Fort Walton Beach Ordinance — 1876--beal cemetery perpetual fund — reading text

approach ( rebalancing the percentage of assets held in various categories to take advantage of market pricing anomalies or strong market sectors) may also be implemented to protect the principal of the portfolio or achieve short -term profits as determined by the Investment Advism( s). As such, any rapid, unanticipated market shifts or changes in economic conditions may cause the asset mix to fall outside Policy Asset Weighting ranges. The Fund views that any 5% point drift away from the Asset Weighting targets warrants a rebalance. When these divergences occur, the Investment Advisor(s) will review, rebalance, or cause the Portfolio Manager( s) to rebalance the assets to within the specified ranges. Similarly, if the Liquidity Assets fall to a level where Fund distributions cannot be met, the Investment Advisor(s) will raise Liquidity Assets by reducing Investment Assets in a manner resulting in a range consistent with the ranges slated in this Policy. When the Investment Advisor(s) is notified of new contributions, the Liquidity Assets will be filled first, followed by Investment Assets. VIII. MASTER REPURCHASE AGREEMENT All approved investment institutions and brokers /dealers transacting repurchase agreements are required to execute and perform as stated in the Fund' s Master Repurchase Agreement. All repurchase agreement transactions shall adhere to the requirements of the Master Repurchase Agreement. IX. PERFORMANCE MEASUREMENTS AND EXPECTED RATE OF RETURN To assist in the evaluation of the Fund' s performance, benchmarks appropriate for the construction of the Fund will be identified and mutually agreed upon by the City and the Investment Advisor(s). The use of benchmarks allows returns to be measured against other investors in the same markets. Custom benchmarks may be provided by the Investment Advisors) when the construction of the portfolios cannot fit into the style box of established benchmarks. Examples of benchmarks include, but are not limited to: S & P 500 Index for large cap equities, Russell 2000 Index for small cap equities, MSCI Europe, Australasia, and Far East ( EAFE) Index for international equities, Barclays Capital Aggregate Bond Index for fixed income securities, and the U. S. 91 Day T -bill for cash equivalents. Page 5 of 12 Ordinance 1876, Adopted March 12. 2013  City of Fort Walton Beach, FL BEAL MEMORIAL CEMETERY INVESTMENT POLICY The portfolio' s overall performance will be reviewed on a quarterly basis, with emphasis placed on results achieved over a rolling five -year period. Over the rolling five -year period, the performance objective for the Fund will be to achieve an average total annual rate of return that is equal to or greater than comparable benchmarks. It is expected that the annual rate of return on Fund assets will be commensurate with the then prevailing investment environment. Measurement of this return expectation will be judged by reviewing returns in the context of industry standard benchmarks, peer universe comparisons for individual Fund investments, and blended benchmark comparisons for the Fund in its entirety. The volatility of investment returns, as measured by the standard deviation of quarterly returns, should be comparable to that of benchmarks. X. REPORTING The Finance Director and /or Investment Advisor(s) shall provide the City Manager with a " Quarterly Investment Report", which shall also be provided to the City Council. The Investment Report shall include the following information, at minimum, as of the report date: A. Investments in the portfolios by class or type B. Book value C. Market value ( presented consistent with accounting guidelines in GASB Statement 31) D. Income earned E. Recent market conditions, economic developments and anticipated investment conditions F. Investment strategies employed in the most recent quarter G. Quarterly total rate of return compared to the appropriate benchmark H. Year -to -date total rate of return compared to the appropriate benchmark f. Any areas of concern warranting possible revisions to current or planned investment strategies Investment reports shall be available to the public. XI. DELEGATION OF AUTHORITY In accordance with the City' s Charter, the responsibility for providing oversight and direction in regard to the management of investments resides with the City Manager. Responsibility for the administration of Beal Memorial Cemetery Perpetual Care Fund investments is hereby delegated to the Finance Director. The Finance Director shall be responsible for monitoring internal controls and regulating the activities of the City' s staff involved with the Fund' s investments. The City may employ Investment Advisor( s) to assist in managing the Fund' s portfolio. Such Investment Advisor(s) must be registered under the Investment Advisor' s Act of 1940. XIL STANDARDS OF PRUDENCE The standard of prudence to be used by Charter Officers or employees of the City of Fort Walton Beach shall be the " Prudent Person Rule" standard and shall be applied in the context of managing the Fund' s investments. Page 6. f 12 ONfne ice 1876, Adopted March 12, 2013  City of Fort Walton Beach, FL BEAL MEMORIAL CEMETERY INVESTMENT POLICY Charter Officers and employees acting in accordance with written procedures and this Policy and exercising due diligence shall be relieved of personal responsibility for an individual investment' s credit risk or market price changes, provided deviations from expectation are reported to the City Council in a timely fashion and the liquidity and the sale of investments are carried out in accordance with the terms of this Policy. The " Prudent Person Rule" states the following: Investments should be made with judgment 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 far investment, considering the probable safety of their capital as well as the probable income to be derived from the investment. Any person or firm hired or retained to invest, monitor, or advise conceming the Fund' s investment program shall be held to the higher standard of " Prudent Expert". The standard shall be that in investing and reinvesting moneys and in acquiring, retaining, managing, and disposing of investments of these funds, the contractor shall exercise: the judgment, care, skill, prudence, and diligence under the circumstances then prevailing, which persons of prudence, discretion, and intelligence, acting in a like capacity and familiar with such matters would use in the 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 Fund' s investment process shall refrain from personal business activity that could conflict with proper execution of the investment objectives, or which could impair their ability to make impartial investment decisions. Charter Officers and employees shall disclose to the Finance Director any material personal financial /investment positions that could be related to the performance of the Fund' s investments. 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, collateraVdepository 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 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 Fund' s investments must meet the following qualifications: A. A bank, insurance company, or investment adviser as defined by the Investment Advisers Act of 1940. Page 7 of 12 Ordinance 1876, Adopted March 12, 2013  City of Fort Walton Beach, FL BEAL MEMORIAL CEMETERY INVESTMENT POLICY B. Provide detailed information on the history of the firm, 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 Fund shall provide written acknowledgement of receiving a current copy of the Fund' s Investment Policy. XVIL AUTHORIZED PORTFOLIO MANAGERS The Investment Advisor( s) shall prudently select appropriate Portfolio Managers to invest the assets of the Fund. Portfolio Managers must: A. Provide historical quarterly performance data compliant with Global Investment Performance Standards GIPS, Securities & Exchange Commission ( " SEC "), and Financial Industry Regulatory Agency FINRA ") rules, as appropriate. B. Provide detailed information on the history of the firm, key personnel, support personnel, key clients, and fee schedule ( including most favored nation clauses). This information can be a copy of a recent Request for Proposal ( °RFP ") completed by the Portfolio Manager or regulatory disclosure. C. Clearly articulate the investment strategy that will be followed and document that the strategy has been successfully adhered to over time. D. Meet all of the following requirements: 1. Regional dealers qualified under Securities and Exchange Commission Rule 15C3 - 1 ( uniform net capital rule) 2. Assets under management of no less than $ 500 million 3. Registered as a dealer under the Securities Exchange Act of 1934 4. Member of the National Association of Dealers ( NASD) 5. Registered to sell securities in Florida 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 Portfolio Managers conducting investment transactions on behalf of the Fund shall provide written acknowledgement of receiving a current copy of the Fund' s Investment Policy. XVIII.