(1) "Eligible Investment" means any investment described in subsection (l) hereof.
(2) "Investment Advisor" means a person or entity which the Council has determined has the experience and training to provide advice and recommendations in regard to overall portfolio investment strategy as well as individual investments of Village funds with whom the Village has contracted in writing to provide such advice and such recommendations.
(3) “Public Moneys” means all moneys in the treasury of the Village or moneys coming lawfully into the possession of the Clerk-Treasurer.
(4) "Qualified Securities Dealer" means a securities dealer who is a member of the National Association of Securities Dealers, Inc.
(5) "Uniform Depository Act " means Chapter 135 of the Ohio Revised Code, and all amendments thereto.
(b) Scope. All Public Moneys of the Village on deposit with an Eligible Depository (as defined in Section 137.08 hereof), except as otherwise hereinafter provided, may be invested, or if already invested may be reinvested, by the Clerk-Treasurer or such official's designee, or by the Village's Investment Advisor upon approval of the Clerk-Treasurer or such official's designee, in the Eligible Investments described in subsection (l) hereof; provided, however, that subject to the provisions of Article VIII, Section 6, Ohio Constitution, Public Moneys:
(1) Held by a trustee or escrow agent under a trust agreement, trust indenture or escrow agreement between the Village and such trustee or escrow agent in connection with, or related to, an issue of bonds, notes or other obligations of the Village may be invested in any investments permitted by such trust agreement, trust indenture or escrow agreement or as are approved by the rating agency or rating agencies rating such bonds, notes or other obligations; or
(2) Specifically exempted by separate ordinance from this Section 137.02, may be invested as permitted in such ordinance.
The Clerk-Treasurer is authorized to pool cash balances of the several funds of the Village for investment hereunder.
(c) Objectives. The achievement of sound fiscal management for the Village requires effective investment of the Public Moneys of the Village. To that effect, the following investment objectives which shall all be of equal priority shall be applied in the investment of Public Moneys of the Village, with the achievement of each such objective being measured against the investment portfolio as a whole and not against an individual Eligible Investment:
(1) Safety. It shall be an objective of this investment policy to seek to preserve the investment principal of the Village's investment portfolio by avoiding, to the extent possible while attempting to achieve the other objects of this policy, capital losses, whether they be from securities' defaults or erosion of market value.
(2) Liquidity. It shall be an objective of this investment policy that the Village's investments shall be sufficiently liquid to enable the Village to meet its operating requirements that might reasonably be anticipated.
(3) Yield. It shall be an objective of this investment policy to strive to attain a market-average rate of return (as evidenced by the yield on a benchmark index acceptable to the Clerk-Treasurer and the Finance Committee) throughout budgetary and economic cycles, taking into account the Village's investment risk constraints and the cash flow characteristics of the portfolio.
(d) Minimizing Investment Risk.
(1) The Village acknowledges that investment risk can result from:
A. A default by the issuer of the investment,
B. Changes in the market price of the investment, or
C. Technical complications leading to temporary loss of liquidity of an investment.
(2) To minimize the effect of such investment risks the following investment limitations shall be adhered to except as otherwise may be approved by the Finance Committee of Council either at a meeting or by telephone, confirmed at the next meeting of the Finance Committee, a written record of which approval shall be maintained by the Clerk-Treasurer:
A. No more than twenty-five percent (25%) of the Village's Public Moneys shall at any given time be invested in any single issue of a security authorized under subsection (l)(2) hereof.
B. With respect to investment of the Village's Public Moneys in the Eligible Investments authorized in subsection (l)(10) hereof.
1. No more than five percent (5%) of the Village's invested Public Moneys shall at any given time be invested in such an Eligible Investment of a single issuer, and
2. No more than sixty-five percent (65%) of the Village's invested Public Moneys shall at any given time be invested in Eligible Investments authorized under subsection (l)(10) hereof. (Ord. 2000-6. Passed 4-10-00.)
C. 1. Except as provided in subsection 137.02(c)(2)C.3. below, unless the maturity of an Eligible Investment is limited in subsection (l) hereof to a period of time less than ten (10) years, in which case the maximum maturity of such Eligible Investment shall be as set forth in subsection (l) hereof, each Eligible Investment made pursuant to this Section 137.02 shall have a maturity not exceeding ten (10) years from the date of settlement of the Eligible Investment.
2. The weighted average maturity of all Eligible Investments (exclusive of any investment in the Ohio Subdivisions Fund created pursuant to Section 135.45 of the Ohio Revised Code) shall not exceed seven (7) years.
3. The maturity of any security issued by any federal government agency or instrumentality, which is an Eligible Investment pursuant to Section 137.02(l)(2) hereof, may exceed ten (10) years, and shall not be used in the calculation of the weighted average maturity identified in subsection 137.02(c)(2)C.2. above.
(Ord. 2007-13. Passed 10-8-07.)
(e) Sale Prior to Maturity. Notwithstanding anything herein to the contrary, nothing in subsections (c) or (d) hereof shall be construed to prohibit the Clerk-Treasurer, such official's designee or the Village's Investment Advisor if acting with the approval of the Clerk-Treasurer or such official's designee from selling any Eligible Investment prior to its maturity, or to impose liability on the Clerk-Treasurer, such official's designee or the Village's Investment Advisor if acting with such approval for any loss occasioned by the sale of any Eligible Investment made at a price lower than its cost or book value, if either:
(1) The liquidity needs of the Village required such a sale; or
(2) The yield on the reinvestment of the sale proceeds of such Eligible Investment, after taking into account the loss incurred in connection with such sale, will exceed the yield that the Village otherwise would have earned if it had held the original Eligible Investment to the earlier of:
A. Its maturity date; or
B. The maturity date of the Eligible Investment purchased with such sale proceeds.
(f) Standard of Care. Investment of the Public Moneys of the Village shall be made with the exercise of that degree of judgment and care, under circumstances then prevailing, that 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. The foregoing standard shall be applied to the investment portfolio of the Village as a whole.
(g) Authority to Invest Public Moneys. The Clerk-Treasurer is hereby authorized and directed to invest the Public Moneys of the Village in accordance with the provisions of this Section 137.02. The Clerk-Treasurer may delegate the authority to invest the Public Moneys of the Village hereunder to another employee or employees of the Village, provided that any such delegation shall be in a writing that shall be filed with the Finance Committee of Council, and such a delegation shall not be effective for all purposes of this Section 137.02 unless and until the Finance Committee approves such a delegation. Such a delegation may be for a limited or unlimited period of time; provided that, if such delegation is for an unlimited period of time:
(1) Revocation of such delegation shall be effective only if made in a writing instrument signed by the Clerk-Treasurer and
(2) Termination of the employment by the Village of such employee shall automatically terminate such employee's authority to invest the Public Moneys of the Village hereunder without the need for a written instrument.
If the Village engages an Investment Advisor to assist it with the investment of its Public Moneys, and has given such Investment Advisor authority to execute the purchase and/or sale of Eligible Investments on behalf of the Village, the Investment Advisor may purchase or sell any Eligible Investment of the Village without the prior approval of the Clerk-Treasurer or such official's designee only if such Investment Advisor is so authorized in its contract with the Village or is otherwise so authorized in writing by the Mayor; otherwise, the Investment Advisor shall obtain the approval of the Clerk-Treasurer or such official's designee prior to the purchase and/or sale of Eligible Investments on behalf of the Village. In addition, each Investment Advisor engaged by the Village shall be sent a copy of Chapter 137 of the Village's Codified Ordinances, as amended by this section, and such Investment Advisor shall agree in writing to comply with the provisions of the same.
(h) Conflicts of Interest. Officers and employees of the Village involved in making investment decisions shall refrain from:
(1) Personal business activity that could conflict with the proper execution and management of the investment program of the Village, or that could impair their ability to make impartial decisions regarding the Village's investments, and
(2) Undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the Village unless the investment transactions conducted by such individual on behalf of the Village are conducted through an informal competitive bidding procedure.
(i) Periodic Reports with Respect to Eligible Investments. The Clerk-Treasurer shall prepare or cause to be prepared an investment report no less frequently than at the end of each calendar quarter, which shall be a public record available for inspection under Section 149.43 of the Ohio Revised Code. Unless the Finance Committee of Council or the Clerk-Treasurer agree otherwise, such report shall include: a list of all Eligible Investments that were part of the Village's investment portfolio at any time during that calendar quarter, with the following information on each Eligible Investment:
(1) A description of the obligation or security that includes the type, original cost, amortized premium, accreted discount, par value, maturity date, coupon interest rate and yield to maturity;
(2) All purchases, sales and maturities of Eligible Investments during that calendar quarter;
(3) All income and profits accrued or realized and/or losses realized during such period;
(4) The market price of each Eligible Investment as of the beginning and end of such period, or if an Eligible Investment was sold prior to the end of such period, the sale price of such Eligible Investment; and
(5) The weighted average annualized yield on the Village's investment portfolio for that calendar quarter compared to the annualized yield from the benchmark index as described in subsection (c)(3) hereof.
If the Village has engaged an Investment Advisor, the report described in this subsection (i) hereof may be prepared by such Investment Advisor and, in such an event, shall be delivered to the Clerk-Treasurer within a reasonable time after the end of each calendar quarter.
(j) Authorized Purchasers from and Sellers to the Village of Eligible Investments. In the case that the purchase of Eligible Investments is made directly by the Clerk-Treasurer or such official's designee, and not through its Investment Advisor, from an Eligible Depository or Qualified Securities Dealer that initiates the sale of an investment to the Village, then such purchase of Eligible Investments hereunder shall be made only from an Eligible Depository or a Qualified Securities Dealer, as the case may be, which has acknowledged to the Village in writing that it has received a copy of Chapter 137 of the Codified Ordinances of the Village, and it will not sell to or for the account of the Village any investment security not expressly authorized hereunder as an Eligible Investment.
(k) Purchases and Sales of Eligible Investments by the Village.
(1) The Village or its Investment Advisor on its behalf:
A. Shall purchase an Eligible Investment hereunder for cash at a price not in excess of the current market price, which price shall be deemed to be the best price as determined hereunder, and
B. Shall sell an Eligible Investment for cash and for a sum not less than its current market price, which price shall be deemed to be the best price as determined hereunder.
(2) A. Except as otherwise provided in subsection (l)(5) hereof with respect to an overnight repurchase agreement, all purchases and sales of Eligible Investments hereunder shall be made only on a delivery versus payment basis. With respect to the purchase or sale of any Eligible Investment other than the Eligible Investments described in subsections (l)(8) and (9) hereof, the Clerk-Treasurer, such Clerk-Treasurer's designee or the Village's Investment Advisor, subject to the provisions of subsection (j) hereof and except as otherwise provided in this subsection shall sell any Eligible Investment at the best price based upon at least two bids from any of the parties described in subsection (j) hereof.
B. As used in subpart (2)(A) hereof:
1. In connection with any purchase of an Eligible Investment, the "best price" shall mean that price which produces the highest yield to maturity in the discretion of the Investment Advisor or the Clerk-Treasurer with respect to such Eligible Investment; and
2. In connection with the sale of an Eligible Investment, the "best price" shall mean the highest price with respect to such Eligible Investment based upon at least two bids obtained at the time of the sale; provided, however, that in any case where there are two or more bids at the best price, the Clerk-Treasurer, such Clerk-Treasurer's designee or the Village's Investment Advisor may, in their absolute discretion, determine which of such bids constitutes the best price.
(3) The Clerk-Treasurer, the Clerk-Treasurer's designee or the Village's Investment Advisor shall keep a written record of the bids taken with respect to each sale of an Eligible Investment.
(l) Eligible Investments. The following obligations are hereby determined to be eligible for investment of the Public Moneys of the Village ("Eligible Investments"):
(1) United States Treasury bills, notes and bonds (excluding stripped principal or interest obligations of such issuances), or any other obligation or security issued by the United States Treasury or any other obligation guaranteed as to principal and interest by the United States;
(Ord. 2000-6. Passed 4-10-00.)
(2) Bonds, notes, debentures or other obligations of or securities issued by any federal government agency or instrumentality (whether in the form of recourse or non-recourse obligations or securities, but excluding stripped principal or interest obligations of such issues), including, but not limited to, the Federal National Mortgage Association, Federal Home Loan Bank, Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation, Government National Mortgage Association, and Student Loan Marketing Association; (Ord. 2007-8. Passed 7-9-07.)
(3) Bonds and notes of the State of Ohio;
(4) Bonds and notes of any municipal corporation, including the Village, or any county, township or other political subdivisions of the State of Ohio rated in not less than the third highest rating category by a nationally recognized rating agency with respect to such bonds or notes as to which there is no default of principal, interest or coupons, provided, however, that bonds and notes of the Village shall not be required to have a rating in order to be an Eligible Investment hereunder;
(5) A written repurchase agreement between the Clerk-Treasurer or such Clerk- Treasurer's designee and any Eligible Depository or any Qualified Securities Dealer if, and only if, under the terms of which agreement the Clerk-Treasurer or such Clerk-Treasurer's designee purchases for the Village and such institution agrees unconditionally to repurchase within a period of not more than thirty (30) days securities described in subdivisions (1) or (2) of this division (l) that will mature or are redeemable within five years from the date of purchase; provided that
A. The market value of such securities subject to a repurchase agreement that matures:
1. On the business day immediately succeeding the business day on which such repurchase agreement was entered into shall be at least one hundred two percent (102%) of the principal amount of the repurchase agreement; and
2. On any other business day after the business day described in the immediately preceding item (i) shall be at least one hundred three percent (103 %) of the principal amount of the repurchase agreement; and
B. The repurchase agreement shall contain the requirement that for each transaction pursuant to such agreement the Eligible Depository or Qualified Securities Dealer shall provide all of the following information:
1. The par value of the securities subject to such agreement;
2. The type, coupon rate, if any, and maturity date of the securities; and
3. A numerical identifier generally accepted in the securities industry that designates the securities;
(6) Certificates of deposit of Eligible Depositories which may provide (and, if so, shall be shown on its face) that the amount of such deposit is payable upon written notice a specified period before the date of the scheduled maturity, provided that security for the repayment of any such certificates of deposit is provided in accordance with Ohio R.C. 135.18;
(7) Bankers acceptances' drawn on and accepted by banks; provided that the issuer of the bankers' acceptances is, at the time of acquisition, rated in the highest short-term rating category of a nationally recognized rating agency;
(8) No-load money market mutual funds consisting exclusively of obligations described in items (1) or (2) above and item (10) below and registered or required to be registered under the Investment Company Act of 1940, as amended;
(9) The Ohio Subdivision's Fund created pursuant to Ohio R.C. 135.45;
(10) Commercial paper notes or other debt obligations (collectively, the "Corporate Securities") issued by any corporation which is incorporated under the laws of the United States or a state and which Corporate Securities meet the following requirements:
A. The Corporate Securities are rated at the time of purchase, no lower than the third highest rating category (without giving effect to any gradations within a rating category) by at least two nationally recognized rating agencies; and
B. The aggregate face amount of the Corporate Securities does not cause either of the limitations set forth in subsection (d)(2) hereof to be exceeded.
(11) Any other investment approved by the Finance Committee of the Village, subject to the provisions of Article VIII, Section 6 of the Ohio Constitution.
(m) Transfer of Eligible Investments to Successor Clerk-Treasurer. Upon the expiration of the term of office of the Clerk-Treasurer or in the event of a vacancy in the office of the Clerk-Treasurer by reason of death, resignation, removal from office or otherwise, the Clerk-Treasurer or the Clerk-Treasurer's legal representative shall transfer and deliver to the successor Clerk-Treasurer all Eligible Investments held by or in the name of the Clerk-Treasurer. For the Eligible Investments so transferred and delivered, such Clerk-Treasurer shall be credited with, and his successor shall be charged with, the amount of money invested in such Eligible Investments.
(n) Collection of Principal and Interest from Eligible Investments. Whenever Eligible Investments acquired under this Section 137.02 mature and become due and payable, the Clerk- Treasurer shall present them for payment according to their tenor and shall collect the moneys payable thereon. The moneys so collected shall be treated as Public Moneys subject to the provisions of this Section 137.02 with respect to their reinvestment.
(o) Accounting for Eligible Investments. The Clerk-Treasurer or the Clerk-Treasurer's designee shall maintain accounting records for each Eligible Investment made hereunder. Such records shall contain appropriate entries of all transactions relating to the investment of the Village's Public Moneys.
(p) Crediting of Interest on Eligible Investments. Interest earned on any Eligible Investments authorized by this section shall be collected by the Clerk-Treasurer and credited to the proper fund of the Village as required by Section 137.05 hereof.
(Ord. 2000-6. Passed 4-10-00.)