of market activity and risk positions to the Federal Reserve Bank of New York and is subject to its informal oversight.
(14) "Rate of return" means the rate of annual income return on an investment, expressed as a percentage, obtainable on a security, based on its purchase price or current market price.
(15) "Safekeeping receipt" means documentation from a bank that it is holding securities for a specific customer within the bank's vault for protection.
(16) "Treasury Investment Board" means the Board defined in Ohio R.C. 135.01 which, for the City, includes the Mayor, the Law Director and the Auditor, as voting members.
(b) Policy. It is the policy of the City to invest public funds according to the objectives stated herein, while conforming to Ohio R.C. Title 7, Ohio R.C. Chapter 135 and these Codified Ordinances.
(c) Standards.
(1) 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 probable income to be derived.
(2) The standard of prudence established in paragraph (c)(1) hereof shall be applied in the context of managing the City's investments as a whole. Investment officers acting in accordance with written procedures and this investment policy, and exercising due diligence, shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided that action is taken to control adverse developments.
(3) Nothing in this subsection shall be construed to relieve any investment officer from the legal requirements established in the Ohio Revised Code.
(d) Scope. This investment policy applies to all financial assets of the City. These funds are accounted for in the City's Comprehensive Annual Financial Report and include the following funds:
(1) General Fund
(2) Special Revenue Funds
(3) Bond Retirement Funds
(4) Capital Improvement Funds
(5) Enterprise Funds
(6) Trust and Agency Funds
(e) Objectives. The City's investment objectives, in order of priority, are to insure the safety of the public funds, to invest these funds in accordance with all State and local laws, to maintain sufficient liquidity to meet all reasonably anticipated expenses and to receive the bench mark rate of return of the three month treasury bill, while meeting the above requirements. The City will maintain a diversification of investments (as later stated in policy) to reduce risk and principal loss. Rate of return is contingent on cash flow needs.
(f) Delegation of Authority.
(1) As a non-charter City, authority to manage the City's investment program is derived from Ohio R.C. Chapter 135 and related sections of Ohio R.C. Chapter 731.
(2) The Treasurer will review the cash position to determine when investments can be made.
(3) Management responsibility for the investment program is hereby delegated to the Treasurer, who shall submit written procedures for the operation of the investment program, consistent with this investment policy, to the Treasury Investment Board for approval. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions.
(4) No person shall engage in an investment transaction, except as provided under the terms of this policy and the procedures adopted by the Treasury Investment Board.
(5) The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.
(6) The Treasury Investment Board will review all investments made by the Treasurer on behalf of Council and may order the Treasurer to liquidate current holdings for good cause.
(g) Conflict of Interest.
(1) Investment officials are prohibited from engaging in business activities which conflict with the proper execution of the investment program. Investment officials must disclose personal investments which could be affected by investment decisions made for the City.
(2) In all cases, City investment officials will subordinate their personal investment interests to those of the City.
(h) Authorized Financial Dealers and Institutions. The Treasurer will maintain a list of financial institutions authorized to provide investment services. The financial advisor will maintain a list approved security broker/dealers that are subject to auditors review. Every five years, the Treasurer will invite all financial institutions within the boundaries of the County to bid for the involvement of active and interim funds of the City. Council will adopt depository ordinances authorizing the Treasurer to deposit funds in the authorized depositories of both active and interim funds. The depository agreements will last a period of five years.
(i) Authorized Investments. The following investments are authorized:
(1) Certificates of deposit, when purchased within the guidelines established in subsections (l) and (n) hereof;
(2) Bonds, notes or other obligations of or guaranteed by the United States, or those for which the full faith and credit of the United States is pledged, for payment of principal and interest;
(3) Bonds and other obligations of the State of Ohio and the City; and
(4) Repurchase agreements with institutions that have signed a written master repurchase agreement which is on file in the Treasurer's office and collateral types are restricted to U.S. Treasuries and Federal Securities.
(5) Federal agency securities.
(6) Commercial paper and bankers acceptances.
(7) Star Ohio - State Treasurer's pool.
(8) All legal investments for statutory cities in Ohio R.C. Chapter 135.
(j) Collateralization.
(1) Certificates of deposit must be backed by collateral with a market value of at least 102 percent of the certificate's value. The collateral for the certificate of deposit may be held by a third party, in a separate trust account or in a pool of securities, as defined in Ohio R.C. 135.181.
(2) The individual securities, which collectively are the subject of a repurchase agreement, become the property of the City for the period of the agreement and are to be held by a third party for safekeeping. The City's demand deposit accounts may be placed in an account which meets the pooled collateral requirements stated in Ohio R.C. Chapter 135, and the collateral may be held by the institution at which the active funds are deposited. Where administrative costs are comparable, preference will be given to those institutions which will provide specific collateral over those which provide pooled collateral.
(k) Safekeeping and Custody. All transactions shall be conducted on a delivery versus payment basis. When feasible, securities will be held by a third party.
(l) Diversification.
(1) The City sets no limit on the amount of funds which may be held in the investments listed in paragraphs (i)(1), (2) and (5) hereof.
(2) Commercial paper and bankers acceptances shall not exceed fifteen percent of the interim funds within the City.
(3) The amount of any one issuer of commercial paper or bankers acceptances is limited to a maximum of five hundred thousand dollars ($500,000).
(4) The Treasurer will adjust future investments to satisfy these requirements, without prematurely liquidating current investments.
(5) The Treasury Investment Board may set lower limits on the amount of funds which can be placed in any investment category.
(m) Institutions Eligible for Active and Inactive Funds.
(1) The institution must be a bank with a branch office in the State of Ohio.
(2) The institution must be insured by the Federal Deposit Insurance Corporation.
(3) Institutions must be approved by the City Council acting as Governing Board.
(n) Institutions Eligible for Interim Funds.
(1) Certificates of deposit may only be purchased from institutions located in the City and eligible under subsection (m) hereof.
(2) Other investments may be made with institutions eligible under subsection (m) hereof.
(3) Institutions must be approved by the City Council acting as Governing Board.
(o) Eligibility of Account Representatives.
(1) Representatives applying for City accounts must sign a statement that they have read and understand this policy and will limit their recommendations to those investments which they believe are consistent with its requirements.
(2) The representative must be associated with an institution approved by the City Council.
(p) Internal Control. The Treasurer shall establish an annual process of review by the Treasury Investment Board. This review will provide internal control by assuring compliance with policies and procedures.
(q) Performance Standards.
(1) The investment portfolio shall be designed with the objective of obtaining a rate of return, throughout budgetary and economic cycles, commensurate with investment risk constraints and cash flow needs.
(2) The City investment strategy is passive. The three-month U.S. Treasury Bill will be used to determine if market yields are being achieved.
(r) Reporting.
(1) The Treasurer will report investments made to the Treasury Investment Board and to Council on a quarterly basis.
(2) The Auditor will provide the Treasury Investment Board with a statement of monies currently in the Treasury and in the process of collection to certify that sufficient funds are available for each investment made by the Treasurer.
(3) The Treasurer will report on investment diversification to Council each quarter.
(4) The Mayor will be Chairperson of the Treasury Investment Board. The Mayor will be responsible for calling quarterly meetings of the Treasury Investment Board to review and approve all investments made up to that time and to conduct any other such business that comes before the Board.
(s) Maturities. Security maturities will be matched to anticipated cash flow requirements.
(1) Interim funds may be invested for up to five years.
(2) Collateral pledged by institutions may include investments with terms of up to five years.
(3) Inactive funds may be invested for up to two years.
(4) Active funds will be awarded every five years. However, the depository may be changed earlier with good cause.
(5) All investments will be made with the intent to hold the investment to maturity, but may be sold earlier, if necessary.
(t) Policy Review. The Treasurer and the Treasury Investment Board will review this policy annually and recommend changes to Council. Revisions may be made more frequently, if necessary.
(Ord. 339-95. Passed 12-4-95; Ord. 291-97. Passed 12-1-97; Ord. 130-03. Passed 5-5-03; Ord. 86-11. Passed 5-2-11.)