Mount Pleasant Public Library: Investment Policy
That the Library Treasurer is hereby authorized to implement the following investment policy for the Library:
This investment policy applies to all public moneys and financial resources available for investment on its own behalf or on behalf of any other entity or individual.
The primary objectives of the Library’s investment activities are, in priority order,
- to conform with all applicable federal, state and other legal requirements (legal);
- to adequately safeguard principal (safety);
- to provide sufficient liquidity to meet all operating requirements (liguidity); and
- to obtain a reasonable rate of return (yield).
DELEGATION OF AUTHORITY:
The Board of Trustees’ responsibility for administration of the investment program is delegated to the Treasurer of the Board who shall establish written procedures for the operation of the investment program consistent with these investment guidelines. Such procedures shall include an adequate internal control structure to provide a satisfactory level of accountability based on a data base or records incorporating description and amounts of investments, transaction dates, and other related information and regulate the activities of subordinate employees.
All participants in the investment process shall seek to act responsibly as custodians of the public trust and shall avoid any transaction that might impair public confidence in the Mount Pleasant Public Library.
Investments shall be made with judgement and care, under circumstances then prevailing, which persons of prudence discretion and intelligence exercise in the investment, considering the safety of the principal as well as the probable income to be derived.
All participants involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.
It is the policy of the Mount Pleasant Public Library to diversify its deposits and investments by financial institution, by investment, and by maturity scheduling.
It is the policy of the Mount Pleasant Public Library for all public moneys collected by any officer or employee of the Library to transfer those funds to the Library Treasurer within the time period specified by law.
The Library Treasurer is responsible for establishing and maintaining an internal control structure to provide reasonable, but not absolute, assurance that deposits and investments are safeguarded against loss from unauthorized use of disposition, that transactions are executed in accordance with management’s authorization and recorded properly, and are managed in compliance with applicable laws and regulations.
DISIGNATION OF DEPOSITORIES:
The banks and trust companies authorized for the deposit of monies up to the maximum amounts are:
Depository Name Maximum Amount
Bank of New York Unlimited
Chase Bank (Chemical) Unlimited
First Union Unlimited
Sleepy Hollow National Bank Unlimited
COLLATRALIZING OF DEPOSITS:
In accordance with the provisions of General Municipal Law 10, all deposits of Mount Pleasant Public Library, including certificates of deposit of special time deposits, in excess of the amount insured under the provisions of the Federal Deposit Insurance Act shall be secured:
- By a pledge of “eligible securities” with an aggregate “market value” as provided by GML 10, equal to the aggregate amount of deposits from the categories designated in Appendix A to the policy.
- By an eligible “irrevocable letter of credit” issued by a qualified bank other than the bank with the deposits in favor of the government for a term not to exceed 90 days with an aggregate value equal to 140% of the aggregate amount of deposits and the agreed upon interest, if any. A qualified bank is one whose commercial paper and other unsecured short term debt obligations are rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization or by a bank that is in compliance with applicable federal minimum risk-based capital requirements.
SAFKEEPING AND COLLATREALIZATION:
Eligible securities used for collateralizing deposits shall be held by the depositary and/or a third party bank or trust company subject to security and custodial agreements.
The Security agreement shall provide that eligible securities are being pledged to secure Library deposits together with agreed upon interest, if any, and any costs or expenses arising out of the collection of such deposits upon default. It shall also provide the conditions under which the securities may be sold, presented for payment, substituted or released and the events, which will enable the Library to exercise its rights against the pledged securities. In the event that the securities are not registered or inscribed in the name of the Library, such securities shall be delivered in a form suitable for transfer or with an assignment in blank to the Mount Pleasant Public Library or its custodial bank.
The custodial agreement shall provide that securities held by the bank or trust company, or agent of an custodian for, the Library will be kept separate and apart from the general assets of the custodial bank or trust company and will not, in any circumstances, be commingled with or become part of the backing for any other deposit or other liabilities. The agreement should also describe that the custodian shall confirm the receipt, substitution or release of the securities. The agreement shall provide for the frequency of revaluation of eligible securities and for the substitution of securities when a change in the rating of a security may cause ineligibility. Such agreement shall include all provisions necessary to provide the Library a perfected interest in the securities.
As authorized by General Municipal Law11, the Mount Pleasant Public Library authorizes the Library Treasurer to invest moneys not required for immediate expenditure for terms not to exceed its projected cash flow needs in the following types of investments only:
- Special time deposit accounts;
- Certificates of deposits of banks which are protected by FDIC;
- Obligations of the United States of America;
- Obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by a the United States of America;
- Obligations of the State of New York;
- Obligations of public authorities, public housing authorities, urban renewal agencies and industrial development agencies where the general State statutes governing such entities or whose specific enabling legislation authorizes such investments.
All investment obligations shall be payable or redeemable at the option of the Mount Pleasant Public Library Board of Trustees within such times as the proceeds will be needed to meet expenditures for purposes for which the moneys were provided and, in the case of obligations purchases with the proceeds of bonds or notes, shall be payable or redeemable at the option of the Mount Pleasant Public Library Board of Trustees within two years of the date of purchase.
AUTHORIZED FINANCIAL INSTITUTIONS AND DEALERS:
The Mount Pleasant Public Library shall maintain a list of financial institutions and dealers approved for investment purposes and establish appropriate limits to the amount of investments, which can be made with each financial institution or dealer. All financial institutions with which the Library conducts business must be credit worthy. Banks shall provide their most recent Consolidated Report of Condition (Call Report) at the request of the Mount Pleasant Public Library. Security dealers not affiliated with the New York Federal Reserve Bank, as primary dealers. The Treasurer is responsible for evaluating the financial position and maintaining a listing of proposed depositaries, trading partners and custodians. Such listing shall be evaluated at least annually.
PURCHASE OF INVESTMENTS:
The Treasurer is authorized to contract for the purchase of investments:
- Directly from an authorized trading partner.
- By participation in a cooperative investment program with another authorized governmental entity pursuant to Article 5G of the General Municipal Law where such program meets all the requirements set forth in the Office of the State Comptroller Opinion No. 88-46, and the specific program has been authorized by the government board.
- By utilizing an ongoing investment program with an authorized trading partner pursuant to a contract authorized by the governing board.
All purchased obligations, unless registered or inscribed in the name of the Library, shall be purchased through, delivered to and held in the custody of a bank or trust company. Such obligations shall be purchased, sold or presented for redemption or payment by such bank or trust company only in accordance with prior written prior written authorization from the officer authorized to make the investment. All such transactions shall be confirmed in writing to the Mount Pleasant Public Library by the bank or trust company. Any obligation held in the custody of a bank or trust company shall be help pursuant to a written custodial agreement as described in General Municipal Law 10. The custodial agreement shall provide that securities held by the bank or trust company, as agent of and custodian for, the Library will be kept separate and apart from the general assets of the custodial bank or trust company and will not, in any circumstances, be commingled with or become part of the backing for any other deposit or other liabilities. The agreement shall describe how the custodian shall confirm the receipt and release of the securities.
Repurchase agreements are not authorized.
Approved by the Library Board of Trustees, May 5, 1996