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8054RESOLUTION NO. 8,054 A RESOLUTION ADOPTING A NEW INVESTMENT POLICY FOR THE CITY OF LITTLE ROCK, ARKANSAS, REPEALING RESOLUTION NO. 6364; AND FOR OTHER PURPOSES. WHEREAS, the City last adopted an official investment policy on June 17, 1980; and WHEREAS, the current investment policy is not broad enough to permit the City to get the best investment return; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ROCK, ARKANSAS: SECTION 1. The Board of Directors of the City of Little Rock adopts as its investment policy the policy statement attached hereto as Exhibit "A" which is hereby made a part of this resolution. SECTION 2. This resolution shall be in full force and effect from and after its adoption and approval. SECTION 3. This resolution specifically repeals Resolution No. 6364 and all other resolutions and any policy statements inconsistent with this resolution. ADOPTED: November 15, 1988 AT APP ED: (tf CIT ' CL K JA CZECH YOR LOTTIE SHAC ELFORD APP D S F MARK STODOLA, CITY ATTORNEY 462 k-3.� 0 -9 INVESTMENT POLICY OF THE CITY OF LITTLE ROCK, ARKANSAS The goals and objectives of an investment policy for a City the size of Little Rock should be to assure that City funds are always protected and that all investments are in compliance with State law. Investments should be made in a manner to provide liquidity if needed without any loss of principal. The policy guidelines contained herein should provide direction to senior management and staff personnel who administer the investment program. It should also provide information to auditors and other interested parties as to how City investments are made. Of course the ultimate goal is to maximize interest earnings on City investments without jeopardizing any City monies. SCOPE: This policy shall apply to all monies held in City accounts that are not needed for near term payment of obligations. These monies shall be invested. While the policy applies to all funds under the control of the Board of Directors of the City of Little Rock, both now and in the future, it expressly does not refer to the Police, Fire and Municipal Judges Retirement Funds. While the Board recommends that a similar policy be followed by various boards and commissions of EXHIBIT A:80983 1 463 the City, this policy will not apply to those boards and commissions that do not receive a majority of their funding from budgeted City appropriations. SAFETY OF INVESTMENT: Safety of principal is the City's foremost objective. Each investment will be made in accordance with Arkansas statutes and City ordinances. Investments in U.S. Government securities will be purchased from the Little Rock Federal Reserve Bank and deposited in the City's Treasury Direct Account, or purchased by the City's depository banks and wired to the Treasury Direct Account the same day purchased. All invested funds not placed in U. S. government securities or secured by FDIC shall be collateralized 102% by U.S. Government securities or 120% by Arkansas municipal bonds which are direct obligation bonds; all such instruments must be authorized as collateral by Arkansas statutes. Evidence of required collateral will be furnished to the City Finance Director at the time investment is completed. It will be policy to transact business only with firms who are willing to meet all federal and state laws, and comply with the City's requirements for safekeeping, delivery, and receipt relative to collateralization instruments. LEGAL REQUIREMENTS: Investment Of City funds will be made only in compliance with Arkansas statutes which limit investments to U.S. Government and U.S. Government secured agency securities, bank CD's and Repurchase Agreements. EXHIBIT A:80983 2 464 NAM M M M M M M LIOUIDITY: As a result of uneven revenue collection and variances in budget and capital expenditures, the City's cash position fluctuates between highs and lows. This requires a substantial portion of the investment portfolio to be composed of highly liquid assets. Liquidity will be considered a priority while recognizing a desire to maximize yield. INTEREST YIELD: After requirements of safety, legal constraints, and liquidity have been satisfied, it is the policy of the City to maximize interest yields while ensuring that maturity dates coincide with projected expenditure needs. Furthermore, it will be a policy that all Little Rock investments will be open to competitive bidding. The City will place the investment with the bid providing the highest interest yield for the maturity required. Provided, however, if a government security having the same term is available with a yield over 1 /10th of 1% above the highest bank bid investment will be made in the government security. RESPONSIBILITY FOR INVESTMENTS: Management responsibility for investing City funds is hereby delegated to the Finance Director and Treasurer. He shall establish written procedures for operation of the investment program. These procedures shall include delegation of authority to persons responsible for executing investment transactions. The Finance Department shall be responsible for all transactions undertaken, and shall EXHIBIT A:80983 3 465 I` establish a system of controls to regulate activities of subordinates. RECORDS AND REPORT: Complete records of all investment transactions will be kept in the Little Rock Finance Department and will be open to inspection during normal business hours. Monthly reports, which show the amount of money invested, how invested, maturity date, and interest yields will be prepared by the Finance Director and submitted to the City Manager. GENERAL POLICY NONDEMAND ACCOUNT FUNDS: In order to keep administrative costs as low as possible, investments of less than $100,000 in any fund will be made through the current depository bank in either Repurchase Agreements or Government Securities. Repurchase agreements must be collateralized 100% with U.S. Government or its agency securities or 120% in face value of Arkansas municipal bonds if they are direct obligation bonds. Collateral for all City repurchase agreements must be kept segregated from other assets of the institution. The amount of funds invested in any bank may not exceed 20% of the bank stockholders equity at the last bank call unless the excess of 20% is secured by a pledge of securities Of the U.S. Government or U.S. Government secured agency securities. EXHIBIT A:80983 4 We