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HomeMy WebLinkAboutbocc.res.064.2008A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF PITHIN COUNTY, COLORADO, AMENDING THE COUNTY'S INVESTMENT POLICY Resolution Nu. ~-2008 RECITALS 1. The Board of County Commissioners of Pitkin Counry, Colorado, (hereinafter "the Board") has previously adopted an investment policy that established guidelines f'or the purchase, sale and safekeeping of investments for Pitkin County (hereinafrer "the Investment Policy"). 2. The current investment diversification policy limits the amount in the County's primary depository bank to no more than 60% of the total portfolio. The County Treasurer recommends increasing this limit to 75%, but only if the depository bank is rated well above average strength (4 or more on a scale of 1 to 5). 3. The Board desires to accept this recommendation and so amend the Investment Policy. NOW, THEREFORE, BE IT RESOLVF,D by the Board of County Commissioners of Pitkin County, Colorado that the Investment Policy is hereby re-adopted in its entirety as attached in F.xhibit "A." IN"I'RODUCED, RE,AD AND ADOPTED ON JUNE Z5, 2008. A ~Jones County Clerk APPROVED AS TO FORM: ~-_; John E ou Attorney BOARD OF COUNTY COMMISSIONERS OF PITHIN COUNTY, COLORADO By; '~~cc%' ~ ~~~ ~ Jack H~t~ield, Chairn~ n Date: ~-~~,~ `?%C ~ ~ MANAGER APPROVAL: ~~l ~=~,~ Hilary Fletq e•, County Manager Bxhibit "A° PITKIN COUNTY, COLORADO INVESTMENT POLICY PURPOSE AND SCOPE The purpose of this investment policy is to establish guidelines far the purchase and sale of investments for Pitkin County. This policy applies to all funds for which the Finance Director or Chief Financial Ofticer/Treasurer have been designated as custodian except the Pitkin County Public Employees' Retirement Fund and the Pitkin County Library Endowment Fund. IL INVESTMENT OBJECTIVES Funds shall be invested to accomplish the following objectives in the following priarity. l. SAFETY To insure the safety of all County funds. Investments shall be made so as to minimize the potential for capiYal losses arising from changes in market value or default. 2. LIQUID[TY To insure that adequaYe funds are available at all times to promptly pay all the County's financial obligations. ~. YIELD To earn a market-average rate of return consistent with the safety and liyuidity objectives. III. DELEGATION OF AUTHORITY Management responsibility for the investment program is delegated to the Chief Financial Officer/Treasurer, who sliall develop and maintain procedures for the operation of the investment program consistent with this policy. These procedures shall include explicit delegation of authority to other persons responsible for investment transactions and shall e~tablish a system of internal controls to insure coinpliance with this policy. IV. PRUDGNCE AND INDEMNIFICATION 'I'he standard of prudence to be applied by the investment officers shall be the "prudent investor" rule, whieh states, "Investments shall be made with judgment 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 investor rule shall be applied in the context of managing the overall portfalio. ~,,.toa: OGy- ~o~~ The iavestment officer, acting in accordance with this policy and exercising due diligence, shall not be held personally responsible foc a specific security's credit risk or mazket price changes, provided that these deviations are reported in a timely fashion and that appropriate action is taken to control adverse developments. V. ELIGISLE INVESTMENTS AND DEPOSITORIES The following are eligible investments and depositories: 1. U.3. Treasury obligations - U.S. Treasury bills, notes and bonds. 2. U.S. Agenci~s and lnstrumentalities - as authorized by CRS. 24-75-601.1 (1) (a) and (b) 3. Time certificates of deposit in state banks or national banks or in state or federally chartered savings and loan associations located in Colorado which are insured by the Federal Deposit Insurance Corporation and which are approved as public fund depositories by the Staie of Colorado Banking Commissioner or Savings and Loan Commissioner. Depositories must be rated "3 stars" ar more (on a scale of 0 to 5 stars, with 5 the highest) by BauerFinancial or an equivalent rating agency. 4. Demand deposit accounts in state banks or national banks located in Colorado which are insured by the Federal Deposit Insurance Corporation and which are approved as public fund depositories by the State of Colorado Barilcing Commissioner. Depositories must be rated "3 stars" or more (on a scale of 0 to 5 stars, witl~ 5 the highest) by BauerFinancial or an equivalent rating agency. 5. Shares of any local government surplus funds trust fund established under the provisions of 24-75-701, CRS, as amended. 6. Money market mutual funds authorized under CRS, 24-75-601.1 (1) (k). VI. ELIGIBLE SECURITIES DEALERS The following are eligible securities dealers: 1. Primary dealers. Securities broker-dealers and banks that trade in U.S. Government securities with the Federal Reserve Bank oi~New York. 2. National and state banks which have their principal offices in the state of Colorado and which are specifically approved by the Board of Cuunty Commissioners. VII. DNERSIFICATION With the exception of U.S. Treasury obligations: 1. No more than 60% of the total portfolio shall be invested in any single category of investment specified in paragraph V. 2. With respect to certificates of deposit and demand deposits: a. The investment in certificates of deposit in any institution shall not exceed ten (10) percent of the total portYolio. b. The maximum amount maturing with a single institution within thirty (30) days shall not exceed one million dollars ($1,000,000.00), excluding, however, the County's primary depository account. c. The County"s primary depository account may hold up to 75% of the total portfolio if the primary depository is rated "4 stars" or mare (on a scale of 0 to S stars, with 5 the highest) by BauerFinancial or an equivalent rating agency and the rating is monitored quarterly. 3. The maximum amount invested in any single local government surplus fund or money market fund shall not exceed 25% of the total portfolio. VIII. MATURITY Investment maturities shall be based on the liquidity needs of the County and the exposure to market risk. At least 10% of the portfolio shall be invested as a liquidity buffer in overnight instruments, depository accounts, money market funds, local government surplus funds, or marketable securities with less than a one-year maturity, ~vhich could ereate available cash within one day. The current portion of the portfolio is for cash management purposes. Therefore the term of investments for this portion of the portfolio shall not exceed thirteen (13) months. The non-current portion of the inveshnent portfolio shall be defined at least annually by the Chief Financial Officer/Treasurer as the minimum expected balance available for investment in the next three years. The term of investments for this portion of the portfolio shall not exceed three (3) years; however, no more than 50% of the non-cun•ent portion may be invested in maturities exceeding two years at the time of investment. Any investment with a maturiry exceeding three years shall require specific approval from the Board of County Commissioners. ~O= OG y- °~00~ IX. COMPETITIVE BIDDING A competitive bid process shall be conducted before the County invests any funds. A sufficient number of bids for a specific type of instrument shall be solicited to insure a competitive price or rate. The County shall accept the bid which provides the highest comparable yield for the maturity required, provided the investment is within the parameters oi' this policy and the institution is of adequate strength. Records shall be kept of all bids offered and accepted. Xl. SAFEKEEPING All investments shall be made in the name of Pitkin County. Institutions issuing non- negotiable certificates of deposit shall keep the CD in safekeeping and send the Cuunty a copy of the CD and a safekeeping receipt. Book entry is an acceptable method of holding CD's. Marketable securities shall be held either (1) by a third-party custodian as evidenced by safekeeping receipts or (2) by a broker-dealer in a customer account that is insured by the Securities Investor Protection Corporation and supplemental insurance for the maximum held in such account. However, a single broker-dealer shall hold no more than 25% of the total portfolio. U.S. Treasury obligations may also be held directly by the Federal Reserve Bank in the Coimtv's name. XII. REPORTS The finance office shall issue quarterly reports to the Board or County Commissioners at a level of detail sufficient to show compliance with this policy. The County's auditors shall review the fourth quarter report for accuracy and compliance with this policy and shall repart any material exeeptions to the Board of County Commissioners.