HomeMy WebLinkAboutR23-026 Adoption of an Amended Investment and Banking Policy DocuSign Envelope ID:A28360B5-B3E9-49FB-BFA6-E025D66E66F6
Commissioner Scherr moved adoption
of the following resolution:
BOARD OF COUNTY COMMISSIONERS
COUNTY OF EAGLE, STATE OF COLORADO
RESOLUTION NO. 2023 - 026
ADOPTION OF AN AMENDED INVESTMENT AND BANKING 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 principal their rind al 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,the Board would like to update Eagle County's Investment Policy.
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.
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.
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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,this Investment Policy is effective as of the date of signing until further order of
the Board.
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MOVED,READ AND ADOPTED by the Board of County Commissioners of the
County of Eagle, State of Colorado, at its regular meeting held the end day of
May , 2023.
DocuSignea( UNTY OF EAGLE, STATE OF
/�`A`�``�ti COLORADO, By and Through Its
. BOARD OF COUNTY COMMISSIONERS
ATTEST:
�DocuSigned by: ,-DocuSigned by:
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. 0-'6ViUlt, BY: WI OunA.iii_v‘—tfuArti
eterf ififf 'Beard of Ka*Ctitr €I 3 Henry
County Commissioners Chair
p-DocuSigned by:
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Commissioner
�DocuSigned by:
Jl'anMney
Commissioner
Commissioner McQueeney seconded adoption of the foregoing proclamation. The
roll having been called, the vote was as follows:
Commissioner Chandler-Henry Aye
Commissioner Scherr Aye
Commissioner McQueeney Aye
This Resolution passed by 3/0 vote of the Board of County Commissioners of the
County of Eagle,State of Colorado.
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Eagle 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. Eagle County operates as a
statutory county,with a three-member Board of County Commissioners.
By approval of the Board of County Commissioners, Eagle County's Investment Policy was
adopted on October 13, 1992, by Resolution 92-128, and has been amended from time to time.
This most recent version of the Investment Policy was approved by the Board of County
Commissioners on May 2nd , 2023 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 CRS 30-10-708, the Board of County Commissioners has granted the County
Treasurer (the "Treasurer") authority for conducting investment transactions. The Deputy
Treasurers, and other authorized persons, may be appointed to assist the Treasurer in performing
investment management functions. Persons authorized to transact investment business for Eagle
County are listed in Annex II of this Investment Policy.
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The Treasurer shall establish written administrative procedures for the operation of the County's
investment program consistent with this Investment Policy.
The Treasurer may engage the support services of outside professionals in regard to its investment
program, so long as it can be clearly demonstrated that these services produce a net financial
advantage or necessary financial protection of the County's financial resources. 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.
PRUDENCE
The standard of prudence to be used for managing the County's assets is the "prudent investor"
rule applicable to a fiduciary,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 capital." (CRS 15-1-304, Standard for Investments.)
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 may occur 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 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,provided that the deviations from expectations are reported in
a timely fashion to the Board of County Commissioners and appropriate action is taken to control
adverse developments.
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 that could
impair or create the appearance of an impairment of their ability to make impartial investment
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decisions. Employees and investment officials shall disclose to the 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 available online at http://www.gfoa.org.
AUTHORIZED SECURITIES 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 24-75-601, et. seq. Funds - Legal Investments;
CRS 24-75-603,Depositories;and CRS 24-75-702,Local Governments—authority to pool surplus
funds. 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:
1. U.S. Treasury Obligations: Treasury Bills, Treasury Notes, Treasury Bonds, and Treasury
Strips with maturities not exceeding five years from the date of trade settlement.
2. Federal Instrumentality 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 maturity
not exceeding five 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 with a maturity not exceeding three years from the date of trade settlement,
issued by any corporation or bank organized and operating within the United States. The
County hereby further 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.
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5. Non-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 25%of the
County's total portfolio, and the amount of CDs that can be purchased from any one financial
institution shall be limited to 5%of the County's total portfolio.
6. Commercial Paper with an original maturity of 270 days or less that is rated at least A-1, P-1
or the equivalent at the time of purchase by at least two NRSROs. The aggregate investment
in commercial paper, corporate debt and banker's acceptances shall not exceed 50% of the
County's total portfolio, and no more than 5% of the County's total portfolio may be invested
in the obligations of any one issuer.
7. Eligible Banker's Acceptances with maturities not exceeding 180 days, issued by banks
domiciled in the U.S. and operating under U.S. banking laws. Banker's Acceptances shall be
rated A-1,P-1 or the equivalent at the time of purchase by at least two NRSROs. The aggregate
investment in banker's acceptances, corporate debt and commercial paper shall not exceed
50% of the County's total portfolio, and no more than 5% of the County's total portfolio may
be invested in the obligations of any one issuer.
8. 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 a minimum
market value including accrued interest of 102 percent of the dollar value of the transaction.
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 by the
Federal Reserve Bank of New York or with firms that have a Primary Dealer within their
holding company structure.
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9. Local Government Investment Pools authorized under CRS 24-75-702 that: are "no-load" (i.e.,
no commission or fee shall be charged on purchases or sales of shares); have a constant net
asset value of$1.00 per share; limit assets of the fund to securities authorized by state statute;
have a maximum stated maturity and weighted average maturity in accordance with Rule 2a-
7 of the Investment Company Act of 1940 and have a rating of AAAm or the equivalent by
each NRSRO that rates the pool.
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10. Money Market Mutual Funds registered under the Investment Company Act of 1940 that are
"no-load" (i.e. no commission or fee shall be charged on purchases or sales of shares); have a
constant net asset value of$1.00 per share); limit assets of the fund to securities authorized by
state statute; have a maximum stated maturity and weighted average maturity in accordance
with Rule 2a-7 of the Investment Company Act of 1940 and have a rating of AAAm or the
equivalent by each NRSRO that rates the fund.
Securities that have been downgraded below minimum ratings described herein may be sold or
held at the Treasurer'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.
PROHIBITED INVESTMENTS
• Non-renewable energy entities or corporations.
• Corporations engaging in activities harmful to the natural environment.
• Corporations which produce firearms other than those intended for branches of the
United States military.
• Foreign investments for nation states with authoritarian, totalitarian or dictatorship forms
of government.
INVESTMENT DIVERSIFICATION
The County shall 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:
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Security Types Max % Max % Per
Portfolio Issuer
(Aggregated when applicable)
Non-negotiable Certificates of Deposit 25% 5%
General Obligation and Revenue Obligation Debt 25% 5%
Corporate Debt, Commercial Paper and Bankers Acceptances 50% 5%
Municipal Bonds issued by state and local governments 15% 5%
INVESTMENT MATURITY AND LIQUIDITY
Investments shall be limited to maturities not exceeding five years from the date of trade settlement
unless otherwise approved in writing 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 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.
COMPETITIVE TRANSACTIONS
With the exception of deposits, all investment transactions shall be conducted competitively with
authorized broker/dealers.At least three broker/dealers shall be contacted for each transaction and
their bid and offering prices shall be 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.
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SELECTION OF BROKER/DEALERS
The Treasurer shall maintain a list of broker/dealers approved for investment purposes,and it shall
be the policy of the County to purchase securities only from those authorized firms.
To be eligible, a firm must meet at least one of the following criteria:
1. Be recognized as a Primary Dealer by the Federal Reserve Bank of New York or have a
primary dealer within its holding company structure,
2. Report voluntarily to the Federal Reserve Bank of New York, or
3. Qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (Uniform Net
Capital Rule).
The County may engage the services of an investment advisory firm to assist in the management
of the portfolio. Such investment advisors may utilize their own approved list of broker/dealers.
Such approved brokers shall comply with the criteria listed above and the list shall be provided to
the County on an annual basis or upon request.
In the event that an investment advisor is not used by the County, the Treasurer will select
broker/dealers on the basis of their expertise in public cash management and their ability to provide
service to the County's account. Each authorized firm shall be required to submit and annually
update a County approved broker/dealer Information Request Form that includes the firm's most
recent financial statements.
The County may purchase commercial paper from direct issuers even though they are not on the
approved broker/dealer list as long as the commercial paper meets the criteria outlined in the
Section, "Authorized Securities and Transactions" of this Investment Policy.
SELECTION OF BANKS
Banks shall be approved by written resolution by the Board of County Commissioners to provide
depository and other banking services for the County. To be eligible for authorization, a bank
must be a member of the FDIC and shall qualify as an eligible public depository as defined in CRS
11-10.5-103. A list of approved banks is included in Annex III of this Investment Policy.
SAFEKEEPING 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
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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 CRS 11-
10.5-103.
The purchase and sale of securities and repurchase agreement transactions shall be settled 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(DTC).
The County's custodian will be required to furnish the County monthly reports of holdings of
custodied securities as well as a report of monthly safekeeping activity.
PERFORMANCE BENCHMARKS
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.
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. All fees involved with managing the portfolio should be included
in the computation of the portfolio's rate of return.
REPORTING
Monthly,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.
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POLICY REVISIONS
This Investment Policy shall be reviewed annually and may be amended as conditions warrant.
Policy annexes may be updated by the Treasurer as necessary, provided the changes in no way
affect the substance or intent of this Investment Policy.
Eagle County, Colorado Investment Policy prepared by:
DocuSigned by:
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Teak Simonton, Treasurer
Eagle County, Colorado
Approved as to legal form:
DocuSigned by:
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Bryan Treu, Eagle County Attorney
Approved:
DocuSigned by:
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Kathy Chandler Henry, Chair
Eagle County Board of County Commissioners
Date: 5/2/2023
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Annex I
Contributing Special Funds
The contributing special funds to the pooled investment portfolio that will be allocated
proportionate investment income are:
The General Fund
School Land Dedication
Emergency 911
E.V. Transportation
E.V. Trails
Capital Improvements
Mental Health& Substance Abuse Fund
Open Space Fund
Conservation Trust Fund
Lodging Tax
The following funds are restricted funds and are not included in the pooled investment portfolio:
Health Insurance
Eagle County Reimbursement
Public Trustee Salary Accounts
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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:
Teak Simonton, Treasurer
Anissa Berge, Chief Deputy Treasurer
Brandi Resa, Deputy Treasurer
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Annex III
Approved Banks and Savings and Loans
The following depositories have been approved by Eagle County, Colorado.
Alpine Bank
FirstBank of Avon
Wells Fargo Bank,NA
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