HomeMy WebLinkAboutC19-009 Eagle County Investment PolicyEagle County, Colorado Investment Policy INTRODUCTION AND SCOPE Eagle County (the "County"), centrally located in the Rocky Mountains along Interstate 70, is home to the internationally renowned ski resorts Vail and Beaver Creek. The County operates as a statutory county, with a three-member Board of County Commissioners. The Board of County Commissioners for Eagle County first adopted the County's Investment Policy on October 13, 1992, by Resolution 92-128. The Board of County Commissioners approved this version of the Investment Policy on January 9, 2019 by Consent Agenda. The following Investment Policy addresses the methods, procedures, and practices which must be exercised to ensure effective and judicious fiscal and investment management of the County's funds. This Investment Policy shall apply to the investment management of those County funds listed in Annex I of this Investment Policy. All cash, except for certain restricted funds also listed in Annex I of this Investment Policy, shall be pooled for investment purposes. The investment income derived from the pooled investment account shall be allocated to the pooled funds listed in Annex I based upon the proportion of their respective average balances relative to the total pooled balance. INVESTMENT OBJECTIVES The County's funds shall be invested in accordance with all applicable County policies and codes, Colorado statutes, and federal regulations, and in a manner designed to accomplish the following objectives, which are listed in priority order: • Preservation of capital and protection of investment principal. • Maintenance of sufficient liquidity to meet anticipated cash flows. • Diversification to avoid incurring unreasonable market risks. • Attainment of a market value rate of return. DELEGATION OF AUTHORITY In accordance with C.R.S. § 30-10-708, the Board of County Commissioners has granted the County Treasurer (the "Treasurer") authority for conducting investment transactions. The Deputy Treasurer and other authorized persons may be appointed to assist the Treasurer in performing investment management functions. Annex H lists the persons authorized to transact investment business for the County. 1 C19-009 T01MITIV eres to tnernm n Finance Officers Association's Code of Professional 'Ahics,, a copy of which is available online at hgp.*//`MrYvvw.gfoa.". All investments shall be made in accordance with the following Colorado laws: C.R.S. § 065401 et seq. Public Deposit Protection Act; C.R.S. § 24-75-601, et. seq. Funds - Legal Investments; C.R.S. § 24-75-603, Depositories; and C.R.S. § 24-75-702, Local Governments authority to pool surplus funds. Any revisions or extensions of these sections of the Colorado Revised Statutes will be assumed to be part of this Investment Policy immediately upon being enacted. The Treasurer has further restricted the investment of County funds to the f©Mowing types of Securities and transactions: 1. LT. S. Treasury Strips with ma Obligations: Treasury Bills, Treasury Notes, Treasury Bonds, and 'Treasury sties not exceeding five years from the date of trade settlement. 2. Federal Instrc�rnentality Securities: Debentures, discount notes, callable securities, step-up securities, and stripped principal or coupons with maturities not exceeding five years from the date of trade settlement. Subordinated debt shall not be purchased. 3. General Obligations and Revenue Obligations of state or local governments with a matu.ri , not exceeding rive years from the date of trade settlement: General Obligations and Revenue Obligations of this state or any political subdivision of this state must be rated at the time of purchase at least A- or the equivalent by at least two nationally recognized statistical rating organizations ("NRSROs"). General Obligations and Revenue Obligations of any other state or political subdivision of any other state must be rated at the time of purchase at least AA - or the equivalent by at least two NRSROs. Exposure to municipal bonds shall not exceed 25%° of the portfolio with no more than 5% held in any one issuer. 4. Corporate Debt.: Corporate debt with a mati�rity not exceeding three years from the date of trade settlement, Issued by any corporation or bark organized and operating within the United States. The County hereby finiher authorizes investments in dollar denominated securities issued by a corporation or bank that is organized and operating within Canada or Australia, not to exceed a portfolio allocation of 10% per each country. The debt must be rated at least AA-, Aa3 or the equivalent at the time of purchase by at least two NRSROs. Subordinated debt shall not be purchased. The combined exposure to corporate debt, commercial paper and bankers acceptances shall not exceed 50% of the portfolio, with no more than 5% ° held in any one issuer. 5. N on-negotiable Certificates of Deposit: Non-negotiable Certificates of Deposits ("CD") in any Federal Deposit Insurance Corporation ("FDIC") insured state or national bank located in Colorado that is an eligible public depository as defined in C.R.S. § 11-10.5 -103. CDs that exceed FDIC insurance limits shall be collateralized as required by the Public Deposit Protection Act. The County shall limit the aggregate value of CDs to no more than 2 5 % of 3 Securities that have been downgraded below minimum ratings described herein may be sold or held at the County's discretion. The portfolio will be brought back into compliance with Investment Policy guidelines as soon as is practical. The foregoing list of authorized securities shall be strictly interpreted. Any deviation from this list must be pre -approved by the Treasurer in writing. The County sha11 diversify its investments to avoid incurring unreasonable risks inherent in over- investing in specific instruments, individual financial institutions, or maturities. Nevertheless, the asset allocation in the portfolio should be flexible depending upon the outlook for the economy, the securities market, and the County's anticipated cash flow needs. The County shall limit investments to a maximum percentage of the portfolio as follows: Security Types (Aggregated when applicable) Max % Portfolio Max %Per Issuer Non-negotiable CDs 25% 5% Creneral Obligation and Revenue Obligation Debt 25% 5% Corporate Debt, Commercial Paper and Bankers Acceptances 50% 5% Investments shall be limited to maturities not exceeding five years from the date of trade settlement unless otherwise approved in wrg by the Treasurer. The maximum weighted average maturity for the portfolio shall be 2.5 years. The County's investable funds will be invested to meet cash flow projections. Core funds (those funds that the County will not need for expected, short-term liabilities) will be identified through cash flow projections so that they can be invested longer-term when market conditions are favorable for such strategies. In the, ease of callable securities,., the first . call date shall be used as the maturity date if, in the opinion of the Treasurer, there is -little doubt that the security v�i11 be called on that call date. The final maturity- date shall be used to disclose the maximum maturity liability in the County's financial reports... SAFEI�E�PING AND CUSTODY The Treasurer shall approve one or more banks to provide safekeeping and custodial services for the County. Custodian banks shall be selected on the basis of their ability to provide service to the County's account and the competitive pricing of their services. A County approved custody agreement shall be executed with each custodian bank prior to utilizing that bank's safekeeping and custody services. To be eligible for designation as the County's safekeeping and custodian bank, a financial institution shall qualify as an eligible public depository as defined in C.R.S. § 11-10.5-103. The purchase and sale of securities and repurchase agreement transactions shall be seitled on a delivery versus payment basis. Ownership of all securities shall be perfected in the name of the County. Sufficient evidence to title shall be consistent with modern investment, banking and commercial practices. All investment securities purchased by the County will be delivered by book entry and will be held in third -party safekeeping by the County approved custodian bank, its correspondent bank or the Depository Trust Company. The County's custodian will be required to fi�.rnish the County monthly reports of holdings of custodied securities as well as a report of monthly safekeeping activity. The investment and cash management portfolio shall be designed to attain a market rate of return throughout budgetary and economic cycles, taking into account prevailing market conditions, risk constraints for eligible securities, and cash flow requirements. The County shall use a dynamic benchmark rate of return for the County's investment portfolio which corresponds to the yield for the current U.S. Treasury security that matches the weighted average maturity of the portfolio. All fees involved with managing the portfolio should be included in the computation of the portfolio's rate of return. 1Vlonthly, the Treasurer shall prepare a report listing the investments held by the County; the current market valuation of the investments and performance results. The report shall include a summary of investment earnings during the period. Portfolio reports prepared for the County shall be compliant with all Governmental Accounting Standards Board requirements. 7 Eagle County, Colorado Investment Policy prepared by: Teak Simonton, Treasurer Eagle County, Colorado Approved as to legal form: n/a Eagle County, Colorado Approved: 1 Chair Eagle County Board of County Commissioners Date: January 9 , 2019 �s '. I1 Authonzed i�ersonnel The following persons are authorized to transact investment business and wire funds for investment purposes on behalf of Eagle County, Colorado: Tear Simonton, Treasurer Anissa Berge, Chief Deputy Treasurer Brandi Resa, Deputy Treasurer 11