HomeMy Public PortalAboutORD16044BILL NO. 2019-137
SPONSORED BY: Councilman Mihalevich
ORDINANCE NO. l(o 044
AN ORDINANCE OF THE CITY OF JEFFERSON, MISSOURI, ENACTING AN
UPDATED INVESTMENT POLICY.
BE IT ENACTED BY THE COUNCIL OF THE CITY OF JEFFERSON, MISSOURI, AS
FOLLOWS:
Section 1. The document entitled Investment Policy dated May 21, 2020, and
attached hereto as Exhibit A, is hereby adopted as the office investment policy for the
City of Jefferson.
Section 2. This Ordinance shall be in full force and effect from and after the date
of its passage and approval.
Passed: � p 15.2020
Presiding Officer
ATTEST:
Approved:�-0
Mayor Carrie Tergin
APPROVED AS TO FORM:
City Cie City �An or
EXHIBIT A
City of Jefferson, Missouri
INVESTMENT POLICY
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 the 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.
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 conforming to all applicable
statutes governing the investment of public funds.
II. Scope
A. 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 and Agency Funds
Exceptions to the above include:
1
May 21, 2020
IV.
EXHIBIT A
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, 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 Bonds Proceeds. The agents of our trust agreements for
debt issues will, with the advice and consent of the Finance Director, invest such
funds as are available in reserve accounts entrusted in their care per the
applicable debt indenture.
B. Pooling of Funds
Except for cash in certain restricted and special funds, the City of Jefferson will
consolidate cash and reserve balances from all funds to maximize investment earnings
and to increase efficiencies with regard to investment pricing, safekeeping and
administration.
Investment income will be allocated to the various funds based on their respective
participation and in accordance with generally accepted accounting principles.
Diversification
The City's Investments will be diversified to minimize the risk of loss resulting from over
concentration of assets is (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
Investment Type and Issuer Minimum — Maximum
U.S. Treasury Obligations
0%-100%
U.S. Government Agency Securities and
Instrumentalities of Government
0%-80%
Certificates of Deposit (CDs)
0%-50%
Repurchase Agreements, Demand Deposit Accounts (DDAs),
or Negotiable Order of Withdrawal (NOW) Accounts
0%-100%
Full faith and credit obligations of the State or any
Missouri local government entity
0%-25%
Delegation of Authority
Authority to manage the Investment program is granted to the Director of Finance.
2
May 21, 2020
EXHIBIT A
V. Standards of Care
A. Prudence
The standard of prudence to be used by investment officials shall be the "uniform prudent
investor act" 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 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 the liquidity and the sale of securities are carried out in accordance with the
terms of this policy.
Investments shall be made with judgement 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 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.
B. Ethics and Conflicts of Interest
Officers and employees involved in the investment process shall refrain from personal business
activity that could conflict with the proper execution and management of the investment
program, or that could impair their ability to make impartial decisions. Employees and
investment officials shall disclose any material interests in financial institutions with which they
conduct business, in accordance with applicable laws. They shall further disclose any personal
financial/investment positions that could be related to the performance of the investment
portfolio.
VI. Investments, Safekeeping and Custody
A. Permissible Investment Types
The following investments will be permitted by this policy:
1. U.S. Treasury Obligations
2. U.S. Government Agency Securities and instrumentalities of Government
sponsored enterprises
3. Repurchase Agreements
4. Collateralized DDA or NOW Accounts
5. Certificates of Deposit (CDs)
6. Any full faith and credit obligations of the United States Government
7. Any full faith and credit obligations of the State of Missouri
8. Any full faith and credit obligations of a Missouri local government unit
9. Missouri local government investment pools
May 21, 2020
EXHIBIT A
B. Credit Ratings
Except for bonds of the City of Jefferson, any bonds accepted for investment or pledged
as collateral shall have a credit rating of "A" or better by a nationally recognized ratings
agency.
VII. Reporting
The Finance Director shall prepare an investment report at least annually, including a succinct
management summary that provides a clear picture of the status of the current investment
portfolio. This management summary will be prepared in a manner which will demonstrate that
investment activities during the reported period have conformed to the investment policy. The
report will include the following:
A. A listing of individual securities held at the end of the reporting period, summarized by
maturity date and investment category.
B. Percentage of the total portfolio which each type of investment represents.
C. The fair value of the portfolio. Fair values for investments are determined by the closing
market prices as reported by the custodian.
4
May 21, 2020