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

conduct of an enterprise of like character and with like aims by diversifying the investments of the funds, so as to minimize the risk, considering the probable income as well as the probable safety of their capital. XIII. ETHICS AND CONFLICTS OF INTEREST Charter 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. Also, Charter Officers and employees involved in the investment process shall disclose to the Finance Director any material financial interests in financial institutions that conduct business with the City, and they shall further disclose any material personal fnanciabinvestment positions that could be related to the performance ofthe City' s investment program. XIV. INTERNAL CONTROLS AND INVESTMENT PROCEDURES The Finance Director shall establish a system of internal controls and operational procedures that are in writing and made a part of the City' s operational procedures. The internal controls should be designed to prevent losses of funds which might arise from fraud, employee error, misrepresentation by third parties, or imprudent actions by employees. The written procedures should include reference to safekeeping, repurchase agreements, separation of transaction authority from accounting and record keeping, wire transfer agreements, banking service contracts, collateral/depository agreements, and " delivery vs. payment' procedures. No person may engage in an investment transaction except as authorized under the terms of this Policy. These procedures are intended to Ordinance Isis, Adopted tanuaw s, 2013 Packet Pg. 61  12. 1. 6 City of Fort Walton Beach, FL INVESTMENT POLICY am reduce the relatively low risk that material losses may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Independent auditors as a normal part of the annual financial audit to the City shall conduct a review of the system of internal controls. XV. CONTINUING EDUCATION The Finance Director and/ or investment staff shall annually complete 8 hours of continuing education in subjects or courses of study related to investment practices and products. XVI. AUTHORIZED INVESTMENT ADVISORS Any person or firm hired or retained to invest, monitor, or advise concerning the City' s investment program must meet the following qualifications: A. A bank, insurance company, or investment adviser as defined by the Investment Advisers Act of 1940. B. Provide detailed information on the history of the fine, key personnel, support personnel, key clients, and fee schedule. This information can be a copy of a recent Request for Proposal ( " RFP ") completed by the Investment Advisor or regulatory disclosure. All Investment Advisors conducting investment transactions on behalf of the City shall provide written acknowledgement of receiving a current copy of the City' s Investment Policy. XVII. AUTHORIZED INVESTMENT INSTITUTIONS AND DEALERS c The following institutions are authorized to provide investment services and act as portfolio managers to the City el of Fort Walton Beach: U U T ft Financial institutions included on the State of Florida' s list of Qualified Public Depositories a. B. Entities providing intergovernmental investment pools authorized per Florida State Statute 163. 01 yE C. Securities brokers /dealers meeting all of the following requirements c 1. Regional dealers that qualify under Securities and Exchange Commission Rule 15C3 -1 ( uniform net 3 capital rate) LLN 2. Assets under management of no less than $ 500 million N 3. Registered as a dealer under the Securities Exchange Act of 1934 4. 5. Member of the National Association of Dealers ( NASD) Registered to sell securities in Florida cuUELN R 6. The firm and assigned broker have been engaged in the business of effecting transactions in U. S. government and agency obligations for at least five ( 5) consecutive years All institutions conducting investment transactions on behalf of the City shall provide written acknowledgement of receiving a current copy of the City' s Investment Policy. Ordnance 1875, Adopted ranuaw 8. 2013 Packet Pg. 62  12. 1. b City of Fort Walton Beach, FL INVESTMENT POLICY All institutions conducting investment transactions on behalf of the City are required to notify the City when the most current audited financial statement is available. XVIII. THIRD -PARTY CUSTODIAL AGREEMENTS Securities, with the exception of certificates of deposits, shall be held with a third party custodian; and all securities purchased by, and all collateral obtained by the City, should be properly designated as an asset of the City. The securities must be held in an account separate and apart from the assets of the financial institution. A third party custodian is defined as any bank depository chartered by the Federal Government, the State of Florida, or any other state or territory of the United States which has a branch or principal place of business in the State of Florida, or by a national association organized and existing under the laws of the United States which is authorized to accept and execute trusts and which is doing business in the Slate of Florida. Certificates of deposits will be placed in the provider' s safekeeping department for the term of the deposit. The custodian shall accept transaction instructions only from those persons who have been duly authorized by the Finance Director and which authorization has been provided, in writing, to the custodian. No withdrawal of securities, in whole or in part, shall be made from safekeeping unless by such a duly authorized person. The custodian shall provide the Finance Director with safekeeping statements that provide detail information on ut the securities held by the custodian. On a monthly basis, the custodian will also provide reports that list all securities held for the City and the book value and the market value of each as of month -end. Nn m Secunty transactions between a broker /dealer and the custodian involving the purchase or sale of securities by transfer of money or securities must be made on a ` delivery vs. payment" basis, if applicable, to ensure that the M custodian will have the security or money, as appropriate, in hand at the conclusion of the transaction. Securities m held as collateral shall beheld free and clear of any liens. XIX. INVESTMENT POLICY ADOPTION The investment Policy shall be adopted by ordinance of the City Council. The Finance Director shall review the Policy annually and submit recommendations to the City Manager for City Council consideration and approval. aamaow Isys, Ad, ud ranaaw s, cou Paaket Pg. 63  12. 1. b City of Fort Walton Beach, FL INVESTMENT POLICY Attachment A - Review and Evaluation of Investment Advisor (as applicable) The Finance Director will meet at least quarterly with the Investment Advisor( s) to review market conditions and investment results. These reviews will focus on: A. The Investment Advisor' s adherence to the City' s Investment Policy guidelines ( i. e. compliance) B. Investment results C. Material changes to the City' s furore investment strategy D. Material changes in the Investment Advisor' s organization, such as philosophical or personnel changes Guidelines for evaluation, retention, and replacement of Investment Advisor A. Communication regarding changing market conditions B. Responsiveness to questions or correspondence from the City C. Portfolio Managers) performance ( quarterly, annual, trailing) mrm Deviation from the City' s Investment Policy is grounds for immediate termination of Imesunent Advisor. Nnm a 3nanc tats. Ado! ranaans, zcis Packet Pg. 64 -.. i  12. 1. b City of Fort Walton Beach, FL INVESTMENT POLICY Attachment B - Review and Evaluation of Portfolio Manager ( as applicable) The Finance Director will meet at least annually with Portfolio Manager( s) or representative These reviews will focus on: A. The Portfolio Manager' s adherence to the City' s Investment Policy guidelines ( i. e. compliance) B. Comparison of the Portfolio Manager' s results to the objectives established for each Portfolio C. Comparison of the Portfolio Manager' s results against a universe of comparable funds and investment styles D. Opportunities available in the market E. Material changes in the Portfolio Manager' s organization, such as philosophical or