3
2.
Interest bearing savings accounts, interest bearing certificates of deposit, or interest bearing time
deposits, or anyother investment constitutionallydirect obligations of any institution as defined by the
IllinoisBankingAct and that is insured by the Federal Deposit InsuranceCorporation.
3.
Illinois PublicTreasurer’s Investment Pool (Illinois Funds).
(I)
Collateral: It shall beCitypolicy to encourage that all funds ondeposit inbanks in excess of FDIC limits
be secured by some formof collateral. Direct investments guaranteed by theUnitedStates, or any agency
of theUnitedStates do not require collateral.
1.
TheCity is hereby adopting, by reference, the provisions of the Illinois Public Funds Investment Act
(30.ILCS.235), and all amendments from time to timemade therein, and excepting anyportions
thereof specifically superseded by this title.
2.
Pledged collateral will be held by theCity in safekeeping and evidenced by a safekeeping agreement.
The collateral agreement will preclude the release of the pledged assetswithout authorized signatures
of theCityTreasurer, but the agreementmay allow for an exchange of collateral of like value.
3.
All securities should be rated “A” or better byMoodys, or Standard andPoors.
a.
Negotiable obligations of theUnitedStatesGovernment.
b.
Negotiable obligations of any agencyor instrumentalityof theUnitedStatesGovernment
guaranteed by the full faith and credit of theUnitedStatesGovernment
(J)
Internal Control: TheCityTreasurer or his/her designee, shall establish a systemof internal controls, which
shall be documented inwriting. These internal controls and this Investment Policy shall be reviewed by an
independent certified public accountant in conjunctionwith the annual examinationof the financial
statements of theCityofMomence. The controls shall be designed to prevent loss ofCity funds arising
from fraud, employee error, misrepresentationby third parties, unanticipated changes in financial markets,
or imprudent actions by employees.
1.
One requirement of internal control is timely reconciliation of all checking, saving, and investment
accounts under the jurisdictionof theTreasurer’sOffice. Reconciliation shall be performed on a
monthlybasis and shall be completed no later than thirty (30) days alter the end of themonthly cycle.
(K)
Reporting: TheCityTreasurer shall submit amonthly cash and investment report to theCityCouncil for
review.
1.
The annual financial report shall include all investment information as promulgated by the
Government AccountingStandardsBoard.
2.
TheCityTreasurer or his/her designee shall periodically suggest policies and improvements that might
bemade in the investment program.
(L)
Standards of Prudence: The standard of prudence to be used by the employees responsible for the
investment of public funds shall be the “prudent person” standard, subject to the foregoing limitations,
which states:
1.
Investments shall bemadewith judgment and care, under circumstances thenprevailing, withpersons
knowledgeable of investment practices, and persons of prudence, discretion, and intelligence exercised
in themanagement of their own affairs, not for speculations of the investment, considering the
probable safetyof their capital, aswell as the possible income to be derived.
2.
The above standard is established as the standard of professional responsibility, and shall be applied in
the context ofmanaging theCity investment portfolio. This policy recognizes that there are
circumstances beyond the control of even themost prudent investor, which impact the returnobtained.
However, officials and employees of theCity, acting in accordancewith this Investment Policy, and
writtenprocedures asmay be established, as exercisingdue diligence shall be relieved of personal
responsibility for an individual security’s credit riskormarket price changes, provided that deviations
from expectations are reported in a timely fashion, and appropriate action is taken to control adverse
developments.
