HomeMy WebLinkAboutRESOLUTION NO. 2015-53 RESOLUTION NO, 2015-53
RESOLUTION ADOPTING A POLICY
FOR THE INVESTMENT OF PUBLIC FUNDS
WHEREAS, it is necessary to protect public funds and establish investment
guidelines; and
WHEREAS, it is required that the City of Fairfax's Investment Policy be
reviewed every two years or more frequently as appropriate.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of
Fairfax, Iowa that the attached Investment Policy is hereby adopted.
BE IT FURTHER RESOLVED, that the Mayor and the City Clerk/Treasurer are
hereby authorized and directed to execute said resolution.
Passed and approved this 9th day of June,2015.
AYES: Beer, Frieden, Otto', Magers, and Wainwright
NAYS: None
Jason Rabe,Mayor
ATTEST:
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Cyr�ffiia Stimson, City Clerk/Treasurer 4
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CITY OF F AIRFAX
INVESTMENT POLICY
SECTION 1 —SCOPE OF INVESTMENT POLICY
The Investment Policy of the City of Fairfax shall apply to all operating funds, bond proceeds and other
funds and all investment transactions involving operating funds, bond proceeds and other funds accounted
for in the City of Fairfax's financial statements. Each investment must be authorized by applicable law
and is subject to conditions of this, Investment Policy. Each investment made pursuant to this Investment
Policy must be authorized by applicable law and this written Investment Policy.
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"I"he investment of bond funds or sinking funds shall comply not only with this investment policy,but also
be consistent with any applicable bond resolution.
The Investment Policy is intended to comply with Iowa Code Chapter 1.2B.
Upon passage and upon future amendment, if any, copies of this Investment Policy shall be delivered to
all of the following:
• The governing body or officer of the City of Fairfax to which the Investment Policy applies.
• All depository institutions or fiduciaries for public funds of the City of Fairfax.
• The auditor engaged to audit any funds of the City of Fairfax.
SECTION 2—DELEGATION OF AUTHORITY
b7 accordance with Section 12B.I0(1), the responsibility for conducting investment transactions resides
with the City Clerk/Treasurer of the City of Fairfax. Only the City Clerk/Treasurer, Deputy City Clerk,
and those authorized by ordinance or resolution may invest public funds, and a copy of any empowering
resolution shall be attached to this,Investment Policy.
The City Clerk/Treasurer or Deputy City Clerk shall establish a written system of internal controls and
investment practices. The controls shall be designed to prevent loss of public funds, to document those
officers and employees of the City of Fairfax responsible for elements of the investment process, and to
address the capability of investment management. The controls shall provide for receipt and review of
the audited financial statement and related reports on internal control structure of all outside persons
performing any of the fallowing fbr the City of Fairfax.:
I. Investing public funds.
2. Advising on the investment of public funds.
3. Directing the deposit or investment of public funds.
4. Acting in a fiduciary capacity for the City of Fairfax.
A bank, savings and loan association or credit union providing only depository services shall not be
required to provide an audited financial statement and related report on internal control structure.
All contracts and agreements with outside persons providing any of the above listed services shall require
written notification to the City of Fairfax within, thirty days of receipt of any communication from either
their auditor or any regulatory authority which denotes any of the following: the existence of a material
weakness in their internal control structure, regulatory orders or sanctions in regard to the services being
provided to the City of Fairfax by the outside person..
The records of investment transactions made by, or on behalf of, the City of Fairfax are public records
and are the property of the City of Fairfax whether in the custody of the City of Fairfax or in the custody
of a fiduciary or other third party.
SECTION 3—OBJECTIVES OF INVESTMENT POLICY
The primary objectives, in order of priority, of all investment activities involving the financial assets of
the City of Fairfax shall be the following:
• SAFETY: Safety and preservation of principal in the overall portfolio is the foremost investment
objective.
• LIQUIDITY: Maintaining the necessary liquidity to match expected liabilities is the second
priority.
• RETURN: Obtaining a reasonable return is the third priority.
SECTION 4—PRUDENCE
When investing or depositing public funds, the City Clerk/Treasurer or Deputy City Clerk of the City of
Fairfax shall exercise the care, skill, prudence and diligence under the circumstances then prevailing that
a prudent person acting in a like capacity and familiar with such matters would use to attain the Section 3
investment objectives. This standard requires that when making investment decisions, the City Council
shall consider the tole that the investment or deposit plays within the portfolio of assets of the City of
Fairfax and the investment objectives stated in Section 3.
SECTION 5-DEPOSITORIES
All deposits shall be in depositories located in the State of Iowa. Each bank must be on the most recent
Approved Bank List as distributed by the Treasurer of the State of Iowa or as amended as necessary by
notice inserted in the monthly mailing from the State Treasurers Office. Each financial institution shall
be properly declared as a depository by the City Council of the City of Fairfax. Deposits in any financial
institution shall not exceed the $6,0100,000 limit approved by the City Council of the City of Fairfax.
SECTION 6—INSTRUMENTS ELIGIBLE FOR INVESTMENT
Assets of the City of Fairfax may be invested in the-following:
• Interest-bearing savings accounts, interest-bearing money market accounts, and interest-bearing
checking accounts at any bank, savings and loan association or credit union in the State of Iowa.
Each bank must be oil the most recent list of Approved Bank List as provided by the State
Treasurer. Deposits will only be made with financial institutions that are properly declared as, a
depository by resolution of the Fairfax City Council. Deposit amounts shall not exceed the
statutory limit approved by the governing body of Fairfax.
• Obligations of the United States government, its agencies and instrumentalities.
• Certificates of deposit and other evidences of deposit at federally insured Iowa depository
institutions approved and secured pursuant to Chapter 12B.
All instruments eligible for investment are further qualified by all other provisions of this Investment
Policy including Section 8 — Investment Maturity I.Jmitations and Section. 9 -- Diverstfication
Requirements.
SECTION 7`PROHIBITED INVESTMENTS AND:INVESTMENT PRACTICES
Public funds of the City of Fairfax shall not be invested in the following:
1. Reverse repurchase agreements.
2. Futures and options contracts.
Assets of the City of Fairfax shall not be invested pursuant to the following investment practices:
1. Trading of securities for speculation or the realization of short-term trading gains.
2. Pursuant to a contract providing for the compensation of an agent or fiduciary based upon the
performance of the invested assets.
3. If a fiduciary or other third party with custody of public investment transaction records of the City
of Fairfax fails to product requested records when requested by this public body within a
reasonable time, the City of Fairfax shall make no new investment with or through the fiduciary
or third party and shall not renew maturing investments with or through the fiduciary or third
party.
SECTION S—INVESTMENT MATURITY LIMITATIONS
Operating funds must be identified and distinguished from all other funds available for investment..
Operating funds are defined as those funds, which are reasonably expected to be expended during the
current budget year or within fifteen months of receipt.
All investments authorized. in :Section 5 are further subject to the following investment maturity
limitations:
1. Operating funds may only be invested in instruments authorized in Section 5 of this Investment
Policy that mature within three hundred ninety-seven(397) days.
2. The City Clerk/Treasurer or Deputy City Clerk may invest funds of the City of Fairfax that are
not identified as Operating Funds in investments with maturities longer than three hundred
ninety-seven (397) days, However, all investments of the City of Fairfax shall have maturities
that are consistent with the needs and use of City of Fairfax.
SECTION 9—DIVERSIFICATION
The City of Fairfax maintains no investments of a type requiring diversification.
SECTION 10--SAFEKEEPING AND CUSTODY
All invested assets of the City of Fairfax involving the use of public funds custodial agreement, as defined
in Section 12B.10C, shall comply with all rules adopted pursuant to 'Section 12B.10C relating to those
investments. All custodial agreements shall be in writing and shall contain a provision that all custodial
services be provided in accordance with the laws of the State of Iowa.
SECTION 11 -ETHICS AND CONFLICT OF INTEREST
The City Clerk/Treasurer and all officers and employees of the City of Fairfax involved in the investment
process shall refi•ain 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. Any
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conflict of interest or bias, whether in fact or by appearance, shall be disclosed in writing to t1w City of
Fairfax.
SECTION 12 -REPORTING
The City Clerk/Treasurer or Deputy City Clerk shall submit an annual investment report in July that
summarizes recent market conditions and investment strategies employed since the last investment report.
The investment report shall set out the current portfolio in terms of maturity, rates of return and other
features and summarize all investment transactions that have occurred during the reporting period and
compare the investment results with the budgetary expectations.
SECTION 13 INVESTMENT POLICY REVIEW AND AMENDMENT
This Investment Policy shall be reviewed every two years or more frequently as appropriate. Notice of
amendments to the Investment Policy shall be promptly given to all parties noted in Section 1.
Passed and approved this 9`h day of June,2015.
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Jason Rabe, Mayor
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Cynthia Stimson, City Clerk/Treasurer
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