Fort Walton Beach Council agenda — 01-08-13--regular — reading text

is designed to ensure the prudent management of public funds, the availability of operating and capital funds when needed, and an investment return competitive with comparable Is19 benchmarks and financial market indices. 2021 SECTION 3. APPLICABILITY 22 The Investment Policy applies to all Ponds controlled by the City in excess of those required to meet current expenses, with the exception of pension Ponds, funds related to fl, Mietea ald 2423 issuance of debt where there are other existing policies or indentures in effect for such funds, -wd W d % 1c n n„ I t.. rct e. s Peulmol C,, fw cz. Additionally, any future revenues that have mV 2526 statutory investment requirements conflicting with the Investment Policy and funds held by state 27 agencies are not subject to the provisions of the Investment Policy. 0 28 SECTION 4. REPEAL 2930 This Ordinance repeals Resolution 04 -20 adopting the City' s previous Investment Policy. 31 SECTION 5. EFFECTIVE DATE 3233 This Ordinance shall take effect immediately upon approval by the City Council. 34 35 36 Adopted 3739 Mike Anderson, Mayor 3940 4142 Attest: Approved for form and legal sufficiency: 4344 4546 Helen Spencer, City Clerk llayward Dykes, Jr, Ciry Attomey Packet Pg. 54  12. 1. b City of Fort Walton Beach, FL INVESTMENT POLICY Table of Contents Page 2 I. Purpose m Scope 2 11. mv Ili. Investment Objectives 3 v N_ c 3 u T TV. Authorized Investments, Maturity & Liquidity, and Portfolio Composition 0a V. Bid Requirement 4 u E VI. Risk and Diversification 5 d VII. Master Repurchase Agreement 6 VIII. Derivatives and Reverse Repurchase Agreements 6 IX. Performance Measurements 6 X. 6 Reporting 7 XL Delegation of Authority XIL Standards of Prudence 7 Ethics and Conflicts of Interest 7 XIII. XIV, Internal Controls and Investment Procedures 7 8 XV. Continuing Education XVI. Authorized Investment Advisors 8 XV II. Authorized Investment Institutions and Dealers 8 9 XVIII. Third -Party Custodial Agreements 9 XIX. Investment Policy Adoption ATTACHMENT A Review and Evaluation of Investment Advisor 10 ATTACHMENT B Review and Evaluation of Portfolio Manager I I 12 ATTACHMENT C: Glossary of Investment Terms Owaaaao 1895, Adop ddaooa 8. 2013 Packet P9. 55  72. 1. b City of Fort Walton Beach, FL INVESTMENT POLICY I. PURPOSE The purpose of this Investment Policy ( hereinafter " Policy") is to set forth the investment objectives and parameters for the management of the funds of the City of Fort Walton Beach, ( hereinafter " City"). This Policy is designed to ensure the prudent management of public funds, the availability of operating and capital funds when needed, and an investment return competitive with comparable benchmarks and financial market indices. II. SCOPE c In accordance with Section 218.415, Florida Starnes, this Policy applies to all funds controlled by the City in C excess of those required to meet current expenses, with the exception of pension funds and funds related to the u issuance of debt where there are other existing policies or indentures in effect for such funds. Additionally, any 0 future revenues that have starntory investment requirements conflicting with this Policy and Po nds held by state a agencies ( e. g. Department of Revenue) are not subject to the provisions of this Policy. uE Cash balances from all accounting foods are consolidated to maximize investment earnings. Investment income is allocated to each accounting fund based on the fund' s respective participation and in accordance with generally accepted accounting principles. N r The City could have four portfolios of investments. Each portfolio must be benchmarked, and may consist of subsidiary portfolios. Portfolios may be managed internally by City staff or externally by Investment Advisor( s). nm A. Liquidity Portfolio ( 0 — 60 Days Effective Duration) M Minimal principal volatility - provides highest degree of principal protection Objective J is provide liquidity P 9 Y )(constant NAV for daily Y liquidity 9 Y needs as well as an appropriate cushion B. Enhanced Cash Portfolio ( 60 Days— 13 Months Effective Duration) aem Longer duration may result in principal (price) volatility UV Objective is to improve returns while still meeting the primary goals of safety of principal and liquidity Incremental risk is very low compared to increase in return o 6 C. Intermediate -Term Portfolio ( 1 - 5 Years Effective Duration) y E Longer duration results in higher principal ( price) volatility. Objective is to maintain and enhance the real purchasing power of the principal while limiting exposure to risk of loss. Greater short- term volatility in this portfolio is to be expected and accepted in exchange for e the opportunity to seek growth of principal over time. miLL D. Long -Term Portfolio (3 — 5 Years Effective Duration) Longer duration results in higher principal ( price) volatility. Objective is to maintain and enhance the real purchasing power of the principal while limiting exposure to 14 risk of loss. Greater short- term volatility in this portfolio is to be expected and accepted in exchange for a the opportunity to seek growth of principal over time. E L The City anticipates that emergencies may arise and with the guidance of the Investment Advisors) will develop m a strategy that complements the overall investment portfolios regarding reserves and emergency funds. G Ordinance 1875, Adopted January 8, 2013 Packet P9• 56  12. 1. b City of Fort Walton Beach, FL INVESTMENT POLICY III. INVESTMENT OBJECTIVES The primary objectives, in order of importance, of the City of Fort Walton Beach' s investment policy are: 1. Safety of Principal The foremost objective of this investment policy is the safety of the principal of the funds within the portfolios. Investment transactions shall seek capital preservation and keep capital losses at a minimum, whether they are from securities defaults or erosion