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Resolution No. 98-71 CITY OF TIGARD,OREGON RESOLUTION NO.98-r1 1 A RESOLUTION UPDATING THE CITY'S INVESTMENT POLICY. WHEREAS, ORS 294.035 requires investment officers to obtain a written order from the governing body of a municipality before investing surplus funds,and, WHEREAS, The current investment policy was adopted by resolution 89-59 on July 24, 1989 and was amended by resolution 94-53 dated November 29,1994,and WHEREAS, the City Council desires to update the investment policy upon the recommendation of the Director of Finance. NOW,THEREFORE,BE IT RESOLVED by the Tigard City Council that: SECTION 1: The investment policy is amended as indicated on the attached Exhibit A. PASSED: Thisj J day of ry) "998. a -City of Tigard ATTEST: C"AC'L'i City Recorder-City of Tigard RESOLUTION NO.98- J j Page 1 "EXHIBIT A" CITY OF TIGARD INVESTMENT POLICY The following Investment Policies are intended to meet the requirements of ORS 294.035 and to provide the framework within which City of Tigard funds may be invested. Authority The Finance Director shall serve as the Investment officer of the City. The investment officer is responsible to ensure that funds are invested so as to make necessary cash available to meet current obligations and to invest excess cash in accordance with ORS 294.035 through ORS 294.047 and these Investment Policies. In the absence of the Finance Director,the Accounting Manager may act as Investment Officer with prior approval of the City Manager. Scone These investment policies apply to all excess cash related to all activities and funds under the direction of the Tigard City Council including water funds on behalf of Durham, King City, and Tigard Water District. Cash accumulations related to bond proceeds or short-term borrowing are included unless more restrictive state or federal regulations are applicable. Excess ca�h shall be defined as all liquid assets not necessary to meet current obligations. Deferred Compensation Deferred compensation funds are placed wilt a third party for investment and are therefore excluded from the restrictions set forth in these guidelines. Obiectives The objectives of these policies are to provide for the preservation of City assets,the availability of such assets to meet obligations as they come due,and to provide for a reasonable rate of return on those assets, in that order. Prudent Investor Investments shall be made under the prudent investors rule,which states,"Investments shall be made with judgment and care,under circumstances then prevailing,which persons of prudence,discretion,and intelligence exercise in the management of their own affairs,not for speculation but for investment, considering the probable safety of their capital as well as the probable income to be derived." Internal Controls The investment officer shall maintain a system of written internal controls,which will be reviewed annually by the independent auditor. Cash Flow Analysis The investment officer shall maintain a historical cash flow record and a cash flow projection which extends twelve months into the future. The projection shall be reviewed and updated on a regular basis. No fixed maturity securities shall be purchased unless the cash flow projection indicates that the funds invested will not be required until the maturity date of the investment. Bond Proceeds Surplus funds resulting from debt issuance shal!be considered as a separate portfolio and shall not be restricted by the maturity and instrument diversification section of these policies. Such funds may be invested for periods exceeding 18 months and up to 36 rnonths. Such maturities shall coincide with the projected cash flow needs resulting from the projected construction schedule. Such funds are restricted to the following instruments: Treasury/Agency Securities 90 percent maximum Local Government Investment Pool 100 percent maximum Diversification The investment officer will diversify the general portfolio to avoid unreasonable risks within the following parameters: • Maturity Diversification Investment maturities shall be scheduled to coincide with projected cash flow needs. Thirty percent of the portfolio will mature in less than 90 days. No investments will be made for a period to exceed 18 months. • Instrument Diversification Certificates of Deposit 25%maximum Commercial Paper 25%maximum Bankers Acceptance 50%maximum Treasury/Agency Securities 75%maximum Local Government Investment Pool 100%maximum Demand Deposits l0%maximum Other Authorized Instruments 25%maximum • Institution Diversification Bank liabilities with any one qualified financial institution shall not exceed 20 percent of the portfolio. Bank liabilities of any one qualified financial institution shall not exceed one percent of the institution's total assets. Investment in commercial paper shall not exceed 10 percent of the portfolio in any one Oregon corporate entity meeting the rating ® requirements of P-2/A-2 or better, or five percent of the portfolio in any one corporate entity outside the State of Oregon. Savings and loan institutions shall be distinguished from commercial banks in that Certificates of Deposit with savings and loan institutions shall not exceed $100,000 unless the excess is 100 percent collateralized by certificate in the State Collateral Pool. For purposes of these guidelines,the state local government investment pool shall-be considered to have a one day liouidity. Selection of Investment Instruments Investments shall be made by the investment officer through the exercise of his/her judgment after requesting quotes from firancial institutions. Selections will be made so as to provide the highest rate of return within the parameters of these policies. Oualified Institutions The investment officer shall maintain a list of all authorized institutions which are approved for investment purposes. The investment officer will request,analyze,and keep on file,periodic financial statements and related information to satisfy himself as to the creditworthiness of each institution on the approved list. Reuortlne The investment officer shall prepare an investment activity report at the end of each month for review by the City Administrator. Amendments These investment policies may be amended at the request of the investment officer, the City Administrator,or members of City Council. Such amendments shall be approved by the City Council in the same manner as the investment policies. Authorized Investment Instruments Ti. fell wing investment instruments listed:n QRS 294.031 as"approved seeurities el.eil be .theriz d investments for the 9:,--of T:ve...l Legally lly i sued general obligations of the United States is a._'__and instfu"_ent lilies, ...... :tom.... ....:ems a...�:-...c......... and these of the states of Onage.. I/....0.:-....a.... 4.i..1.....-/'ali femia -moi. ,.. .1.. neve..te. .. _�__ . —_p____ and en.'.ge ...e.nta :. _____s, iilUfual savings bFanek in the state of OFegen • T_...ts .,hieh de e-'ed e e P....1..f e...eche.publie plev::rs aie......1...1 c�.a'rF.vvrivv:iPav3— Pvmc� £mane:el institutien being a whieh is !seated in the .. banking business and not Fequir-ed undef ORS 295.01.te fiNdWaill a FeSSFVe deposit e ne ffimemia4 paper issued by a on behalf C., qualified C:..e.,e;el instituden, _he.lding Repur-ehase affeements ifiveiving legally issued geneEal obligations ef the United States .i its ageneies l instfunientalities :1-7h, ell,. muscagreer-BPHFBha-.e theseetiFities within 90 days c „ •ng-the date of the investment. If the ec the .,.,e_,. J inb due Investmentr-epure1. ^m el t be ebysigned ti, ,, seller d C t .1• full desrripti A f see„ e..held f oSeeping Y The investment officer shall invest the money of the City only in qualifying investments according to ORS 294.035. These investments include: • Demand deposits with approved institutions. • Deposits in the Oregon Local Government investment Pool. • Certif sates of Deposit with Oregon banks. • Banker's acceptances. • Qualifying corporate indebtedness. • Direct obligations of the United States and obligations guaranteed by the United States. e Direct obligations of the States of Oregon, Washington, Idaho and California and political subdivisions of those states. • Repurchase agreements. Safekeeping Certificates of Deposit will be placed in a secured area within the vault on the premises at the City of Tigard. All bearer instruments,treasury and agency securities,and all bankers acceptance shall be placed in safekeeping with a qualified third party. The safekeeping department of a bank maybe designated as custodian for safekeeping securities purchased from that bank and its subsidiaries. Bold&Italic to replace strikelhmugh.