010-99 Ordinance RECORD OF ORDINANCES
Form No. 30043
Dayton Legal Blank Co.
10-99 Passed----------- -------19--- -
Ordmance o._____________________ _
An Ordinance Authorizing the Modification of the City's Investment Policy
WHEREAS, the City of Dublin has an Investment Policy that has been adopted by
~ City Council; and
WHEREAS, the Investment Policy establishes the policies and guidelines to be
followed for the investment of interim and inactive monies of the City; and
WHEREAS, it is recommended that the Investment Policy be modified to provide
amore detailed description of authorized investments, extend the maximum maturity
dates and allow for the use of an investment advisor.
NOW, THEREFORE, BE IT ORDAINED, by the Council of the City of Dublin,
State of Ohio, of the elected members concurring that:
ion 1. The attached Investment Policy is hereby adopted. The Investment Policy
maybe amended or modified by approval of City Council.
S ion 2. The Director of Finance shall be relieved from any liability for the loss of
public monies deposited or invested pursuant to and in compliance with the City's
Investment Policy.
~ ion 3. That this Ordinance shall take effect and be in force in accordance with Section
4.04 (b) of the Dublin City Charter.
a~ Passed this ~ day of , 1999.
i
Mayor -Presiding Officer
ATTEST:
~ ,
Clerk of Council
T:\DATA\FINANCE\IN VESTS\ORD. WPD
CITY OF DUBLIN
Memo
To: Members of Dublin City Council
From: Tim Hansley, City Manager
Date: January 28, 1999
Re: Ordinance No. 10-99, Amending the City's Investment Policy
Initiated by: Marsha I. Grigsby, Director of Finance
Vikki L. Vincent, Director of Accounting & Auditing
The attached ordinance proposes amendments to the current investment policy. As Council will
recall from the budget hearings, we discussed using an investment advisor and included the
necessary funding in the 1999 Operating Budget. After researching and interviewing investment
advisors, we intend to enter into an agreement with the United American Capital Corporation
(UACC) for investment advisory services. Mr. Yacobozzi, President of UACC, has extensive
investment management experience, with specific experience in public funds. The state's
investment pool (STAR Ohio) was originally developed and managed by Mr. Yacobozzi.
With Mr. Yacobozzi's assistance, we have reviewed the City's Investment Policy and are
recommending the following modifications:
• Further define eligible investments (i.e. commercial paper, found on page 4 of the
modified Investment Policy. The previous Policy specified a Moody's rating of P-1 or a
Standard & Poor's rating of A-1. The modified Policy specifies a Moody's rating of P 1 or
P2 and a Standard & Poor's rating of Al+, Al or A2).
• Extend the maximum maturity of investments from two years to five years, unless the
investment is matched to a specific obligation or debt of the City. Section 135.14 of the
Ohio Revised. Code, which was amended on September 27, 1996 by Senate Bill 81,
extended investment maturities allowed by law from two years to five years for government
entities.
• Allow for the use of an outside investment advisor.
The City's Investment Policy is conservation with the highest priority given to the safety of the
City's funds. We are confident that the modified policy and the use of UACC as the City's
investment advisor will further diversify the City's investments and result in a higher yield, while
maintaining the safety of funds invested.
If you have any questions, please do not hesitate to contact Marsha or Vikki.
CITY OF DUBLIN, OHIO
INVESTMENT POLICY
I. Introduction
The purpose of this investment policy is to establish the definition(s) of eligible investments of
the City of Dublin, Ohio (hereinafter referred to as the "City"), including guidelines and parameters
regarding the investment management of the City's investment funds [hereinafter referred to as the
"Portfolio"]. This investment policy, as approved by City Council, shall serve to define authorized
} investments and eligible investment transactions of the City. Such eligible investments may be
derived from, or based upon Chapter 135.14 ORC, and/or include certain other investments not
authorized or defined under 135.14 ORC. Investments not defined under 135.14 ORC, but
authorized pursuant to this investment policy, are considered as authorized investments of the City.
That this Ordinance shall take effect and be in force in accordance with Section 4.04 (b) of the
Dublin City Charter. This policy includes [totally or partially] sections of the statute in order to
describe certain eligible investments. In some sections, the policy places further limits upon the use
eligible investments or investment transactions.
II. Scone
This policy applies to all financial assets of the City of Dublin. Such funds are accounted for in
the City's Comprehensive Annual Financial Report (CAFR), and includes all funds of the reporting
entity.
III. INVESTMENT OBJECTIVES
The investment objectives of the City, in priority order, include:
,~.d A. Safety of
principal
Safety of principal is the foremost objective of the investment program. The investment of City
funds shall be conducted in a manner that seeks to ensure the preservation of capital within the
context of the following criteria:
o Market risk (interest rate risk)
The market value of securities in the City's portfolio will increase or
decrease based upon changes in the general level of interest rates. The effects
of market value fluctuations will be minimized by (1) maintaining adequate
liquidity so that current obligations can be met without a sale of securities;
(2) diversification of maturities; (3) diversification of assets.
1
o Credit Risk
Credit risk is the risk of loss due to the failure of a security issuer to pay
principal or interest, or the failure of the issuer to make timely payments
of principal or interest. Eligible investments affected by credit risk include
certificates of deposit, commercial paper, bankers acceptances, and corporate
medium term notes. Credit risk will be minimized by (1) diversifying
~ assets by issuer; (2) ensuring that required, minimum credit quality ratings
exist prior to the purchase of commercial paper, bankers acceptances, and
corporate medium term notes; and (3) maintaining adequate collateralization
of certificates of deposit.
B. Liquidity
The portfolio shall remain sufficiently liquid to meet all current obligations of
the City. Minimum liquidity levels [as a percentage of average investable
funds] maybe established in order to meet all current obligations. The portfolio may
also be structured so that securities mature concurrently with cash needs.
C. Yield/Return
The portfolio shall be managed to consistently attain a market rate of return
throughout budgetary and economic cycles. Whenever possible, and consistent
with risk limitations and prudent investment management, the City will seek
to augment returns above the market average rate of return through the
implementation of active portfolio management strategies.
IV. Standards of Care
A. Prudence
Investments shall be made with the exercise of that degree of judgement 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.
The standard of prudence to be used by investments officials shall be the "prudent person"
standard and shall be applied within the context of managing an overall portfolio. Investment
officers or registered investment advisors, acting in accordance with established procedures and the
2
approved investment policy, and exercising due diligence, shall be relieved of 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 taken to control adverse developments.
B. Delegation of Authority
Management responsibility for the investment program is hereby delegated to the Director
of Finance pursuant to the City Charter. The Director of Finance shall establish written procedures
for the operation of the investment program consistent with this investment policy. Such procedures
shall include explicit delegation of authority to persons responsible for investment transactions.
No person may engage in an investment transaction except as provided under the terms of this policy
and the procedures established by the Director of Finance. The Director of Finance shall be
responsible for all transactions undertaken and shall establish a system of internal controls to
regulate the activities of subordinate officials.
C. 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 of the investment program, or which could
impair their ability to make impartial investment decisions. Employees and investment officials
shall disclose to the City Manager any material financial interests in financial institutions with which
they conduct business. They shall further disclose any personal financial or investment positions
that could be related to the performance of the investment portfolio. Employees and officers shall
refrain from undertaking personal investment transactions with the same individual with whom
business is conducted on behalf of the City.
V. Authorized Investments (itemizedl
-U.S. Treasury Bills, Notes, and Bonds; various federal agency securities including issues of
Federal National Mortgage Assn. (FNMA), Federal Home Loan Mortgage Corp. (FHLMC), Federal
Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), Student Loan Marketing Assn.
(SLMA), Government National Mortgage Association (GNMA), and other agencies or
instrumentalities of the United States. GNMA mortgage-backed, pass-through securities are
considered as eligible investments of the City and are not derivative securities, as defined under
135.14(C). Collateralized mortgage obligations (CMOs) of any kind are expressly prohibited.
Eligible investments include securities that maybe "called" [by the issuer] prior to the final maturity
date. Any eligible investment may be purchased at a premium or a discount. All federal agency
securities shall be direct issuances of federal government agencies or instrumentalities.
3
_ a
-Interim deposits in the eligible institutions applying for interim moneys as provided in Section
135.08 ORC. Certificates of deposit must be collateralized with a 10% market value cushion.
Either 135.18 (individual assignment method) or 135.181 (pooling method) shall apply regarding
the collateralization of City deposits.
-No-load money market mutual funds, as defined in 135.14(B)(5), rated in the highest category
by at least one nationally recognized rating agency, investing exclusively in the same types of
eligible securities as defined in Division B(1) or B(2) under 135.14 ORC, and repurchase agreements
secured by such obligations. Eligible money market funds shall comply with 135.01 ORC, regarding
' limitations and restrictions.
-Commercial paper issues of companies incorporated under the laws of the United States, rated
Al+, Al or A2 by Standard & Poor's and P1 or P2 by Moody's. The maximum maturity of
commercial paper shall be 270 days from the date of purchase. Investments in commercial paper
shall not exceed 10% of the average portfolio, based upon the calculation methodology approved
by the Finance Director.
-Bankers acceptances issued by any bank domiciled in the State of Ohio or bankers acceptances
issued by any domestic bank rated in the highest category by one of two nationally recognized rating
agencies. Investments in bankers acceptances shall not exceed 10% of the average portfolio, based
upon the calculation methodology approved by the Finance Director.
-Repurchase agreements with any eligible institution mentioned in section 135.03 ORC, or any
eligible securities dealer pursuant to (M) of 135.14 ORC of this section, except that such eligible
securities dealers shall be restricted to primary government securities dealers. Repurchase
agreements will settle on a delivery vs payment basis with repo collateral held at a qualified
custodian or agent, designated by the City. Eligible repo collateral is restricted to securities listed
in division (B)(1) or (B)(2) under 135.14 ORC. The market value of securities subject to a
repurchase agreement must exceed the principal value of the repo amount by at least 2%. Prior to
the execution of any repo transaction, a master repurchase agreement will be signed by the City and
the eligible parties.
-Medium term notes issued by a domestic corporation having assets in excess of $500 million,
provided that such medium term notes have a maximum maturity of five years and are rated [at the
time of purchase] by Standard & Poor's or Moody's under the following limitations:
Standard & Poor's Moody's
A+ (2-yr max maturity) Al (2-yr max maturity)
A (2-yr max maturity) A2 (2-yr max maturity)
A- (2-yr max maturity) A3 (2-yr max maturity)
AA+ (3-yr max maturity) Aal (3-yr max maturity)
4
AA (3-yr max maturity) Aa2 (3-yr max maturity)
AA- (3-yr max mahzrity) Aa3 (3-yr max maturity)
AAA (maturities > 3 years) Aaa (maturities > 3 years)
If a security has a split rating, the higher of the two ratings shall be used to determine the
eligibility for investment purposes. In no event shall a corporate security [at the time of purchase]
be rated less than A- by Standard & Poor's or less than an A3 by Moody's.
The aggregate total of all corporate medium term notes shall not exceed 15% of the average
portfolio, based upon purchase cost or book value. The average portfolio calculation methodology
w shall be approved by the Director of Finance. No more than $1 million (par value) shall be invested
in a single issuer. Commercial paper and bankers acceptances shall not be considered when
calculating the maximum holdings in any single issuer.
-The state treasurer's investment pool [STAR OHIO], pursuant to Section 135.45 ORC.
-The use of derivative securities, as defined in 135.14 (C), is expressly prohibited.
-All eligible investments will mature within five years from the date of settlement, unless the
investment is matched to a specific obligation or debt of the City, and the investment is specifically
approved by the Director of Finance.
VI. Safekeeping and Custody
Securities purchased for the City will be held in safekeeping by a qualified trustee [hereinafter
referred to as the "Custodian"), as provided in Section 135.37 ORC. Securities held in safekeeping
by the custodian will be evidenced by a monthly statement describing such securities. The custodian
may safekeep the City's securities in (1) Federal Reserve Bank book entry form; (2) Depository Trust
Company (DTC) book entry form in the account of the custodian or the custodian's correspondent
bank; or (3) Non-book entry (physical) securities held by the custodian or the custodian's
correspondent bank. All securities transactions will settle using standard delivery-vs-payment
(DVP) procedures. The records of the custodian shall identify such securities in the name of the
City.
VII. Director of Finance and an Investment Advisory Committee
The City may establish an investment advisory committee which shall meet quarterly to review
the investment portfolio of the City. Specific areas of review include the investment inventory,
transactions for the period, and realized income.
Any amended policy that has been approved by the City Council shall be filed with the Auditor
of State.
5
/ '
VIII. Internal Controls
The Director of Finance is responsible for establishing and maintaining an internal control
structure designed to reasonably ensure that the investment assets of the City are protected from loss,
theft or misuse. The internal control structure shall be designed to provide reasonable assurances
that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of
a control should not exceed teh benefits likely to be derived and, (2) the valuation of costs and
benefits requires estimates and judgements by management.
The Director of Finance shall establish a process for annual independent review by an external
.b
auditor. This review will provide internal control by assuring compliance with policies an
procedures.
IX. Pooling of Funds
The Director of Finance is authorized to pool cash balances from the several different funds of
the City for investment purposes. Interest and other portfolio income will be credited to the fund
proportionate to the amount invested.
X. Portfolio Reporting
The City shall maintain an inventory of all portfolio assets. A description of each security will
include security type, issue/issuer, cost [original purchase cost or current book value], par value
~ [maturity value], maturity date, settlement date [delivery versus payment date of purchased or sold
securities], and any coupon [interest] rate. The investment report will also include a record of all
security purchases and sales. Regularly issued reports will include a monthly portfolio report and
a quarterly portfolio report to the Director of Finance, detailing the current inventory of all
securities, all investment transactions, any income received [maturities, interest payments, and sales],
and any expenses paid. The report will also include the purchase yield of each security, the average-
weighted yield and average-weighted maturity of the portfolio. The portfolio report shall state the
name(s) of any persons or entity effecting transactions on behalf of the City.
XI. INVESTMENT ADVISORS ~ZUALIFIED DEALERS AND FINANCIAL
INSTITUTIONS
The City may retain the services of a registered investment advisor. The investment advisor will
manage the City's portfolio, or a portion thereof, and will be responsible for the investment and
6
reinvestment of City's investment assets, including the execution of investment transactions. Upon
the request of the Director of Finance, the investment advisor will attend meetings and/or City
Council meetings to discuss all aspects of the City's portfolio, including market conditions affecting
the value of the City's investments. The investment advisor will be required to issue monthly and
quarterly portfolio reports as defined under section VIII of this investment policy ["Portfolio
Reporting"].
The investment advisor may transact business (execute the purchase and/or sale of securities)
with eligible Ohio financial institutions, primary securities dealers regularly reporting to the New
York Federal Reserve Bank, and regional securities firms or broker dealers licensed with the Ohio
Department of Commerce, Division of Securities, to transact business in the State of Ohio.
The Finance Director may, at any time, add or delete broker/dealers or eligible financial
institutions. Additions or deletions to the list of approved broker/dealers or financial institutions
may be made by the Finance Director based upon recommendations of the City's investment advisor.
All such broker/dealers and financial institutions transacting investment business with the City are
required to sign the approved investment policy as an acknowledgment and understanding of the
contents of said policy.
XII. Sale of Securities Prior to Maturity
Portfolio assets may be liquidated or sold prior to maturity under the following conditions:
(1) To meet additional liquidity needs
(2) To purchase another security to increase yield or current income
(3) To purchase another security to lengthen or shorten maturity
(4) To realize any capital gains and/or income
(5) To increase investment quality
Such transactions maybe referred to as a "sale and purchase" or a "bond swap". For purposes
of this section, redeemed shall also mean "called" in the case of a callable security.
XIII. Procedures for the Purchase and Sale of Securities
Securities will be purchased or sold through approved broker/dealers on a "best price and
execution" basis. All such investment transactions will be communicated by facsimile transmission
to the Director of Finance or to an authorized representative, designated by the Director of Finance.
A purchase or sale of securities will be represented by transaction advices issued by the City's
investment advisor which will describe the transaction, including par value, coupon (if any), maturity
7
date, and cost. A facsimile transmission will also be sent to the City's designated custodian bank
and will serve as an authorization to said custodian to receive or deliver securities versus payment.
Confirmation advices, representing the purchase or sale of securities, will be issued by the eligible
broker/dealer and sent to the investing authority. Copies of such advices will be sent to the City's
investment advisor.
XIV. Statements of Compliance
This investment policy has been approved by City Council and filed with the Auditor of State,
pursuant to 135.14 (N)(1) ORC. Any amendments to this policy will be filed with the Auditor of
State within fifteen days of the effective date of the amendment.
The investment portfolio will be managed in accordance with the parameters specified within
this policy. Performance of the portfolio will be periodically monitored and compared to an
appropriate benchmark.
All brokers, dealers, and financial institutions executing transactions initiated by the City or the
City's investment advisor have signed the approved investment policy. The City's investment
advisor is registered with the Securities and Exchange Commission and possesses public funds
investment management experience; specifically in the area of state and local government investment
portfolios. The investment advisor has additionally signed the approved investment policy and the
signed policy is filed with the Director of Finance.
The Director of Finance will be responsible for providing regular reports to City Council. Such
reports will accurately describe all portfolio assets, including transaction activity for the period. The
City's investment policy shall be adopted by Ordinance and modifications must be approved by City
Council.
8
ACTION SHEET
DUBLIN CITY COUNCIL
DATE: 2/16/99
ORDINANCE/RESOLUTION N0. Ordinance 10-99
v~-ITLE
Mr. Ms. Hide Mayor Mr. Mr. Mrs. Mr.
Adamek Pittaluga Krans McCash Reiner Boring Peter
son
Introduced
Refer to P&Z
Waive 3-time
Reading
Waive
3-time Reading
Emergency
Amend
Take off Table
Table
`TOTE
comments and Notes:
Office of the City Manager
5200 Emerald Parkway • Dublin, Ohio 43017-1006
ciTY of nus[,tty ! Phone: 614-761-6500 • Fax: 614-889-0740
Memo
To: Members of Dublin City Council
From: Timothy C. Hansley, City Manager
Date: February 9, 1999
Re: Ordinance No. 10-99, Modification of the City's Investment Policy
Initiated by: Marsha I. Grigsby, Director of Finance
Per request of Council Member Adamek, attached please find a copy of the City's current Investment
Policy. The Ordinance is scheduled for public hearing and adoption at the February 16, 1999 City
Council meeting.
T:\PER\DKP\99\ 119-9-MG. WPD
CITY OF DUBLIN
Investment Policy
I. Policv
It is the policy of the City of Dublin to invest public funds in a manner which will provide
maximum security with the highest investment return while meeting the daily cash flow
demands of the City and conforming to applicable state and local statutes governing the
investment of public funds.
II. Scope
This policy applies to all financial assets of the City of Dublin. These funds are accounted for
in the City's Comprehensive Annual Financial Report, and includes all funds of the reporting
entity.
III. Objectives
The primary objectives, in priority order, of the City's investment activities shall be:
A. Safety
Safety of principal is the foremost objective of the investment program. Investments
shall be undertaken in a manner that seeks to ensure the preservation of capital in the
overall portfolio. The objective will be to mitigate credit risk and interest rate risk.
1. Credit Risk
Credit risk is the risk of loss due to the failure of the security issuer or backer. Credit
risk may be mitigated by:
Limiting investments to the safest types of securities. The City shall invest
only in securities where there is certainty of receiving full par value plus
accrued interest, at the securities' legal final maturity.
Pre-qualifying the financial institutions, broker/dealers, intermediaries, and
advisors with which an entity will do business; and
Diversifying the investment portfolio so that potential losses on individual
securities will be minimized.
2. Interest Rate Risk
Interest rate risk is the risk that the market value of securities in the portfolio will fall
due to changes in general interest rates. The City will mitigate interest rate risk by:
Structuring the investment portfolio so that securities mature to meet cash
requirements for ongoing operations, thereby avoiding the need to sell
securities on the open market prior to maturity; and
* By investing operating funds primarily in short-term securities.
Investment and Depository Policy
Page 2
B. Liquidity
The City's investment portfolio will remain sufficiently liquid to enable the City to meet
operating requirements which might be reasonably anticipated.
C. Return on Investments
The City's investment portfolio shall be designed with the objective of maximizing the
rate of return throughout budgetary and economic cycles, taking into account the
investment risks and liquidity constraints. The City's investments are limited to
relatively low risk securities in anticipation of earning a fair return relative to the risk
being assumed.
IV. Standards of Care
A. Prudence
.Investments shall be made with the exercise of that degree of judgement 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.
The standard of prudence to be used by investments officials shall be the "prudent
person" standard and shall be applied in the context of managing an overall portfolio.
Investment officers acting in accordance with written procedures and the 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 appropriate action is taken to control
adverse developments.
B. Delegation of Authority
Management responsibility for the investment program is hereby delegated to the
Director of Finance per the City Charter. The Director of Finance shall establish written
procedures for the operation of the investment program consistent with this investment
policy. Such procedures shall include explicit delegation of authority to persons
responsible for investment transactions. No person may engage in an investment
transaction except as provided under the terms of this policy and the procedures
established by the Director of Finance. The Director of Finance shall be responsible for
all transactions undertaken and shall establish a system of internal controls to regulate
the activities of subordinate officials.
C. Ethics and Conflicts of Interest
Officers and employees involved in the investment process shall refrain from personal
business activity that could conflict with proper execution of the investment program,
or which could impair their ability to make impartial investment decisions. Employees
and investment officials shall disclose to the City Manager any material financial
interests in financial institutions with which they conduct business. They shall further
disclose any personal financial or investment positions that could be related to the
performance of the investment portfolio. Employees and officers shall refrain from
undertaking personal investment transactions with the same individual with whom
business is conducted on behalf of the City.
Investment and Depository Policy
Page 3
V. Safekeeping and Custody
A. Authorized Financial Dealers and Institutions
The Director of Finance will maintain a list of financial institutions authorized to provide
investment services. In addition, a list will also be maintained of approved security
broker/dealers selected by credit worthiness (a minimum capital requirement of
S 10,000,000 and at least five years of operation) who are authorized to provide
investment services to the City. These may include "primary" dealers or regional
dealers that qualify under Securities & Exchange Commission Rule 15C3-1 (uniform net
capital) and that are registered with the Ohio Department of Commerce to do business
in the State of Ohio.
All financial institutions and broker/dealers who desire to become qualified bidders for
investment transactions must supply the following as appropriate:
audited financial statements
* proof of National Association of Securities Dealers (NASD) certification
* proof of state registration
certificate of having read the entity's investment policy
Periodic reviews of the financial condition and registrations will be conducted by the
Department of Finance. Financial institutions and broker/dealers designated as
depositories will be approved by City Council through Ordinance.
B. Internal Controls
The Director of Finance is responsible for establishing and maintaining an internal
control structure designed to reasonably ensure that the assets of the entity are
protected from loss, theft or misuse. The internal control structure shall be designed
to provide reasonable assurance that these objectives are met. The concept of
reasonable assurance recognizes that (1) the cost of a control should not exceed the
benefits likely to be derived and, (2) the valuation of costs and benefits requires
estimates and judgements by management.
The Director of Finance shall establish a process for annual independent review by an
external auditor. This review will provide internal control by assuring compliance with
policies and procedures.
VI. Authorized Instruments
A. Investment Types
The following investments will be permitted by this policy:
1. United States and Federal Agency and Instrumentality Obligations
a. United States Treasury bills, notes, bonds, 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.
b. Bonds, notes, debentures, or any other obligations or securities issued
by any federal government agency or instrumentality, including but not
limited to, the Federal National Mortgage Association, Federal Home
Loan Bank, Federal Farm Credit Bank, Federal Home Loan Mortgage
Investment and Depository Policy
Page 4
Corporation, Government National Mortgage Association, and Student
Loan Market Association.
c. All federal agency or instrumentality securities must be direct issuances
of the federal agency or instrumentality. Investments in derivatives and
in stripped principal or interest principal or interest obligations of eligible
obligations are strictly prohibited.
2. Non-Negotiable Interest Bearing Time Certificates of Deposit and Savings
Accounts
Non-negotiable Interest Bearing Time Certificates of Deposits and savings
accounts in banks organized under the laws of this State, national banks
organized under the laws of the United States, doing business and situated in
this State, savings and loan associations located in this State and organized
under Federal law and under Federal supervision, provided that any such
deposits and savings accounts are secured by collateral as prescribed herein.
3. Negotiable Interest Bearing Time Certificates of Deposit
Negotiable Interest Bearing Time Certificates of Deposit issued by institutions,
provided that any such deposits are secured by collateral as prescribed herein.
4. Bankers Acceptances
Bankers Acceptances which are eligible for purchase by the Federal Reserve
System.
5. Repurchase Agreements
Repurchase Agreements of a bank or savings and loan association organized
under the laws of the United States or any State thereof, provided a master
repurchase agreement is signed.
6. Commercial Paper/Corporate Bonds
Commercial notes of any United States company provided that such notes are
rated "prime" (P-1) by Moody's Investors Service and (A-1) by Standard and
Poor's.
" Collateralized commercial paper. Medium term corporate notes rated "prime"
(P-1) by Moody's Investors Service and (A-1) by Standard and Poor's.
7. Money Market Funds
Money market funds whose portfolios consist of the foregoing 11-6).
8. Now Accounts
Now Accounts, Super Now Accounts or any other similar account authorized
by the Federal Reserve's Depository Institution's Deregulation Committee.
9. State Treasury Asset Reserve of Ohio (STAR Ohio)
STAR Ohio is an investment pool managed by the Ohio Treasurer of State,
offered to subdivisions of the State as defined in Section 135.45(E)12).
Investment and Depository Policy
Page 5
B. Collateralization
Collateralization will be required on two types of investments: Certificates of Deposits
and Repurchase Agreements. In order to anticipate market changes and provide a level
of security for all funds, the Collateralization level will be 110% of the deposit.
Collateral may be through a single pool of securities pledged toward all deposits of
public funds held by the depository. Collateral shall be held by an independent third
party. Each financial institution with which the City has Certificates of Deposits and/or
Repurchase Agreements shall provide a detailed quarterly statement of all securities
pledged to the pool.
The right of collateral substitution is granted.
XII. Investment Parameters
A. Diversification
The City of Dublin will diversify its investments by security type and institution. With
the exception of U.S. Treasury securities and authorized pools, no more than 50% of
the City of Dublin's total investment portfolio will be invested in a single security type
or with a single financial institution.
B. Competitive Bidding
The purpose of competitive bidding is to strengthen the investment program in terms
of level and consistency of performance. All sales of securities will be bid
competitively and, to the extent practical, all investments will be placed with vendors
yielding the highest returns to the City. The right is reserved to reject the bid yielding
the highest return of interest on any investment if inconsistent with the city investment
strategy, i.e., maturity, risk, liquidity, etc.
Price and rate quotations on all trades may be obtained from sources within and outside
the City. In the case of the sale of securities or the purchase of securities where all
other factors are considered by the Director of Finance to be equal, placement will be
made in favor of the banking institution situated within the City if two bids or more are
the same.
As stated in this policy, the City will competitively bid and invest part or all of its
surplus or excess funds outside the designated central depository bank. However, this
practice will not limit the central depository bank from competitively bidding on the
City's investment business as would any other financial institution.
C. Maximum Maturities
To the extent possible, the City will attempt to match its investments with anticipated
cash flow requirements. All investments will mature within two (2) years from the date
of settlement.
XIII. Pooling of Funds
The Director of Finance is authorized to pool cash balances from the several different funds of
the City for investment purposes. Interest on these investments will be credited to the fund
proportionate to the amount invested.
Investment and Depository Policy
Page 6
IX. Performance Standards
The investment portfolio will be managed in accordance with the parameters specified within
this policy. The portfolio should obtain a market average rate of return during a
market/economic environment of stable interest rates. The City employs a passive investment
strategy recognizing safety and liquidity as higher objectives than return. Portfolio performance
will be monitored by reviewing the average Fed Funds rate.
The Director of Finance will be responsible for providing regular reports to City Council about
the City's investment activities. The report should include at least the details of the City's
portfolio by institution and instruments.
X. Adoption
The City's investment policy shall be adopted by Ordinance and modifications must be
approved by City Council.