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the prior versions of the Investment Policy are hereby repealed and are of no further force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]
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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
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EXHIBIT A
Amended Investment Police
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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
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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;
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(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,
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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.
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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.