Loading...
R-21-50VILLAGE OF DEERFIELD RESOLUTION NO. R-21-50 A RESOLUTION ADOPTING AN AMENDED INVESTMENT POLICY FOR THE VILLAGE OF DEERFIELD WHEREAS, the Village previously adopted an investment policy governing the investment of public funds by the Village ("Investment Policy'; and WHEREAS, the Village amends its Investment Policy from time to time to keep it current, compliant with applicable laws, and fiscally responsible; and WHEREAS, the Village desires to further amend the Investment Policy to further the above stated goals ("Amended Investment Policy'); and WHEREAS, the Village Board has determined that is in the best interest of the Village to approve and adopt the Amended Investment Policy as set forth in this Resolution; NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE BOARD OF DEERFIELD, LAKE AND COOK COUNTIES, ILLINOIS, as follows: SECTION ONE: RECITALS. The foregoing recitals are incorporated into, and made a part of, this Resolution as findings of the Village Board. SECTION TWO: APPROVAL OF AMENDED INVESTMENT POLICY. The Village Board hereby approves and adopts the Amended Investment Policy attached to this Resolution as Exhibit A. To the extent that the provisions of any prior versions of the Investment Policy are inconsistent with the provisions of the Amended Investment Policy, the prior versions of the Investment Policy are hereby repealed and are of no further force and effect. SECTION THREE: EFFECTIVE DATE. This Resolution will be in full force and effect upon its passage and approval by a majority of the members of the Village Board. [SIGNATURE PAGE FOLLOWS] {00123665.1) PASSED this 6th day of December, 2021. AYES: Benton, Jacoby, Jester, Metts-Childers, Oppenheim, Seiden NAYS: None ABSENT: None ABSTENTION: None APPROVED by me this 7th day of December-, 2021. LL� �� Daniel C. Shapiro, Village Mayor ATTEST: Kent S. St eet, Village Clerk {00123665.11 EXHIBIT A Amended Investment Police {00123665.1) INVESTMENT POLICY DEERFIELD, ILLINOIS Policy It is the policy of the Village of Deerfield to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the entity and conforming to all state and local statutes governing the investment of public funds. Scope This policy includes all funds governed by the Board of Trustees. Prudence 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 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. Objective The primary objectives, in order of priority, shall be: • Legality: conformance with federal, state and other legal requirements • Safety: preservation of capital and protection of investment principal • Liquidity: maintenance of sufficient liquidity to meet operating requirements • Yield: attainment of market rates of return The portfolio should be reviewed periodically as to its effectiveness in meeting the entity's needs for safety, liquidity, rate of return, diversification and its general performance.. Delegation of Authority Management and administrative responsibility for the investment program is hereby delegated to the Finance Director (Treasurer), who, under the delegation of the Board of Trustees, shall establish written procedures for the operation of the investment program. 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. Authorized Financial Dealers and Institutions The Finance Director (Treasurer) shall maintain a list of financial institutions authorized to provide investment services. In addition, a list will also be maintained of approved security brokers/dealers. Authorized and Suitable Investments Investments may be made in any type of security allowed for in Illinois statutes regarding the investment of public funds. Investment shall be made that reflect the cash flow needs of the fund type being invested. Qualified Investment Advisers The Village of Deerfield may engage the services of investment advisers to assist in the _management of the Village's portfolio in a manner consistent with this Investment Policy. The Village has the ability to grant such advisers discretion to purchase and sell investment securities in accordance with standards outlined in this poligy. Any such investment adviser must be registered as an authorized investment adviser in the United States under the Investment Advisers Act of 1940 or with the appropriate banking regulators if a subsidiary of a bank. Investment companies acting as investment advisers must be registered under the Federal Investment Act of 1940 and the Illinois Securities Law of 1953. Sustainable The Finance Director (Treasurer) shall perform a comprehensive analysis of all potential investments, in which traditional financial factorsas well as sustainability factors are considered_ in order to develop a more complete view of investment prospects. The Village believes that such a comprehensive analysis, in which sustainable factors that are releyzutjQjhQ environmental impact, social impact, and governance of investments (ESG factors) are considered in conjunction with financial r is vital for maximizing the safety and performance of public funds. As provided under the Illinois Sustainable Investin Act 30 ILCS 2338). material. relevant. and decision -useful sustainability factors considered within the bounds f financial and fiduciary prudence include, but are not limited to: () Cot porate Governance & Leadership Factors: (2) Environmental Factors: (3) Social Capital Factors; (4) Human Capital Factors: and. (5) Business Model & Innovation Factors 2 Such sustainability factors will be consider-ed as primau components of portfolio construction investment decision-making,investment analysis, due diligence, and investment oymaLhip of Village funds to maximize anticipated financial returns, minimize projected risks and more effectively execute fiduciary duties. Local Considerations In support of the Village's commitment to romote economic develol2mcnt within the Villa e of Deerfield local financial institutes shall be utilizedfor the investment of public funds when suitable. As such considerations shall be given to financial institutions within Deerfield when making investment decisions. And when comparable rates are offered, and all other investment objectives and requirements, as outlined in this policy,are Qq ually mel, local institutioninstitutiLona will be favored. Collateralization Funds on deposit (checking accounts, certificates of deposit, etc.) in excess of FDIC limits must be secured by some form of collateral, witnessed by a written agreement, and held at an independent third -party institution in the name of the municipality. Safekeeping and Custody All security transactions, including collateral for repurchase agreements, entered into by the Village of Deerfield shall be conducted on a delivery -versus -payment (DVP) basis. Securities will be held by an independent third -party custodian designated by the Finance Director and evidenced by safekeeping receipts and a written custodial agreement. Diversification The entity shall diversify its investments to the best of its ability based on the type of funds invested and the cash flow needs of those funds. Diversification can be by type of investment, number of institutions invested in, and length of maturity. Maximum Maturities To the extent possible, the Village of Deerfield shall attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the Village will not directly invest in securities maturing more than five years from the date of purchase. Reserve funds may be invested in securities exceeding five years if the maturity of such investments is made to coincide as nearly as practicable with the expected use of the funds. Internal Control The Finance Director (Treasurer) is responsible for establishing and maintaining an internal control structure designed to insure that the assets of the entity are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The internal controls shall address the following points: • Control of collusion • Separation of transaction authority from accounting • Custodial safekeeping • Written confirmation of telephone transactions for investments and wire transfers Performance Standards The investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a comparable rate of return during a market/economic environment of stable interest rates. Portfolio performance will be compared to the 90-day T- bill. Reporting The Finance Director (Treasurer) shall prepare an investment report at least quarterly. The report should be provided to the Board of Trustees and available on request. The report should be in a format suitable for review by the general public. An annual report should also be provided to the Board. Marking to Market A statement of the market value of the portfolio shall be issued to the Board of Trustees quarterly. Investing Policy Adoption The investment policy shall be adopted by the Board of Trustees. The policy shall be reviewed on an annual basis by the Finance Director (Treasurer), and any modifications made thereto must be approved by the Board of Trustees. Pooling of Funds Except for cash in certain restricted and special funds, the Village will consolidate cash balances from all funds to maximize investment earnings. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles. ILLS 235 Authorized Investments Any public agency may invest any public funds as follows: (1) in bonds, notes, certificates of indebtedness, treasury bills or other securities now or hereafter issued, which are guaranteed by the full faith and credit of the United States of America as to principal and interest; (2) in bonds, notes, debentures, or other similar obligations of the United States of America, its agencies, and its instrumentalities; 0 (3) in interest -bearing savings accounts, interest -bearing certificates of deposit or interest -bearing time deposits or any other investments constituting direct obligations of any bank as defined by the Illinois Banking Act; (4) in short-term obligations of corporations organized in the United States with assets exceeding $500,000,000 if (i) such obligations are rated at the time of purchase at one of the 3 highest classifications established by at least 2 standard rating services and which mature not later than I9 270 days from the date of purchase, (ii) such purchases do not exceed 10% of the corporation's outstanding obligations, and (iii) no more than one-third of the public agency's funds may be invested in short-term obligations of corporations under this paragraph (4); (4.5) in obligations of corporations organized in the United States with assets exceeding $500,000,000 if (i) such obligations are rated at the time of purchase at one of the 3 highest classifications established by at least 2 standard rating services and which mature more than 270 days but less than 3 vears from the date of purchase, (ii) such purchases do not exceed 10% of the corporation's outstanding obligations and [iii] no more than one-third of the public agency's funds may be invested in obligations of corporations under this 12aragr h14 5_l�or (5) in money market mutual funds registered under the Investment Company Act of 1940, provided that the portfolio of any such money market mutual fund is limited to obligations described in paragraph (1) or (2) of this subsection and to agreements to repurchase such obligations. In addition to any other investments authorized under this Act, a municipality may invest its public funds in interest bearing bonds of any county, township, city, village, incorporated town, municipal corporation, or school district. The bonds shall be registered in the name of the municipality or held under a custodial agreement at a bank. The bonds shall be rated at the time of purchase within the 4 highest general classifications established by a rating service of nationally recognized expertise in rating bonds of states and their political subdivisions. Investments may be made only in banks which are insured by the Federal Deposit Insurance Corporation. Any public agency may invest any public funds in short term discount obligations of the Federal National Mortgage Association or in shares or other forms of securities legally issuable by savings banks or savings and loan associations incorporated under the laws of this State or any other state or under the laws of the United States. Investments may be made only in those savings banks or savings and loan associations the shares, or investment certificates of which are insured by the Federal Deposit Insurance Corporation. Any such securities may be purchased at the offering or market price thereof at the time of such purchase. All such securities so purchased shall mature or be redeemable on a date or dates prior to the time when, in the judgment of such governing authority, the public funds so invested will be required for expenditure by such public agency or its governing authority. The expressed judgment of any such governing authority as to the time when any public funds will be required for expenditure or be redeemable is final and conclusive. Any public agency may invest any public funds in dividend -bearing share accounts, share certificate accounts or class of share accounts of a credit union chartered under the laws of this State or the laws of the United States; provided, however, 5 the principal office of any such credit union must be located within the State of Illinois. Investments may be made only in those credit unions the accounts of which are insured by applicable law. For purposes of this Section, the term "agencies of the United States of America" includes: (i) the federal land banks, federal intermediate credit banks, banks for cooperative, federal farm credit banks, or any other entity authorized to issue debt obligations under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and Acts amendatory thereto; (ii) the federal home loan banks and the federal home loan mortgage corporation; and (iii) any other agency created by Act of Congress. Except for pecuniary interests permitted under subsection (f) of Section 3-14-4 of the Illinois Municipal Code or under Section 3.2 of the Public Officer Prohibited Practices Act, no person acting as treasurer or financial officer or who is employed in any similar capacity by or for a public agency may do any of the following: (1) have any interest, directly or indirectly, in any investments in which the agency is authorized to invest. (2) have any interest, directly or indirectly, in the sellers, sponsors, or managers of those investments. (3) receive, in any manner, compensation of any kind from any investments in which the agency is authorized to invest. Any public agency may also invest any public funds in a Public Treasurers' Investment Pool created under Section 17 of the State Treasurer Act. Any public agency may also invest any public funds in a fund managed, operated, and administered by a bank, subsidiary of a bank, or subsidiary of a bank holding company or use the services of such an entity to hold and invest or advise regarding the investment of any public funds. To the extent a public agency has custody of funds not owned by it or another public agency and does not otherwise have authority to invest such funds, the public agency may invest such funds as if they were its own. Such funds must be released to the appropriate person at the earliest reasonable time, but in no case exceeding 31 days, after the private person becomes entitled to the receipt of them. All earnings accruing on any investments or deposits made pursuant to the provisions of this Act shall be credited to the public agency by or for which such investments or deposits were made, except as provided otherwise in Section 4.1 of the State Finance Act or the Local Governmental Tax Collection Act, and except where by specific statutory provisions such earnings are directed to be credited to and paid to a particular fund. A public agency may purchase or invest in repurchase agleements of government securities having the meaning set out in the Government Securities Act of 1986, as now or hereafter amended or succeeded, subi ect to the provisions of said Act and the regulations issued thereunder. The government securities, unless registered or inscribed in the name of the public agency, shall be purchased through banks or trust comnanie� authorized to do business in the State of Illinois. C.1 Exce t for repurchase agreements of government securities which are subject to the _Government Securities Act of 1986. as now or hereafter amended or succeeded. no public agency may purchase or invest in instruments which constitute repurchase agreements. and no financial institution may enter into such an agreement with or on behalf of any public agency unless the instrument and the transaction meet the following requirements: 1 ) The securities, unless registered or inscribed in the name of the public agency, are purchased through banks or trust comijanies authorized to do business in the State of Illinois. (2) An authorized public officer after ascertaining which firm will give the most favorable rate of interest} directs the custodial bank to "purchase" specified securities from a designated institution. The "custodial bank" is the bank or trust company, or agency of government, which acts for the public agency in connection with repurchase agreements involving the investment of funds by the public agency. The State Treasurer may act as custodial bank for public agencies executing renu_rchase agreements. To the extent the Treasurer acts in this capacity. he is herebv authorized to pass through to such public agencies any charges assessed by the Federal Reserve Bank. (3) A custodial bank must be a member bank of the Federal Reserve System or maintain accounts with member banks. All transfers of book -entry securities must be accomplished on a Reserve Bank's computer records through a member bank of the Federal Reserve System. These securities must be credited to the public agency on the records of the custodial bank and the transaction must be confirmed in writing to the public agency by the custodial bank. (4) Trading partners shall be limited to banks or trust companies authorized to do business in the State of Illinois or to registered primary reporting dealers, 5 The security interest must be perfected. (6) The public agency enters into a written master repurchase agreement which outlines the basic responsibilities and liabilities of both buyer and seller. (7) Agreements shall be for periods of 330 days or less. 8 The auLhorized public officer of the public agency informs the custodial bank in writin of the maturity details of the repurchase agreement. 9) The custodial bank must take deliver• of and maintain the securities in its custody for the. account of the public agencv and confirm the transaction in writing to the public agency. The Custodial Undertaking shall provide that the custodian takes possession of the securities exclusively for the public agency: that the securities are free of any claims against the trading partner .and any claims by the custodian are subordinate to the public agency's claims to rights to those securities. 10 The obligations purchased by a publiQ agency may-Qnly be soldor presented for redem ti n or payment by the fiscal agent bank or trust com M holding the obligations u on the written instruction of the public agency or officer authorized to make such investments. 11 The custodial bank shall be liable to the public agency for any monet m loss suffered by the public agency due to the failure of the custodial bank to take and maintain possessiolof such securities. Notwithstanding the foregoing restrictions on investment in instruments constitutin repurchase a eements the Illinois Housing Development Authority may invest in any financial institution with capital of at least $250,000,000 may act as custodian for instruments that constitute repurchase agreements, provided that the Illinois Housing Development Agthority. in making each such investment com lies with the safety and soundness g=uidelines f Qr en actin in re urchase transactions applicable to federally insured banks savings banks. savin s and loan associations or other depository institutions et forth in the Federal Financial Institutions Examination Council Policy Statement Regarding Repurchase Agreements and any re ul tin issued- or which may be issued by the supervisory federal authority pertaining thereto and any amendments thereto; provided further that the securities shall be either i. direct eneral obligations of, or obligations the payment of the principal of and/or interest on which are unconditionally guaranteed by. the United States of America or ii any obligations of an agency, corporation or subsidiary thereof controlled or supervised by and acting as an instrumentality of the United States Government pursuant to authority granted by the Con ress of the United States and provided further that the securit = interest must be perfected by either the Illinois Housing Development Authority. its custodian r its agent receiving ossession of the securities either physically or transferred through a nationally recognized book entry system. In addition to all other investments authorized under this Section. a community college district may invest public funds in an mutual funds that invest primarily in corporate investment grade or global government short term bonds. Purchases of mutual funds that invest primarily in global government short term bonds shall be limited to funds with assets of at least $100 million and that r rated at the time of purchase as one of the 10 highest classifications established by a recognized rating service. The investments shall be subiesoQroyal b=y the local community college board of trustees. Each community college board of trustees shall develo a olic regarding th ercenta e of the colle e's investment portfolio that can be invested in such funds. Nothing in this Section shall be construed to authorize an intergovernmental risk management entity to accept the deposit of public funds except for risk management pumoses. (Source: P.A. 102-285.