(a) Objectives. Funds of the City will be invested in accordance with Ohio R.C. Chapter 135. The City's investment portfolio shall be managed so as to attain the highest rate of return while preserving and protecting capital. Safety of principal shall be the primary objective of the investment program.
(b) Scope. This investment policy applies to activities of the City with regard to investing the financial assets of all City funds. The funds consist of the General Fund, Special Revenue Funds, a Bond Retirement Fund, Capital Improvement Funds and Trust and Agency Funds.
(c) Delegation of Authority. The Treasurer is designated as the investment officer of the City and is responsible for investment decisions and activities. The Treasurer shall develop and maintain written administrative procedures for the operation of the investment program.
(d) Prudence. Investments shall be made with judgment and care, under circumstances then prevailing, not for speculation, but for investment, considering the probable safety of capital as well as the probable income to be derived. The investment officer, acting in accordance with written procedures and exercising due diligence, shall not be held personally responsible for a specific security's credit risk or market price changes, provided that these deviations are reported in a timely fashion and that appropriate action is taken to control adverse developments.
(e) Internal Controls. The investment officer shall establish a system of written internal controls, which shall be reviewed annually by an independent auditor. The controls shall be designed to prevent loss of public funds due to fraud, error, misrepresentation or imprudent actions.
(f) Portfolio Diversification. The City will diversify its portfolio to avoid incurring unreasonable risks inherent in overinvesting in specific instruments, individual financial institutions or maturities.
Investment maturities for operating funds shall be scheduled to coincide with projected cash flow needs and anticipated revenue. Maturity scheduling for longer-term needs shall be timed accordingly.
Allowable investments shall be those authorized by Ohio R.C. 135.14. In addition, debt issued by the City of Pepper Pike may be purchased by either the Bond Retirement Fund or the Treasury Investment Fund as an investment.
(g) Competitive Selection of Investment Instruments. Before the City invests any surplus funds, a competitive bid process shall be conducted.
(h) Qualified Institutions. The City shall invest with only those financial institutions and their affiliated brokers/dealers which have contracted with the City for financial services. Banks shall provide their most recent Consolidated Report of Condition ("call" report) at the request of the City.
(i) Safekeeping and Collateralization. All investment securities purchased by the City shall be held in third-party safekeeping by the institution from which the purchase is made. The institution shall issue a safekeeping receipt to the City listing the specific instrument, rate, maturity and other pertinent information. Deposit-type securities (i.e. certificates of deposit) shall be collateralized as required by the Ohio Revised Code.
(j) Reporting Requirements. The investment officer shall generate reports as investments change. Monthly reports for management purposes shall be provided to the Mayor and City Council.
(Res. 1996-43. Passed 9-18-96.)