(A) Statement of purpose. The purpose of this investment policy statement is to establish the investment objectives of the village. These policies are designed to ensure the prudent management of public funds, conformance to the Ohio Revised Code, the availability of operating and capital funds when needed, and an investment return competitive with comparable funds and financial market indices. This should be used as a guideline for overseeing all investments of the village and to serve as a notice of restrictions for all entities conducting investment business with the village.
(B) Objective of portfolio. The village portfolio shall be managed to accomplish the following hierarchy of objectives.
(1) Preservation of principal. The single most important objective of the portfolio is the preservation of principal of those funds within the portfolio.
(2) Maintenance of liquidity. The portfolio shall be managed in such a manner that assures that funds are available as needed to meet those immediate and/or future operating requirements of the village.
(3) Maximize return. The portfolio shall be managed in such a fashion as to attain a market-average rate of return throughout budgetary and economic cycles.
(C) Operating procedures. The Fiscal Officer is responsible for the prudent investment of the village’s funds. The Investment Board shall consist of the Mayor, the Council, the Law Director, and the Fiscal Officer. The Investment Board is responsible to annually review the investment policy.
(D) Investment income. It is the policy of the village to invest public funds in a manner which will provide the highest investment return with maximum security, safety, and preservation of principal, while meeting the daily cash flow demands of the village subject to the Ohio Municipal Depository Law governing the investment of public funds.
(E) Investment policy. Interest earned on deposits comprises investment income. This source of income fluctuates depending on fund balances and interest rates.
(F) Allocation of interest, motor vehicle license and fuel taxes, and street or state highway special revenue funds.
(1) As required by Ohio Constitution, Article XII, § 5a, the use of motor vehicle license and fuel taxes are restricted. No moneys derived from fees, excises, or license taxes relating to registration, operation, or use of vehicles on public highways, or to fuels used for propelling such vehicles, shall be expended for other than costs of administering such laws, statutory refunds, and adjustments; provided therein, payment of highway obligations, costs for construction, reconstruction, maintenance, and repair of public highways and bridges and other statutory highway purposes, expense of state enforcement of traffic laws, and expenditures authorized for hospitalization of indigent persons injured in motor vehicle accidents on public highways.
(2) Therefore, the village shall post interest to the street or state highway special revenue funds as required by Ohio Constitution, Article XII, § 5a. The village shall allocate interest to the required funds on a monthly basis.
(G) Interest allocation. The allocation formula will be as follows: The interest from the village’s funds cash balances are all pooled to the village’s general account. On a monthly basis, the Fiscal Officer will prepare an allocation interest report based upon the overall cash balance percentages for each of the special revenue funds for street and state highway. For example, if the street fund cash balance at the end of the month is 2% of the village’s sweep account monthly cash balance at months end, the Fiscal Officer will report an allocation 2% of total interest earned from such account for that month to each specific fund to the Fiscal Officer to receipt it into the UAN system.
(H) Allocation of interest for all other funds.
(1) On a monthly basis, interest other than street or state highway special revenue funds and the Cemetery Endowment Fund shall be booked by the Fiscal Officer, into the General Fund.
(2) Interest earned from the Cemetery Endowment Fund shall be booked by the Fiscal Officer into the Cemetery Fund.
(3) On a quarterly basis, interest earned from the cemetery savings account shall be booked by the Fiscal Officer into the Cemetery Fund.
(I) Authorized investments. The Fiscal Officer is authorized to invest funds as described in R.C. § 135.143, as summarized as follows:
(1) United States Treasury bills, notes, bonds, or any other obligations or security issued by the United States Treasury or any other obligation guaranteed as to principal and interest by the United States;
(2) Bonds, notes, debentures, or any other obligations or securities issued by any federal government agency or instrumentality;
(3) Certificate of deposits or savings or deposit accounts in eligible depositories;
(4) Bonds and other obligations of this state or the political subdivisions of this state;
(5) Commercial paper, unsecured short-term debt of corporations incorporated under the laws of the United States or a state if all of the following conditions are met:
(a) The maturity is no greater than 180 days;
(b) The total holding of an issuer’s paper does not represent more than 10% of the issuing corporation’s total outstanding commercial paper; and
(c) The short-term debt rating, at the time of purchase, is at least A1 or equivalent by at least two nationally recognized standard rating services.
(6) State Treasury Asset Reserve of Ohio (STAR Ohio).
(J) Diversification. Each portfolio shall be structured to diversify investments to reduce risk of loss resulting from over-concentration of assets in a specific maturity, a specific issuer or a specific type of security. The maximum percentage of the total average portfolio permitted in each eligible security is as follows.
Certificate of deposits | 100% |
Commercial paper | 25% |
Federal agency (callable) | 50% |
Federal agency (fixed rate) | 100% |
Municipal obligations | 50% |
STAR Ohio | 100% |
U.S. Treasury | 100% |
(K) Investment education. The Fiscal Officer will apply for the exemption for investment training on an annual basis, until such time that the village decides to invest monies. Upon investments being made, the Fiscal Officer will seek to attend the annual investment training.
(Res. 19-12, passed 8-26-2019)