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HomeMy WebLinkAboutCash Management and Investement Policy TOWN OF ITHACA CASH MANAGEMENT and INVESTMENT POLICY I. SCOPE This cash management and investment policy applies to all moneys and other financial resources available for investment on of the Town of Ithaca. II. OBJECTIVES The primary objectives of the Town of Ithaca's Cash Management and Investment Policy are, 1. conformance with federal, state and other legal requirements; 2. to adequately safeguard all cash principal; 3. to provide sufficient liquidity to meet all operations; 4. and to obtain a reasonable and safe rate of market yield. III. DELEGATION OF AUTHORITY The governing town board's responsibility for administration, and monitoring of the Town's Cash Management and Investment Policy is delegated to the Town's Chief Fiscal Officer (which is the Town Supervisor) and the Town Budget Officer for the specific reason that is these Town Officers that have day-to-day custody of all Town money. This custodianship shall include adequate and practicable internal controls that will provide satisfactory levels of accountability within the Town's accounting and financial records and reports. IV. PRUDENCE Everyone who is involved in the cash management and investment process is expected to act responsibly as custodians of the public trust and will avoid any transactions which might impair public confidence in the Town of Ithaca to administrate any/or govern effectively. V. DIVERSIFICATION It is the policy of the Town of Ithaca to diversify it's cash deposits and investments whenever practicable and to the benefit of the Ithaca Town community by institution, by both investment and account type and maturity scheduling. 1 VI. INTERNAL CONTROLS It is the policy of the Town of Ithaca for all moneys collected by any officer or employee of the Town of Ithaca to give such funds to the Town's Chief Fiscal Officer or Town Budget Officer who shall deposit such funds within three (3) business days, or within a time period specified by law, whichever is shorter. The Town's Chief Fiscal Officer and Town Budget Officer or any other employee or agent having custody of Town moneys is responsible for maintaining effective internal controls in safeguarding the cash assets of the Town of Ithaca against loss. Such transactions are to be recorded properly in the Town's accounting banking records. VII. DESIGNATION OF DEPOSITARIES The banks and trust companies authorized for depositing of Town moneys and investments shall be annually designated under resolution by the governing town board. VIII. COLLATERALIZING DEPOSITS General Municipal Law, section 10 provides for all deposits of the Town of Ithaca, including certificates of deposits, money market accounts, savings accounts, demand accounts that are in excess of the amount insured under those provisions of the Federal Insurance Deposit Act shall be secured: 1. By a pledge of "eligible securities" with an aggregate "market value", or provided by General Municipal Law, section 10, equal to the aggregate amount of deposits as designated in Appendix A of this policy. IX. SAFEKEEPING and COLLATE RALIZATION Eligible securities used for collateralizing the deposits of the Town of Ithaca shall be held by the bank or a third party custodian in the name of the Town of Ithaca subject to the terms and conditions of a security and custodial agreement. The security agreement shall provide that eligible securities are being pledged to secure the Town of Ithaca deposits together with agreed upon interest, if any, and any costs or expenses arising out of the collection of such deposits upon default. It shall also provide the conditions under which securities may be sold of substituted or released and the events which enable the Town of Ithaca to exercise its right against the pledged security(ies). In the event that the securities are not registered or inscribed in the name of the Town of Ithaca, such security(ies) are to be delivered and transferred in a suitable form to the Town of Ithaca or its custodial bank. 2 The custodial agreement is to provide that securities held by the bank or trust company, agent or custodian for the Town of Ithaca, will be kept in a separate account, apart from the general assets of the custodial bank, the bank, trust company or agent. In brief, these securities are not to be commingled with the assets of the financial institution. The agreement will also instruct and direct that the custodian shall confirm the receipt, substitution or release of securities. The agreement will also identify the frequency for valuing those collateral securities held for the benefit of the Town of Ithaca. X. PERMITTED INVESTMENTS The Chief Fiscal Officer, treasure or any other officer who has custody of municipal money to invest funds to invest idle funds not needed to meet immediate expenditures. The following types of investments are: - Special time deposit. - Certificate of deposit. - Obligations of the United States of America. - Obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by the United States of America. - Obligations of the State of New York. - With approval from the State Comptroller, obligations issued pursuant to Local Finance Law, section 24 & 25 by any municipality, school district or other municipality corporation. - Obligations of public authorities, public house authorities, urban renewal agencies and industrial development agencies where general State statues governing such entities or whose specific enabling legislation authorizes such investments. - Certificate of Participation (COPs) issued pursuant to General Municipal Law, section 109b, and - Obligations of this local government, but only with moneys in a reserve fund established under General Municipal Law, sections 6-c, 6-d, 6-e, 6-g, 6-h, 6-j, 6-k, 6-I, 6-m or 6-n. The State Comptroller directs that all investments are payable or redeemable at the option of the Town of Ithaca within such times as the proceeds will be needed to meet expenditures for which the moneys were initially provided and, when obligations have been purchased with the proceeds of bonds or notes, they too will be payable or redeemable at the option of the Town of Ithaca within two years of the date of purchase. XI. AUTHORIZED FINANCIAL INSTITUTIONS The Town of Ithaca will annually under separate resolution designate the Town Official Depositories for the purpose of depositing and investing Town funds. 3 The may also establish, if desired, appropriate limits to the amount of funds that can be invested in any or specific financial institution. All financial institutions doing business with the Town of Ithaca must be credit worthy. Each financial institution at the discretion of the Chief Fiscal Officer or other Officer having custody of Town funds may request the Consolidated Report of Condition (financial statement commonly referred to as the Call Report) of any bank or financial institution doing business with the Town of Ithaca. The Chief Fiscal Officer and the Town Budget Officer recommend that the governing town board annually designate under separate resolution those depositaries, and other financial custodians of town funds annually. 4 CASH MANAGEMENT and INVESTEMENT POLICY FOR THE TOWN OF ITHACA Schedule of Eligible Securities (1) Obligations issued, or fully insured or guaranteed as to the payment of principal and interest by the United States of America, an agency thereof or a United States government sponsored corporation. (2) Obligations issued or fully insured or guaranteed by the State of New York, obligations issued by a municipal corporation, school district or district corporation of such State or obligation of any public benefit corporation which under a specific State statue may be accepted as security for deposit of public moneys. (3) Obligations of counties, cities, and other governmental entities of a state other than New York State, having the power to levy taxes that are backed by the full faith and credit of such government entity and rated in one of the three highest rating categories by at least one (e.g. Moody's) nationally recognized statistical rating organizations. (4) Any mortgage related securities, as defined in the Securities and Exchange Act of 1934, as amended, which may be purchased by banks under the limitations established by bank regulatory agencies. 5