(A) Whenever there are monies in the city treasury which will not be required to be used for a period of six months or more, such money may, in lieu of being deposited in a bank, be invested in obligations of the city, in bonds or other obligations of the United States, or in other obligations authorized by the provisions of R.C. § 731.56. All such investments of city funds shall be made in accordance with the provisions of R.C. §§ 731.57 to 731.59, inclusive.
(B) Investment activities of the City of Wadsworth shall be governed by the Investment Policy set forth in this division. It will be reviewed periodically by the Treasurer for compliance and to assure the flexibility necessary to effectively manage the portfolio. All investment activities will be done in compliance with the Ohio Revised Code and will be undertaken by the Treasurer.
(C) Investment policy.
(1) General objectives. The primary objectives, in priority order, of investment activities shall be safety, liquidity and yield:
(a) Safety. Safety of principal is the foremost objective of the investment activity.
(b) Liquidity. The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.
(c) Yield. The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account investment risk constraints and liquidity needs.
(2) Standards of care.
(a) 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 Treasurer or those persons assigned thereby to engage in investment activities, acting in accordance with written procedures and this policy and exercising due diligence will 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 appropriate action is carried out in accordance with this policy.
(b) Ethics and conflicts of interest. Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions.
(c) Delegation of authority. The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Treasurer.
(3) Suitable and authorized investments. The following investments will be permitted by this policy:
(a) United States Treasury bills, notes, bonds or any other obligations or securities issued by the United States Treasury or any other obligations guaranteed as to principal and interest by the United States but does not include stripped principal or interest obligations.
(b) Bonds, notes, debentures, or any other obligations or securities issued by any federal government agency or instrumentality. All federal agency securities shall be direct issuances of federal government agencies or instrumentalities.
(c) Certificates of deposit in commercial banks or savings and loans which qualify as eligible depositories under Ohio Revised Code, provided those deposits are properly insured or collateralized. This includes investments in certificates of deposit with FDIC insurance coverage on the full amount of deposit plus accrued interest administered through the Certificate of Deposit Account Registry Service (CDARS) or any other program that meets the requirements of Ohio Revised Code.
(d) Bonds or other obligations of the State of Ohio, or the political subdivisions of this state, provided that with respect to bonds or other obligations of political subdivisions, all of the following apply:
1. Bonds or other obligations are payable from the political subdivision's general revenues and backed by the full faith and credit of the political subdivision,
2. Bonds or other obligations are rated at the time of purchase in the three highest classifications established by at least one nationally rated standard rating service and purchased through a registered securities broker or dealer,
3. The aggregated value of the bonds or other obligations does not exceed 20% of interim monies available for investment at the time of purchase, and
4. Treasurer is not the sole purchaser of the bonds or other obligations at original issuance. No investment shall be made in municipal bonds unless the Treasurer has completed additional training that has been approved by the Treasurer of State and is either conducted by or provided under the supervision of the Treasurer of State.
(e) No-load money market mutual funds consistently exclusively of obligations described in divisions (a) or (b) and repurchase agreements secured by such obligations.
(f) The State of Ohio's subdivision fund, STAR Ohio, and the STAR Plus Federally Insured Cash account.
(g) 1. Up to 40% of the city's interim funds in either of the following:
2. Commercial paper issued by a for-profit corporation, business trust or association, real estate investment trust, common-law trust, unincorporated business, or general or limited partnership which has assets exceeding $500,000,000. Such notes must:
a. Be rated at the time of purchase in the highest classification established by at least two nationally recognized standard rating services,
b. Have an aggregated value that does not exceed 10% of the outstanding commercial paper of the issuing entity,
c. Mature no later than 270 days after purchase, and
d. Be limited to the aggregate of 5% of interim monies available for investment at the time of purchase, when issued by a single issuer.
(h) Bankers acceptances of banks that are insured by the Federal Deposit Insurance Corporation ("FDIC") and that mature no later than 180 days after purchase. No investment shall be made in made in commercial paper or bankers acceptances unless the Treasurer has completed additional training that has been approved by the Treasurer of State and is either conducted by or provided under the supervision of the Treasurer of State.
(i) Written repurchase agreements with eligible financial institutions and dealers, under the terms of which agreement the Treasurer purchases and such financial institution or dealer agrees unconditionally to repurchase any of the eligible securities as described in R.C. § 135.14(e). A written repurchase agreement shall not exceed 30 days and the market value of the securities subject to the agreement must exceed the principal value of the agreement by at least 2% and be marked to market daily.
(j) Obligations of the City of Wadsworth as authorized by R.C. § 731.56.
(4) Maximum maturity. Investments made by the city must mature within five years from the date of settlement, unless the investments are matched to a specific obligation or debt of the city. Investments are to be made with the intention of being held to maturity. Securities may be redeemed or sold prior to maturity to enhance the yield of the portfolio, to re-structure the portfolio, for diversification purposes, or to meet unexpected liquidity needs.
(5) Reporting. The Treasurer shall establish and maintain an inventory of all investments. The Treasurer shall provide an Investment Performance and current inventory update to City Council semi-annually.
(6) Service providers, safekeeping and custody.
(a) The Treasurer may engage the services of an investment advisor to assist in the management of the city's investment portfolio in a manner consistent with this investment policy. Such investment advisor may be granted discretion to purchase and sell investment securities in accordance with this investment policy. The investment advisor must be licensed by the division of securities under R.C. § 1707.141 or registered with the Securities and Exchange Commission, and possess experience in public funds investment management specifically in the area of state and local government investment portfolios, or the investment advisor is an eligible institution as mentioned in R.C. § 135.03. The investment advisor must enter into a written investment advisory agreement with the Treasurer. In addition, the investment advisor must supply a copy of its Form ADV Part 2, or make a copy available, on an annual basis.
(b) Should the Treasurer choose not to engage the services of an investment advisor, then a list will be maintained of financial institutions and broker/dealers who provide investment services. All financial institutions and broker/dealers with which the Treasurer conducts business must supply proof of Financial Industry Regulatory Authority (FINRA) registration and State of Ohio registration, as appropriate. The Treasurer is responsible for evaluating and reviewing on a periodic basis the regulatory status of such financial institutions and broker/dealers.
(c) The Treasurer will also arrange to have any investment securities held in safekeeping by an independent third-party custodian. Any advisor or broker/dealer doing business with the Treasurer cannot serve as a custodian or safekeeping agent. Investment securities shall be settled to the custody account on a delivery-versus-payment (DVP) basis. The custodian must enter into a written custodial agreement with the Treasurer.
(d) In accordance with the Ohio Revised Code, a copy of this policy will be forwarded to each investment advisor, financial institution and broker/dealer doing investment business with the city. The signature of each will be required indicating that each has received, read, comprehend and will abide by its contents when managing assets or recommending or selling any investment security to the city. Any third-party custodian providing services is excluded from this requirement as long as it will not be managing assets, recommending, or selling any investment security to the city.
(7) Investment Committee. The Treasurer may appoint a committee of three to five qualified people to assist in the investment decisions. The committee shall review and advise on making new investments or changing the investment portfolio. The committee will be appointed for three years with staggered terms. The committee shall meet yearly, during the third quarter, or as called on by the Treasurer on the basis of need. The committee will also be reimbursed for any out-of-pocket expenses for attendance at the meeting.
(8) Other. The Treasurer or those persons assigned thereby to engage in investment activity shall participate in any beginning and/or continuing education training programs sponsored by the Treasurer of the State, the Auditor of State, or any professional association such as the Government Finance Officers Association (GFOA), the Municipal Finance Officers Association (MFOA) or the Ohio Association of Public Treasurers (OAPT).
(‘65 Code, § 125.01) (Ord. 2145, passed 3-16-54; Am. Ord. 17-047, passed 8-15-17)