HomeMy Public PortalAboutORD12536 Al
BILL NO. 96-93
SPONSORED BY COUNCILMAN
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF JEFFERSON, MISSOURI, ENACTING AN
INVESTMENT BANKING POLICY.
BE IT ENACTED BY THE COUNCIL OF THE CITY OF JEFFERSON, MISSOURI, AS
FOLLOWS:
Section 1. The document entitled Investment Policy dated October 22, 1996,
and attached he as Exhibit A,is hereby adopted as the official investment policy for the
City of Jefferson.
Section 2. This ordinance shall be in full force and effect from and after the date of
lits passage and approval.
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Passed: �6 —� �" Approved: 0
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Presiding Officer Mayor
ATTEST: APPRO D AS FORM:
Cit Clerk ity Counse or
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City of Jefferson, Missouri
INVESTMENT POLICY
Investment Policy Summary
The City of Jefferson,Missouri,as an organization established to serve and
protect the interest of its citizens,has as one of its many responsibilities,the .,
proper management of money entrusted to its care. The stipulations of this policy
are designed to allow good management of those funds by investment so they will
work for the good of the citizens,while keeping in mind that maintenance of the
principal is more critical and a higher priority than any consequential gain that
might be made. With the language and resulting controls established herein,both
objectives should be addressed in the best possible fashion.
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This investment policy for the City shall be reviewed by the Council on a
periodic basis after its adoption.Any changes must be approved by the Council.
I. Policy
It is the policy of the City to invest public funds in a manner which will provide
maximum security of capital,meet daily cash flow demands and earn a market
rate of return on investment for like maturities and securities instruments;while
i conforming to all applicable statutes governing the investment of public funds.
II. Scope
Funds included in the investment policy are accounted for in the City's
Comprehensive Annual Financial Report and include:
1) General Fund
2) Special Revenue Funds
3) Debt Service Funds
4) Capital Projects Funds
5) Enterprise Funds
6) Internal Service Funds
7) Trust&Agency Funds
{ Exceptions to the above include:
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a) Investments in employees'Deferred Compensation plans
b) Public not-for-profit corporations created by the City under Chapter 355,or
other sections of the revised statutes of Missouri 1986, as amended, for the
purposes of issuing tax-exempt debt instruments. Permitted investments are
identified within the issuance documents and agreements for specific issues and
approved by the corporation Board of Directors.
c) Investments of Bond Proceeds. The agents of our trust agreements for debt
issues will,with the advice and consent of the Finance Director, invest such
j funds as are available in reserve accounts entrusted in their care per the
u i applicable debt indenture.
III. Diversification
The City's investments will be diversified to minimize the risk of loss
resulting from over concentration of assets in(1) a specific investment type,(2)
a specific issuer or(3) a specific maturity. The following guidelines represent
limits established for diversification by instrument:
Diversification of Percent of Portfolio
Investments'yp.e_and"Issuer minimum—maximum
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U.S Treasury Obligations 5%-100%
U.S.Government Agency Securities
and Instrumentalities of Government 0%-80%
Certificates of Deposit(CD's) 0%-50%
Repurchase Agreements 5%- 100%
Full faith and credit obligations of the State
or any Missouri local governmental entity 0%-25%
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IV. Delegation of Authority
Authority to manage the investment program is granted to the Director of
Finance.
V. Standards of Care
1. Prudence
The standard of prudence to be used by investment officials shall be the
"prudent person"standard and shall be applied in the context of managing an
overall portfolio.Investment officers acting in accordance with written
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procedures and this investment policy while exercising due diligence shall not
be held personally responsible 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.
Investments shall be made with judgment and care,under circumstances then
I+ prevailing,which persons of prudence,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 r5
to be derived.
The"prudent person"concept discourages speculative transactions. It attaches
primary significance to the preservation of capital,and secondary importance
to the generation of income and capital gains. The "prudent person" is
expected to be a reasonably well informed person,not a professional investor
or market-maker,who is obligated to act responsibly.
VI. Investments,Safekeeping and Custody
1. Permissible Investment Types
The following investments will be permitted by this policy:
A. U.S.Treasury obligations
B. U.S.Government Agency Securities and instrumentalities of Government
sponsored corporations
C. Repurchase agreements(Repo's)
D. Certificates of deposit(CD's)
E. Any full faith and credit obligations of the United States Government
iF. Any full faith and credit obligations of the State of Missouri
G. Any full faith and credit obligations of a Missouri local government unit
1 H. Missouri local government investment pools "
2. Credit Ratings
Except for bonds of the City of Jefferson,any bonds accepted for investment
or pledged as collateral shall have a nationally recognized investment grade
("A"or better)credit rating.
VII. Reporting
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�Ir ' The Finance Director shall prepare an investment report at least quarterly,
including a succinct management summary that provides a clear picture of the ti
status of the current investment portfolio and transactions made over the ,
stated period. This management summary will be prepared in a manner
which will demonstrate that investment activities during the reporting period
have conformed to the investment policy.The report will include the
following:
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A. An listing of individual securities held at the end of the reporting period,
summarized by maturity date and investment category with applicable
percentage to total investments.
j B. Unrealized gains or losses resulting from appreciation or depreciation by
listing the cost and market value of securities(i.e.,marking to market).
` C. Average weighted yield to maturity of the portfolio as compared to an
r applicable benchmark.
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City of Jefferson, Missouri
j , INVESTMENT POLICY
Table of Contents
Page-Number
Investment Policy Summary 1
I. Policy 1 E
II. Scope 1
III. Objectives
1. Legality 2
2. Safety 2
3. Liquidity 2
' 4. Yield 2
5. Diversification
3
IV. Delegation of Authority 4
V. Standards of Care
1. Prudence 4
2. Ethics and Conflicts of Interest 4
3. Internal Controls 5
VI. Investments, Safekeeping and Custody
1. Qualified Institutions 5
2. Permissible Investment Types 6
3. Collateral ization 6
4. Delivery vs.Payment 7
5. Credit Ratings 7 f.
VII. Reporting
1. Methods 7
2. Performance Standards g
VIII. Transition Exemption g
Glossary q
Exhibits
1. Banking Institution Selection Criteria 13
2. Securities Dealers Selector Criteria 14 '
3. Missouri s ouri S
tare Statues
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4. Jefferson City Charter-Article VII,Section 7.1.7 16 1
Jefferson City Code-Article X,Section 2.354 1
' 5. Example Reports
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Investment Policy Summary
The City of Jefferson,Missouri,as an organization established to serve and
protect the interest of its citizens,has as one of its many responsibilities,the
proper management of money entrusted to its care. The stipulations of this policy
are designed to allow good management of those funds by investment so they will
work for the good of the citizens,while keeping in mind that maintenance of the
principal is more critical and a higher priority than any consequential gain that
might be made. With the language and resulting controls established herein, both J
objectives should be addressed in the best possible fashion.
This investment policy for the City shall be adopted by resolution of the City
Council and reviewed by the Council Finance Committee on a periodic basis.
Except as otherwise provided,any changes must be approved by the City
Council.
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I. Policy
It is the policy of the City to invest public funds in a manner which will provide {
maximum security of capital,meet daily cash flow demands and earn a market
rate of return on investment for like maturities and securities instruments;while J
conforming to all applicable statutes governing the investment of public funds.
II. Scope ti
Funds included in the investment policy are accounted for in the City's
j Comprehensive Annual Financial Report and include:
1) General Fund
2) Special Revenue Funds
3) Debt Service Funds
4) Capital Projects Funds
5) Enterprise Funds
6) Internal Service Funds
7) Trust&Agency Funds
Exceptions to the above include:
a) Investments in employees'Deferred Compensation plans
b) Public not-for-profit corporations created by the City under Chapter 355, or
r' other sections of the revised statutes of Missouri 1986,as amended,for the
purposes of issuing tax-exempt debt instruments. Permitted investments are
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identified within the issuance documents and agreements for specific issues and
approved by the corporation Board of Directors.
ic) Investments of Bond Proceeds. The agents of our trust agreements for debt
I issues will, with the advice and consent of the Finance Director, invest such
fluids as are available in reserve accounts entrusted in their care per the
applicable debt indenture.
II1. Objectives
The primary objectives, in priority order,of the City of Jefferson's investment
activities shall be,
1. Legality
The City shall only invest in "Permissible Investment"securities (see section
VI)and will insure that all legal requirements regarding investing and
collatcralizing of public funds are met.
2. Safety
Safety of principal is the foremost objective of the investment program.
Investments shall be undertaken in a manner that seeks to ensure the
preservation of capital in the overall portfolio. Therefore,diversification is
requited in order that potential losses on individual securities do not exceed
the income generated from the remainder of the portfolio. The objective will
be to mitigate credit and interest rate risks. Under no circumstances will the
City invest it:derivatives,or will the City allow the use as collateral any
investments wbicb includes derivatives.
3. Liquidity
The City's investment portfolio shall remain sufficiently liquid to meet all
operating requirements that may be reasonably anticipated.This is
accomplished by structuring the portfolio so that securities mature concurrent
with cash needs to meet anticipated demands. To control risks of liquidity,at
all times the City of Jefferson,Missouri should maintain a minimum of 10%
of the total portfolio in highly marketable U.S.Treasury Bills or overnight
repurchase agreements.
4. Yield
The City's investment portfolio shall be designed with the objective of
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attaining a market average rate of return throughout budgetary and economic
cycles,taking into account investment type, risk,maturity and location
constraints,and liquidity needs.Return on investment is of least importance
compared to the safety and liquidity objectives described above.The core of
investments are limited to relatively low risk securities in anticipation of
earning a market average return relative to the risk being assumed. Securities
shall not be sold prior to maturity with the following exceptions:
A. a declining credit security could be sold early to minimize loss of principal;
B. a security swap would improve the quality,yield,or target duration in the
portfolio;or
C. liquidity needs of the portfolio require that the security be sold.
5. Diversification
jThe City's investments will be diversified to minimize the risk of loss
i resulting from over concentration of assets in(1) a specific investment type, (2)
j a specific issuer or(3) a specific maturity. The following guidelines represent
i limits established for diversification by instrument:
Diversification of Percent of Portfolio
Investment—Type_and.Issuer minimum=maximum i
U.S Treasury Obligations 5%-100%
y' U.S.Government Agency Securities
and Instrumentalities of Government 0%-80%
Certificates of Deposit(CD's) 0%-50%
Repurchase Agreements 5%-100%
Full faith and credit obligations of the State
or any Missouri local governmental entity 0%-25%
Diversification_of.Maturities
To the extent possible,the City will attempt to match its investments with
anticipated cash flow requirements,taking into account large(payroll,bond)
payments,major routine expenditures,capital expenditures as well as
considering significant anticipated revenue(property tax,utility tax,sales tax).
Generally,the City should purchase investments with maturities of less than I `
two(2)years however,it may invest up to 75%of the lessor of targeted or `
actual unreserved fund balances of all included investment funds in maturities
of up to five(5)years.
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IV. Delegation of Authority
Authority to manage the investment program is granted to the Director of
Finance. At the discretion of the Director,certain staff members of the
Finance Department may assist with various investment activities.Procedures
include the use of safekeeping agreements,investment accounting,repurchase
agreements,wire transfer agreements,collateral/depository agreements and
banking services contracts.No person may engage in an investment
transaction,except as provided under the terms of this policy and the '
procedures established by the Director of Finance.The Director of Finance
shall be responsible for all transactions undertaken and shall establish a system
of controls to regulate the activities of subordinate officials.
V. Standards of Care
1. Prudence
The standard of prudence to be used by investment officials shall be the
"prudent person" standard and shall be applied in the context of managing an
overall portfolio.Investment officers acting in accordance with written
procedures and this investment policy while exercising due diligence shall not
be held personally responsible 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.
Investments shall 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 for investment,
considering the probable safety of their capital as well as the probable income
to be derived.
The"prudent person"concept discourages speculative transactions. It attaches
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primary significance to the preservation of capital,and secondary importance
to the generation of income and capital gains. The"prudent person" is ,
expected to be a reasonably well informed person,not a professional investor
or market-maker,who is obligated to act responsibly.
2. Ethics and Conflicts of Interest
Officers and employees involved in the investment process shall refrain from
personal business activity that could create an appearance of impropriety or
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w could conflict with the proper execution and management of the investment
i program,or which could impair their ability to make impartial decisions.
•,, Employees and investment officials shall disclose to the Director of Finance
r any material interests in financial institutions with which they conduct
business.They shall further disclose any personal financial/investment
positions that could be related to the performance of the investment portfolio.
Employees and officers shall refrain from undertaking personal investment
r transactions with the same individual with whom business is conducted on
' behalf of the City.
3. Internal Controls
The Director of Finance is responsible for establishing and maintaining an
internal control structure designed to ensure that the assets of the City are
protected from loss,theft,misuse,employee error,misrepresentation by third
parties or in anticipated changes in financial markets. The internal control
structure shall be designed to provide reasonable assurance that these
objectives are met.The concept of reasonable assurance recognizes that (1) the
cost of a control should not exceed the benefits likely to be derived, and(2) the
valuation of costs and benefits requires estimates and judgments by
management.
The security portfolio is subject to an annual review by the City's independent
auditor. This review will provide internal control by assuring compliance
with established policies and procedures.
VI. Investments,Safekeeping and Custody
1. Qualified Institutions
A. Investment transactions will be made through the City's Banking Services
provider or other financial institutions or securities dealers that have been
approved by the Director of Finance in accordance with the criteria listed in
Exhibit I&II.
B. The City shall maintain a listing of financial institutions which are approved
as depositories for investment purposes. Banks shall provide their most recent
Consolidated Report of Conditions("call" report) at the request of the City.
~ At a minimum,the City shall conduct an annual evaluation of each bank's
creditworthiness to determine whether it should be on the"Qualified
i Institution" listing. Securities dealers not affiliated with a bank shall be
required to have an office located in Jefferson City,Missouri and be fully
licensed and registered NASD Broker/Dealers.
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i C. The City shall follow a"competitive bid" process in awarding Certificates of
Deposit. Bids will be requested for instruments in$100,000 units which meet
maturity requirements. The City will award the bid based on the highest rate
of return within the maturity required and within the parameters of these
policies. Bid awards may be split among bidders to obtain an overall greater
rate of return. Records will be kept of the bids offered,the bids accepted and a
brief explanation of the decision which was made regarding the investment.
All bids must be approved by the Director of Finance before a purchase can be
made. The minimum acceptable bid rate must exceed the comparable rate
available on U.S.Treasury securities for the same maturity.
2. Permissible Investment Types
The following investments will be permitted by this policy:
A. U.S.Treasury obligations
B. U.S. Government Agency Securities and instrumentalities of Government
sponsored corporations
C. Repurchase agreements(Repo's)
D. Certificates of deposit(CD's)
E. Any full faith and credit obligations of the United States Government
F. Any full faith and credit obligations of the State of Missouri
G. Any full faith and credit obligations of a Missouri local government unit
H. Missouri local government investment pools
3. Collateralization
7. A. In accordance with Missouri state law(Sections 110.010 and 110.020
RSMo),collateralization will be required on all funds deposited including
certificates of deposit.
B. The securities which may be accepted as collateral,at the discretion of the
Director of Finance are outlined below:
1. Bills,notes, bonds or other direct obligations guaranteed as to payment
of principal and interest by the government of the United States or any
agency or instrumentality thereof.
2. Bonds of the State of Missouri.
3. Bonds of any city in this state having a population of not less than
twenty-five thousand(25,000)which are payable from an unlimited
tax.
4. Bonds of any county in this state issued and sold pursuant to an
election therefore and which are payable from an unlimited tax.
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5. The approved registered bonds of any school district situated in any
city in this state with a population of not less than twenty-five
thousand(25,000) and payable from an unlimited tax.
6. Any revenue bonds issued by the City of Jefferson,Missouri. i
C. Collateral shali have a market value at all times equal to one hundred(100)
percent of the amount of the City investment less any amounts insured by
the Federal Deposit Insurance Corporation,or other governmental agency
performing similar functions.
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jD. Collateral will be held by the City,a Federal Reserve Bank or other
j banking institution or depository as trustee,with whom the City has a
current Custodial Agreement. A clearly marked evidence of ownership
(safekeeping receipt)must be supplied to the City. Execution and return
of the receipt by the City is required for any transfer,substitution or
i release of pledged securities.
4. Delivery vs.Payment
All trades where applicable will be executed by delivery vs.Payment(DVP).
This ensures that securities are deposited in the eligible financial institution
prior to the release of funds.Securities will be held in the City's name by a
third party trust custodian designated by the Director of Finance and
evidenced by safekeeping receipts.
5. Credit Ratings i
Except for bonds of the City of Jefferson,any bonds accepted for investment
or pledged as collateral shall have a nationally recognized investment grade
("A"or better) credit rating.
VII. Reporting
1. Methods
The Finance Director shall prepare an investment report at least quarterly,
including a succinct management summary that provides a clear picture of the
status of the current investment portfolio and transactions made over the
j stated period. This management summary will be prepared in a manner
!! which will demonstrate that investment activities during the reporting period
have conformed to the investment policy.The report will include the
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A. An listing of individual securities held at the end of the reporting period,
summarized by maturity date and investment category with applicable
tr percentage to total investments.
' I resultin from appreciation or depreciation by Unre alized gains or losses
" listing the cost and market value of securities(i.e., marking to market).
C. Average weighted yield to maturity of the portfolio as compared to an
applicable benchmark.
2. Performance Standards
The City's investment strategy will be based on passive portfolio management ;
in accordance with the parameters specified within this policy.Passive
management is designed to obtain a market average rate of return during a
market/economic environment of stable interest rates,taking into account the
City's investment location and risk constraints,and cash flow needs;while
limiting the amount spent on investment personnel and training.
+t For management purposes,and for City Council review,the total rate of j
i return will be calculated for the portfolio and compared to appropriate
security market indexes as established by the Finance Director.
VIII. Transition Exemption
Any investment held on the effective date of this policy that does not meet the
guidelines of this policy shall be exempted from the requirements of this policy.
At maturity or liquidation,such monies shall be reinvested only as provided by
this policy. t
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GLOSSARY
AGENCIES: Federal agency securities.
BID: The bid offered for securities.
BROKER: A broker brings buyers and sellers together for a commission paid by the
initiator of the transaction or by both sides;he does not position.In the money market,
brokers are active in markets in which banks buy and sell money and in inter-dealer markets.
COLLATERAL: Securities,evidence of deposit or other property which a borrower
pledges to secure repayment of a loan.Also refers to securities pledged by a bank to secure
deposits of public monies,
COMPREHENSIVE ANNUAL FINANCIAL REPORT(CAFR): The official annual
report for the City of Jefferson,Missouri. It includes combined statements and basic
financial statements for each individual fund and account group prepared in conformity with
Generally Accepted Accounting Principles(GAAP).It also includes supporting schedules
necessary to demonstrate compliance with finance-related legal and contractual provisions,
extensive introductory material,and a detailed Statistical Section.
CERTIFICATE OF DEPOSIT(CD): A time deposit with a specific maturity and
interest rate evidenced by a certificate.Large-denomination CD's (over$100,000) are
typically negotiable.
COUPON: (a) The annual rate of interest that a bond's issuer, promises to pay the
bondholder on the bond's face value. (b)A certificate attached to a bond evidencing interest
due on a payment date.
DEALER: A dealer,as opposed to a broker,acts as a principal in all transactions,buying
and selling for his own account.
DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities:
I delivery versus payment and delivery versus receipt(also called"free").Delivery versus
payment is delivery of securities with an exchange of money for the securities.Delivery
versus receipt is delivery of securities with an exchange of a signed receipt for the securities.
DISCOUNT:The difference between the cost price of a security and its value at maturity
! when quoted at lower than face value.A security selling below original offering price shortly
after sale also is considered to be at a discount.
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DISCOUNT SECURITIES: Non-interest bearing money market instruments that are
'+t issued at a discount and redeemed at maturity for full face value,e.g.U.S.Treasury Bills.
DIVERSIFICATION: Dividing investment funds among a variety of securities offering
independent returns.
FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply
credit to various classes of institutions and individuals,e.g.,S&L's small business firms,
students,farmers,farm cooperatives,and exporters. i
FEDERAL FUNDS RATE: The rate of interest at which banks lend excess funds to other
banks. This rate is set by the Federal Reserve through open market operations.
FEDERAL RESERVE SYSTEM: The central banking system of the United States created
by Congress and consisting of a seven-member Board of Governors in Washington,D.C., 12
Regional Banks and about 5,700 commercial banks that are members of the system. ,
FEDERAL,DEPOSIT INSURANCE CORPORATION(FDIC): A federal agency that
insures bank deposits for public funds,currently up to$100,000 per time deposit and
$100,000 per demand deposit.
LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash
without a substantial loss of value. In the money market,a security is said to be liquid if the
,. spread between bid and asked prices is narrow and reasonable size can be done at those
quotes.
MARKET VALUE: The price at which a security is trading and could presumably be
purchased or sold.
MATURITY: The date upon which the principal or stated value of an investment becomes
due and payable.
MONEY MARKET: The market in which short-term debt instruments(bills,commercial
paper,bankers' acceptances, etc.)are issued and traded.
OPEN MARKET OPERATIONS: Purchases and sales of government and certain other
securities in the open market by the New York Federal Reserve Bank as directed by the
Federal Reserve Open Market Committee,in order to influence the volume of money and
credit in the economy. Purchases inject reserves into the bank system and stimulate growth
of money and credit;sales have the opposite effect. Open market operations are the Federal
Reserve's most important and flexible monetary policy tool.
PORTFOLIO: Collection of securities held by an investor.
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" PRUDENT PERSON RULE: An investment standard in which a trustee may invest in a
security if it is one which would be bought by a prudent person of discretion and intelligence
i who is seeking a reasonable rate of return and preservation of capital.
PRIMARY DEALER: A group of government securities dealers that submit daily reports
of market activity and positions and monthly financial statements to the Federal Reserve
Bank of New York and are subject to its informal oversight. Primary dealers include
Securities and Exchange Commission(SEC) registered securities broker-dealers,banks and a
few unregulated firms.
QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim
exemption from the payment of any sales or compensating use or ad valorem taxes under the
laws of this state,which has segregated for the benefit of the City eligible collateral having a
value of not less than its maximum liability and which has been approved by the City to
hold public deposits.
RATE OF RETURN: The yield obtainable on a security based on its purchase price or its
current market price. This may be the amortized yield to maturity on a bond or the current
income return.
REPURCHASE AGREEMENT(REPO): A holder of securities sells these securities to an
investor with an agreement to repurchase them at a fixed price and interest rate on a fixed
!� date. The security"buyer" in effect lends the"seller" money for the period of the agreement,
/ and the terms of the agreement are structured to compensate the "buyer"for this. Dealers
use repos extensively to finance their position. Exception: When the Federal Reserve is said
to be doing a repo,it is lending money and increasing bank reserves.
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SAFEKEEPING: A service to customers rendered by financial and other institutions
whereby securities and valuables of various types are held in trust in the institutions vault for
protection,usually under a custodial or safekeeping agreement.
SECONDARY MARKET: A market made for the purchase and sale of outstanding debt
issues following their initial distribution.
SEC RULE 15C3-1: See uniform net capital rule.
SECURITIES&EXCHANGE COMMISSION: Agency created by Congress to protect
investors in securities transactions by administering securities legislation.
SWAP: The exchange of securities,usually initiated by a dealer,for a realized profit greater
than if the security was held to maturity.
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TREASURY BILLS: A non-interest bearing discount security issued by the U.S.Treasury
to finance the national debt. Most bills are issued to mature in three months,six months,or
one year.
TREASURY BONDS: Long term U.S. Treasury securities having initial maturities of
more than ten years.
1 TREASURY NOTES: Intermediate term coupon bearing U.S. Treasury securities having
initial maturities from two to ten years.
YIELD: The rate of annual income return on an investment,expressed as a percentage. (a)
I INCOME YIELD is obtained by dividing the current dollar income by the current market
price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income
yield minus any premium above par or plus any discount from par in purchase price,with
the adjustment spread over the period from the date of purchase to the date of maturity of
the bond.
UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement
that member firms as well as nonmember broker-dealers in securities maintain a maximum
ratio of indebtedness to liquid capital of 15 to 1;also called net capital rule and net capital j
ratio. Indebtedness covers all money owed by a firm,including margin loans and
commitments to purchase securities. Liquid capital includes cash and assets easily converted I'
into cash.
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Exhibit 1
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j City of Jefferson,Missouri
BANKING INSTITUTION SELECTION CRITERIA
To receive any City of Jefferson,Missouri monies,all financial institutions must satisfy the
following criteria unless otherwise permitted in special programs,i.e.Linked "
deposits or citywide time deposits:
1. Jefferson City,Missouri location.
2. Federal or State Chartered banking institution.
3. Community Reinvestment Act evaluation rating:
j a) "satisfactory"or better for exams conducted on or after July 1, 1990.
b) "2"oi-better for exams conducted prior to July 1, 1990.
4. A Sheshunoff rating of 10 or more in at least one of the previous four(4) t
consecutive quarters.
{ 5. Provide evidence(affidavit)that there are no delinquent or outstanding
axes,
fees,fines or charges due to the City of Jefferson or the State of Missouri.
j 6. Execute the current depository trust agreement with the City.
The Banking Institution Selection Criteria may be revised by the Director of Finance.
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f Exhibit 2
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1F City of Jefferson,Missouri
SECURITY DEALERS SELECTION CRITERIA
To be selected as a qualified Security Dealer authorized to conduct City of Jefferson, F
Missouri security transactions,the following criteria must be satisfied:
kI 1. Jefferson,Missouri location.
2. Primary dealer as designed by the Federal Reserve Bank.Provide proof,copy
of registration,etc.
3. Fully licensed and registered NASD Broker/Dealers.
4. Clearance for City of Jefferson,Missouri occupational license,business
personal property tax,and other applicable taxes. Provide evidence that these
have been paid.
5. Submit for review the following:
` a) Provide a current audited financial statement.
b) Provide proof of State of Missouri registration.
c) Provide certification of having read City of Jefferson,Missouri investment
policy.
d) Provide three (3) references of current governmental entity investment
clients.
The Security Dealer Selection Criteria may be revised by the Director of Finance.
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EXHIBIT 3
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Missouri REVISED STATUTES 1994
CHAPTER 110 SECTION 110.010- 110.020.
PAGE 1406
DEPOSITARIES, GENERALLY
RSMo.8183 &8184
j 110.010.Deposits of public funds to be secured. The public funds of every
county,township,city,town,village,school district of every character,road district,sewer
district,fire protection district,water supply district,drainage or levee district,state hospital,
state schools for the mentally deficient,Missouri School for the Deaf,Missouri School for the
Blind, Missouri Training School for Boys,training school for girls,Missouri Veterans'
Home,Missouri State Chest Hospital,state university,Missouri state teachers' colleges,
Lincoln University,which are deposited in any banking institution acting as a legal
depositary of the funds under the statutes of Missouri requiring the letting and deposit of the
same and the furnishing of security therefor,shall be secured by the deposit of securities of
the character prescribed by section 30.270,RSMo,for the security of funds deposited by the
state treasurer.
2.The securities shall,at the option of the depositary banking institution, be
delivered either to the fiscal officer or the governing body of the municipal corporation or
other depositor of the funds,or by depositing the securities with another banking institution
or safe depositary as trustee satisfactory to both parties to the depositary agreement.The
trustee may be a bank owned or controlled by the same bank holding company as the
depositary banking institution.
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3.The rights and duties of the several parties to the depositary contract shall be
the same as those of the state and the depositary banking institution respectively under
Section 30.270,RSMo.If a depositary banking institution deposits the bonds or securities
with a trustee as above provided,and the municipal corporation or other depositor of funds
gives notice in writing to the trustee that there has been a breach of the depositary contract
and makes demand in writing on the trustee for the securities,or any part thereof,then the
trustee shall forthwith surrender to the municipal corporation or other depositor of funds a
sufficient amount of the securities to fully protect the depositor from loss and the trustee
shall thereby be discharged of all further responsibility in respect to the securities so
surrendered. r.
(RSMo 1939,§8183;A.L. 1955 p.735,A.L. 1959 S.B.77,A.L. 1961 p.463,A.L. 1971 i!
H.B.581,A.L. 1988 H.B. 1204)
ws
Missouri REVISED STATUTES 1994
{ CHAPTER 110 SECTION 110.010- 110.020.
PAGE 1406
DEPOSITARIES,GENERALLY
RSMo. 8183 &8184
110.020. Securities deposited,amount of. The value of the securities
deposited and maintained by a legal depositary under section 110.010 shall at all times be not
less than 100 percent of the actual amount of the funds on deposit with the depositary,less i
1 the amount, if any,insured by the Federal Deposit Insurance Corporation.
(RSMo 1939,§ 8184;A.L. 1959 S.B.77,A.L. 1973 S.B.66)
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EXHIBIT 4
JEFFERSON CITY-CHARTER
ARTICLE VII SECTION 7.1
ESTABLISHING FINANCIAL PROCEDURES
7. Fiscal Officer. The fiscal affairs of the city shall be the responsibility of the finance
department. The head of the finance department shall be designated the fiscal officer of ;
the city. Qualifications,duties and powers of the fiscal officer shall be set by ordinance.
JEFFERSON CITY-CODE
ARTICLE X,SECTION 2.354
FINANCE DEPARTMENT,FUNCTIONS OF THE DIRECTOR
A. Be responsible for the administration of the fiscal affairs of the city.
E. Maximize the investment of all city funds
ney of the city which may come into his hands,
I. He shall receive and safely keep all mo
and shall disburse the same only upon proper requests.
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