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(A) Investment types and credit guidelines. Consistent with W.S. § 9-4-831, the following investments will be permitted by this policy and are those defined by state and local law where applicable. If additional types of securities are approved for investment by public funds by state statute, they will not be eligible for investment by the town until this policy has been amended and the amended version adopted by the governing body.
(B) Collateralization. As described in W.S. § 9-4-820 and W.S. § 9-4-821, full collateralization will be required on all demand deposit accounts, including checking accounts and certificates of deposit. Acceptable collateral shall include only those instruments outlined in W.S. § 9-4-821.
(Prior Code, § 3.A08.090) (Ord. 2018-22, passed 12-12-2018)
(A) Mitigating credit risk in the portfolio. Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. The town shall mitigate credit risk by adopting the following: diversification. The investments shall be diversified by:
(1) Limiting investments to avoid overconcentration in securities from a specific issuer or business;
(2) Sector (excluding U.S. Treasury securities);
(3) Limiting investment in securities that have higher credit risks;
(4) Investing in securities with varying maturities; and
(5) Continuously investing a portion of the portfolio in readily available funds such as local government investment pools (LGIPs), money market funds or overnight repurchase agreements to ensure that appropriate liquidity is maintained in order to meet ongoing obligations.
(B) Mitigating market risk in the portfolio.
(1) Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of interest rates. The town recognizes that, over time, longer-term/core portfolios have the potential to achieve higher returns. On the other hand, longer-term portfolios have higher volatility of return. The town shall mitigate market risk by providing adequate liquidity for short-term cash needs, and by making longer-term investments only with funds that are not needed for current cash flow purposes. The town further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments.
(2) The town, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
(a) The town shall maintain a minimum of three months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements;
(b) The maximum stated final maturity of individual securities in the portfolio shall be five years, except as otherwise stated in this policy; and
(c) Liquid funds will be held in the State Pool or in money market instruments maturing one year and shorter.
(d) Longer term/core funds will be the defined as the funds in excess of liquidity requirements. The investments in this portion of the portfolio will have maturities between one day and five years and will be only invested in higher quality and liquid securities. Exception to five-year maturity maximum: reserve or capital improvement project monies may be invested in securities exceeding five years if the maturities of such investments are made to coincide as nearly as practicable with the expected use of the funds.
(Prior Code, § 3.A08.100) (Ord. 2018-22, passed 12-12-2018)
The investment portfolio will be managed in accordance with the parameters specified within this policy. A series of appropriate benchmarks shall be established against which portfolio performance shall be compared on a regular basis. The benchmarks shall be reflective of the actual securities being purchased and risks undertaken. The Treasurer will establish a series of appropriate benchmarks, based on a Benchmark Index, which portfolio performance shall be compared on a regular basis.
(Prior Code, § 3.A08.110) (Ord. 2018-22, passed 12-12-2018)
(A) Methods.
(1) The Treasurer shall cause the preparation of an investment report periodically, including a management summary that provides an analysis of the status of the current investment portfolio and the individual transactions executed over the last quarter.
(2) This management summary will be prepared in a manner which will allow the town to ascertain whether investment activities during the reporting period have conformed to the investment policy. The report should be provided to the town’s Investment Board.
(3) The report will include, at a minimum, the following:
(a) An asset listing showing par value, cost and accurate and complete market value of each security, type of investment, issuer and interest rate;
(b) Maturity distribution of the portfolio;
(c) Average portfolio credit quality;
(d) Rate of return for the portfolio for the year to date and since inception compared to the Benchmark Index returns for the same periods; and
(e) Distribution by type of investment.
(B) Annual reports.
(1) The investment policy shall be reviewed at least annually within 60 days of the end of the fiscal year to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends.
(2) A comprehensive annual report shall be presented in conjunction with the investment policy review. This report shall include comparisons of the town’s return to the Benchmark Index return, shall suggest policies and improvements that might enhance the investment program, and shall include an investment plan for the coming year.
(C) Annual audit. The governing body of the town shall establish an annual process of independent review by the external auditor to assure compliance with internal controls. Such audit will include tests deemed appropriate by the auditor.
(Prior Code, § 3.A08.120) (Ord. 2018-22, passed 12-12-2018)
(A) Exemption. Any investment currently held that does not meet the guidelines of this policy shall be exempted from the requirements of this policy. At maturity or liquidation, such monies shall be reinvested only as provided by this policy.
(B) Amendments. This policy shall be reviewed on an annual basis. Any changes shall be by standard ordinance procedure.
(Prior Code, § 3.A08.130) (Ord. 2018-22, passed 12-12-2018)
The following documents, as applicable, may be attached to this policy:
(A) Listing of authorized personnel;
(B) Listing of authorized broker/dealers, investment advisors and financial institutions;
(C) Internal controls;
(D) Investment Guidelines Manual; and
(E) Glossary.
(Prior Code, § 3.A08.140) (Ord. 2018-22, passed 12-12-2018)
For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
CERTIFICATES OF DEPOSIT/BANK DEPOSIT/SAVINGS ACCOUNTS. Time deposit open accounts, certificates of deposit and savings accounts in insured institutions as defined in state statue, in credit unions as defined in state statute or in federal credit unions, if the institution or credit union maintains a head office or a branch in this state. (State statute).
GSE - AGENCY OBLIGATIONS. U.S. Government Agencies, Government Sponsored Enterprises (GSEs), Corporations or Instrumentalities of the U.S. Government - Federal Instrumentality Securities include, but are not limited to Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC), Federal Home Loan Banks (FHLB), and the Federal Farm Credit Bureau (FFCB). (State statute).
LOCAL GOVERNMENT INVESTMENT POOL. State treasurer’s local investment fund up to the statutory limit per state statute.
U.S. TREASURY OBLIGATION. Direct obligations of the United States Treasury whose payment is guaranteed by the United States. (State statute note).
(Prior Code, § 3.A08.150) (Ord. 2018-22, passed 12-12-2018)