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Home My WebLink AboutResolution 2015 (29) Resolution No. 29 (2015) ST. R I X- YNTY RESOLUTION AMENDING INVESTMENT POLICY 1 WHEREAS, the St. Croix County Board of Supervisors adopted Resolution No. 2(2014) 2 on January 7, 2014 amending the St. Croix County Investment Policy; and 3 4 WHEREAS, section XIII of the current policy directs the Administration Committee to 5 review the Investment Policy; and 6 7 WHEREAS, the Administration Committee has reviewed the Investment Policy 8 amendments and recommends approval by the St. Croix County Board of Supervisors. 9 10 THEREFORE, be it resolved by the St. Croix County Board of Supervisors that the 11 attached St. Croix County Investment Policy, as amended, is hereby adopted by the County 12 Board effective upon adoption. Legal—Fiscal—Administrative Approvals: Legal Note: None Fiscal Impact: The County desires 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 County and conforming to all federal and state statutes governing the investment of public funds He ther Wolske � e Assistan 'Carpnrah � bert M' Interun �— a 72015 Ama P ck pson,County /2015 08/19/15 Administration Committee APPROVED ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .......... RESULT: APPROVED [2 TO 1] MOVER: Jill Ann Berke, Supervisor SECONDER: Ron Kiesler, Vice Chair AYES: Jill Ann Berke, Ron Kiesler NAYS: Judy Achterhof EXCUSED: Travis Schachtner, Roy Sjoberg Vote Confirmation. a,chtncr,5u BCZSl2{l I S St. Croix County Board of Supervisors Action: Roll Call -Vote Requirement— Majority of Supervisors Present RESULT: ADOPTED [UNANIMOUS] MOVER: Travis Schachtner, Supervisor SECONDER: Roy Sjoberg, Supervisor AYES: Schachtner, Ring, Babbitt, Novotny, Sjoberg, Koch, Nelson, Berke, Ostness, Larson, Hansen, Kiesler, Peterson, Anderson, Achterhof, Leibfried ABSENT: Chris Kilber, Andy Brinkman, William Peavey This Resolution was Adopted by the St. Croix County Board of Supervisors on September 1, 2015 Cindy Campbell, County Clerk S T. C R 0 1-X '00,21 U,N T Y a iooi�o uo �muu rtu m uu luau""" immnA.m INVESTMENT POLICY It is the policy of St. Croix County (County) 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 County and conforming to all federal and state statutes governing the investment of public funds. L Governing Authority The investment program shall be operated in conformance with federal, state, and other legal requirements, including Wisconsin Statutes §§ 59.62 and 59.25(3)(s). II. Scope This investment policy applies to activities of the County with regard to investing the financial assets of all funds, including any new fund created, unless specifically exempted. Except for funds in certain restricted and special funds, the County commingles its funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. III. General Objectives The primary objectives, in priority order, of the County's investment activities shall be: 1. Safety Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The goal will be to mitigate credit risk, interest rate risk and custodial risk. 2. Liquidity The investment portfolio shall remain sufficiently liquid to enable the County to meet all operating requirements that might be reasonably anticipated. 3. Return on Investments The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints of safety and liquidity needs 4. Special Considerations Where possible, funds may be invested for the betterment of the local economy or that of local entities within the State. IV. Standards of Care 1. Prudence The standard of prudence to be used by investment officials shall be in accordance with the"prudent person rule"per Wisconsin Statutes § 881.01(11) and shall be applied in the context of managing an Page 1 of 4 REVISED Aug 2015 overall portfolio. The"prudent person" standard states that "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." Investment Officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal liability 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. 2. Ethics and Conflicts of Interest: Officers and employees involved in the investment process shall refrain from personal activity that could conflict with proper execution and management of the investment program, or that could impair their ability to make impartial investment decisions. Officers and employees involved in the investment process shall disclose to the County Administrator any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. The employees and officers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the County. V. Delegation of Authority: Pursuant to Wisconsin Statutes §§ 59.62 and 59.25(3)(s), and County Resolution (2015) the authority to manage the County's investment program is delegated to an Investment Committee comprised of the County Administrator, County Treasurer, Finance Director, and either the County Board Chair or County Board Vice Chair. The Finance Director shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinates. The Investment Committee shall act in accordance with established written procedures and internal controls for the operation of the investment program consistent with this Investment Policy. All participants in the investment process shall seek to act responsibly as custodians of the public trust. No officer or designee may engage in an investment transaction except as provided under the terms of this policy and supporting procedures. As defined in Wisconsin Statutes §66.0603(2), the County may delegate the investment authority over any of its funds not immediately needed to a state or national bank, or trust company, which is authorized to transact business in the State. Investment Advisor The Investment Committee may engage the services of one or more external investment advisors to assist in the management of the entity's investment portfolio in objectives. Such external advisors may be granted discretion to purchase and sell investment securities in accordance with this Investment Policy. Such advisors must be registered under the Investment Advisors Act of 1940. VI. Authorized Financial Institutions and Depositories The primary provider of banking services will be the County's official depository as determined by the Administration Committee and will abide by the guidelines of this policy. In addition, the Investment Committee may place funds in other public depositories defined in Wisconsin Statutes § 59.61(3). In accordance with Wisconsin Statutes §§ 34.01(5) and 34.09, all Wisconsin banks, state or federal chartered, as well as the Wisconsin local government investment pool fund, are authorized depositories. Page 2 of 4 REVISED Aug 2015 VII. Permitted Investments All investments will be made in accordance with Wisconsin Statutes §§ 66.0603 and 219.05 governing the investment of public funds and as further restricted by this Investment Policy. Investments shall be made in any of the following: 1. Time deposits in any credit union, bank, savings bank, trust company or savings and loan association that is authorized to transact business in this state if the time deposits mature in not more than 3 years. 2. Repurchase agreements that are fully collateralized by bonds or securities. 3. Bonds or securities issued or guaranteed as to principal and interest by the federal government, or by a commission, board or other instrumentality of the federal government. 4. Bonds or securities of any county, city, drainage district, technical college district, village, town or school district of this state. 5. Securities of a no-load investment trust with a portfolio limited to consisting of the following: • Bonds and securities issued by the federal government or a commission, board or other instrumentality of the federal government. • Bonds that are guaranteed as to principal and interest by the federal government or a commission, board or other instrumentality of the federal government. • Repurchase agreements that are fully collateralized by bonds or securities. 6. The State of Wisconsin Local Government Investment Pool and other states' managed local government investment pools (LGIPs). LGIPs other than the State of Wisconsin's should have a thorough investigation of the pool/fund prior to investing, and on a continual basis. VIII. Depository Collateralization Requirements The State pledges general purpose revenues as described in Wisconsin Statutes §20.144(1)(a) for the payment of losses of public deposits until the balance of the appropriation is exhausted. However, no payment for a loss in excess of$400,000 for any one public in any individual public depository will be made. As the Federal Deposit Insurance Corporation (FDIC) and National Credit Union Share Insurance Fund(NCUSIF)insures deposits up to $250,000, a public deposit is protected up to $650,000 in any one depository institution. Funds will only be placed in depository institutions that are FDIC or NCUSIF insured. Collateralization will be required on demand deposits, time deposits, certificates of deposit and repurchase (and reverse) agreements. Funds placed in any one depository institution above $250,000 including demand deposits, time deposits, and certificates of deposit must be 100% (minimum) collateralized as to principal and interest. The County chooses to limit collateral to the following government securities: 1. Obligations of the U.S. Government, its agencies and GSEs, including mortgage backed securities. 2. Obligations of any state, city, county or authority rated at least AA by two nationally recognized statistical rating organizations. Collateral will always be held by an independent third party with whom the County has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the County and retained. Collateralization shall be in the form of specific securities held for the County. The only exceptions are FDIC, NCUSIF, Securities Investor Protection Corporation (SIPC) and pre-approved insurance coverage. The County may collateralize its repurchase agreements using longer-dated investments not to exceed 5 years to maturity. The right of collateral substitution is granted. IX. Safekeeping and Custody All security transactions, including collateral for repurchase agreements, entered into by the County shall be conducted on a delivery-versus-payment(DVP)basis. Securities will be held by a third party custodian designated by the Investment Committee and evidenced by safekeeping receipts. 1. Delivery vs. Payment All trades of marketable securities will be executed (cleared and settled) on a delivery vs. payment Page 3 of 4 REVISED Aug 2015 (DVP)basis to ensure that securities are deposited in the County safekeeping institution prior to the release of funds. 2. Third-Party Safekeeping Securities will be held by an independent third-party safekeeping institution selected by the County. All securities will be evidenced by safekeeping receipts in the County's name. The safekeeping institution shall annually provide a copy of its most recent report on internal controls - Service Organization Control Reports (formerly 70, or SAS 70)prepared in accordance with the Statement on Standards for Attestation Engagements (SSAE)No. 16 (effective June 15, 2011.). 3. Internal Controls The Finance Director is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the County are protected from loss, theft or misuse. An internal control structure shall be designed to provide reasonable assurance that these objectives are met. X. Diversification The County will diversify its investments by security type and institution. With the exception of U.S. Treasury securities and authorized pools, no more than 50% of the County's total investment portfolio will be invested in a single security type or with a single financial institution. The County will make all reasonable efforts to place appropriate and competitive investments within institutions in St. Croix County. XI. Maturities Maturities of individual securities must be in compliance with Wisconsin Statutes § 66.0603. Per Wisconsin Statutes § 66.0603, time deposits may not exceed three(3)years, and debt that is not guaranteed as to principal and interest by the Federal Government or its Agencies, or a Wisconsin municipality must have a maturity not more than five(5)years. XII. Reporting The Finance Director shall provide the Administration Committee quarterly investment reports that provides an analysis of the status of the current investment portfolio. The management report should include comments on the fixed income markets and economic conditions, discussions regarding restrictions on percentage of investment by categories,possible changes in the portfolio structure going forward and thoughts on investment strategies, the name of any broker agent, investment hold period, discounts or premiums interest earned, yield, safekeeping agent and other information as requested by the Administration Committee. Schedules in the quarterly report should include the following: • A listing of individual securities held at the end of the reporting period by authorized Investment category • Average life and final maturity of all investments listed • Coupon, discount or earnings rate • Par value, Amortized Book Value and Market Value • Percentage of the Portfolio represented by each investment category XIII. Investment Policy Adoption St. Croix County's investment policy shall be adopted by resolution of the County Board of Supervisors. The County Administration Committee shall periodically review the policy and shall make any recommended changes to the County Board of Supervisors. Page 4 of 4 REVISED Aug 2015