Res 1033 - Adopt Invest Policy
COUNCIL BILL NO. 1269
RESOLUTION NO. 1033
A RESOLUTION ADOPTING AN INVESTMENT POLICY AND PORTFOLIO
GUIDELINES FOR CllY FUNDS.
WHEREAS, the City of Woodburn manages its financial resources in order
to meet services needs, comply with statutory requirements for budget and financial
services, and protect the public's interest and welfare; and
WHEREAS, the investment guidelines of the City of Woodburn are an
important tool in preserving and enhancing investment capital as a financial resource; and
WHEREAS, the prudent observance of sound investment guidelines
concerning internal control, diversification, collaterilization, performance, and other factors
will maximize earnings with protention of principal; NOW, THEREFORE,
THE CITY OF WOODBURN RESOLVES AS FOLLOWS:
Section 1. That the "Investment Policy and Portfolio Guidelines" are hereby
adopted by the City Council, a copy of which is attached for reference.
Section 2. That Resoluti~n ~nerebY repealed'_1 Y _ V
APprovedastoform~'~ ~ _ . \2 '7
City Attorney Date
APPROVED: J-~ tU ~/.JVI J
FRED W. KYSER~~YC)R-
Passed by the Council
December 17, 1990
Submitted to the Mayor
December 18, 1990
Approved by the Mayor
December 18, 1990
Filed in the Office of the Recorder
ATTEST: ~~ ~~
Mary Tenn t, Deputy Recorder
City of Woodburn, Oregon
December 18, 1990
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COUNCIL BILL NO. 1269
RESOLUTION NO. 1033
.
CITY OF WOODBURN
INVESTMENT POLICY AND PORTFOLIO GUIDELINES
SCOPE:
The Investment Policy of the City of Woodburn applies to all funds accounted for in the
City's annual financial report.
AUTHORITY:
The Finance Director shall be the investment officer of the city and shall be responsible
for investment decisions and activities, under the direction of the City Administrator.
Written administrative procedures for the operation of the investment program, consistent
with this investment policy, shall be established by the Finance Director. The Finance
Director has the responsibility to have cash available to meet day-to-day demands; and
invest all cash, including bond proceeds and equipment replacement reserves, while
adhering to applicable statutes, regulations, and this policy governing investments.
Funds of the city will be invested in accordance with Oregon Revised statutes 294.035
through 294.048, ORS 294.125 through 294.155, ORS 294.810, other applicable statutes
and this investment policy.
OBJECTIVES:
In order to secure a safe and reasonable return on investments, the City's investment
objectives are:
Preservation of capital and the protection of investment principal.
Conformance with Federal, State and other legal requirements.
Maintenance of sufficient liquidity to meet operating requirements.
Diversification to avoid incurring unreasonable risks regarding specific
security types or individual financial institutions.
Attainment of market-average rate of return throughout budgeting and economic
cycles.
PRUDENCE:
The standard of prudence to be applied shall be the "prudent person" rule, which 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 person rule
shall be applied in the context of managing the overall portfolio.
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City of Woodburn Investment Policy
Investment officers acting in accordance with written procedures and exercising due
diligence shall be relieved of personal responsibility for an individual security's credit risk
or market price changes, provided deviations from expectations are reported in a timely
fashion and appropriate action is taken to control adverse developments.
INTERNAL CONTROLS:
The Finance Director shall establish a system of internal controls, which shall be reviewed
annually by the independent auditor. The controls shall be designed to prevent loss of
public funds due to fraud, error, misrepresentation, unanticipated market changes, or
imprudent actions.
DIVERSIFICATION:
Security diversification and staggered maturities are essential to ensure against a
significant loss of capital and to make available funds for unexpected cash requirements.
As a general policy, cash for daily disbursements will be held in the State of Oregon Local
Government Investment Pool. The following schedules will be used as a guideline for
investments.
MATURllY SCHEDULING
Under 30 days 10% Minimum
Under 90 days 25% Minimum
Under 180 days 75% Minimum
Under 360 days 90% Minimum
Under 18 months 100% Minimum
Maturities exceeding eighteen months must be approved by the
Woodburn City Council.
SECURllY SELECTION
Maximum percentages of securities listed below have been set based on the assumed
risk factors for each security. All securities are also included in the list of "U.S.
Government and Agency Securities for Local Government Investments Under ORS
294.035 and 294.040." This list was compiled by the Office of the Oregon State Treasurer
and revised September 1985
U.S. Treasury Bills, Notes and Bonds
(maturing in less than eighteen months)
State of Oregon Local Government Investment Pool
Banker's Acceptances
Oregon-Issued
Non-Negotiable Time Certificates
Commercial Banks
75% Maximum
100% Maximum
50% Maximum
25% Maximum
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City of Woodburn Investment Policy
Savings and Loan
U.S. Government Agency Discount Notes and Bonds
{U.S. Government and Agency Securities for
Local Government Investments under ORS 294.035
and 294.040, prepared by the Oregon State
Treasurer's Office}
10% Maximum
50% Maximum
To receive deposits, a bank, savings and loan association, or securities dealer must
maintain a branch or office within the state, with local institutions being given preference.
Banks and savings and loans with deposits less than $2,000,000 will be limited to TCD's
of $100,000. Banks and savings and loans with deposits over $2,000,000 will be limited
to TCD's of up to 10% of deposits. A maximum of $1 ,500,000 of TCD's and/or BA's may
be invested with one financial institution.
Each participating financial institution must provide a statement of financial condition on
an annual basis. This statement will be kept on file in the Finance Department.
Securities dealers not affiliated with a bank shall be required to have an office located in
Oregon and be classified as reporting dealers affiliated with the New York Federal
Reserve Bank as primary dealers.
COLLATERALlZATION:
Time certificates of deposits will be held in the vault of the City of Woodburn or may be
protected by third party custodial safekeeping. Bearer securities shall be protected by
third party custodial safekeeping. Treasuries, agency discount notes and bonds, and
bankers acceptances shall be secured through third party custody and safekeeping
procedures.
Deposit-type securities {Le., certificates of deposit} shall be collateralized through the state
collateral pool as required by ORS for any amount exceeding FDIC or FSLlC coverage.
Other investments shall be collateralized by the actual security held in safekeeping by the
third party.
PERFORMANCE EVALUATION:
The performance of the City's portfolio shall be measured against the performance of the
State of Oregon Local Government Investment Pool.
REPORTING REQUIREMENTS:
An investment report shall be prepared at least quarterly for submission to the City
Administrator, with a copy to the city auditor. The report shall contain a list of the
investments, a description of the type of investment, investment dates, principal amount,
interest rate and earnings, total earnings fiscal year to date, and the average percentage
earnings year to date. Within 60 days of the end of the fiscal year, the Finance Director
shall present to the City Council, an annual investment report. This annual report shall
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City of Woodburn Investment Policy
include a 12-month and separate quarterly comparisons of return, summarize significant
market conditions and developments, and suggest improvements that might be made in
the investment program.
POLICY REVIEW:
This policy shall be reviewed and modified, if appropriate, on an annual basis by the
Woodburn City Council unless market conditions or operations warrant an earlier review.
12/90
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City of Woodburn Investment Policy
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