I. SCOPE: This investment policy applies to all moneys and other financial resources of the Seymour Public Library District (“Library”) available for investment on its own behalf or on behalf of any other entity or individual.
II. OBJECTIVES: 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 (liquidity); and
● To obtain a reasonable rate of return (yield).
III. DELEGATION OF AUTHORITY: The Board of Trustees’ (“Board”) responsibility for administration of the investment program is delegated to the Library Treasurer (“Treasurer”) and the Finance Committee 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 database or records incorporating description and amounts of investments, transaction dates and other relevant information and regulate the activities of subordinate employees.
IV. PRUDENCE: 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 Library to govern effectively.
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 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. For purposes of this policy, “personal business activity” shall mean any involvement whatsoever in any business, including but not limited to banking, investment sales or management, brokerages, or referral activities.
V. DIVERSIFICATION: Subject to the limitations placed on the Library by law and the Board’s fiduciary obligation to adequately safeguard principal, the diversification of investments and deposits by type and location is encouraged.
VI. INTERNAL CONTROLS: It is the policy of the Board for all moneys collected by any officer or employee of the Library to transfer those funds to the Treasurer within five (5) business days of collection, or within the time period specified by law, whichever is shorter.
The Treasurer is responsible for establishing and maintaining an internal control structure to provide reasonable assurance that deposits and investments are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management’s authorization and recorded properly and are managed in compliance with applicable laws and regulations.
VII. DESIGNATION OF DEPOSITORIES: Funds received by the Library shall be deposited in one or more depository banks duly designated by the Board. Said designation shall be made at the Board’s organizational meeting, but may be changed by subsequent vote of the Board. Said depository or depositories shall be located and authorized to do business in New York. Any such depository so designated shall fully collateralize all deposits as provided by law and by this policy.
VIII. COLLATERALIZING OF DEPOSITS: In accordance with the provisions of General Municipal Law §10, all deposits of the Library, including certificates of deposit and special time deposits, in excess of the amount insured under the provisions of the Federal Deposit Insurance Act, shall be secured by one or more of the following:
- By a pledge of “eligible securities” with an aggregate “market value” as provided by General Municipal Law §10, at least 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 Library 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.
- By an eligible surety bond payable to the Library for an amount at least equal to 100% of the aggregate amount of deposits and the agreed upon interest, if any, executed by an insurance company authorized to do business in New York State, whose claims-paying ability is rated in the highest rating category by at least two nationally recognized statistical rating organizations.
IX. SAFEKEEPING AND COLLATERALIZATION: Eligible securities used for collateralizing deposits shall be held by 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 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 Library or its custodial bank.
The custodial agreement shall provide that securities held by the bank or trust company, or agency 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 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.
X. PERMITTED INVESTMENTS: As authorized by General Municipal Law, the Board authorizes the 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:
● Special time deposit accounts;
● Certificates of deposit;
● 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 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 the entity’s specific enabling legislation, authorizes such investments;
● Certificates of Participation (COPs) issued pursuant to General Municipal Law §109-b.
All investment obligations shall be payable or redeemable at the option of the Library 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 purchased with the proceeds of bonds or notes, shall be payable or redeemable at the option of the Library within two years of the date of purchase.
XI. AUTHORIZED FINANCIAL INSTITUTIONS AND DEALERS: The Library shall maintain a list of financial institutions and dealers approved for investment purposes. All financial institutions with which the Library conducts business must be creditworthy. Banks shall provide their most recent Consolidated Report of Condition (Call Report) at the request of the Library. Security dealers not affiliated with a bank shall be required to be classified as reporting dealers 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 and the Treasurer shall evaluate this list at least annually.
XII. PURCHASE OF INVESTMENTS: The Treasurer is authorized to contract for the purchase of investments:
a. Directly, including through a repurchase agreement, from an authorized trading partner.
b. By participation in a cooperative investment program with another authorized governmental entity pursuant to Article 5-G of the General Municipal Law where such program meets all requirements set forth in the Office of the State Comptroller Opinion No. 88-46, and the specific program has been authorized by the Board.
c. By utilizing an ongoing investment program with an authorized trading partner pursuant to a contract authorized by the 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 authorization from the officer authorized to make the investment. All such transactions shall be confirmed in writing to the Library by the bank or trust company. Any obligation held in the custody of a bank or trust company shall be held 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. Such agreement shall include all provisions necessary to provide the Library of a perfected interest in the securities.
Inquiries regarding this policy or requests for a printed copy should be directed to: Director, Seymour Public Library District, 176 Genesee Street, Auburn, New York, 13021 (315) 252-2571.
Adopted: October 23, 2018
Schedule of Eligible Securities
XX (i) Obligations issued, or fully insured or guaranteed as to the payment of principal and interest, by the United States of America, an agency thereof or a United States government sponsored corporation.
(ii) Obligations issued or fully insured or guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, and the African Development Bank. (iii) Obligations partially insured or guaranteed by any agency of the United States of America, at a proportion of the Market Value of the obligation that represents the amount of the insurance or guaranty.
XX (iv) Obligations insured or fully insured or guaranteed by the State of New York, obligations issued by a municipal corporation, school district or district corporation of such State or obligations of any public benefit corporation which under a specific State statute may be accepted as security for deposit of public moneys.
(v) Obligations insured by states (other than the State of New York) of the United States rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization. (vi) Obligations of Puerto Rico rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization. (vii) Obligations of counties, cities and other governmental entities of a state other than the State of New York having the power to levy taxes that are backed by the full faith and credit of such governmental entity and rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization. (viii) Obligations of domestic corporations rated in one of the two highest rating categories by at least one nationally recognized statistical rating organization. (ix) Any mortgage related securities, as defined in the securities Exchange Act of 1934, as amended, which may be purchased by banks under the limitations established by bank regulatory agencies. (x) Commercial paper and bankers’ acceptances issued by a bank, other than the Bank, rated in the highest short term category by at least one nationally recognized statistical rating organization and having maturities of not longer than 60 days from the date they are pledged.
XX (xi) Zero coupon obligations of the United States government marketed as “Treasury strips.”