Fort Walton Beach Resolution — 00-24-Investment Policy/Procedures — reading text

o o RESOLUTION 2000- 24 A RESOLUTION ADOPTING A POLICY FOR THE INVESTMENT PROCEDURES OF THE CITY OF FORT WALTON BEACH AS PROVIDED FOR IN SECTION 218.415 F. S.; PROVIDING FOR REPEAL OF RESOLUTION 95- 29 AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Fort Walton beach, both now and in the past, has public funds in excess of the amounts needed to meet current expenses, and WHEREAS, interest income from such revenue has enhanced the City' s financial position in the past and is expected to provide additional revenue in the future, and WHEREAS, Florida State Statute 218.415 requires that certain investment activity by a unit oflocal government be consistent with a written investment plan, and WHEREAS, authorized investments identified in Florida State Statute 218.415 ( 16) are in the best interest of the City of Fort Walton Beach and its Citizens. NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT WALTON BEACH, FLORIDA: The City of Fort Walton Beach, Florida Investment Policy It is the policy of the City of Fort Walton Beach, Florida to invest funds in a manner, which will secure the safety of principal while meeting daily cash flow demands. The optimization of investment shall be secondary to the requirements for safety and liquidity. 1.0 SCOPE This investment policy applies to all financial assets of the City of Fort Walton Beach, excluding Pension Funds. These funds are accounted for in the City' s Comprehensive Annual Financial Report and include the following: General Fund, Capital Projects Fund, Special Revenue Funds, Enterprise Funds, and Trust and Agency Funds. 2. 0 STAUTORY AUTHORITY The investment oflocal government surplus funds is provided for in Florida State Statute 218.415. 3. 0 AUTHORIZED PERSONS The City's Finance Director or designee of the Finance Director and/or City Manager is authorized to invest and reinvest surplus public funds ()f the City in accordance with this policy and Florida State Statute 218- 415. 4. 0 INVESTMENT OBJECTIVES The primary objectives, in order of importance, of the City of Fort Walton Beach' s investments are: a) Safety of Principal. Safety is the primary objective of the investment program. Investments of Fort Walton Beach shall be undertaken in a manner that seeks to ensure the preservation of 1-  o o capital. To attain this objective, diversification is required in order to offset potential losses on securities and that these losses do not exceed the income generated from the remainder of the portfolio. b) Liquidity. The City of Fort Walton Beach' s investments will remain sufficiently liquid to enable the City to pay obligations as they come due. c) Investment Income. The City of Fort Walton Beach' s investments shall be designed with the objective of attaining a rate of return comparable to that of the market, taking into account the City' s the safety of principal and the liquidity of the investments. 5. 0 PEFORMANCE MEASUREMENT On at least a quarterly basis, the Finance Director will provide to the City Manager and the City Council a performance report indicating each type of investment instrument and their return. This information will be analyzed to guide the Finance Director in the mix of investments for the following period and as various investments mature allowing for reallocation. 6.0 PRUDENCE AND ETmCAL STANDARDS The City of Fort Walton Beach hereby adopts the Prudent Person Rule, which states that: Investments should be made with judgment and care, under circumstances prevailing, which persons ofprudent, 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 from the investment." 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. 7. 0 AUTHORIZED INVESTMENTS The City of Fort Walton Beach is required by Statute to invest any surplus public funds in the City' s control or possession in the following manner: a) The Local Government Surplus Funds Trust Fund or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act as provided in Florida Statute Chapter 163, Section 01. b) Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency. c) Interests bearing time deposits or savings accounts in qualified public depositories as defined in Florida Statute Chapter 280, Section 02. d) Direct obligations of the United States Treasury. e) Federal agencies and instrumentalities. f)Securities of, or other interests in, any open- end or close- end management-type investment company or investment trust registered under the Investment Company Act of 1940, 15 U.S. C. ss. 80a- 1 et seq., as amended from time to time, provided that the portfolio of such investment company or investment trust is limited to obligations of the United States Government or any agency or instrumentality thereof and to repurchase agreements fully collateralized by such 2-  o o United States Government obligations, and provided that such investment company or investment trust takes delivery of such collateral either directly or through an authorized custodian. g) Other investments authorized by law or by ordinance for a county or a municipality. h) Other investments authorized by law or by resolution for a school district or a special district. 8. 0 MATURITY AND LIQUIDITY REQUIREMENTS The investment portfolio shall be structured, to the extent possible; to match investment maturities with known cash needs and anticipated cash flow requirements. 9. 0 PORTFOLIO COMPOSITION The following investment policy guidelines are adopted: a) Collective Investment Assets of any of the funds may be invested in collective investment pools run and managed by other public bodies and banks. However, no such investment shall be made in a pool where the investment objectives and restrictions differ from the investment objectives listed in Section 2. 0 of the statement of investment policy, nor should any investments be made in a fund that engages in market timing or anticipating interest rate changes or that uses derivatives or other securities other than as a hedge against interest rate risk. b) Mutual Funds/Money Markets Investment in Money Markets must be on a non- fluctuating basis ( dollar in - dollar out) and should have a life ofless than ninety ( 90) days. Money Market investors will supply information on a weekly basis for review oversight to two major rating agencies, and on an annual basis a formal review. Investment in shares of mutual investment funds may be made if the investments meet the same restrictions those of collective investment pools described in Section 6, paragraph a. In as addition,purchase of these funds must not result in payment of a purchase premium or commission. The investment advisor must be registered with the Securities and Exchange Commission ( SEC)as an investment advisor. c) Cash Holdings Each portfolio will hold sufficient cash equivalent investments to ensure known obligations for the next six months. Idle cash will be invested to the fullest extent practicable in interest- bearing investments. d) Operating Expense Portfolio Permissible investments for the Operating Expense Portfolio are: 1) Bank checking accounts, time deposits, or certificates of deposits subject to the $ 100, 000 Federal Deposit Insurance Corporation (FDIC)limit or collateralized. 2) U. S. Treasury obligations with maturities of one year or less. 3) U. S. Government agency papers with a maturity of one year or less. 4) Commercial paperrated A11P1 by Moody' s and Standard and Poor. 3-  o o 5) Bankers acceptances. 6) Money market mutual funds that restrict investments to short-term U.S. Treasury and Agency securities. 7) State of other government agency collecting investment pools, where the investment policies are compatible with those of the City of Fort Walton Beach. The following transaction is optional and should be make with appropriate restrictions: 8) Loans with an agreement for the collateral to be repurchased by the borrower ( repurchase agreements from the perspective of the public body), with a maturity not to exceed six months; the amount of such instruments will not exceed 10 percent of the market value of theportfolio. Acceptable collateral for repurchase agreements are U.S. Treasury and Agency securities. e) Capital Expenditure Portfolio Permissible investments for the Capital Expenditure Fund are all investments permitted for the Operating Expense Fund, except maturities may be extended to five years, provided the duration of the portfolio does not exceed two years and sufficient liquidity is available to meet major outlays.