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§ 40.12 DIVERSIFICATION.
   In order to reduce the risk of default, the investment portfolio of the city shall not exceed the following diversification limits unless specifically authorized by the City Council:
   (A)   Monies deposited at a financial institution shall not exceed 75% of the capital stock and surplus of that institution;
   (B)   Commercial paper shall not exceed 33% of the city’s investment portfolio;
   (C)   Deposits in the Illinois Public Treasurer’s Investment Pool shall not exceed 50% of the city’s investment portfolio;
   (D)   Brokered and negotiable certificates of deposit shall not exceed 25% of the city’s investment portfolio.
(1994 Code, § 40.12) (Ord. 99-03, passed 3-22-1999; Ord. 2017-07, passed 12-26-2017)
§ 40.13 MAXIMUM MATURITIES.
   (A)   To the extent possible, the city shall attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the city shall not directly invest in securities maturing more than five years from the date of purchase.
   (B)   Reserve funds (MC&CF or trusts) may be invested in securities exceeding the maximum years.
(1994 Code, § 40.13) (Ord. 99-03, passed 3-22-1999; Ord. 2017-07, passed 12-26-2017)
§ 40.14 INTERNAL CONTROL.
   (A)   The Commissioner of Accounts and Finance and the City Treasurer are responsible for establishing and maintaining an internal control structure designed to 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 objections are met. The concept of reasonable assurance recognizes that:
      (1)   The cost of the control should not exceed the benefits likely to be derived; and
      (2)   The valuation of costs and benefits require estimates and judgements by management.
   (B)   The internal controls shall address the following points:
      (1)   Control of collusion;
      (2)   Separation of transaction authority from accounting and record keeping;
      (3)   Custodial safekeeping;
      (4)   Avoidance of physical delivery of securities or other allowable investments;
      (5)   Clear delegation of authority to subordinate staff members;
      (6)   Written confirmation of telephone transactions for investments and wire transfers; and
      (7)   Development of a procedure for making wire transfers.
(1994 Code, § 40.14) (Ord. 99-03, passed 3-22-1999; Ord. 2017-07, passed 12-26-2017)
§ 40.15 PERFORMANCE STANDARDS.
   The investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a comparable rate of return during a market/economic environment of stable interest rates. Portfolio performance should be compared to appropriate benchmarks on a minimum quarterly basis.
(1994 Code, § 40.15) (Ord. 99-03, passed 3-22-1999; Ord. 2017-07, passed 12-26-2017)
§ 40.16 REPORTING.
   (A)   Investment report. The Commissioner of Accounts and Finances or the City Treasurer shall prepare and provide an investment report at least quarterly, including a succinct management summary that provides a clear picture of the status of the current investment portfolio, to the City Council. This management summary will be prepared in a manner that will allow the entity to ascertain whether investment activities during the reporting period have conformed to the investment policy. The report may include the following:
      (1)   A listing of individual securities or other allowable investments held at the end of the reporting period;
      (2)   Average weighted yield to maturity of portfolio on city investments, as compared to applicable benchmarks;
      (3)   A listing of investments by maturity dates;
      (4)   The percentage of the total portfolio that each institution is holding;
      (5)    The principal and type of investment by fund.
   (B)   Marking to market. A statement of the market value of the portfolio shall be issued at least quarterly, and a management summary shall be provided to the governing body. This will ensure that the minimal amount of review has been performed on the investment portfolio in terms of value and subsequent price volatility. Review should be consistent with the GFOA-recommended practice on mark-to-market practices for state and local government investment portfolios and investment pools (Attachment #3 to Ordinance 2017-07).
(1994 Code, § 40.16) (Ord. 99-03, passed 3-22-1999; Ord. 2017-07, passed 12-26-2017)
§ 40.17 INVESTMENT POLICY ADOPTION.
   This investment policy shall be adopted by the City Council. The policy shall be reviewed on an annual basis by the Commissioner of Accounts and Finance, the City Treasurer and the City Attorney to monitor such matters as conformance to accepted practices, conformance with standards such as GFOA, and changes to the suitability of investments. Any modifications made thereto shall be effective only upon approval by the City Council.
(1994 Code, § 40.17) (Ord. 99-03, passed 3-22-1999; Ord. 2017-07, passed 12-26-2017)