HomeMy WebLinkAboutResolution No. 2013-01RESOLUTION 2013 -01
A RESOLUTION OF THE CITY COUNCIL OF CAPE CANAVERAL,
BREVARD COUNTY, FLORIDA, ADOPTING A REVISED
INVESTMENT POLICY PURSUANT TO SECTION 218.415, FLORIDA
STATUTES; PROVIDING FOR THE REPEAL OF PRIOR
INCONSISTENT RESOLUTIONS AND WRITTEN INVESTMENT
POLICIES, SEVERABILITY, AND AN EFFECTIVE DATE.
WHEREAS, the City is granted the authority, under Section 2(b), Article VIII, of the
State Constitution, to exercise any power for municipal purposes, except when expressly
prohibited by law; and
WHEREAS, pursuant to Section 218.415, Florida Statutes, investment activity of a
municipality must be consistent with a written Investment Policy adopted by the City Council or
be conducted in accordance with the alternative investment guidelines set forth in Section
218.415(17), Florida Statutes; and
WHEREAS, the City is authorized to adopt a written Investment Policy pursuant to
Section 218.415, Florida Statues; and
WHEREAS, the City Council has historically elected to adopt a written Investment
Policy by Resolution 2001 -24 for the City consistent with Florida law rather than rely on the
alternative investment guidelines in the Florida Statutes; and
WHEREAS, the City Council last amended the existing written Investment Policy in
2002 by Resolution 2002 -25; and
WHEREAS, the Florida Legislature has amended Section 218.415, Florida Statutes
several times since the City last updated its Investment Policy; and
WHEREAS, Section 218.415(22), Florida Statutes requires the City's Auditor to report,
as part of the Annual Audit, whether or not the City has complied with Section 218.415; and
WHEREAS, the City's Auditor has reported that although the City's investments
complied with the requirements of Section 218.415, the City's Investment Policy does not
include all of the enumerated requirements set forth in Section 218.415; and
WHEREAS, based on their Report, the City's Auditor has recommended that the City
Council update the City's Investment Policy; and
WHEREAS, City staff has recommended that the City Council continue its past practice
of adopting a written Investment Policy for the City and not rely solely on the alternative
investment guidelines in Section 218.415; and.
City of Cape Canaveral, FL
Resolution No. 2013 -01
Page 2 of 3
WHEREAS, based on the Auditor's Report and City staff's recommendation, the City
Council hereby finds that it is in the City's best interests to update the City's written Investment
Policy in order to afford the City flexibility, oversight and control over the investment of City
Funds;
WHEREAS, the City Council also hereby finds that the Investment Policy adopted
pursuant to this Resolution is consistent with Section 218.415, Florida Statutes, and is structured
to place the highest priority on the safety of principal and liquidity of the City's Funds and that
the optimization of investment returns shall be secondary to the requirements for safety and
liquidity; and
WHEREAS, it is the intent of the Investment Policy adopted hereunder to apply to
Funds under the control of the City in excess of those required to meet current expenses; and
WHEREAS, it is the intent and purpose of the Investment Policy adopted hereunder to
promote sound financial policies and practices that are commensurate with the nature and size of
the Public Funds within the City's custody; and
WHEREAS, the City Council of Cape Canaveral deems that this Resolution is in the
best interests of the public health, safety, and welfare of the citizens of Cape Canaveral.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Cape
Canaveral, Brevard County, Florida, as follows:
Section 1. Recitals. The foregoing recitals are hereby fully incorporated herein by
this reference as Legislative Findings and the intent and purpose of the City Council of the City
of Cape Canaveral.
Section 2. Revised Investment Policy The City Council hereby adopts the revised
Investment Policy which is attached hereto as Attachment #1 and fully incorporated herein by
this reference.
Section 3. Repeal of Prior Inconsistent Resolutions and Investment Policies
All prior inconsistent resolutions adopted by the City Council, or parts of prior Ordinances and
Resolutions in conflict herewith, are hereby repealed to the extent of the conflict.
Section 4. Severability If any section, subsection, sentence, clause, phrase, word,
or portion of this Resolution is for any reason held invalid or unconstitutional by a court of
competent jurisdiction, whether for substantive, procedural, or any other reason such portion
shall be deemed a separate, distinct, and independent provision, and such holding shall not affect
the validity of the remaining portions of this Resolution.
City of Cape Canaveral, FL
Resolution No. 2013 -01
Page 3 of 3
Section 5. Effective Date This Resolution shall become effective immediately
upon adoption by the City Council of the City of Cape Canaveral.
ADOPTED by the City of Cape Canaveral, Florida, this 15th day of January, 2013.
ATTEST! % t
I
Angela Apperson, 'As- sistant City
Manager /City Clerk
Approved as to Form:
Anthony A. Garganese, City Attorney
Rocky Randels, MAYOR
Name For
John Bond x
Bob Hoog X
Buzz Petsos Motion
Rocky Randels x
Betty Walsh Second
Against
Resolution 2013 -01 Attachment #1
INVESTMENT POLICY
City of Cape Canaveral, FLORIDA
I. PURPOSE
The purpose of this policy is to set forth the investment objectives and parameters for the
management of public funds of the City of Cape Canaveral, Florida (hereinafter "City ").
These policies are designed to ensure the prudent management of Public Funds, the
availability of operating and capital funds when needed and a satisfactory investment
return. This Policy is adopted to implement Section 218.415, Florida Statutes.
II. SCOPE
In accordance with Section 218.415, Florida Statutes, this Investment Policy applies to
the investment of public funds in excess of the amounts needed to meet current expenses,
which includes cash and investment balances of the City's Funds.
This policy does not apply to the investment of principal, interest, reserve, construction,
capitalized interest, redemption or escrow accounts created by Ordinance or Resolution
pursuant to the issuance of bonds where the investments are held by an authorized
depository.
III. INVESTMENT OBJECTIVES
Safety of Principal
The foremost objective of this Investment Policy is the safety of the principal of invested
funds. Investment transactions shall seek to keep capital losses to a minimum, whether
they are from securities defaults or erosion of market value.
Maintenance of Liquidity
The second highest priority is liquidity of Funds. The portfolios shall be managed in
such a manner that Funds are available to be liquidated to meet reasonably anticipated
cash flow requirements in an orderly manner.
Return on Investment
The third highest priority is income. Investments shall be undertaken with the objective
of attaining a satisfactory rate of return, taking into account investment risk constraints
and liquidity needs. Return on investment is of the least importance compared to the
safety and liquidity objectives described above. Investments are limited to relatively low
risk securities in anticipation of earning a fair return relative to the risk being assumed.
Resolution 2013 -01 Attachment #1
IV. DELEGATION OF AUTHORITY
The responsibility for providing oversight and direction in regard to the management of
the investment program resides with the Investment Committee. The Investment
Committee shall be established consisting of the City Manager, Assistant City Manager
and Finance Director. The Investment Committee shall meet periodically to review the
City's investment strategy.
The management responsibility for all City funds and investment transactions is
delegated to the City Manager. The Finance Director shall establish written procedures
for the operation of the Investment Program and a system of internal accounting and
administrative controls to regulate the activities of employees.
V. STANDARDS OF PRUDENCE
The standard of prudence to be used shall be the "Prudent Person" standard and shall be
applied in the context of managing the overall Investment Program. The Investment
Committee acting in accordance with written procedures and this Investment Policy and
exercising due diligence shall be relieved of any personal responsibility for an individual
security's credit risk or market price changes. The Prudent Person standard is as follows:
"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 from the investment."
VI. ETHICS AND CONFLICTS OF INTEREST
The City's staff 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. Also, employees
involved in the investment process shall disclose to the City any material financial
interests in financial institutions that conduct business with the City, and they shall
further disclose any material personal financial /investment positions that could be related
to the performance of the City's Investment Program.
VII. INTERNAL CONTROLS AND INVESTMENT PROCEDURES
The Finance Director shall establish and maintain a written system of internal controls
and operational procedures. The system of internal controls shall be periodically
reviewed no less than once every three (3) years or whenever comments regarding the
controls are submitted to the City by Auditors. The review should be conducted by the
Investment Committee to assure proper functioning of the controls. The internal controls
should be designed to prevent losses of funds, which might arise from fraud, employee
error, and misrepresentation by third parties, or imprudent actions by employees.
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Resolution 2013 -01 Attachment #1
No person may engage in an investment transaction except as authorized under the terms
of this Policy.
Independent Auditors, as a normal part of the Annual Audit of the City, shall conduct a
review of the system of internal controls to ensure compliance with policies and
procedures.
VIII. MATURITY AND LIQUIDITY REQUIREMENTS
To the extent possible, an attempt will be made to match investment maturities with
known cash needs and anticipated cash flow requirements. Investment maturities shall
not exceed five (5) years.
IX. AUTHORIZED INVESTMENTS AND PORTFOLIO COMPOSITION
Investments should be made subject to the cash flow needs and such cash flows are
subject to revisions as market conditions and the City's needs change. However, when
the invested Funds are needed in whole or in part for the purpose originally intended or
for more optimal investments, the City Manager may sell the investment at the then -
prevailing market price and place the proceeds into the proper account.
The following are the investment requirements and allocation limits on security types,
issuers, and maturities, as established by the City. The Investment Committee shall have
the option to further restrict investment percentages from time to time based on market
conditions, risk and diversification investment strategies. The percentage allocation
requirements for investment types and issuers are calculated based on the market value of
each investment.
A. The Florida Local Government Surplus Funds Trust Fund and the Florida State
Treasury's Special Purpose Investment Account.
1. Purchase Authorization
Invest in the Florida Local Government Surplus Funds Trust Fund and the
Florida State Treasury's Special Purpose Investment Account.
2. Portfolio Composition
A maximum of 100% of available funds may be invested in the Florida Local
Government Surplus Funds Trust Fund and the Florida State Treasury's Special
Purpose Investment Account.
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Resolution 2013 -01 Attachment #1
B. Direct Obligations of the United States Treasury
1. Purchase Authorization
Invest in Negotiable Direct Obligations or obligations the principal and
interest of which are unconditionally guaranteed by the United States
Government. Such securities will include, but not be limited to the following:
Treasury Bills
Treasury Notes
Treasury Bonds
2. Portfolio Composition
A maximum of 100% of available funds may be invested in the United States
Government Securities.
3. Maturity Limitations
The maximum length to maturity of any direct investment in the United States
Government Securities is five (5) years from the date of purchase; provided,
always, that no such investment shall be made without providing sufficient
liquidity of funds to pay City obligations as they may become due.
C. Interest Bearing Time Deposit or Saving Accounts
1. Purchase Authorization
Invest in non - negotiable interest bearing Certificates of Deposit or savings
accounts in banks organized under the laws of this State and/or in National
Banks organized under the laws of the United States and doing business and
situated in the State of Florida, provided that any such deposits are secured by
the Florida Security for Public Deposits Act, Chapter 280, Florida Statutes.
Additionally, the full amount of principal and accrued interest of each such
Certificate of Deposit shall be insured by the Federal Deposit Insurance
Corporation.
2. Portfolio Composition
A maximum of 100% of available funds may be invested in non - negotiable
interest bearing time deposits or savings accounts.
3. Limits on Individual Issuers
A maximum of 100% of available funds may be deposited with any one
issuer.
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Resolution 2013 -01 Attachment #1
4. Maturity Limitations
The maximum maturity on any Certificate shall be no greater than five (5)
years from the date of purchase. The maximum maturity on any Certificate
shall be no greater than five (5) years from the date of purchase; provided,
always, that no such investment shall be made without providing sufficient
liquidity of funds to pay City obligations as they may become due.
D. Registered Investment Companies (Money Market Mutual Funds)
1. Investment Authorization
Invest in shares of open -end or no -load Money Market Mutual Funds
provided such Funds are registered under the Federal Investment Company
Act of 1940 and operate in accordance with 17 C.F.R. § 270.2a -7, which
stipulates that Money Market Funds must have an average weighted maturity
of 90 days or less. The prospectus of such Funds must indicate that the share
value shall not fluctuate. The Funds must be registered with the Securities
and Exchange Commission registered Money Market Funds and have the
highest credit quality rating from a nationally recognized rating agency.
2. Portfolio Composition
A maximum of 100% of available funds may be invested in Money Market
Funds.
3. Limits of Individual Issuers
A maximum of 100% of available funds may be invested with any one Money
Market Fund.
4. Rating Requirements
The Money Market Funds shall be rated "AAm" or "AAm -G" or better by
Standard & Poor's, or the equivalent by another rating agency.
5. Due Diligence Requirements
A thorough investigation of any Money Market Fund is required prior to
investing, and on a continual basis. A current prospectus must be obtained.
E. Intergovernmental Investment Pool
1. Investment Authorization
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Resolution 2013 -01 Attachment #1
Intergovernmental Investment Pools that are authorized pursuant to the Florida
Interlocal Cooperation Act, as provided in Section 163.01, Florida Statutes.
2. Portfolio Composition
A maximum of 100% of available funds may be invested in intergovernmental
investment pools.
3. Due Diligence Requirements
A thorough investigation of any pool fund is required prior to investing. A
current prospectus must be obtained.
X. DERIVATIVES AND REVERSE REPURCHASE AGREEMENTS
Investments in any derivative products or the use of reverse repurchase agreements are
not permitted. A "derivative" is defined as a financial instrument the value of which
depends on, or is derived from, the value of one or more underlying assets or indices or
asset values.
XI. REPORTING
The Finance Director shall provide a minimum of a quarterly Investment Report as a part
of the Finance Report including the listing of holdings in the portfolio at cost and
estimated value to the City Manager. This report will then be forwarded to the City
Council.
XII. THIRD -PARTY CUSTODIAL AGREEMENTS
All securities, with the exception of Certificates of Deposits, shall be held with a third
party custodian; and all securities purchased by the City should be properly designated as
an asset of the City. The securities must be held in an account separate from the assets of
the Financial Institution. A "third party custodian" is defined as "any bank depository
chartered by the Federal Government, the State of Florida, or any other state or territory
of the United States which has a branch or principal place of business in the State of
Florida all as defined in Section 658.12, Florida Statutes, or by a national association
organized and existing under the laws of the United States which is authorized to accept
and execute trusts and which is doing business in the State of Florida."
Certificates of Deposits maintained at the issuing bank shall clearly identify the City as
the owner.
The City Manager shall execute on behalf of the City, third party custodial
agreement(s) with its bank(s) and depository institution(s). Such agreements may
include letters of authority from the City, details as to the responsibilities of each
party, method of notification of security purchases, sales, delivery, procedures
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Resolution 2013 -01 Attachment #1
related to wire transfers, safekeeping and transaction costs, procedures in case of
wire failure or other unforeseen mishaps, describing the liability of each party.
The custodian shall accept transaction instructions only from those persons who have
been duly authorized by the City and which authorization has been provided, in writing,
to the custodian. No withdrawal of securities, in whole or in part, shall be permitted
unless by such a duly authorized person.
The custodian shall provide the Finance Director with safekeeping receipts that provide
detail information on the securities held by the custodian.
XIII. INVESTMENT POLICY REVIEW
The Investment Committee shall review the Policy annually and make revisions as
warranted.
XIV. PREEMPTION
Any provision of any special act, Municipal Charter, or other law which prohibits or
restricts a Local Governmental Entity from complying with this section or any rules
adopted under this section is void to the extent of the conflict.
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