1980-27 Adopting an Investment Policy
RESOLUTION N0, 27-80
A RESOLUTION OF T}{F. VILLAGE COUNCIL OF NORTH PAIN] BEAC}I,
FhORIDA, ADOPTING AN INVESTMENT POLICY FOR THE VILLAGE,
BF. IT RF.SOLVfiD BY THE VILLAGE COUNCIL OF NORT}{ PALM BEACH,
' FLORIDA:
Section 1, The Investment Policy attached to this Resolution
as Exhibit No, 1 is hereby adopted and shall apply to the investment
oi' funds controlled by the Village of North Palm Beach.
Section 2, This Resolution shall take effect immediately
upon passage.
PAS51iD AND ADOPTED THIS 22ND DAY OF MAY, 1980,
MAYOR
ATTEST:
~ ~~ ~ ~~
VILLAGE CLERK
1
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]:NVI:STMCN'1' POLICY
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__ Nl1r1131;k T1TI,li PAC1; N0.
] . U_I 1'~irp~rsc ]-
2 ~ U] 1'rem:i.se ]
2 . U ~ 7)'P e s ].
'i . (II kesponsib:i.a.:ity 2
"i . 0 2 1'roc e dare s 2
3.03 Cligbi.].ity 2
3 . UIF Tic (hcotati yin 3
~I . Ul I'o] i cy Rev:i ew 3
~I.(12 7'yPc cif II,V~Sine,its 3
~I.(13 (hiotat:i.on Procechires 3
Y
stlrlrytltY
]TOa I~~ose: Generally, this policy describes a program for short-term
and ]on};-term investments of V:i]].a~*,e )_luids not needed for current govcrtunenta]
operat:i arts
llstor.ica]]y, it has been the practice of t1u V].llage to :invest ":i.dle"
funds based not on the highest current y_e]d, but ruttier "idle" i'unds were
invested :in .loca] banla, that huppc:ned at the t:inie, to ]told the dematnil accounts.
The program adopted hcre:in is based on a s:in};lc premise: I4tbl:ic money
should be used i'or the people's benefit. (hua very important way, certa:in].y,
~; to m;tx.imizc the c,u•n.in~;s on publ:i.c ]ands, 'this reduci~t~; the need fur
uilditinnaa tax revenue.
]'o]7ow:ing is ct sltor'C out l.i.ne oi' some o]' the important components of our
:investment po):icy.
2. 1•Yl'ES O]' LEGAL ]NVI:STTII:NTS
7.0.1 ]'remise: 1'or ~ntdance and elarii':iecrtion, the on]y types oi' nvcst-
uu~nts to be made w.i.]:L be ne~;n'Cictble diruct oh].:igutions o11, or nbl.it;atin;~ 'the
prnc.ipu] and. :interest of which are unconcti_t:i.onal].y },ntarzurteect by the United
Sfatos Govcrtmtent at i'he then prevai.]_ing market pr.icc for such security,
1'ur i'urther c].ar:i_ficat:ion, I:xhib:its 10 and 11., "Analysi-s of 1'r:imary
Jnvesi'nicnt Instrtunents," taken from the Mwt:i.c:ipctl finance Oft:i.cers Ass~c..iat:ion
7'rcusur Manc~cment ]Icuulbook, w].l.l -also be used, Copies of both exhibits are
hereby made part oi' tlt:is po]:icyo
2_OZ_~ tl (:s: 'J'hc three (3) b;tsi.c types are as :follows:
u) Ccrt:il'catc of llepos]t - Lssucd by uny financ.i.a] :inst.tut:ion
w.it]t a due date certa:in {3U days or more) e
b) Fepurchase Agreements - A contract a~*reement between a I'nanc:ia]
instiZtt.ion or :investment banker and the Vi_].1afie whereby the Village purchases
u contract that the haul: will. buy back at a prede'Cexmned date, ll. S. Govertmtent
-1.-
Sec~nr.ites or agencies. 1'or ilce use oP these iiuuL:, thu V].lagc receives an
amrnmt of :interest from the brnt]< negotiated by the llireetor of I'.nance and thc~
];nnl. at ibe tame oi' pnrehase (2-29 days) e
c) Ua:i~ Suv ~ti /lccoun't's - Cons:i s'Lent w -th ]'edercx]. Reserve gu i de-
]roes, the V:i].lage wail] nucintuin savings accounts at its bank of depos:ito+~
3. ll~ (1T71770N PROCliI)URI;S 1'OR INVCS1fi11:NTS
3.U] Reswnsib.i_li~: lhcder the supervision of the Vi.]lagc Manager,
tLe ll.irec~tor of F_i.ncu~ee sha]:L obtain canpeti.tiva c,~totati.ons for a]].
Cor'L'.i 1' i c•ccte:; oi' llepos t and Repo' s.
3eU2_ 1'1~ocedures: The fo]lowiny; procedures wi]_t be used:
u) A.1] I'inane.i;c] inst.iiuti-ons w.i].:I ;~c nut.i9`.ied by tcaephone, cucL
i~.iinc that :invest~nent•s arc to be made. The 1).ircetor oi' Finance or a duly
al,po:ixrl'cd stai'i' member will. solicit cpcotes for. i.nvestinents, detai.li.ng amowct
unit ^iatur:ity date for investment. 1111 quotes must be received no later tluuc
LI :'. (1 A. h1.
D) The :i;;sC:iiution provi.d:ing the ]tighest interest yield will be
awarded fhe :investment. Transi'cr instructions w:i]-] be :issued by t:he 1)_irector
nl~I'inunce after award.
o) Quotations o1' i'incnxcial. :instit-crti-ons wall be available i'or
Inil~].ic~ .iiispeot:ion by ctll. :interested pccrt:ie, at the 1':inance lle1>artment. /+].].
part:ic~:ipatng institut:i.uns w:il_l be supplied copies of cpuctes received for
tbut chrhe upon recncest~
3~ll:i_1:] ~ib.i]i~: I'art:icipat:ion :in quotes wi]1 be based on the 1'o).]owng:
a) lns't':itlcton must have 100 percent collateral for tite cunuuut oi'
*ll;cnlss oi' depos:it to be establ:i.shed by the V:i]..lage Coune:i.l
-1-
.invcwl'nu•nis. Collatcra7. Hoist' Le .n the :form of ,gtproved securities
tnrc•ondi:iona]_]y },nuu•antc•ed by the U. S, Government xcs to prineipa]_ anit
interest' ut' the preva:il:ing market price of :investment.
b) Rtcs:is used by nsti'tuti.on to crnrr)tutc :interest must be on 3(i0 flays.
3.04 '1':i.e Quotaticros: Ti.u cptotations w.17 he awarded usi.n}~ the
a) ]lanl: oi' deposit w.].l. be liven prei'erence over non-depos:itor:ics
t9nis cl.im:inat':inl trans Per oi' i'unds.
b) Investment may be sp]:it if more. ih~ut one fund or various maturity
ilatos arc :invo]ved.
4. ANNl1AT. RI;V7IaV
~I.U]___Po]ic'y Review: nnnua].ly, this pol icy Should be reviewed prior to
Si•lrt'omber 30th each ycau~ and updated as necessary.,
4 ,02 7yhe o1_].nvestment: /ls the Vi.l].ale expands :its revenue anti st.rCe
:Imrr; c•h;nige. other methods ef' nvestmenfi wi.]1. be reviewed.
~I.U3 (hurL'at.iun I'rnt•c(lures: ns a lrca'L'ur tnuubcr of• banks move :into
CLc ut•ca and the :inereaseil need t•or better tuxl b:i~;ler inve:;tments, the
glint-a-C irn~ pro~•edurc~ nr<ry have to be nuid.i_f`.i.ect to accommodate uni~orusecm
ifevea opments.
- 3-
"" ~ EXHIBIT 10
Analysis of Primary Investment
Instruments
_ r _ ...
~~ SlcaMary ~, '
~
InaWmenU Lpaliry Salary Matudry Yarkel
. Dpuidiry ..`
Bank Deposits -
1. Time CRnilicale5 of
,
. '
Deposit (GDa) '
'A«oroinq to - ,
A. Negotiable " Stela a L«al Law :' y „;, ', 1 • 12 Monlha Adne .Moderate
e. NoMJegoliaDle Stale a L«al Law - +?~~
r'.: ,
_
- 1 • f 2 Man1RS NomNegoliable low -
2. Tune Deposits- 30 Day " Stale a Lowl Law ~ 1 Mo. Minimum NonNegotiable Moderate -
3. Pau Book Savings ,': Stale a fowl Law-.- No MlrYmum -- NonNegolieble Hqh
M Ssdn9s a Lwn Aan.
1. Savings or Investment According to i • 12 Months Nonalapoliable low
Ceni&ales, Snares. Deposits Stale a Local law
2. Pau Book Savings Stale a Local Law. No Minimum NruvNegd'Mble Hph
III U.S. Treasury Securities
1. Treasury Bills Generally Available Fug Faith a - 91, 182, 270, Moat ADMe ~. /8qF
Geoit - U.S. OoN. 385 Days
2. Treasury Notes Generally AraiMble FWI FailA 6 1 - 7 Years - ~ Adive - - Mooerate
Credit • U.S. Govt .
3. Treasury Bonos Generally Available Full Faith a S • 30 Years ~ ADDve Mooerate
~
~
IV U.S. Agency Securities
Fully Guaranteed
1. Ea«d-knporl Bank
Delxnluras d Panicipalion
Cenilicales
2. Farmers HOme AOmin.
Insured Notes
3. GNMA -Federal blame loan
Marga9a Corporation
1. GNMA-FNMA, Bonds
5. GNMA, PatliciDalian
Cenilkale3
V U.S. Agency Securaies
Not Fully Guaranteed
1. Banks for C«peralives
Bones
2. ieoeral Hom¢ loan
Bank Bolls
3. FHLB Consblidateo NOles
/. Federal lnlermediate
Credit Bank Bonds
5. Federal Land Bank Bonds
6. FNMA Capital Delrenlures
7. FNMA Debenlurea
8. iNMA pxounl Nolea
9. TVA BOlWa
l0. TVA Oiscounl Naves
VI Sbte 8 L«al Garernmant
Sa<uritisa
Accoroinq to State
al«al Uw
Accoroinq to Slate
a L«al law
According to Stale
a l«al Law
Accoroinq to State
8 L«al Law
Accoroinq to State
a L«al Law
Accoroinq to Stale
a L«al law
Accoroinq to Stale
a L«al Law
According to Slate
6 L«al Law
Accoroinq to SIa1e
a L«al Law
A««oing to Stale
6 L«al Law
Accordirg to Stale
6 L«al Law
Accoroinq b Stale
6 L«al Law
Accoroinq to Stale
8 L«al Law .
Accoroinq to Stale
a L«al Law
Accadirg to Stale
6 Local Law
Full Faith 8 -
Credit • LLB. (ioN.
FWI Faith a
Credit - U.S. GoN.
Full Fahh a
Ge0it • LLS. Ooh.
Fun Faiih a
Credit - U.S. Govt.
Full Faith a
Credo • U.S. Govt.
Guaranteed by
Age«Y OMy
Gwranteed by
Age«y Only
Guaranteed by
Afle«y Ony
Gwnnleeo Dy
Agency Only
Guaranteed by
A9encY Only
Guaranteed DY
A9encY Onty
Guaranteed by
Aqe«y Only
Guaranteed Dy
Aqe«Y ONy
Guaranteed by
Aqe«y Onry
Guaranteed M
Aqe«y Onty
3•SVeua
5 - 15 Years
2 - 25 Years
5 • 20 Years
8 - 20 Years
6 Monlha or
3K Years
1 - 10 Years
f Year or Leu
0 Monlha 10
1 Years
18 Months to
15 Years
5 • 25 Years
18 Monlha to
- 25 Years
30.270 Days
5 - 25 Years
1 Months
Acliw
Active
Active
Active
AcSve
Active
Active
Active
Active
Active
1. General Obligation Bonds Generally Available Guaranteed by 5 - 10 Years Active
Issuer Only ..
2. iaa Anlicipalum NOtes Generally Available 6uaranlecd Dy 1Year or Leu
luwr Only
3. Revenue Anticipation Nolea Generally Available Guaranteed by 1 Year «Leu
Issuer Onry
a. Revenue BOrWS Generally AVaiWble Guaranteed Dy 5. /O Years Acara
Lauer OMy
5. Wamanls Generally Available Guaranteed by Upon Redemption
luuer OMy
VII Repurchase Agreements Accoroinq to State Cbnlractuclly Conbad
a L«al Law S«ure Neooliated
• The FDIC insures bank deposits uD to $40,000. Most stales require all deposits above that
amount to be secured by collateral placed in trust.
• • 7ne FSLIC insures deposits in Savings and Loan Association up to $100,000. Most slates
require all deposits above that amount to De secured by collateral placed In trust.
' Moderate '
_... Low
low
low
Low
Nigh
Moderate
Hqn
Migh
Hqh
Moderate
' Mooerate
Hqn
Moderate
High
Moderate
Moderate
. Moderate
~i
:~,
if
;!.)
J
-~
;,s
!"i
'r UNDERSTAND INVESTMENT SECURITIES
- ,
45
It
EXHIBIT 11
Technical Analysis of
Primary Investment Instruments
Irotrvmenls
I Bank Time Deposits
1. Time CerliliWle of
Deposits (COs)
A. NegoliaDle
B. Non+legoliaDle
2. Time Deposits -30 Days
3. SavingsDeposls-
Immedidle withdrawal
II Saringa 8 Loan Asan.
I. Savings or lnveslmenl
Certificates. Snares,
or Deposits
III U. S. Treasury 5aurilin
I. TreawryBnls
Markets Form' Isew Lils Interest Round lot
Payment a Minimum
Primary Secontlary Schedule Denomination
On Demand None Agency Name s-12 Monhs Quarterly for 31 OO.OW and up
f Agency Treawrer Malurih Dale
On Demand Norte " 1-12 Months Quarterly for Up to 5100,000
Malurih Dale
On Demand None 1 Mo. Minimum At Wilndrawal No Minimum•
On Demand • Nune No Minimum At WilMrawal No Minimums
On Demand None
WeekiY: 91 ~~ Active
1B2 Day Bills
Monthly: 271 a
365 Oay Oilla
No Minimum AI Withdrawal No Minimums
B 91, t82. 270, Discoumed 510.000
360 Days al Purchase
2. Treasrry Notes Periodic Adive R or 6 1.7 Years Semiannual 51,0003
310.000
3. TreasuryBonds Periodic Active R a B 5~l0 Yean Semiannual E1,0003
310,000
IV U.E. Agan<y Securities
FuIIY Guaranlaed
I. ExDOn -Impod Bank Irregular R or B 3-15 Veers Semiannual E5.000
Deoenlure4 d Panicipalion
Gertiliedt[5
2. F.M.A. Insured Notes Irregular Nol Very R or B 5-15 Years Annual 325M, SIOOM
Active 3500M, St,000A1
3. GNMA-Federal Home Loan Irregular Not Very R 2Q5 Years Semiannual 325.000
Mortgage Corp. Active
!. GNMA -FNMA, Bonds Irregular NoI Very R 6-20 Years Semiannual E25,000
Active
5. GNMA, Participation Irregular R &20 Years Semiannual §5,0008
Certdicales
310.000
V U.S. Agancy Securities-
Nol fully Guarantee0
1. Banks Ia Coepera6ves Monthly Active B 6 Months pr At Maturity §5,0pp
Bonds 3& Years (6 Mo.1: Semiannual
2. F.H.L.B. Bonds Monthly Active B 1-20 Years Semiannual 55.000 8
310.000
3. F.M.l.B. Nolen Monthly Active B Up lot Year Discounted E700,000
al Purchase
!. Fed. Int. Cred. Bank Monthly Active D 9 Mos.-! Years AI Malurih (9 Mo.l 35.000
Bones Semi-annual
5. fed. land Bank-Bands Monthly Active R or B I &-15 Years Semiannual S1.00o
6. FNMA Capital DeoenNres Irregular D.dive R or R 5-26 Years Semiannual 310.000
Z FNMA~eDenlures Monthly B Iq-25 Years 6emiannual SIM, fSM,
3 310M
B. FNMA-0iscounl NOtes Daily Adive B 27JO Days Discounted 515.000
at Purcnau
9. T.VA.$oMS Yearly Adive R or B 525 Years Semiannual SI,000
f 0. T.V.A.-0i5counl Notes Monlmy Adive B !Months Discanled 35,000
al Purckase
I f. Bonds R or B !0 Years Semi-annual 315.000
VI Stale 8 Local Govemmenl
Securities
1. General ODligallon Bands Irregular Active B or C Sd0 Years Semiannual 35.000
(Cammpnly)
2. Tax Anticipation NOtes Irregular None B 3MOe-1 Year A1Maturih 55.000
(Generally) (Generally) (Generally
3. Revenue Anticipation Notes Irregular None B Up l0 1 Year - AI Maturity 55,000
(Generally) (Generally) (Generally)
!. Revenue Bonds Irregular Adive B or C 6~0 Veers Semiannual 35.000
(Commonly) (Generally)
5. Warrants Irregular None Vendor or Until Cask Upon Redemption Any
Payroll Demand is Available
VII Repurckase Agreements On Demand' None Name of Agency 1-] Days At Agreed Varies, Alany
•Agency Treawrer Usually on Dale Stales Rsvlurcc
§100,000
' If permitted by bank. Not alt banks accept Ihis account.
a B, Bearer R- Registered C- Convertible
a Up to $100,000 secured by FDIC, beyond This bank or savings and loan muss hold collateral
securilie5 in escrow.
46 A TREASURY MANAGEMENT HANDBOOK