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HomeMy WebLinkAboutR04-012 Investment PolicyCommissioner ~ ~? moved adoption of the following esolution: BOARD OF COUNTY COMMISSIONERS COUNTY OF EAGLE, STATE OF COLORADO RESOLUTION N0.2004 - ~`t-- ~ % ~ f~' ADOPTION OF AN INVESTMENT POLICY WHEREAS, the provisions of §30-10-708, C.R.S., as amended, and of §11-47-101 et seq., C.R.S., provide that the County Treasurer shall deposit all funds and monies of whatever kind that come into her possession by virtue of her office, in her name as such treasurer, in one or more state banks, national banks having their principal office in the State of Colorado, or in savings and loan associations having their principal offices in this state which have theretofore been approved and designated by written resolution duly adopted by a majority vote of the Board of County Commissioners of the County of Eagle, State of Colorado ("Board"), which shall be entered into its minutes; and WHEREAS, the Board by an adopted written resolution may authorize the County Treasurer to invest all or part of such funds and monies, in those securities set forth in C.R.S. §24-75-601.1 if the period from the date of purchase of the security to its maturity date is five years or less or if authorized by the Board for such period in excess of five years; and WHEREAS, pursuant to §24-75-701 et seq, C.R.S., Eagle County may pool certain monies in its treasury with similar monies of other Colorado jurisdictions, according to the condition and requirements of the statute; and WHEREAS, on March 31, 2001, by Eagle County Resolution No. 2001-036, the Board adopted Eagle County's Investment Policy, which the Board would now like to approve. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF EAGLE, STATE OF COLORADO: THAT, the Investment Policy attached hereto as Exhibit "A" is hereby adopted and approved. THAT, the County Treasurer of Eagle County be, and hereby is, authorized and approved to deposit all funds and monies of whatever kind that come into the Treasurer's possession by virtue of the office in her name as such Treasurer in accordance with the Investment Policy. THAT, the County Treasurer of Eagle County be, and hereby is, authorized to invest all or part of such funds and monies, in those securities set forth in C.R.S. §24-75-601.1 if the period from the date of purchase of the security to its maturity date is five years or less or if authorized by the Board for such period in excess of five years. THAT, the Treasurer shall ensure that no Eagle County monies are deposited, or continue to be deposited, in any national bank, state bank, savings and loan association, or other institution or investment which (1) is not in full compliance with applicable provisions of C.R.S. §11-10.5-101 et seq., and §11-47-101 et seq., as amended, concerning protection of deposits of public monies, (2) is not properly insured pursuant to C.R.S. §24-75-603, as amended, or (3) is not otherwise in full compliance with any other applicable statute or law concerning investments or deposits by counties. THAT, pursuant to §24-75-701 et seq, C.R.S., Eagle County may pool certain monies in its treasury with similar monies of other Colorado jurisdictions, according to the condition and requirements of the statute. THAT, this Investment Policy is effective as of December 4, 2000 until further order of the Board. MOVED, READ AND ADOPTED by the Board of County Commissioners of the County of Eagle, State of Colorado, at its regular meeting held the ~ day of 2004. ATTEST: Clerk to the Board of County Commissioner ~~E C ~I C3~ ~• O~ Tom . Sto e Commis ~o r Michael .Gallagher Commissioner Arn M. Menconi Commissioner Commissioner ~G~J D "~c seconded adoption of the foregoing resolution. The roll having been called, the vote was as follows: Commissioner Stone Commissioner Gallagher Commissioner Menconi This Resolution passed by " / 3 the County of Eagle, State of Colorado. COUNTY OF EAGLE, STATE OF COLORADO, By and Through Its OARD OF COUNTY COMMISSIONERS vote of the Board of County Commissioners of EAGLE COUNTY, COLORADO INVESTMENT POLICY I. INTRODUCTION AND SCOPE Eagle County, centrally located in the Rocky Mountains along Interstate 70, is home to the internationa{ly renown ski areas, Vail and Beaver Creek. Eagle operates as a statutory county, with athree-member Board of County Commissioners. The County Treasurer is elected to a four year term. The Treasurer's duties include receiving and paying moneys belonging to the County as well as investing the County's funds in accordance with applicable Colorado State Statutes, CRS Article 30, Section 10, Part 7, "Treasurer" and CRS 30-10-102, "All Money Delivered to Treasurer." By approval of the Board of County Commissioners, Eagle County's Investment Policy was adopted on October 13, 1992, by Resolution 92-128 and revised four times: on May 24, 1993, by Resolution 93-51; on April 22, 1996, by Resolution 96-34; on January 12, 1998, by Resolution 98-02; and on March 13, 2001, by Resolution 01-036. 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 Policy shall apply to the investment management the following financial assets under control of the County: general funds; E-911 funds; airport funds; debt service funds; agency funds; and transportation funds. These funds are listed by name in Annex I. All cash, except for certain restricted funds, shall be pooled for investment purposes. The investment income derived from the pooled investment account shall be allocated to the General Fund and those special funds listed in Annex I based upon the proportion of their respective average balances relative to the total pooled balance. A list of the restricted funds can also be found in Annex I. II. INVESTMENT OBJECTIVES All funds which are held for future disbursement shall be deposited and invested by the County in accordance with Colorado State Statutes and resolutions enacted by the County Board of Commissioners in a manner to accomplish the following objectives: Safety of Funds: Safety of principal is the program. Investments shall be undertaken preservation of capital in the overall portfolio. risk and interest rate risk. a) Credit Risk: the County will minimize failure of the security issuer, by: foremost objective of the investment in a manner that seeks to ensure the The objective will be to mitigate credit credit risk, the risk of loss due to the • Limiting investments to the safest types of securities • Pre-qualifying the financial institutions, broker/dealers, and advisors with which the County does business Diversifying the investment portfolio so that potential losses on individual securities will be minimized. EXHIBIT Page 1 Decem -, ,_ `;~~,.-. ,. . ~"~~': ' .-._. ,,, ._ --.,-,...~±~;k*'":-., "-"~=~~.~n~;-;~;,sc~a"Y°`. _,.-. -_'~~.a':~, 8~~'r~r~~~. ..... ,:„u_ .,z,~.w~.9.a.~r~*-a~stc~c~'~+~:.o+r~..t.~~~•: a.ca,. ~w~n,n-;..caw-~..~.6,,.eY~.. b) Interest Rate Risk: the County will minimize the risk that the market value of securities in the portfolio will fall due to changes in general interest rates by: • Structuring the investment portfolio so that securities mature sufficiently close to cash requirements for ongoing operations, thereby minimizing the potential need to sell securities on the open market prior to maturity • Investing operating funds primarily in short to intermediate-term securities, approved local government investment pools, approved money market mutual funds and repurchase agreements. 2. Liquidity of Funds: The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. To ensure that adequate funds are available to pay the County's projected financial obligations, investments will be purchased or deposits made that reasonably match the anticipated cash disbursements of the County. Since all possible cash demands cannot be anticipated, the portfolio shall consist largely of securities with active secondary or resale markets so that the potential for a realized loss, if an early liquidation of a security is necessary, will be minimized. A core of stable funds may be identified through cash flow analysis that is available for investing in longer-term securities. Although the market value of these longer- term securities may fluctuate significantly, the fluctuation will not effect the liquidity of the portfolio since they can be held to maturity in all but extreme circumstances. 3. Yield: The County's portfolio shall earn a competitive market rate of return on available funds throughout budgetary and economic cycles. In meeting this objective, investment management personnel will take into account the County's investment risk constraints and cash flow needs. III. DELEGATION OF AUTHORITY In accordance with CRS 30-10-708, responsibility for conducting investment transactions for the County resides with the County Treasurer. The Deputy Treasurer (CRS 30-10-704) and other authorized persons (CRS 30-10-703) may be appointed to assist the Treasurer in performing investment management, cash management or treasury functions. Persons authorized to transact securities business for Eagle County are listed in Annex II of this Policy. The Treasurer shall establish written administrative procedures for the operation of the County's investment program consistent with this Policy. The Treasurer may engage the support services of outside professionals. Such services may include engagement of financial advisors in conjunction with debt issuance, portfolio management support, special legal representation, third party custodial services, and independent rating services. IV. PRUDENCE Page 2 December 4, 2000 ».., y~'.tb'~ `C: _ ~- , .. . - i' _ ,. `..?'.... ; ~ :. - _ ..-_ ... 4:i.ir- - ' - - . , « .:i•~+,.r~sc^.YS.;3,ys.a:.~ .., -..t-::..a «..., ~ ... x.. -.....~x.am..w~w.s,...a«a.F+.N..w ~.-..b..«.. ,. -....,.~~.«®....,,,. »- ... _... ,. _ ..._..... w.... The standard of prudence to be used for managing the County's assets is the "prudent investor" rule, which states that a prudent investor "shall exercise the judgment and care, under circumstances then prevailing, which men of prudence, discretion, and intelligence exercise in the management of the property of another, not in regard to speculation but in regard to the permanent disposition of funds, considering the probable income as well as the probable safety of their capital." (CRS 15-1-304, Standard for Investments.) The County Treasurer is, by state statute, a fiduciary of County funds. The County's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The County recognizes that no investment is totally riskless and that the investment activities of the County are a matter of public record. Accordingly, the County recognizes that occasional measured losses are inevitable in a diversified portfolio and shall be considered within the context of the overall portfolio's return, provided that adequate diversification has been implemented and that the sale of a security is in the best long-term interest of the County. The County Treasurer and other authorized persons 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 (CRS 30-10-708(3)). Eagle County Treasurer is protected as an elected public official by a surety bond in the amount of $180,000 issued by Pioneer General Insurance Company for a term of four years beginning January 14, 1997. V. ELIGIBLE INVESTMENTS AND TRANSACTIONS All investments shall be made in accordance with the Colorado Revised Statutes: CRS 11-10.5-101, et seq. Public Deposit Protection Act; CRS 11-60-101, et seq. US. Agency Obligations; and CRS 30-10-708, et seq. Treasurer -Deposit of Funds in Banks and Savings and Loan Associations, which further sites CRS 11-47-101, et seq. Savings and Loan Association Public Deposit Protection Act; CRS 24-75-601, et. seq. Funds - Lega! Investments for Governmental Units; CRS 24-75-603, et seq. Depositories; and CRS 24-75-701, et seq. Local Governments -Local Government Pooling. Any revisions or extensions of these sections of the CRS 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 following types of securities and transactions: U.S. Treasury Obligations: Treasury Bills, Treasury Notes, Treasury Bonds and Treasury Strips with maturities not exceeding five years from the date of purchase. 2. Federal Instrumentality Securities: Debentures, discount notes, callable securities and stripped principal or coupons with maturities not exceeding five years from the date of purchase issued by the following only: Federal National Mortgage Association (FNMA), Federal Farm Credit Banks (FFCB), Federal Home Loan Banks (FHLB), and Federal Home Loan Mortgage Corporation (FHLMC). 3. Prime Commercial Paper with maturities not exceeding 270 days from the date of purchase and rated in its highest rating category at the time of purchase by one or Page 3 December 4, 2000 . ~ ...'r;, -. ~3 ---, a, mod' i. -, ......, .-.-.-~.. +-i:tl'u~ :--w,'a-.=43:X.: , . ,. ~ ..„!x.,:-f.,~,sz+„n .uaaamw.ao-.an r~+aeee~..++w.r• w ... ...............+a~+ra-R....,..-..,. m.e, e,.aav.,.. ,.~,...,..v~.,. .,,~. .... ..,-...-wa... more nationally recognized organizations which regularly rates such obligations. If the commercial paper issuer has senior debt outstanding, the senior debt must be rated by each service that publishes a rating on the issuer of at least A+ by Standard and Poors, A-1 by Moody's, and A+ by Fitch IBCA, Duff and Phelps. Senior debt is defined as the most senior secured or unsecured debt of the issuer with an original maturity exceeding one year. 4. Eligible Bankers Acceptances with an original maximum maturity not exceeding 180 days, issued on domestic banks or branches or foreign banks domiciled in the U.S. and operating under U.S. banking laws, whose senior long-term debt is rated, at the time of purchase AA by Standard and Poors, Aa by Moody's, or AA by Fitch IBCA, Duff and Phelps. 5. Repurchase Agreements with a defined termination date of 180 days or less collateralized by U.S. Treasury securities with a maturity not exceeding 10 years. For the purpose of this section, the term collateral shall mean purchased securities under the terms of the County's approved Master Repurchase Agreement. The purchased securities shall have an original minimum market value including accrued interest of 102 percent of the dollar value of the transaction and the collateral maintenance level shall be 101 percent. Collateral shall be held in the County's custodial bank as safekeeping agent, and the market value of the collateral securities shall be marked-to-the-market daily. Repurchase Agreements shall be entered into only with dealers who have executed a Master Repurchase Agreement with the County and who are recognized as Primary Dealers with the Market Reports Division of the Federal Reserve Bank of New York. Broker/dealers who have an executed County approved Master Repurchase Agreements are listed in Annex IV. Approved counterparties to repurchase agreements shall have at least ashort-term debt rating of A-1 or the equivalent and along-term debt rating of A or the equivalent from one or more nationally recognized organizations which regularly rates such obligations. Local Government Investment Pools authorized under CRS 24-75-701 and CRS 30- 10-708(4) which: 1) are "no-load" (i.e., no commission fees shall be charged on purchases or sales of shares); 2) have an objective of maintaining a constant daily net asset value per share (usually $1.00 per share); 3) limit assets of the fund to securities authorized in this Investment Policy; 4) have a maximum stated maturity and weighted average maturity in accordance with Federal Securities Law Regulation 2A-7; and 5) have a rating of AAAm by Standard and Poors or AAA by Moody's or AAA/V-1+ by Fitch Investors Service. 7. Money Market Mutual Funds registered under the Investment Company Act of 1940 which: 1 } are "no-load" (i.e. no commission fee shall be charged on purchases or sales of shares); 2) have a constant daily net asset value per share (usually $1.00 per share); 3) limit assets of the fund to securities authorized in this Investment Policy; 4) have a maximum stated maturity and weighted average maturity in accordance with Federal Securities Regulation 2A-7; and 5) are rated either AAAm by Standard and Poors or AAA by Moody's or AAA/V-1+ by Fitch Investors Service. Page 4 December 4, 2000 8. Time Certificates of Deposit or Savinqs Accounts in state or national banks which are state approved depositories per CRS 24-75-603, et seq. (as evidenced by a certificate issued by the State Banking Board) and are insured by the FDIC. Certificates of Deposit which exceed the FDIC insured amount shall be collateralized in accordance with the Colorado Public Deposit Protection Act. This collateral shall have a market value equal to or exceeding 102 percent of the difference between the insured amount and the County's total deposit of all funds with the institution. The County shall limit the aggregate value of Certificates of Deposit to no more than 25% of the County's portfolio. The County shall purchase Certificates of Deposit only from financial institutions that meet the PMA or Sheshunuff bank rating requirements described in Section X of this Policy. The amount of Certificates of Deposit that can be purchased from any one financial institution shall be limited to 25% of that institution's unimpaired capital. 9. Time Certificates of Deposit or Savinqs Accounts in state or federally chartered savings and loans which are state approved depositories per CRS 24-75-603, et seq. (as evidenced by a certificate issued by the State Banking Board) and are insured by the FDIC. Deposits which exceed the FDIC insured amount shall be collateralized in accordance with the Colorado Public Deposit Protection Act. This collateral shall have a market value equal to or exceeding 102 percent of the difference between the insured amount and the County's total deposit of all funds with the institution. The County shall limit the aggregate value of Certificates of Deposit to no more than 25% of the County's portfolio. The County sha{I purchase Certificates of Deposit only from financial institutions that meet the PMA or Sheshunuff bank rating requirements described in Section X of this Policy. The amount of Certificates of Deposit that can be purchased from any one financial institution shall be limited to 25% of that institution's unimpaired capital. 10. Municipal Notes or Bonds that are an obligation of any State of the United States, the District of Columbia, or any territorial possession of the United States or of any political subdivision, institution, department, agency, instrumentality, or authority of any such governmental entities which qualify under CRS 24-75-601 and meet the standards as outlined below: Municipal bonds or notes which are general obligation or revenue bonds with an effective final maturity of three years or less and are rated Aa or better by Moody's or AA or better by Standard and Poors; or revenue bonds with an effective final maturity of three years or less and are rated Aa or better by Moody's or AA or better by Standard and Poors; general obligation or revenue bonds that are insured by the MBIA or AMBAC Indemnity Corporation (as long as MBIA and AMBAC maintain their AAA rating), or are escrowed to maturity in U.S. Treasury collateral. It is the intent of the Treasurer that the foregoing list of authorized securities be strictly interpreted. Any deviation from this list must be pre-approved by the Treasurer in writing. Page 5 December 4, 2000 The County recognizes that securities other than those authorized in this Investment Policy may be held as of the date this Policy was adopted. However, all purchases made after the date of Policy adoption shall be limited to the above items. VI. INVESTMENT DIVERSIFICATION It is the intent of the County to diversify the investments within the portfolio to avoid incurring unreasonable risks inherent in over investing in specific instruments, individual financial institutions or maturities. The asset allocation in the portfolio should, however, be flexible depending upon the outlook for the economy, the securities market, and the County's anticipated cash flow needs. A minimum of 50% of the investable assets of the County will be maintained in the following securities: • U.S. Treasury Obligations: Treasury Bills, Treasury Notes, Treasury Bonds and Treasury Strips with maturities not exceeding five years from the date of purchase; • Federal Instrumentality Securities: Debentures, discount notes, callable securities and stripped principal or coupons with maturities not exceeding five years from the date of purchase issued by the following . only: Federal National Mortgage Association (FNMA), Federal Farm Credit Banks (FFCB), Federal Home Loan Banks (FHLB), and Federal Home Loan Mortgage Corporation (FHLMC); • Repurchase Agreements: that comply with the criteria set forth in Section V. under Eligible Investments and Transactions; • Local Government Investment Pools: that comply with the criteria set forth in Section V. under Eligible Investments and Transactions. VII. INVESTMENT MATURITY AND LIQUIDITY Investments shall be limited to maturities not exceeding five years from trade settlement date unless otherwise approved in writing by the County Treasurer. The maximum weighted average maturity for the portfolio shall be 2-1/2 years. The County shall maintain at least 10% of its total investment portfolio in instruments maturing in 60 days or less. Once the liquidity requirement of 10% has been satisfied, the balance of 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 case 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 will 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. Vlll. COMPETITIVE TRANSACTIONS Page 6 December 4, 2000 With the exception of deposits, all investment transactions shall be competitively transacted with broker/dealers who have been authorized by the County, with at least three broker/dealers contacted for each transaction and their bid and offering prices recorded. If the County is offered a security for which there is no other readily available competitive offering, then the Treasurer will document quotations for comparable or alternative securities. When purchasing original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities at the same original issue price. The purchase and sale of all securities shall be on adelivery-versus-payment basis (i.e.: moneys will not be released by the County's safekeeping bank until securities are received at the Federal Reserve Bank). The County seeks an active, rather than passive, management of its portfolio assets. Assets may be sold at a loss only if the Treasurer and the Investment Advisor believes that the sale of the security is in the best long-term interest of the County. lX. SELECTION OF BROKER/DEALERS AND FINANCIAL INSTITUTIONS ACTING AS BROKER/DEALERS It shall be the policy of the County to purchase securities only from authorized institutions and firms. Broker/dealers and other financial institutions shall be selected by the Treasurer on the basis of their expertise in public cash management and their ability to service the County's account. To be eligible, institutions must meet at least one of the following criteria: 1. be recognized as a Primary Dealer by the Market Reports Division of the Federal Reserve Bank of New York, 2. report voluntarily to the Market Reports Division of the Federal Reserve Bank of New York, or 3. the broker/dealer shall provide written certification to the District that the broker/dealer has met the securities dealer's capital adequacy requirements of the New York Federal Reserve Bank on a continuous basis for the previous twelve month period. (The capital requirements are found in the New York Federal Reserve Bank publication entitled Capital Adequacy Guidelines for Governmental Securities Dealers); or 4. be an FDIC member and meet criteria in the Section "Selection of Banks and Savings and Loans as Depositories and Providers of General Banking Services". Each institution that has been authorized by the Treasurer shall be required to submit a County approved broker/dealer Information Request Form which includes the firm's most recent financial statements. Annual updates to the broker/dealer information request form are required. The Treasurer shall maintain a file of the most recent broker/dealer information request forms as well as written certifications indicating that each broker/dealer has received a copy of this Investment Policy. A list of approved institutions and firms is included in Annex V to this Policy. Page 7 December 4, 2000 The County may purchase commercial paper from direct issuers even though they are not on the approved broker/dealer list as long as they meet the criteria outlined in item V.3 of the Eligible Investments and Transactions section of this Investment Policy. X. SELECTION OF BANKS AND SAVINGS AND LOANS AS DEPOSITORIES AND PROVIDERS OF GENERAL BANKING SERVICES Banks and savings and loans shall be approved by written resolution by the Board of County Commissioners (CRS 30-10-708(1)) to provide depository and other banking services for the County. To be eligible for authorization, a bank or savings and loan must be a member of the FDIC and must meet the minimum credit criteria (described below) of credit analysis provided by commercially available bank rating services. Banks or savings and loans failing to meet the minimum criteria, or in the judgment of the Treasurer no longer offering adequate safety to County, shall be removed from the list. The County shall utilize the commercially available bank rating services of Sheshunoff Public Finance Bank Rating Service or PMA Financial Network, Inc. to perform a credit analysis on banks and savings and loans seeking authorization. Data obtained from the bank rating services wil{ include factors covering overall rating, liquidity policy, credit risk policy, interest rate policy, profitability, and capital policy. To be eligible for designation to provide banking services, a financial institution shall meet one of the following criteria: 1. have a Sheshunoff Public Finance Peer Group Rating of 30 or better on a scale of zero to one hundred with one hundred being the highest quality for the most recent avai{able.reporting quarter before the time of selection; or 2. have a PMA Financial Network, Inc. overall rating of three or better on a scale of one to five with one being the highest quality for the most recent reporting quarter before the time of selection. The Treasurer shall require each approved financial institution to submit a copy of its Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income (Call Report) to the County within 45 days after the end of the June and December calendar quarters. The Treasurer shall maintain a file of the most recent credit rating analysis reports performed for each approved financial institution by one of the rating firms listed above. Credit analysis shall be performed at least semi- annually on all approved banks and savings and loans. A list of approved banks and savings and loans is included in Annex Vl. XI. SAFEKEEPING AND CUSTODY The Treasurer shall approve one or more financial institutions 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 safekeeping related services. To be eligible for designation as the County's safekeeping and custodian bank, a financial institution shall meet one of the following criteria: Page 8 December 4, 2000 1. have a Sheshunoff Public Finance Peer Group Rating of 20 or better on a scale of zero to one hundred with one hundred being the highest quality for the most recent available reporting quarter before the time of selection; or 2. have a PMA Financial Network, lnc. overall rating of three minus or better on a scale of one to five with one being the highest quality for the most recent reporting quarter before the time of selection. 3. qualify as a depository of public funds in the State of Colorado as defined in CRS 24-75-603 et seq. and be a Federal Reserve member financial institution. The Treasurer shall require each approved safekeeping financial institution to submit a copy of its FFIEC Consolidated Reports of Condition and Income (Call Report) to the County within 45 days after the end of the June and December calendar quarters. The Treasurer shall maintain a file of the credit rating analysis reports performed for each approved financial institution. Credit analysis shall be performed semi-annually on all approved depositories. A County approved Safekeeping Agreement shall be executed with each custodian bank prior to utilizing that bank's safekeeping services. The purchase and sale of securities and repurchase agreement transactions shall be settled on a delivery versus payment basis. It is required of the County that all purchased securities 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, except non-negotiable Certificates of Deposit, Local Government Investment Pools and Money Market Mutual Funds, purchased by the County will be delivered by either book entry or physical delivery and will be held in third- party safekeeping by a County approved custodian bank, its correspondent New York bank or the Depository Trust Corporation (DTC). The County's perfected ownership of all book entry securities shall be evidenced by a safekeeping receipt issued to the County by the custodian bank that acts as the County's safekeeping agent. The safekeeping receipt shall state that the securities are held in the Federal Reserve system either in a Customer Account/1030 for the custodian bank which will name the County as "customer" or in a Trust Account/1050 with the trust department named as agent for the County. All non-book entry (physical delivery) securities shall be held by the custodian bank's correspondent bank in New York City and the custodian bank shall issue a safekeeping receipt to the County evidencing that the securities are held by the correspondent bank for the County. The County may utilize the services of the Depository Trust Corporation (DTC) as a depository for delivery of non-wirable securities. All custodied securities that are registered shall be registered in the name of the County or in the name of a nominee of the County or in the name of the custodian or its nominee or, if in a clearing corporation, in the name of the clearing corporation or its nominee. The County's custodian will be required to furnish the County with monthly reports of holdings of custodied securities as well as an account analysis report of monthly securities activity. Page 9 December 4, 2000 XI1. PERFORMANCE BENCHMARKS The investment and cash management portfolio shall be designed to attain a market value rate of return throughout budgetary and economic cycles, taking into account prevailing market conditions, risk constraints for eligible securities, and cash flow requirements. Eagle County shall use a dynamic benchmark rate of return for the County's investment portfolio which corresponds to the yield for the current US Treasury security that matches the weighted average maturity of the portfolio. In no case shall the benchmark yield be less than the monthly average yield of the Colorado Local Government Liquid Asset Trust (ColoTrust) measured on an annualized basis. All fees involved with managing the portfolio should be included in the computation of the portfolio's rate of return. XIII. REPORTING An investment report shall be prepared monthly, 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. A record shall be maintained by the County of all bids and offerings for security transactions in order to ensure that the County receives competitive pricing. Portfolio reports prepared for the County shall be compliant with the Governmental Accounting Standards Board Statement No. 31 (also known as GASB 31). XIV. ETHICS AND CONFLICTS OF INTEREST Elected officials and employees 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 or create the appearance of an impairment of their ability to make impartial investment decisions. Employees and investment officials shall disclose to the County Treasurer any material financial interest they have in financial institutions that conduct business with the County, and they shall subordinate their personal investment transactions to those of the County. The County adheres to the Government Finance Officers Association's "Code of Professional Ethics" a copy of which is included in Annex VII. XV. POLICY REVISIONS This Investment Policy shall be reviewed annually in January and may be amended as conditions warrant. Annexes to this Policy may be updated by the Treasurer as necessary, provided the changes in no way effect the substance or intent of this Investment Policy. Page 10 December 4, 2000 Prepared by: Karen L. Sheaffer, Treasurer Eagle County, Colorado Approved as to legal form: Approved: Date: James R. Fritze, County Attorney Eagle County, Colorado Tom C. Stone, Chairperson Eagle County Board of County Commissioners Page 11 December 4, 2000 Annex I Contributing Special Funds The contributing special funds to the pooled investment portfolio that will be allocated proportionate investment income are: Offsite School Dedication Emergency 911 E.V. Transportation E.V. Trails R.F. Transportation R.F. Trails Emergency Reserve Fund Transportation Vehicle Replacement Fund Bellyache Ridge The following funds are restricted funds and are not included in the pooled investment portfolio: Alpine Bank Health Insurance Eagle County Reimbursement Public Trustee Salary Account Vail/B.C. Jet Center Page 12 December 4, 2000 Annex II Authorized Personnel The following persons are authorized to transact investment business and wire funds for investment purposes on behalf of Eagle County, Colorado: Karen Sheaffer, Treasurer Margo Painter, Deputy Treasurer Mari Renzelman, Accounting Technician Page 13 December 4, 2000 Annex ill Applicable Statutes The following Colorado Revised Statutes are applicable to the investment operations of Eagle County, Colorado: CRS 11-10.5-101, et seq., Public Deposit Protection Act; CRS 11-60-101, et seq., US. Agency Obligations; CRS 30-10-708, et seq. Treasurer -Deposit of Funds in Banks and Savings and Loan Associations which further sites CRS 11-47-101, et seq., Savings and Loan Association Public Deposit Protection Act; CRS 24-75-601, et. seq., Funds-Legal Investments for Governmental Units; CRS 24-75-603, et seq., Depositories; CRS 24-75-701, et seq., Local Governments-Local Government Pooling. Page 14 December 4, 2000 Annex IV Master Repurchase Agreement The attached Master Repurchase Agreement and Annex has been approved by Eagle County, Colorado. The following broker/dealers have an executed Master Repurchase Agreement on file with Eagle County, Colorado: Banc of America Securities, LLC BMO Nesbitt Burns Corporation Fuji Securities Morgan Stanley Dean Witter Page 15 December 4, 2000 Annex V Approved Broker/Dealers The following broker/dealers have been approved by Eagle County, Colorado. Banc of America Securities, LLC BMO Nesbitt Burns Corporation Dain Rauscher Fuji Securities Merrill Lynch Morgan Stanley Dean Witter Paine Webber Prudential Securities Salomon Smith Barney Page 16 December 4, 2000 Annex VI Approved Depositories The following depositories have been approved by Eagle County, Colorado. Alpine Bank Colorado Business Bank First Bank of Avon Wells Fargo Brokerage Services, LLC WestStar Bank Page 17 December 4, 2000 Annex VIl Government Finance Officers Association "Code of Professional Ethics" The Government Finance Officers Association of the United States and Canada is a professional organization of public officials united to enhance and promote the professional management of government financial resources by identifying, developing, and advancing fiscal strategies, policies and practices for the public benefit. To further these objectives, all government finance officers are enjoined to adhere to legal, moral and professional standards of conduct in the fulfillment of their professional responsibilities. Standards of professional conduct as set forth in this code are promulgated in order to enhance the performance of all persons engaged in public finance. I. Personal Standards Government finance officers shall demonstrate and be dedicated to the highest ideals of honor and integrity in all public and personal relationships to merit the respect, trust and confidence of governing officials, other public officials, employees, and of the public. • They shall devote their time, skills and energies to their office both independently and in cooperation with other professionals. • They shall abide by approved professional practices and recommended standards. I I. Responsibility as Public Officials Government finance officers shall recognize and be accountable for their responsibilities in the public sector. • They shall be sensitive and responsive to the rights of the public and its changing needs. They shall strive to provide the highest quality of performance and counsel. • They shall exercise prudence and integrity in the management of funds in their custody and in all financial transactions. • They shall uphold both the letter and the spirit of the constitution, legislation and regulations governing their actions and report violations of the law to the appropriate authorities. III. Professional Development Government finance officers shall be responsible for maintaining their own competence, for enhancing the competence of their colleagues, and for providing encouragement to those seeking to enter the field of government finance. Finance officers shall promote excellence in the public sector. Page 18 December 4, 2000 Annex VII (cont.) Government Finance Officers Association "Code of Professional Ethics" IV. Professional Integrity-Information Government finance officers shall demonstrate professional integrity in the issuance and management of information. • They shall not knowingly sign, subscribe to, or permit the issuance of any statement or report which contains any misstatement or which omits material fact. • They shall prepare and present statements and financial information pursuant to applicable practices and guidelines. • They shall respect and protect privileged information to which they have access by virtue of their office. • They shall be sensitive and responsive to inquiries from the public and the media, within the framework of state or local government policy. V. Professional Integrity-Relationships Government finance officers shall act with honor, integrity and virtue in all professional relationships. • They shall exhibit loyalty and trust in the affairs and interests of the government they serve, within the confines of this Code of Ethics. • They shall not knowingly be a party to or condone any illegal or improper activity. • They shall respect the rights, responsibilities and integrity of their colleagues and other public officials with whom they work and associate. • They shall manage all matters of personnel within the scope of their authority so that fairness and impartiality govern their decisions. • They shall promote equal employment opportunities, and in doing so, oppose any discrimination, harassment, or other unfair practices. VI. Conflict of Interest Government finance officers shall actively avoid the appearance of or the fact of conflicting interests. • They shall discharge their duties without favor and shall refrain from engaging in any outside matters of financial or personal interest incompatible with the impartial and objective performance of their duties. • They shall not, directly or indirectly, seek or accept personal gain which would influence, or appear to influence, the conduct of their official duties. • They shall not use public property or resources for personal or political gain. Page 19 December 4, 2000