(a) Definitions.
(1) "Active funds" means public deposit 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.
(2) "Approved Broker/Dealer" means any entity recommended by the Investment Advisor and approved by the Treasury Investment Board.
(3) "Collateral" means securities pledged by an institution to secure deposits of public funds.
(4) "Certificate of Deposit" means a time deposit with a specific maturity evidenced by a certificate.
(5) "Delivery versus payment" means delivery of securities concurrent with an exchange of money for the 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 or any approved broker/dealer with whom the City may conduct investment activities.
(8) "Interim Funds" means public funds which are not classified as "active funds" and may be invested out to five (5) years.
(9) "Investment Officials" means any employee involved in the investment of City funds including the Director of Finance or designee.
(10) "Liquidity" means the ability to easily and rapidly convert an investment into cash without a substantial loss of value.
(11) "Maturity" means the date upon which the principal or stated value of an investment becomes due and payable.
(12) "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.
(13) "Safekeeping receipt" means evidence that a financial institution is acting as a safekeeping agent for a security owned by the City.
(14) "Treasury Investment Board" means the board defined in Ohio R.C. 135.01 which, for the City includes the Mayor, the Director of Law, and the President of Council or his/her designee 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 Title 7 and Chapter 135 of the Ohio Revised Code and the Tallmadge Code of Ordinances.
(c) Prudence.
(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 subsection (c)(1) of this policy shall be applied in the context of managing the City's investments as a whole. Investment officials 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 deviations from expectations are reported in a timely fashion and 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) Objectives. The City's investment objectives, in priority order, are insuring the safety of the public funds, investing these funds in accordance with all State and local laws, maintaining sufficient liquidity to meet all reasonably anticipated expenses, and receiving the best rate of return while meeting these requirements.
(e) Delegation of Authority.
(1) As a charter City, authority to manage the City's investment program is derived from the authority contained in the Charter of the City of Tallmadge, Ohio R.C. Chapter 135 and related sections of Chapter 731.
(2) The Director of Finance will review the cash position to determine when investments can be made.
(3) Management responsibility for the investment program is hereby delegated to the Director of Finance who may delegate certain investment functions to other staff within the Finance Department.
(4) No person may 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 Director of Finance 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 Director of Finance on behalf of Council and may order the Director of Finance to liquidate current holdings for good cause.
(f) 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 to the Treasury Investment Board.
(2) In all cases, City investment officials will subordinate their personal investment interests to those of the City.
(g) Eligible Investments.
(1) All interest bearing bank accounts, including certificates of deposit, savings accounts, and checking accounts, within the guidelines established in subsections (h) and (j) of this section.
(2) Bonds, notes or other direct obligations of or guaranteed by the United States or its agencies or instrumentalities or those for which the full faith and credit of the United States is pledged for payment of principal and interest issued by, including but not limited to, the following:
U.S. Treasury
Federal National Mortgage Association (FNMA)
Federal Farm Credit Bank (FFCB)
Federal Home Loan Bank (FHLB)
Federal Home Loan Mortgage Corporation (FHLMC)
(3) Bonds and other obligations of the State of Ohio, the City of Tallmadge, and political subdivisions within the State of Ohio.
(4) Up to forty percent of interim funds available for investment in either of the following:
A. Commercial paper notes issued by an entity that is defined in division (D) of Section 1705.01 of the Revised Code and that has assets exceeding five hundred million dollars, to which notes all of the following apply:
1. The notes are rated at the time of purchase in the highest classification established by at least two nationally recognized standard rating services.
2. The aggregate value of the notes does not exceed ten per cent of the aggregate value of the outstanding commercial paper of the issuing corporation.
3. The notes mature not later than two hundred and seventy days after purchase.
4. State Auditor certification is required prior to investing in commercial paper
B. Bankers acceptances of banks that are insured by the Federal Deposit Insurance Corporation and to which both of the following apply:
1. The obligations are eligible for purchase by the Federal Reserve System.
2. The obligations mature not later than one hundred eighty days after purchase.
(5) Repurchase agreements with institutions that have signed a written master repurchase agreement which is on file in the Director of Finance's office and are eligible for investments under subsections (i) or (j) of this section.
(6) Shares of the State Treasury Asset Reserve of Ohio (Star Ohio).
(h) Diversification.
(1) The City sets no limit on the amount of funds which may be held in investments listed in subsection (g)(1), (2) and (3) hereof.
(2) The Director of Finance will adjust future investments to satisfy these requirements without prematurely liquidating current investments.
(3) The Treasury Investment Board may set lower limits on the amount of funds which can be placed in any investment category.
(i) Institutions Eligible for Active or Interim Funds.
(1) Preference will be given to depository institutions with offices in Summit and Portage Counties, unless there exists a significant advantage at other depository institutions.
(2) The depository institution must be insured by the Federal Deposit Insurance Corporation.
(3) Interim funds may be invested through broker/dealers approved by the Director of Finance.
(j) Eligible Institutions. Institutions 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.
(k) Collateral. All bank deposits as set forth in subsection (g) above shall be backed by collateral with a market value as required by Ohio R.C. 135 Such collateral may be held by a third party, or in a separate trust account, or in a pool of securities as defined in Ohio R.C. 135. Deposits within the CDARS network are exempt from this collateral requirement as per the Ohio Revised Code.
(l) Safekeeping and Custody.
(1) All transactions with an "eligible securities dealer" shall be conducted on a delivery versus payment basis;
(2) Repurchase agreement transactions conducted with an "eligible financial institution" (commercial banks) do not need to comply with subsection (m)(1).
(m) Reporting.
(1) The Director of Finance will report investments made to the Treasury Investment Board upon making an investment and to Council on a monthly basis.
(2) The Director of Finance will provide the Treasury Investment Board with a statement of moneys currently in the treasury and in the process of collection to certify that sufficient funds are available for each investment made by the Director of Finance.
(3) The Director of Finance will report on investment diversification to Council each quarter.
(n) Maturities.
(1) Interim funds may be invested up to five years including certificates of deposit.
(2) Depositories for active funds will be awarded every five years. Any depository designated may be changed earlier for good cause.
(3) All investments will be made with the intent to hold the investment until maturity but may be sold earlier.
(o) Policy Review. The Director of Finance and the Treasury Investment Board will review this policy annually and recommend changes to Council. Revisions may be made more frequently if necessary. (Ord. 105-2017. Passed 1-11-18.)