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
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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
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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.
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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
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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.
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