HomeMy WebLinkAbout2000 Resolution No. 034•
RESOLUTION NO . .J!I_'
SERIES OF 2000
A RESOLUTION APPROVING CHANGES TO THE CITY OF ENGLEWOOD
INVESTMENT POLICY.
WHEREAS, by the pauage of Ordinance No . 45, Series of 1995, the Di.rector of Fillaac:ial
Service,, ex officio City Treuun,r, ii empowered to invest all funde and mooiea not
i.,mec!iately needed for operating expenaeo of the City and various peDlion runde, punuant
tc an illveotmont policy to be adopted by Council each year; and
WHEREAS, the Di.rector of Financial Service■ bu hereto attached a copy of the City'a
lnveatment Policy for Council's approval ;
NOW, THEREFORE , !IE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ENGLEWOOD, COLORADO, THAT:
Sla;imu. The Investment Policy attached u "Exhibit A", submitted by the Di.rector of
Financial Services i, hereby approved.
ADOPTED AND APPROVED this 7th of February, 2000 .
I, Loucrishia A. Ellis, City Clerk for _ui-City of Engl
above is a true copy of Resolution N~ Series of 20
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City of Englewood, Colorado
INVESTMENT POLICY q
The Director of Financial Seiv lces of the City of Englewood . Colorado Is charged with the
nespons ibility to prudently and properly manage any and all funds of the City . Because these
funds may be called upon , it is essential that absolute ma!urity horizons are ldentillabte for the
purpose of liquidity . Moreover, these funds must be fully collaterallzed and approprlatety
authorized . The follow in•, Investment Polley e--Jdresses the methods , procedures and pnecilces
wh ich must be exercised to ensure ellectiv e and sound fiscal management.
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Th is Policy shall app ly to the Investment or all financ ial asse ts and all funds of the City of
Englewood (hereafter re ferred to as the "City") over wh ich ii exercis~s fi n;;ncial control , except the
City of Englewood Firefighters Pension Fund , Volunteer Firefi ghters Pens ion Fund , Pol ifie Officers
Pens ion Fund, the Non-Emerge ncy Employees Retlnement Plan Fund and other City employee
re tirement plans . In order to ellectlvety make use of the City 's cash resources, all monies shall be
pooled into one investment account and accoun ted for separately. The investment income
derived from th is account shall be distributed to the various City funds in accordance with
Englewood Mun icipa l Code , 4-1 -2-A.
OBJECTIVES
The City's principal investment objectives are :
• Preseivation of capital and the protectlon of investment principal.
• Maintenance of sufficient liqu idity to meet anticipated disbursements and cash Hows .
• Diversification to avoid incurring unreasonable risks regarding securities owned .
• Attainment of ma rl<et rate of return equal to or higher than the performance measure
es tablished by the Directo r of Financ ial Seiv ices .
• Conformance with all City, Federal , State and other legal requirements .
DELEGATION OF AUTHORITY
The u!Umate respons ibility and authority fo r investment transactions involving the City resides with
the Director of Financial Seiv ices (hereina fl e• referred to & the "D irector") who has been
des ignated by the City Manager as the ln vOJtment Officer in accordance with Engl ewood
Mun icipal Code . The Director may appoint cU-,e: members of the City staff lo assist him in the
cash management and investment function. Persons who are authorized lo transact business
and wire funds on behalf of the City wm be des:gaated by the Director by the wire transfer
agreement executed wi th the City 's approved de pository for ba:ik seivlces (see Append ix I), The
Director shall be respons ible for all inv,,stment decisions and ,ctivilies , and shall establish written
admin istrative proced ures for the operation or the City's inve ,tment program consistent with this
Investment Policy . The Investment Officer acting with in lhJse procedures shall not be held
personally liable for specific investment transactions .
The Director may in his discretion ap?oin t one or more Investment Advisors, registered with tha
Securities and Exchange Comm iss ion under the Investment Adv isors Act of 1940, to manage a
pun ion of the City's assets . An appointed ,vestment Advisor may be granted limited Investment
discre tion with in the gu ide lines of th is Inves tment Polley with regard to the City's assets placed
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under Its management. An Investment Advl1or can only be eppolnted after conaultatlon with and
approval by the City Manager.
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The standard of prudence to be used for maneg ,ng the City's assets Is the "prudent lnv11tor" rule,
which states, "Investments shall be made with judgment and care, under cltcum1tan-then
preva ;Jlng, which persons of prudence, discretion and intelligence exercise in the management of
their OWi' affairs, not for speculation . but for investment considering the probable 11f1ty of their
capital as wall as the probable Income to be derived." (CRS 15•1 ·304)
The City 's ov,irall h•vestment program shall be designed and managed with a degree of
professionallsrn that is worthy of the p~0lic trus t. The City recognizes that no Investment Is totally
riskless and th, I the i'lvestment activil;9s of the City are a matter of public record . Accordingly ,
the City recopizes that occas ional measured losses are inevitable in a divers ified portfolio and
shell be cons idered with in the cont•,xt of the overall portfolio's return, provided that ad &qJ,a le
diversification has been implemented and that the sale of a security is in the best 101 g <•nm
interest of the City .
ELIGIBLE INVESTMENTS AND TRANSACTIONS
All investments will be made in accorda11ce with the Colorado Revised Statutes (CRS) as follows:
CRS 11-10.5-101 , et seq. Public Depos it Protection Act; CRS 11-47-101, et seq . Savings and
Loan Associati~n Public Deposit Protection Ar.I; CRS 24-75-601 , et seq . Funds-legal
Investments for Governmental Units ; CRS 24-75-603 , et seq . Depos itories ; and CRS 2.;.75-701,
el seq . Local Governme nts-Local Government Pooling . Any revisions or extensions of these
sections of the CRS will be assumed to be part of this Investment Policy immedletely upon being
enacted .
As a home rule City . Englewood may adopt a list of acceptable Investment Instruments differing
from those outlined in CRS 24-75-601, et seq . Funds-Legel Investments for Governmental Units .
Funds of the City of Englewood covered by this Investment Policy may be Invested In the
following types of securities and transacilons :
1. Treasury Obligations (T-Bills , T-Notes , T-Bonds).
2. Treasury Strips (book-entry U.S. Treasury securities whose coupon has been removed).
3. Federal Instrumentalities • Debentures , Discount Note , Medium Term Notes or Callable
Securities issued by the follow ing only : Federal National Mortgage Association (FNMA),
Federal Home Loan Bank (FHLB), Federal Home Loan Mortgage Corporation (FHLMC),
Federal Farm Credit Banks (FFCB ), and Student Leon Marketing Association (SLMA).
4. Repurchase Agreemen ts with a termination date of 90 days or less utilizing U.S. Treasury
and Federal Instrumentality securities listed above. collaterellzed initially at a minimum market
value of 102 percent of the dollar value of the transaction with the accrued Interest
accumulated on the collateral included in the calculation . If the market value of the collateral
falls below 10 1 percent of the dollar value of the transacti on , th e collateral will be required to
be brought up to the 102 percent initial maintenance level.
Repurchase agreements shall be entered into only with dealers who :
a) are recognized as Primar/ Dealers by the Matl<et Reports Divis ion of the Federal Reserve
Bank of New York: and
b) have executed a City appro•.-Jd Ma ster Repurchase Agreement (see Append ix II). •
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Primary Dealers approved ea Repurchase Agreement counterpartlas shall have a sholt•lerm
credit rating OI al least A· 1 or lhe equivalent and a long-term credit rating of at least A or lhe
equivalent.
Colla tera l (purchased securities) shall be held by lhe City's custo1Ian bank II aafekeeplng
agenl, and Iha market value of the collateral securities shall be marked-to-lhe-marl:el dally .
For lhe purposes of lhis section , Iha lerm "cotlaler•I• shall mean ·purcr~sed secunttet• under
lhe terms of Iha City approved Mesler Repurchase Agreement In no case will the maturity of
lhe collateral exceed ten years .
5. Reverse Repurchase Agreements wilh a maturity of 90 days or less executed only against
securities owned by lhe City and collaleralized by lhe same type of -urity reversed .
6. Flexible Repurchase Agreements wilh a final maturity of ten years or less entered inlo by lhe
City wllh appro,Ad counlerparties . These flexible repurchase agreements may be closed oul
in varying amo, ,,ts and al varting li mes at lhe option •,f lhe City . These agreements are
deemed by bolh parties to be purchases and sales of securities and are no! loans
Al l such flexible repurcha se agreemen ts shall meet lhe following criteria :
Be determined as legal and valid fo,· both parties ;
Collateral shall be limited lo:
a) Securities issued by, ijoaranteed by, or for which lhe credit of any of Iha fo ll ,winQ Is
pledged for payment : lhe Unlled Slates, Federal Farm Credi! Bank, Federal Land
Bank , Federal Home Loan Bank , Federal Home Loan Mortgage Corporation, Federal
National Mortgage Association , Export Import Bank or th~ Government National
Mortgage Association; or
b) Securities issued by , guaranteed by , or for which Iha credit of lhe following is pledged
for payment An entity or organization wh ich is nol lisled in paragraph a) ab<ive , bul
which is (1) created by, or lhe creation of which Is authorized by, legislalion ~nacted
by Iha United Slates Congress and which is subject lo control by the federal
government which is at least as txtensive as lhal which governs an entity or
organization listed in paragraph a) above, and (2) rated in ils hip'.,esl rG ~ng category
by one or more nationally recognized organizations whiC:1 regularly rate suc h
obligations .
Have a fixed rate during lhe entire life of the ~Jreemenl;
The dollar amounts and periods of lime when lhe City may draw funds out of lh e
repurchase agreement shall be agreed upon in writing by bolh parties and shall be pa rt of
Iha written repurchase agreement exercised by the City end lhe approved counlerparty ;
The City has the option of varying Iha dollar amount and Iha timing of Iha draw down by
an agreed upon percentage of lhe anticipated draw down and a specified number of days .
The City and lhe counterparty lo Iha agreement will specify lh,, details of lhe allowable
variance when the agreement is structured. In addition, lhe City may draw down in
excess of the variance up to the remain ing balance in the agreement for a bona fide ,
unantic ipated cash need;
Collateral shall have an original minimum market value (including accrued interest
eccumulated) of al least 102 percent of the dollar value of lhe '.!"ansaction . Once a
repurchase agreemen t is established, Iha collateral c,ainta intid shall be no less lhan 101
percent of lhe dollar value of lhe transaction al all lirnes:
Repurchase agreements ;hall be entered into only with dealers who are authorized by lhe
Finance Oireclor and h>·. e executed a City approved Master Repurchase Agreement;
The tille to or a perfected !ocurity interes t in securities , along wilh any necessary transfer
documents , 'TIUSI be transferred and actually delivered lo , and shall be held by , lhe City's
lhird-party custodian bank acting as safekeeoing agent The market value of Iha
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COiiaterai securltieS shall be martcld-to-lhe-market momhly baaed on t1i'1 doling bid price
at the time the custodian ror Iha collate,!11 lssuea Ill monthly statement ID1he City . •
For Iha purpose of the section , the term "collateral" shall mean "purchaaed MCUrities" under
the tenna of the City approved Master Repurchase Agreement. In no caH d the maturity of
the collateral exceed ten years .
7. Time Certificates of Deposit or aavlngs accounts In state or naUonll lllnka operating In
Colorado which are stele approved depnaitories (as evidenced by a certlllcale la-«! by the
State Banking Board) and are Insured by the FDIC. Cartlflcatas al dljlGllt which IIXCNCI the
FDIC insured amount shall be collateralized In accordance with thi. Colorado Public Deposit
Protection Act. The coWalenil will have an initial market value equal to or exceeding 102
~t of the <flllerence between the insured amount and the City's total depolita for ail funds
with in the institution. If the market value of the collateral falls below 101 pen:ant of the dollar
value of the transaction , the collateral will be required to be brought up lo the 102 percent
Initial maintenance .
8. Time Certificates of Depoelt or savings accounts in stale or radenilly chartered savings and
loans operating in Colorado which are Insured by the FDIC . Deposits which e::ceed the FDIC
insured amount shall be collateraltzed in accordance with the Colorado Public Deposit
Protection Act. Th is collateral will have an Initial mark et value equal to or exceeding 102
percent of the difference between the insured amount and the City's total deposit !or all funds
with in the institu j on . If the market value of the collateral falls below 101 percent of the dollar
value of the transaction, the collateral will be requ ired to be brought up to the 102 percent
initial maintenance leve!.
9. Colorado Local Government Liquid Asset Trust (COLOTRUST).
10. Prime Bankers Acceptances with a maturity of six months or less Issued on domestic banks
or branches of foreign banks domiciled in the U.S. and operating under U.S . banking laws .
Accepting banks must have a senior debt rating of A2 by Moodys and/or A by Standard nnd
Poors.
11 . Prime Commercial Paper with a maturity of 180 days or less which, at the time of purchase , is
rated st least A-1 by Standard and Poors, P-1 by Moodys , F-1 by Filch OR 0-1 by Duff and
Phelps .
a) At the lime of purchase, the commercial paper must be rated by at least two of the above
staled rating agencies at tt1e stated minimum rating ,
b) If more than two of the above staled agencies rates an Issuer, all of those rating agencies
must rate the issuer in accordance with above stated minimum credit criteria .
c) If the commercial paper issuer has senior debt outstanding , the .;~nior debt must be rated
by each service that publishes a rating on the Issuer as at lust A2 by Moodys, A by
Standard and Poors , A. by Filch , OR A. by Duff and Phelps .
OTHER INVESTMENTS
II is the intent of the City that the foregoing list of authorized securities be strictly interpreted . Any
deviation from this list must be pre-approved by the Director In writing after approval by the City
Manager.
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!NYESJMENT PIYIBSIFICA TION
It is the intent of the City to diversify the investment instruments within the pol1folio to IVold
incurring unreasonable risks inherant In over invatlng in speciftc instruments, individull llnlncial
institutions or maturities . The anet lltocatlon in the pol1folio should, however, be flexible
depending upon the outlook for the economy, the securities market, and the City's call flow
needs .
The City may invest to the following maximum limits within each category :
• 100% in U.S. Treasury Obligations
• 50% in Certificates of Deposit
• 50% in allowable Federal Instrumentalities
• 40% in Repurchase Ag1'8'!ments cottateralized by allowable Federal Instrumentalities
• 100% in Repurchase Agreements collateratized by U.S. Treasury Obligations
• 20% in Bankers Acceptances
• 40% in Commercial Paper
Tests for limitations on percentages of holdings apply to the composite of the entire portfolio of the
City , 001 to individual portfolios maintained by the City . Percentage limitations used for
measu ,s,nents are based on the percentage of cost value of the portfolio .
INVESTMENT MATURITY ANO LIQUIDITY
Investments shall be limited to maturities not exceeding five years . In addition, the weighted
average maturity of the total portfolio shall at no time exceed 24 months .
OTHER INVESTMENT GUIDELINES
All investment transactions must be executed with broker/dealers md financial institutions that
have beer, authorized by the City, end each transaction must be competitively transacted wtth at
least two authorized broker/dealers financial institutions . If the City is offered a security for which
there is no other readily available competitive offering , then the Director shall 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 pr',ca . in addition, before any repurchase agreements shall
be executed with an authorized broker/dealer or financial institution, 1 City approved Mater
Repurchase Agreement must be signed between the City and that broker/dealer or financial
institution . The Director shall maintain a lite of all Master Repurchase Agreements .
The purchase and sale of all securities shell be on a delivery v.,,.us payment or payment -•us
delivery basis . For instance , for securities purchases, monies will not be released by the City's
safekeeping bank until securitie, are received at the Federal Reserve Bank for further credH to the
City's safekeeping bank . In the c.ase of s•curilies sales , monies will be received by the City's
safekeeping bank via the Federal Reserve Bank as the securities are simultaneously released to
the purchaser . In th is manner the City will always have possession of either its securities or its
monies .
The City seeks an act ive , rather than passive, ma • ,agernent of its portfolio assets . Assets may be
sold at a loss only If the Director or the lnvestmer,t Advisor feels that the sale of the security Is In
the best long-term interest of the City .
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SELECTION QI' DBQKEB/Dl!ALERS AND f!NAH';IAL INSJ1IUTI0NI ACJ1NA Al
IIROKIM/u.Ll!RS,
The Director shall maintain e 11:,t of authorized brok«/dalara .,d financial inltllutlon1 which are
approved tor lnves1ment purp0111 (lff Appendix Ill), and ii shall be the policy of the City lo
purchue 11C1Jrtl1N 01 ,ly from those aulhortzed lnslltutlons and firms .
To b·• .llglble , a flrm/b,11k must mHI al least one ~f the following criteria :
i. be rer.ognlzed as a Prtmary Deale.-by the tv.arket Reports Division of Iha Federal Reserve
B~:11< of New York ,
2. report voluntarily 10 the Market Reports Divl•lon of the Federal Reserve Bank of New York,
3. provlc:e written certificaUon lo the Clly that the broker/dealer has mel the SICIJriU.. de,lefs
capital adequacy req uiremenls of the New York Federal Reserve Bank on a conUnuous besis
for the previous rwelve month period . These cap ital adequacy requiremenlS are found In the
New York Federal Reserve Bank publication enliUed Cap~a/ Adequacy Gulde/me, for
Go vernment Securities Deeters.
4. be an FDIC IT18fT'ber.
Broker/dealers and other financial Institutions wil l be selected by U,e Oireclor on Iha buls of their
expertise In public r.ash mana~emenl 3nd their ab iuty to provide service lo the Cily's account.
Each broker/dealer, bank or savings and loan that has been authorized by the Director shall be
required to submit and annually updale a Cily approved Broker/Dealer Information Raquest form
which in cludes the firm 's most recent financia l stataments . The Director shall malntaln a file of the
mosl recent Broker/Dealer lnformaUon Request forms submitted by each firm approved for
investmenl purposes . Broker/Dealers shall also attesl in writing thal they have received a copy of
this Polley .
The Clly may purchase Commercial Paper from direc t issuers oven though they are not on the
approved lis t of broker/dealers as long as they meet the criteria outlined in Item 11 of the Eligible
lnves1men11 and Transaclions section of this Policy .
SELECTION OF BANKS AND SAVINGS AND LOANS AS DEPOSITORIES AND PROYJQE~
OF GENERAL BANKIHG SERVICES
The City shall maintain a lisl of authorized banks and savings and loans which are approveo to
provide banking services or from whom the City may purchase certificates of deposit. To be
eligible for authorization, a bank or savings and loan must meet the minimum credit criteria
(described below) of credit analysis provided by a commercially available bank rating s,-rvlce .
Banks or savings and loans falling lo meet the minimum criteria , or In the judgment of the Director
no longer offering adequate safety lo the City. will be removed from the list. Although a bank or
savings and loan is on the qualified list , it will still be requ ired to pledge collateral on all ~e posilS
and inveslmenls , pursuant lo Stale law.
The Cily shall utilize a commerc ially available bank rating seivice (Shesnunoff, PMA Financial
NalWork) to perform a se:~:annual credit analysis on banks and savings and loans . The bank
rating guidelines will be calculated us ing publicly ava il able financial information obtained from the
release of tho Consolidated Reports of CondiUon and Income (FFIEC Report) from the Federal
Reserve or from data reported to the Comptroller of the Currency . Data obtained from the bank
rating service will include factors covering the follow ing : overall rating , liquidity policy, cred it risk
po licy . interest rate pol icy . profilabilily and cap ital policy .
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• In order to meet 1M minimum credN crttlria . a bank or savings and loan mu1t meet the laltowtng
credit rating requirements :
1. have a Sheshuno" Public Fina.~c• PHr Group Rating of 30 or better on a scale of zero to on e
hundred with one hundred being Ille highHI quality for the most recent reportlng qUIIIW; or
2. have a PMA Financial Network overall rating of three or better on a scale of one to ~ with
one being the highest quality for Ille most recent reporting quarter .
3. Th e institution mu st qual ify as a depos itory of publ ic funds in Colorado as deffne~ In CRS 24-
75-603 .
The Director shall ma inta in a file of all cred it rating analysis reports performed for the City.
SAFEKEEPING AND CUSlODY
The safekeeping and cus,ooy of securities owned by Iha City shall be managed In accon!ance
wilh Colorado law and applicable Attorney General opinions , Regulation 3-1-8, Use of c ;eartng
Corporations and Federal Reserve Book-Entry System .
The Director shall approve one or more financial institutions to provide safekeeping end cuatodlal
services for the City . A City approved Sa fokeeping Agreement shall be executed with each
custodian bank prior to utilizing that bank's safekeep ing services. To be eligible for designation as
Ille City 's safe!<eep ing and custodian bank . a financ ial ins ti tution shall meet the following crtlerla:
1. have a Sheshunoff Pub li c Finance Peer Group Rating of 20 or better on a scale of zero lo one
hundred with one hundred being the high es t quality for the mos t recent reporting quarter; or
2. have a PMA Financial Network overall ra tin o of three minus or better on a scale of one to five
with one being the highest quality for the most 1-ecent report ing quarter.
3. qualify as a depos itory of public funds in the State of Colorado as definod in CRS 24-75-603
and be a Federal Reserve member financ ial institu tion .
Custodian ban ks will be selected on the basi s of the ir ab il ity to provide service to the City's
account and th e competitiv e pricing of their safekeep ing related services (set, Appendix IV).
The Director shall also ma intain a me of Iha cred it rating anal ysis reports perfooned fo r each
approved fi nancial ins titution . Credit analysis shall be performe~ on a seml-Mnual basis .
It is the objective of the City that all owned securities be perfected in i ,e name of the City .
Sufficient evidence to ti tle shall be consistent with modem lnveslment , banklng and commerclel
practi ces .
All investme nt securit ies , except non-negotiable certificates of deposit 6nd money market funds,
purchased by th e City will be del ivered by either book entry or physical delivery and will be held in
third-party safekeepin g by a City approved custod ian bank , its correspondent New York bank or
the Depository Trust Corporation (OTC).
The City's perfected ownership of all book entry securiti es shall be evidenced by a safekeeping
rece ip'1 issued to the City by the custodian bank who acts as the City's safekeeping agent. The
safek,,ep ing rece ipt shall state that the securill es are held in the Federal Reserve system either In
a Cu,1tomer AccounU1 O~O for the custodian bank wh ich will name the City as •customer" or in a
Trus l AccounU1050 with the trust department named as agent for the C:lty .
All non-boo k en try (p hysical delivery) securiti es shall be held by the custodian bank's
correspondent bank in New York City and the cus tod ian bank shall issue a safekeeping rece ipt 10
the City evidencing that the securities are held by the correspondent bank for the Citv . The City
may utNlza the IIIVlcM of the Oepollto,y Trust Corporation (OTC)•• a depoeiloly lot delMry of
non-w lreablt aacuritlas .
All custodlld HCUritiu that are registered lhall be rl9!1terld in the name ol the City or In the
name of • norninae of the City or In the name of the custodian or its nominee or, ~ in a c1NrinQ
corporation, In the name ol the clearing corporation or lta nominee .
The City's custodian will be requ ired to fumish the City with a monthly report of securiliu held as
well as an account analys is report of monthly securities activity.
PROVISIONS FOR ARBITRAGE
The City periodically issues debt obliga ti ons wh ich are subject to the provisions of the Tax Reform
Act of 1986 (section 148F), Arbitrage Rebate Regulations . Cue to the legal complexities of
arb itrage law and the necessary immun ization of yield levels , th e proce<'.:i res undertaken in the
re investment of all or a portion of the proceeds of such debt isauanCf' .na, extend beyond those
ou tlin ed in this Policy. The .ilrector, upon advice from Bond Counsel ,nd financial advisors , may
alter provisions of this Policy for arb itrage related investments as may '>e necesury to conform
with federal llbitrage regulations . In all cases , however, if>vestments will be in compliance with
Col~rado Revised Statutes . Th is section is only appl icable to City funds subject to arb itrage
rost rictlon&.
REPORTING
An investment report shall be prepared , at lean\ on a monthly bas is, listing the investments held
by the City, the current market valuation of the investments and performance results . The
monthly investment report shall be submitted in a timely manner to the City Manager and the City •
Cou ncU A record shall be maintained by the Department of Financial Selvices of all bids and
offering s for secu rities transactions in order to ensure that the City receives compe titive pricing .
The City has established reporting and accounting standards for callable U.S Instrumentality
securiti es . Ca ll able secu rities may be reti red at the issuer's option prior to the stated maximum
ma turity . All securities holding reports for the City shall disclose th e stated maturity as we ll as the
firs t call date of each callable securi ty held. In the case of callabl• •s;;urities which are purchased
pri ced to the firs t call date and , in the op inion of the Director, have overwhelm ing probabil ity of
be ing called on the first call date , weighted average maturity , amoni..ation as well as yield shall be
calculated using the first call data . The Director mey , however, choose to use a further call date
matur ity date for ·eporting purposes when conditions mandate .
PERFORMANCE REVIEW
The Director and the City Ma ... ,ger shall meet at least quarterly to review the portfoli o's adherence
to appropr iate risk levels and to compare the portfolio's total retum to the established investment
objectives and goals .
n,e Director shall periodically esta blish a benchmark yield for the City's investments wh ich shall
be equal to the average yield on the U.S. Treasury security which most closely COtresponds to the
portfolio's actual welghi.... average ma turity . When comparing the performance of the City 's
portfolio, all fees and expenses involved with managing the pottfot io should be included in the
compu tati on of the portfolio's rate of retu m.
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ETHICS AND CC.'NfYCIS QF INJIIWI
OfflceB and lffl',JloyeM involved In the lnvfltment Pl'OC8SI shall rafraJn from .,.,.anal bulNU
activity that co,,ld conflict with proper -tlon 9' the inv11tment program, or whlc:h could Impair
their abUity tr., make Impartial irMttment decltlona. EmployNa and lnVlllmlnt at'llcllle 1h11
disclose lo the City Manager any material llnllllciaJ lntereat in ftnandal inltltutlona that conduct
business with the City, and they ahlll further disclose any large l)8l90llal llnanclat/lnvatt
positions that could be related lo the pelformance of the City's portfolio . Employ-and offlcetl
shall ~ubordlnate their person11i lnv11tment transactions lo those of the City par1lcularty with
regard to the liming of purchasos and sakls.
POLICY RE'IISIOIIS
This Investment Polley will be reviewed periodically by the Director and mey be amended as
conditions warrant by the City Manager and the City Council.
Prepared by:
Frank Grygtewicz
Director of Financial Services
Approved by City Council
September 17 , 1990
Amended by City Council
Decamoor 16, 1991
Amended by City Council
April 5, 199~
Slate of Colorado , County of Arapahoe
Prepared by:
Sieve Oazzlo
Chief. ·cuntanl
Amena ~ : ,:y City Council
Seplemt · r 5. 1995
Amended by City Council
December 15, 1997
Amended by City Council
February 7, 200n
I, Loucrishia A. Ellis , City Clerk in and for the City of Englewood , in the Stale aforesaid , do hen!by
certify that the foregoing is a full, true and correct c,ipy of the Investment Policy as the same
appears upon the records of my office which are in my custody .
Given under by hand and official seal , this __ day of _____ • A.O. 1997, ___ _
o'clock_.m.
1'11119
Loucrishia A. Ellis
City Clerk
Palley 01.00 .... _2-00
APPENQQU
Allthorlnd Personnel
The following ~ .-. IU1horized to conduct lnves1ment mnctions and w1rl tranlfw funds
on behalf of the city ot Englewood:
Steve Oszzlo, Chief Accountal'lt
Jennifer Nolan, Accountant II
Kathy Cuui, 1.ccountant II
Frank Gryglewk:z. Director of Flnenclal Services
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APP!NDUtll
Repurchase AQl'Mrllt IS h
The following firms have executed a City zppl'O'llld Matar Repun:hue Agreament wffll Ille City of
Englewood .
Banc of America Securities
~4orP,an Stanley Dean Willer
Prue lentlal Securities
Agreem1t.e~ maintained in saparata !Ile .
~Ill
Authortnd aroktt'll)Mlenl and Flnlnclal lnat!tutlo11a
Toe follawln9 ftnnt .,. approved lor imlNlfflll1I purpOHI by the City of Englewood ,
Banc of America SecurilleS
oatnRluacher
Klr1<p8tridt Peltla
Merrill Lynch
Morgan Stan!<w Dean Witter
PalneWeb
Prudential s..,,rtttell
SalomOn Smith Barney
Paley 01-40 -_2-40
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Al'PINDIXr-1
~lgnltld cidt'&u11 Bank11
j'>
The lol1owing bank Is authorized es 1he designallld custodial bBllk for the City of ~:
~ Bank Milnesola
e"anc!M~
Mlnneepbiis, MN 55479-0130
DRAFT: Additional IWl94191 ll undfdEtst .... , , ...... 111111 11,0tllRNWflh ..,._
City of Englewood, Colorado
INVESTMENT POLICY
The Director of Financial Services of the Clly or Englewood, Cokndo le charged with the
responsiblllty to prudentty and property mana~e any and au funds of the Clly. a-... thNe
funds may be called upon , it Is essential that &~solute maturity horizons in 1denlilllble for the
purpose of llquldlty . Moreover, the-.~ funds mu.,t be fuly collaterallzed and appropriately
authorized . The following lnvestme.,t Policy addre8"es the methods, ·procedures and practices
which must be exercised to ensu re efloctlvr; and sound iia::al ~t.
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This Policy shal, , , •~ly to the lnves!ment of all financial -• and all funds of the City of
Englewood (herl,c ' .~ referred to as the "City") over which It exen:iles financial conlrol, except the
Cily of Englewood ",reflghlers Pension Fund , Volunl-F',refJghters Pension Fund , Police OfllceB
Pension Fund, the Non-Emergency Employet...• -<Stirement Plan Fund and other Clly employep
retirement plans. In order lo eflectlvely make use of the Clly's cash resourres, all monies shall i>e
pooled into one investment account and accounted for separately . Tne Investment income
derived from this account shall be distribulod to tht, various City funds in accardance with
Englewood Municipal Code, 4-1-2-A.
QIJ~
The City's principal investment objectives ere :
• Preservation of capital and the protection of investment principill .
• Maintenance of sufficient liquidity to meet anticipated disbursements and .:asr flows .
• Diversificallon to avoid lncuning unreasonable risks regarding securities owned .
• • Attainmflnt of market rate of return equal to or higher than the perfonnan,a measure
established by the Director of Financial Services .
• Conformance with all Clly, Federal , Slate i:;nd other legal requirements .
DELEGAIJON OF AUTHORITY
The ultimate responsibilty and authority for lnves!ment transactions involving the Clly resides with
the Director of Financial Services (hereinafter refelTad to as the "Olrector") who has been
designated by the Clly Manager as the Investment Officer in accordance with Englewood
Municipal Code . The Director may appoint other members of the City staff to assist him In the
cash management. and investment lunc,•on. Persons who am authorized to transact business
and wire fund s or, beha~ of the Cily ••~If be designated by the Director by the wire transfer
agreement ••ecutad with the Clly's approved depository for bank services (see Appendix I). The
Director s.'lall be responsible tor elf inve stment decisions and activities , and shall establish written
admin istrative procedures tor the operation of the City's Investment progra.,, consistent with this
Investment Policy. The Investment Officer actlr,g within loose pr.xedw .s shall not be held
personally liable for specific investment transactions .
The Director may in his discretion appoint one or more Investment Advisors, registered with the
Securities an Exchange Commission under the Investment Adivlsors Ad of 1940, to manage a
portion of the Cily's assets . An appo inted Investmen t Advisor may be granted limited investment
Page 1 Policy Ot-00 mlfinc
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dlacretJon within the guidelines of this Investment Polley with r9111rd to the City's .... ts placed
under Its l'!Wlllgefflenl AA Investment Advisor can only be appointed after consultation with end
apptOVal by the Clly Manager.
PRUDENCE
The standard of prudence to be used for managing the City's assets Is the "prudent lnvtlltlY.' rule,
which stataa, ·inv.tments lhall be made with judgment and care, under citcu1T11lance1 then
prevailing, which persons of prudence , discretion end Intelligence exercise in the management of
their own aflan, not for speculation, bul for inveslment considering the probable Mty of their
capital aa well u th ~ probable income lo be derived." (CRS 15-1-304)
The City 's overall investment program shall be des igned and managed wiih a degree of
orofessionajism Jhlt i• wonhy of the public trust. The City recognizes that no invukDIOJ II 191111v
rts.iess and that llJ• investment actJyjtJes of the City are a m11tter of QIJbllc recorg AccorgkJajy
!HH City recognizes that occasional measured losses are inevitable in,a-diversifled portfpfio ang
spsu be considered within the context of the overall portfolio's retum provided lbll adegyate
gjye(siflcation has been implemented ang that the yle o1 a secynty is in the b8JI i9o9:tl!Jn
interest of the City .
ELIGIBLE INYESJMENJS AMP TRANSACTIONS
All investments will be made In accordanc:e with the Colorado Revised Statutes (CRS) u followa:
CRS 11-10.5-101, el seq. Public Depoail Protection Act; CRS 11-47-101, et seq. Savings end
Loan Association Public Deposit Protection Act; CRS 24-75-601, et seq, Funds-Legal
liweslmentll for Governmental Units; CRS 24-75-803, et seq. Depositories ; end CRS 24-75-701,
el seq . Local Govemmenm-Local Government Pooling. Any revisions or ~~•ions of they
sections of ihe CRS will be assumed 10 be part of this Investment Policy immedj§IQIY upon being
~
All a home rule City, Englewood may adopt a list of acceptable in•,estment instruments differing
from those ouUlned in CRS 24-75-601, et seq. Funds-Legal Investment.. for Governmental Units .
Funds of the City of Englewood covered by this Investment Polley may be Invested in the
following types of securities and transactlons:
1. Treasury Obligatlons (T-Bills , T-Noles , T-Bonds).
2. Treasury Slrfps (book-entry U.S. Treasury securities whu$A coupon has been removed).
3. Federal Instrumentalities • Debentures , Discount Notes , Medium Tenn Notes er CallRble
Securities issued by the following only : Federal National Mortgage Auoclatlon (FNMA),
Federal Home Loan Bank (FHLB), Federal Home Loan Mortgage Corporation {FHLMC),
Federal Farm Credit Banks (FFCB), and Student Loan Marketing Association (SLMA).
4. Repurchase Agreements with a termination dale of 90 days or less ulillzir.g U.S. Treasury
and Federal Instrumentality securities listed above , collateralized initially at a minimum market
• value of 102 percen t of the dollar value of u,e tmnsactlon with tho accrued interest
accumulated on the collateral induded In the calculation . If the market value of the collateral
falls below 101 percent of the dollar value of the transaction, the collateral will be required to
· e brouQhl up ., the 102 percent inillal maintenance level.
Repurchase agreements shall be entered into only with dealers who :
a) are recognized"" Primary OealeB by the Market Reports Division of the Federal Reserve
Bank of New YOl1<; and
b) have executed a City approved Master Repurchase Agreemen t (see Appendix II).
Policy 01 -00 redline
b Prjmary Dealers approved as RepyrciJlff Agreement COW!t!P@rtifS Shall haye I Short-tll!JD
gredlt rauna of at 1eas1 A·, or the egy1va10 □1 ang a lgng·JomJ g11 rating of •I 11ut A q the
egy!menl
Collalenll (purchased sacurttles) shall ba held by the City's custodian bank II uflllMpi1g
'lg9nl, and the market value of the collateral sacurttles shall be marked-10-the-llWMI daly
••••• 1n tt.a Ii_. pFiaa fer u:i, 11r1 law, do~ ae rapar1a-' iR U.a lH9II §&rael JIN!!!I,
For the purposes of this sactlon, the lann "collateral" shall mean ·purchased HCUriUes" Wider
the tanns of Iha City approved Master Repurchase Agreement. In no case wl the rnalurtly of
the colla• eral exceed ten years .
5. ReverH Rapun:hese ~ with a maturity of 90 days or less exewted only against
HCUritiel owned by Iha City and collatarallzed by the same type of sacurity r8VIIMC!.
8. Flexible Repurchase Agreements with a llnal maturity of ten years or less entered Into by the
City with approved counterpa,tles . These flexible repurchase agreements may be dol6'd out
In VIIIYlnQ amounts and at Y111Ylng llmas at the option of Iha City. Th-agreena,ts are
deemed by both parties to be purchases and sales of sacurttles and are not loans .
All such flexible repurchese agreements shall meet the following criteria :
• Be delannined as legal and valid for both parties;
• Collateral shall be limillld to:
a) Securities issued by, guaranteed by , or for which the credit of any of the following is
pledged for payment the United States , Federal Farm CredR Bank, Federal Land
Bank, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal
National Mortgage Association, Export Import Bank or lhe Government Nallonal
Mortgage Association; or
b) Sacurities issued by, gudranlaed by, or for which Iha credit of lhe following Is pledged
for payment: An entity or organization which is not listed in paragraph a) above, but
which Is (1) created by, or Iha creation of which Is authorized by, legillatlon enacted
by lhe United States Congress and which is subject to control by the federal
govemment which Is at least as extensive as lhat which governs an entity or
organization !Isled In paragrapn a) above , and (2) rated in its highest rating category
by ona or mora nationally recognized organizations which regularly rate such
obllgatlons .
• Have a fixed rate during the entire life of the agreement;
• The dollar amounts and penods of time when the City may draw funds out of Iha
repurchase agreenwrt shall be agreed upon in writing by both parties 8M shall be part of
the written repurchase agraement exen:isad by Ills City and the Approved counterparty;
• The City has the option of Vlll)'ing the dollar amoun t and the liming of the draw ~own by
an agraed upon percentage of the ~ draw down and a specified number of days .
The City and the COLWllerparty to the agreement will specifJ · the details of the allowable
variance when Iha agrMffl'!f1t is structured . In addttlon , • ,e City may draw down in
excess of the variance up lo Iha remaining balance in U,• .,..reement for a bona fide,
unanticipated cash eaed ;
• Collateral shall ha'le an or1g ;a~1 minimum market value (Including accrued Interest
accumulated) of al least 102 pan,ent of the dollar vatu~ of the transaction . Once a
re~urchasa agreemuit is establish•d. the collateral mainta ined shall be no less than 101
percent of the dollar value of the tranl8Cllon at all times ;
• Repurch ase agreements shail be •, 1:ared into only with dealers who ara authorized by the
Finance Director and have exacutad a City approved Master Repurchase Agreement;
Policy 01 -00 redline
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• The llt!e to o, a perfected security lnt-t In securtti,I, llong with any ,-a,y trl!)llw
documents, fllJSI be tranafamld and actually dtllvw,cl to, and shall be held by, the City's
thin:111811)1 0UIIOdlan bank acting u aafeQepjng 11Q11!1L The marqt value of the
collateral securities lhlll be nwtced-lo-tl)eof!W1c8 monthly bued on the clallng 111d Pflce
at the time the cuatDdlln for the collateral luues lta monthly statement to the City.
For the purpose of the section, the term "co1laterar shall mean "purchaSed securitlN" under
the terms of the City approved Maatar Repurchue Agreement. In no case will the maturity of
the collateral exceed ten years .
7. Time Certfflcates of Deposit or savings accounts In staid or national banks operating In
Colorado which ere state approved depositories (as evidenced by a cartlficata INued by the
Stata Banking Board) and are Insured b~ the FDIC . Certificates of depoalt which exceed the
FDIC Insured amount shall be collaterallzed in accordance with the Colorado Public Deposit
Protection Ac!. The collateral will have an initial market value equal to or exceeding 102
percent of the difference bolween the insured amount and Iha City'~ total depoalta for an funds
within the instltutlon . If Iha market value of the collateral falls below 101 percent of the dollar
value of the transectlon, the collateral will be required to ba brought up to the 102 pen:ent
Initial rnalntP.nance .
8. Time Certfflcates of Deposit or savings accounts In state or federally cha rtered savings and
loans operatinQ In Colorado which ere insured by the FDIC . Deposits which eXCled the FDIC
insured amount shall ba collatenltlzed in acconlance with the Colorado Public Deposit
Protectlon N;t. This collateral will have an initial market value equal to or exceeding 102
percent of the diffetance balween the insured amount and Iha City's total deposit for all funds
within the Institution. ~ Iha market value of the collateral falls below 101 percent of tha dollar
value of the transaction , the collateral will be required to be brought up to the 102 percent
Initial maintenance level .
9. Colorado Local Government Liquid Asset Trust (COLOTRusn.
10. Prime Bankers Accaplances with a ma / of six months or less issued on Jomeatlc banks
or branches of torev, banks domlclled in the U.S. and operating under U.S. banking lfts.
Accepting banks must have a senior debt rating of A-I-£.,by Moodys and/or p,,.... ~by
Standard and Poors.
11. Prime Commurcial Paper with a maturity of 180 days or less which , at the time of purchese, Is
rated at least A--i. .!cl.by Slandard and Pocn, P-1 by Moodys, F-1 by Fitch OR~ .Q:!
by Duff and Phelps .
a) Al the time of purchase, the commercial paper must be rated by at least two of the above
-ed rating agencies at the stated minimum rating .
b) If more than two of the above stated agencies rates an issuer, all of those rating agencies
must rate the issuer in accordance with above stated minimum credit criteria .
c) ~ the commen:ial paper Issuer has senior debt outstanding , the senior debt must be rated
by each service that publishes a raUng on the issuer as at least A4-&by Moodys, ~
by Standerd and Poors , l'-½'l,_by Filch , OR ~by Duff and Phelps .
OTHER INVESTMENTS
It Is the intent of the City that the forego ing lis t of authorized securi:;es ~~ strictly interpreted . Any
deviation from this list must be pre-approved by thA Director in writing after approval by the i:Ity
Manager .
Policy O 1-00 redline
(NYISTNINT PIY!ftllfKWKlN
It II the lntant ol the City to dlvnlfy the inv.tment lnltrument9 within the por1fallo to 1111old
lncun1ng un,-onlble rtaka Inherent In CNer illVMtfng In spedllc ~. lncllWllll flnanclal
inl1ltutlons or meturttln . The IIIHI allocation In the portfolio lhOuld, i-, bl llulbll
depending upon tht ouUoo k for the economy, the HCUritlH mart<et, end the Olty'1 Cllllh llow
needs.
The City may Invest to the following niaximum limits within each catego,y:
• 100% in U.S. Treasury Obligations bwl net leas lllan iQIK
• 50% In CertillcatH ol Deposit
• 50% in allowable Federal lna1rumentalltie9
• 40% in RepurchaH Agreements coltaterallzed by allowable Federal lnstrumentalltlel
• 100% In Rapun:t,ase Agreements collaterallzed by U.S . Treasury Obligations
• 20% in Benkera Acceptances
• ~In Commercial Paper
Tests for llmltatton• on oercentagn of holdings apply !Q !!le composite oi the enlire portfpllo of Iha
City. not to individual portfolios malnlalned by l!l8 City . Percentage limllatlons used for
measurements are based on the percentage of cost value of the portfolie.
INVESTIIENJ MATURITY AND U0UIQIJY
Investments shall a llmtted to maturttlM not exceeding ~ears. In addition , the weighted
average maturity of the totat por1lolto shall at no Uma exceed .-~months. "Ale !;:it) ,~all
at all lirAN R' tlAlatfl 1 &IM ef II& latal iA aalfflenl peRfalie iA iAltfvFRIAII irRBlwriAI iA 1aG dB) e er
leee,
OTHER INVESTMENT GUIDELINES
All investment transacUons must be executed with broker/daale,s and financial insUtutions that
have been authorized by the City , and each transaction must be competitively transected with at
least two authorized broker/dealers financial Institutions. w the City is olle<ed a securjty ~or which
then, is no other readily avaHable competitive offering then the Director s11an document guotatlcns
for comparable or altematlye securities . When purehasing original iuue Instrumentality
securities no competltivtt offerings will be required f.u![_g_ealers in the selling group otrer those
securities at the same ortglnal Issue price In addltlun , before any repun:hae agreements shall
be executed with an authorized broker/dealer or llnn:ial Institution , a City approved Master
Repun:hMe Agreement must be lignad ~ the City and that brol<ar/dealer or financial
lnsUtution . The Director shall maintain a ffle of all Master Repurchase Agreerna,11 .
Tha purchase and sale of all securttln shall be on a delivery versus payment or payment versus
delivery basis . For Instance, for aecuritiel pun:han, monies will not be released by the City's
safekeeping bank untH securities are received at lhe Federal Reserve Bank for further credit to the
City's safekeeping bank . In the case of securities sales, monies wttt be recaived by the City's
safekeeping bank via tho Federal Reserve Bank as lhe securtt:es are sinultaneously released to
the purchaser. In this manner the City will always have possession of either Ill securities or its
monies .
The City seeks an active . rather lhan passive , management of Its portfolio 111811 . Assets may be
sold at a loss only ff the Dlraclor or the Investment Advisor feels that the sale of the security Is in
the best long-term interest of the City .
Pogo5 Policy O 1-00 redline
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IEU!CT)ON Of BROKER/DIALERS ANO FINANCIAL tNIJIIUifON§ AC]]NG M
DBQKERIPf!I EB!!,
The Diredllr lhall mainblln a lilt of authorized broker/d881e<9 and ftnanelaJ lnllfflutlont which W9
appmed for inYatmenl pu,poae1 (-Appendix Ill), and ~ shall be the policy ol the Ci:y to
purchllS,') securities only t,om thole authorized lnatttutiona and flnna .
To be eligible , a firm/bank must mHI al least one of the following criteria :
1. be recognized as a Primary Dealer by the Market Reports Division of the Federal R8MN9
Bank of New York,
2. report voluntarily to the Market Reports Division of the Federal Reserve Bank al New York,
3. ba appF8 ell Iii) IRa giFaelar altar a 88FAflF8hanaj: a Rdll aAd eaiailelii!Bli8A 8AalrJIII IA-·-···
Iha fiFffl ie aSe~ualol) JiA&AHEi le senawet lauainooa crfth IRe ~ilPYfdl )lritten
certification to the c;11y that the broker/deafer has met the securities der.ier:s cap1111 FPIIIIPfY
requirements of the New Yqr'~ Rgerye Bank on a cqnUnuou1 bgjs for lbt preyjpus
twelve month period . These capital adequacy requirements are fpung in the New York
Federal Reserve Bank publication entiHQd Capital Adenu:;:;· G11;:Jelines (pr Gov,mment
Securities Qulera.
4. be an FDIC member.
Broker/deahn and o4her financial lnatilutions will be selected by the Director on the bull of !heir
expertise In public cash management an1 their ability to provide service to the City's accounl
Each broker/dealer, bank or savings and , ,an that has been authorized by the Dtractor IN( be
required 10 submit and annually update a City approved Broker/Dealer lnfonnatlon Requeat fonn
which Includes Iha finn'1 most recent financial statainents. The Director shall maintain a file of the
most recant Broker/Dealer lnfonnation Request fonns submilled by each firm approved for
lnvestmer,t purposes. BrokerlDealers shall also attest in writing that IBY have received a copy of
this Policy.
The City may QUIGhase Commercjal Paper from direct Issuers even though they are not on the
approved 11st or broker/deafm as long u they meet the crileria outlined in Item 11 of the Ellgjble
Investments and Transactions section of this Policy .
ll!,ICTION OF BANKS !NP SAYJNGS AND LOANS AS DEPOSITORIES AND PROVJDERS
Of GENEfW. BANKING SERY)CES
The City shall maintain a list of authorized banks and savings and loans which an, approved 10
provide bankllg ser,ices or from whom the City may purchase certiflcatas of deposit. To be
eligible for aulhorizallon, a bank or savings and loan must meet the minimum credit criteria
(described below) of credit analysis provided by a commercially available bank rating service.
Banks or savings and loans faiing to meet the minimum criteria , or in the Judgment of the Dlnlctor
no longer offering adequate safety to the City, will be removed from the llsl Although a bank or
savings end loan is on the qualified list, it wiil still be required to pledge collateral on all deposits
and investments , pursuant to State law.
The City shall utilize a commercially available bank rating service (Sheshunoff, PMA Financial
Network) 10 perfonn a semiannual credit analysis on banks and savings and loans. The bank
rating guidelines will be calaJlated using publicly avaiablfl financial information obtained from the
release of the COlllOlidatad Reports of Condition end Income (FFIEC Report) from the Federal
Reserve or from data reported to Iha Comptroller of the Curr1111cy . Data obtained from the bank
rating service will include factors covering the following : overall rating , liquidity policy , credit risk
policy, Interest rate policy. profitability and capital policy .
Pago6 Policy O 1-00 ~inc
" In order to meet 1111 mlnlmiln credH criteria, a bank or savlngl and loan IT1UII meet l1t folliiwlng
cradH rating requirements: '
1. have• Shllhunoff Public Finance P-G~m Rattlg of 30 or beltlr on• IICale al DIii "'one
hundred wtlh one hundred being the hlghlet quality 1or the moll ,_,. reporting Cll-w. or
2. have a PMA Flnanclal Network overall l'lllng of thrN or bell• on a lcale of one to 11\19 with
one belng the hlghnt qualily for the moat recent n,port1ng qua'ler.
3. The inltHutlon must qualify 89 a dapoaltory of public lunda In Colonldo u defined In-Gal~
~ CRS 24-75-603 .
The Director •hall mainta in a file of all credtt rating analy•ls reporta perlormed for the City.
SAFEKEEPING AND CUSTODY
The safekeeping and custody of HCUritles owned by the City ahllll be managed In accordance
with Coloraco law all'J applicable Atlomey General opinions, Regulation 3-1-6 , Use of Clearing
Corporations and Federal Rner,e Book-Entry System.
T, e Director shall approve one or more financial instibJtlons to provide safekeeping and custodial
ser,ices for Iha City . A Cily approved Safekeeping Agreement shall be executed with each
custodian bank prior t,, utilizing that bank's :18fekeeplng services. To be eligible for designation 89
t~e Clly's safekeeping and custodian bank , a finandal Institution shall rMM the following criteria:
1. have a Sheshunoff Public Finance P-Group Rating of 20 or better on a scale of zero to one
hundred wilh one hundred being the highest quality for the moll recent reporting quarter; or
2. have a PMA Fnanclal Network overall rating of three rnilus or better on a scale of one to five
with one being the highest quality for the most recent reporting quarter.
3. qualify as a geoosilQ,v of oublie funds in the State of Colorado as defined in CRS 24-75-§03
and be a Federal Reserve member financial institution .
Custodian banks will be selected on Iha basis of tile~ abilty to provide ser,ica to the Cily's
account and the competitive pricing of their safekeepin g rela111d servicas (-Appendix IV),
"R:le Qireeter shall F01:t1::1 iFe ea&.~ appre ei:, safekee,:i ing fiRenGia l iR&lih:dion le ewbmil a sepy ef ill
Co•sollaalea RepeR& af CoRailie• a•a IRaome !f'f'i~C RepoRj 18 lae Gil', The Director shall also
maintain a fie of »,e credll rating analysis repor1I perforlT1ed for each approved llnanclal
instltullon . Credit ana lys is shall be performed on a semi-annual basis
II is the objective of the Cily lhat all owned 18CUritfes be l)«fected In the name of tile Clly.
Sufficient evidence 10 tiUe shall be con i!i!tent wilh modern investment. banking and cqmmen;ial
~
Afl investment securities , except non~tiable certificates of depoal1 and money market funds,
purchased by the Cily will be delivered b , either book enlry or physicaJ delivery and will be Mid in
lh lrd-party safekeep ing by a Cily approved custodian bank , its correspondent New York bank or
the Depository Trust Corporation (OTC).
T),q Cily's perfected ownership of all book enlry securities shall be eviden.:ed by a safekeeping
receipt Issued to lhe City by the custodian bank who acts as tile Clly's safekeeping agent. The
safekeeping receipt shall state thal the securities are held In the Federal Reser,e system either in
e Customer AccounU1030 for the custodian bank which will name the City as "customer" or In a
Tr\Jst AccounU1050 with lhe lru~I department named as egenl for the Clly.
All non-book entry (physical delivery) securities shall be held by the custodian bank's •
correspondent bank in New York Cily and the custodian bank shall issue a safekeeping receipt to
Paoe7 Policy O 1-00 l<dli.ic
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lho City Menclng 111111 lho sea.ri1IN .,. held by lho Qli1aaponde.1t bank 1w fie CIIY , Thi Cly
may utllln the lrlicee of the uepoelll'Ay Trutt Corporation (OTC)• a depoaltory lat delivery r:A
non-wnable amtaee.
All cuatodlacl ICJlillea 11111 .,. regislered shall be rwgll1er9d In the name of the City or In the
name of a namiMe of lhe CKt or In the name r:A the CUl1adllln or ill nominee or, if In e ctNllng
c:orporallan, In the name of Iha during COIJ)Ollltioc1 or ill nominee .
The City's custodian will be requited lo furn ish lhe City with a monthly report of securities held as
well as an SCC01Jnl analys is report of monthly securities activity .
PROVISIQNSfORARBITRAGE
The City periodically Issues debt obligations which are subject to the provisions of lhe Tax Reform
Act of 1986 (section 148F), Arbitrage Rebate Regulations . Due to -the legal complexitiN of
arbitrage 1-and the neceaaar/ immunization of yield levels , the procedures undertaken In lhe
reinvestment of all or a portion of Iha proceeds of such debt Issuance 'niay extend beyond those
outilned in th is Polley . The Dlre\."lor, upon advice from Bond Counaal and financial advilcn, may
alter provisions of this Po)Jlcy for llbffraga related invas1ments as may be ,-sary to conform
with faderal arbitrage regulations. In all casa, however, Investments will be In compliance with
Colorado Revised Statutes . This section is only applicable to City funds subject to arb:trage
restrictions .
REPORTING
As Investment report shall be prepared , at least on a monthly basis , listing the lo "estments held
by the City , Iha currant market valuation d lhe Investments and perfor!nanc., teeults. ~
monthly investment report shall be submilled In a timely manr.er to the City Manager a,d the City
Council. A record shall be maintained by Iha Depmtment of Financial Se . ,,ces of all bids and
offerings for securities transactions in order to ensure that the City receives compellti,a pricing.
T1111 City has Nlablilhed reporting and accounting standards r callable U.S . Instrumentality
securities. Callable securities may be retired at the Issuer's 0'.ltion prior to the stated maximum
matu rity . All securities hold ing reports for the City shall dlsciose the stated maturity as well as the
first call data of each callable security held. In Iha case of callable cecurities which ant purchased
priced to lhe first call date and , in the op inion of the Dlre,;tor, have an overwhelming probab~lty of
belng called on the tits! call date . weighted average maturity, a.'!10rlization as well as yield shall be
calculated using the flnlt call date. The Dlraclor may , however, choose to use a further call data
maturity data for reporting p,rposes when conditions mandate.
PERFORMANCE REVIEW
The Director and Iha City Manager shall meet at least quarterly to revl-Iha portfolio 's adherence
to appropriate risk l~vcls and to compare Iha portfolio 's total return to the established investment
Objectives and goal•.
The Director •hall period ically estab lish a benchnwk yield for the City 's investments which shall
be equal to Iha average yield on the U.S. Treasury security wtiich most cior.ely corresponds to Iha
portfol io's actual weighted average maturity . When compa ring the pe:formance of the City's
portfolio, all fees and expenses involved with managing the portfolio shou1d be included in the
computation of the portfolio 's rate of return .
ETHICS AND CDNFLJ .,'TS OF INTEREST
Policy O 1-00 rodline
Officers end employNe imlolved In the invettment µocN1 "'811 refrlln fl'Om ~ bulln-.
adlvlty 1h11 could conflict will prapar eXICUtlon of the lnvN1nwll program, or whlah could ·~
lhelr ability lo make Impartial ln-lment decisions . EmpluyH■ and lnvwtnwlt alllcllla lhal
dlaclo,;e lo lhe City Manager 1111y mater1II flnanclal lnleml In nnencial lnatltutlonl 1h11 oonduct
business with the Clty, and liay 11h11 further dlaclOM any large pnonal ~
positions lhal COUid be ruled to the performance of lhe City'• portfolio. Empk,yaN and alllclr9
shall subordlnale 111.,Jr ~ ln-tment tranaactlons 10 lhoae of lhe City paticullrty with
regard lo lhe timing of puiehases and , lies ,
POLICY REVISIONS
This lnveslmenl Pol !~y will be reviewed periodically by the Director and may be amended 11
cond illons warranl by lhe City Manager and Iha City Council.
PrepM!d by :
Frank Gryglewicz
Director of Financial Services
Approved by City Council
Seplember 17, 1990
Amended by City Council
December 16, 1991
Amended by City Counr'I
April 5, 1993
s1a1e of Colorado, cou.,ty of Arapahoe
Plwparedby:
Sieve Dazzio
Chief Accounlanl
Amr / City Council
Ser amb or 5, 1995
Amended by City Council
December 15, 1997
Amended by City Council
Fabruary7.._m
I, Loucrishia A. EUia, City Clel1< In and for lhe City of Englewood , in Iha Slate dfore.Jald , do hereby
certify that Iha foregoing le I ful, true end cooec:t copy of Iha lnveslmenl PoJic:y .. Jhe -
appears upon the records of my ofllce which are in my custody .
Given under by hand and offldaJ seal , lhls _ . day of ____ -A.D. 1997, ___ _
o'clock _.m.
Pago 9
Loucrishla A. Ellis
City Clerk
Policy O 1-00 mlliDe
•
~IXI
Auth~ Pel'IOlln'!I
The foilclM1g per90111 n authorized ID conduct nvatrnent nnuctionl and wn 1ranlfw flllldl
on behalf ot the City ot Englewood:
S-Dazzlo, Chief Accountant
Jennifer Nolan, Accountant II
Kalhy Cagal Accountant II
Frank Grygtewlc:z. DfnlclDr ot Flnandll Services
Pogo10 Policy 01-00 mlline
APPINDIXII
Repun:hne Agretmtnta
The foltoMlg ftnns have executed a City approved Ma1er Repurchae Agreement with !he City of
Englewood.
llal>ill l.yRBA
Banc ol Amef'lca Secy@es
Moman Sll{)ley Dean Witter
Prudential Securttles
li111i!A 1181111¥
Agreements maintained ;n separate file.
nJ.,.
A'
Policy 01-00rodlli,.
'APPl!NDBNII
AuthorlDd ll"ObrtDNlera Ind financial l11-,t1tutlon1
The followlngtma .. appnlY9d tar lrMlllment purpl)NS by the Cllyof ~
Banc o1 America Securtties
Dain Rauscher
Klrlcpalrick Pettis
Menill Lynch
r.4o<gan Stanley Dean Witter
PalneWebber
Prudential Securities
Si!l!!!!Qu_ Smith Barney
Pago 11 Policy 01-00 rodlino
APMNEIIX'N
The following bank la authorized u lhe ~ cuatodilll ban !Of the City ol l!nglawood :
1u1111 l-lilfll aank hi11n1
PQ 81•all;t;li
Pt.HAIN; '1 8&Q38 Q;t]I
NO!Wfll Bank Minnesota
s~ ang Marnuette
Minneapolis MN 55479-0130
I '1
Policy 01-00 e<dline
•
•
•
COUNaLCOMMUNCATION
Datt
February 7, 2000 I
Ager,da Hom I Subjtcl
Rnolutlon approving changes to tho
11 c 1l City of Englewood lnvNtmtnt policy.
lnlliattd By
Citv of Enolewood , Financ ial Serv ices Department I stall Source
Frank Grvc ltwK.Z. Director
COUNCIL GOAL AND PREVIOUS COUNCIL ACTION
City Council approved the original inves1ment policy on September 17, 1990. Since that time the Council has
amended the Policy live times . City Council dlscu 5 ;ed the proposed changes at a study session on January 17,
20v0 .
RECOMMENDED ACTION
stall recommonda City Council approve tht attached re1olutlon making chang11 to tht City of Englewood
lnvt1tm1nt policy.
BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED
The City's Inv estment Policy sets !he parameters of the City's shorMerm investment act iv ities . Th ia Polley is :3ppl icabl1 to
all the City's llnancia l assets except the Fi refighters Pension Fund, the Police Officers Pens ion Fund , to1e Non ~Emergency
Employees Pension Fund , and other City emp:oyff retirement plans . The City 's funds are pooled lo improve efficiency and
effectiveness . t:arnings on the pooled funds are distributed to funds baaed on their cash balances .
The City's financ ial objeciives that the Policy supports are:
Preservation of cap ital and protection of princ ipal
• Maintenance of adequate liquidity
Divers ificat ion to adequately spread risk between investments
• Market rate of return on total portfolio
• Ensure the City conforms with all City , Slate, Federal, and other legal guideli nes
The proposed changes support these objectives. No other alternat iv es were identified .
FINANCIAL IMPACT
None
UST OF ATTACHMENTS
?reposed resolut ion
Copy of Investment Policy wrth proposed changes
Clean copy of Investment Policy