1988-01-18 - Resolution 1988-03 - AMENDING THE INVESTMENT AND DEPOSIT POLICY FOR THE VILLAGE OF BUFFALO GROVERESOLUTION NO. 88 - 3
A RESOLUTION AMENDING TI{E INVESTMENT AND DEPOSIT POLICY
FOR TIIE VILLAGE OF BUFFALO GROVE
I.IIIEREAS, the Vlllage of Buffalo Grove has both a statutory and flscal
responslbillty to properly manage and control cash and lnvest[ent aaaets
entrusted to lt; and
ITHEREAS, lt ls consldered necessary that a fornal pollcy be establlshed
by the VtJ,Lage regarding all investment and deposlt actlvltles, and lf
necessary, be aoended fron tlme to tlne to reflect changes ln operatlonal or
market conalderatlons; and
WtsEREAS, such a pollcy should be both understandable for staff to
monltor and quantlflable for purposes of dlsclosure both internally and
externally by those partles to the overall pollcy; and
WI{EREAS, the Vlllage of Buffalo Grove adopted 1ts orlglnal Investnent
and Deposlt Pollcy on Aprll 2I, 1986 wlth Resolutlon No 86-32.
NOW, THEREEORE, BE IT RESOLVED BY TIIE PRESIDENT AND BOARD OT TRUSTEES OF
THE VILLAGE OF BUFFALO GROVE, COOK AND LA(E COUNTIES, ILLINOIS, thAt:
SECTION 1. The Vtllage of Buffalo Grove Pollcles and Procedures Relatlve
to oepo-EJFliE Investmenas, noted as Exhibit rrAtr to thls Resolutlon ls
amended by the Vlllage and remalns a statement of both policy and control ln
the management of cash and lnvestment assets.
SECTION 2. The dtsclosure re qulrenents of this poltcy w1ll remaln part
of the Vflfigers activltles reportlng cycle on elther an Eonthly or quarterLy
basis, and lf directed by audlt staff, part of the V1llagers Comprehenslve
Annual Flnanclal Report.
SECTIoN 3. The notlflcatlon to Vlllage banklng lnstitiutlons w111 be
f orewiidEi-I6Jhose banks upon adoptlon, sald resoiutlon and anended pol-lcy
to be effectlve as of January 18, 1988.
AYES :4 - Ilarienthal, Glover, Reid, Shifrin
NAYES: 0 - None
ABSENT: 2 - ShiEldS Kowalski
PASSED: January 18 , r988
ATTEST:
Qb"al"fu Elrrha^
vflaEE;EGi[
\r11lage Presldent
APPROVED: Januarv 18 , 1988
VILLAGE OF BUFFALO GROVE
POLICIES AND PRACTICES
RELATIVE TO DEPOSITS AND INVESTMENTS
The Vlllage of Buffalo Grove, as a publlc agency, has an lnherent flduciary
responsiblllty to properly account for and oanage publlc funds. Public funds
are to be consldered current operatlng funds, speclal funds, lnterest and
slnklng funds, and funds of any kind or character belonglng to or ln the
custody of any publlc agency (Chapter 85, paragraph 901, Illinols Revlsed
Statutes). It wlll be the Vlllagers pollcy to Ealntaln the hlghest level of
lnvested cash balances not only as a good management practlce, but as a
conmitment of responslblllty to the resldenta of the Vlllage who have en-
trusted these funds to us.
The overall dlrectlon of the V11lagers lnvestment progran rnay be found ln the
folJ-owlng objectlves, whlch have been prlorltlzed and explained to clearlyldentlfy the resulta expected.
Safety of Princlpal ls consldered of greatest prlorlty to the
Each i.nvestment that ls to be rnade shall seek to lnsure that
losges are avolded, whether they be from securitles defaulst or
of narket values.
Llquldlty 1s consldered to be the next lmportant obj ectlve.The
toVlllagers investment portfollo shall rernaln sufflclently llquld
enable itself to oeet all operatlng requlrments from tlme to tlme.
Maxlmum rate of return shaIl alwa ys be sought
V111age.
capital
eros 1on
but shall be
and prudent
conslstent
lnvestmentwlth both rl8k llEltatlons ldentifled hereln
prlnclples.
Pub11c conftdence ln the lnvestmeot program 1s inperative. The Vlllage
sha11 avoid any transactlon that nlght lnpalr its publlc confidence.
Investmenta sha1l be rnade wlth judgement and care, under clrcumstances
then prevalllng, whlch persons of prudence, dlscretlon, and lntellegence
exerclse ln the nanagenent of their o$n affalrs. Such a standard avoids
speculation, and enphasis is placed on the probable safety of capital
rather than the probable lncome to be derived,
The types of deposlts and lnvestment lnstruments that w111 be authorized for
use by the Vlllage of Buffalo Grove ln nanaglng 1ts lnvestoent of publlc
funds sha1l be dictated by statute. The speclflc reference 1s Chapter 85,paragraph 902, Illinols Revlsed Statutes. Speclfica1ly, the inveetmentspermltted are:
Bonds, notes, certlflcates of lndebtedness, treasury bI11s or othersecurltles now and hereafter lssued, r.hlch are guaranteed by the fuI1falth and credlt of the Unlted States of Aoerlea as to prlnclpal and
lnterest.
Interest bearing savlngs accounts, lnterest bearing certlflcates ofdeposlt, lnterest bearlng tlme deposlts or any other lnvestnents con-stltutlng direct obllgatlons of any bank as deflned by the IllLnols
Banklng Act. Investments nay be nade only in banks whtch are lnsured bythe Eederal Depo8lt Ingurance Corporatlon.
Short tern obllgatlons of corporatlons organlzed ln the United States
wlth assets exceedlng $500,000,000 1f such obllgations are rated at the
tine of purchase lr-lthln the three highest classlflcatlons establlshed by
at least two standards ratlng servlces and whlch mature not later than
180 days fron the date of purchase, and such purchases do not exceed 102
of the corporatlonrs outstandlng obllgatlons.
Short terE dlscount
clatlon,
obllgatlons of the Federal Natlonal l.{ortgage Asso-
Shares or other forms of securltles lssuable by savlngs and loan asso-
ciatlons lncorporated under the laws of the State of Illlnois or an),
other state or under the laws of the Unlted States. Investments may be
made only ln those savlngs and loan associatlons whlch are lnsured by
the Federal Savlngs and Loan Insurance Corporatlon.
Money-market mutual funds registered under the amended Investment
Conpany Act of 1940 provlded that the portfollo is limlted to bonds,
notes, certlflcatee of lndebtednese, treasury bllls or other Becurlties
whlch are guaranteed by the full faith and credlt of the United States
of America or agreements to repurchase these same types of obllgatlons.
In addltlon to the above Lnvestment optlons, the Vlllage may also lnvest any
publlc funds ln the Illlnois State Treasurers Investuent Pool.
A11 earnlngs aceruing or pald on any lnvestments or deposits roade shall be
credlted to the specific lnvestnent rnade, and such earnlngs shall be ln turn
credlted to and pald to the partlcular Vlllage fund for lrhlch the lnvestment
has been made.
It should be noted that rrhlle lnveatnents ln chartered credlt unlotrs are
pernltted, lt Lrlll be the Vlllagers pollcy not to lnvest public funds 1n such
lnstltutlons. ALso, the Vl!-lage wlIl not lnvest ln repurchase or re-
verse-repurchase agreements.
AL1 lnvestments sha1I be nade ln the nane of the Vlllage of Buffalo Grove.
In additlon, lf such securitles w1ll be made fron rnonles taken from speclfic
Vlllage funds or accounts, the nane of such fund or account shall be added tothat of the Vl1lage. All investments purchased sha1l be held for the benefltof the Vlllage. Money taken from a partlcular fund or account shall becredlted to and deened to be a part of such fund or account, and shall beheld for the beneflt thereof. A11 lnvestments sha11 be deposited and held ln
safekeeplng Ln the nane of the VIJ-lage wlth proper evldence of safekeeplng
forewarded to the Vlllage for use ln its lnternal accountlng system.
rhe vlllage w111 secure depoglt col-lateral fron deposltory lnstltutlons. The
amount of deposlts not collaterallzed or lnsured by an agency of the federal
government shall not exceed, 752 of the capltal stock and surplus of a banklngLnstltutlon. These values shall be revlewed on a quarterly basts comparlngactual deposits not inaured or coLlaterallzed aga{nst the capltal stock andsurplus measure. Values shal1 be taken from publlshed regulatory agencyreports requlred by elther the Conptroller of the Currency or the Comlsslon-er of Banks and Trust Companles.
If deposlts are matntalned wlth a savings and loan assoclatlon, the aEount of
deposlts not collaterallzed or lnsured shall oot exceed 752 of the net worth
of the instltution as deflned and reported to the regulatory agencles.
The Vlllage w111 requlre that all deposlts ln excess of the apptoprlate
regulatory agency llnlts' 1.e. $100'000 per account' be collateralLzed. The
form of collateral shall conslst of teadlly marketable rnuntclpal or Unlted
States goverrunental prlmary or agency securltles maintalned 1n a trust
safekeeping relatlonship for the beneflt of the Village of Buffalo Grove,
Whlle not retalnlng ownershlp of pledged securitles, the Vlllage will reserve
the rlght to release such securltles and to revlew replacement securttles.
Tte targeted level of collateral malntalned w111 be equal to 100.002 of the
deposlt balances of the VlLJ-age when comblnad \r1th the deposlt lnsurance
afforded by the governoental regulatory agencles, The collateral balances
wlll be revlewed on a quarterly basls for compllance wlth these pollcles.
Addltloual lnsurable balances are provlded relative to total, actuarlal
beneflclal lnterest for the pollce and ftre penslon prograas based on menber-
shLp paraneters.
Tte collateral requlreEents for deposlts rrlthln the Illlnols State Treasurera
Investnent Pool are the aaroe as requlred for the deposit of state funds by
the State Treasurer. See llllflols Revised Statutes, Chapter 130, paragraphs
17 aod 20-43.
The transfer of ready cash balances for operating and Lnvestnent purposea
w111 be directed through pollcies and procedures establlshed from tlme to
ttne by the Departnent of Flnance and General Servlces. An operatLng proce-
dure ls currently ln effect wlth the Bank of Buffalo Grove, Contlnental Bank
of Buffalo Grove, N,A., and the First Anerican Bank of Lake County that
govern either rrlre transfers or requests for caehlerrs checks from any
VlJ,lage savings or checklng account. The pollcy nanes the appropriate
lndlvlduals Lrlthln the Department of Flnance and General ServLcee that have
such wlthdrawal authorlty. Also, the named lndlvlduals have addltlonal
authorlty to rol1-over Certlficates of Deposlt, to cash sane 1n and deposlt
1n the approprlate V11lage fund account and to use the services of theIlllnols State Treasurers Pool for lnvestment purposes.
As forrnally artlculated ln the letters of dlrectlon to the locaL flnanciallnstLtutiona, only the followlng can be performed by naned lndlvlduaLs of the
procedure:
Transfer fundg to the vlllagers Dlsbursement Account at the contlnentalIlllnols Natlonal Bank.
Transfer funds to the Vlllagers account wlth the rlllnois State Treasur-errs Investnent Pool at the Springfleld Marlne Bank.
Request wlre transfers or cashlerrs checks to transfer funds betweenvlIIage-only accounts malntalned elther at the Bank of Buffalo Grove,Contlne[tal Bank of Buffalo Grove, N.A,, or Flr6t Anerlcan Bank of LakeCounty. Proper identlflcatlon of the recelvlng account nust be provldedln the instructlons. perlodlcally, both lnstitutlons will be provldedwlth 1lsts of currently opened and authorlzed Village denand and """ing"accounts.
Request deblt/credlt transfers of Vlllage funds between V1l1age accounts
rrlthln the aaEe inatitutlon due to deposlt or wlthdrawal errors.
Roll-over and/or caah ln certlflcates of Deposlt at the dlrectlon of the
of the Director of Flnance and General Servlces.
Transfer funds to the Northwest Water Co[mlsslon operatlng account
establlshed at the Contlnental Il1lnols Natlonal Bank or Sprtngfleld
Marlne Bank ln confornance rrlth the Comisslonrs bond ordlnance.
Any transactlon outslde of the above w111 be requested only by the Vlllagers
Dlrector of Flnance and General Services. In all cases, any transactlon rr1l1
be followed-up r.rith wrltten correspondence wlthln 24 hours of the trans-
actlon. The instltutlons have been lnstructed to notlfy the Vlllage ln case
there ls no notlficatlon l,lthln the deadline paraneters.
Managenent responslblllty for the Villagers deposlt and lnvestment progran
shall rest rrlth the Dlrector of Flnauce and General Serv1ces. The Dlrector
shall- dlrect the deposlt and lnveetxnent program ln a manner that is
consr.stent rrlth thls Pollcy. lnternal procedures sha1l be revlewed and
modifled froxn tlme to tlme ln order to insure that this Po1lcy nalntains lts
lntegrlty and workabillty. A system of controls shall be establlshed to
monltor afld regulate the actlvltles of all employees deallng wlth any aspect
of thls Pollcy.
VlL1"age Penslon Funds The lnvestment programs of the Vll1agers Po1lce and
Flre Pension Funds wllI be dlrected by the statutory language of Chapter t08l
of the Illlnols Revlsed Statutes. The speclflc Sectlons are 3-135 for Pollce
PenBlon lnvestments and 4-128 for Fire Penslon. The language for these
actlvitles ls separate fron other general lnvestment actlvltles ln that the
appolnted and elected penslon boards have statutory povers and dutles under
the Penslon Code,
Whlle such lnvestment programs w111 be dlrected
the Vlllage will nalntaln the internal accounting
by the respectlve Board I s,
for same.
Internal Reportlng The De partDent of Flnance and General Servlcee rr111provlde, on a regular basls, reportlng to the Corporate Authorlties and the
Penelon Boards on any and all lnveatment actlvltles. The reporting willlncIude, but not be llnlted to, average cash and lnvestment balances,portfollo ylelds and lnterest, and treasury report notlng month-end cash andlnvestment posltlons. The reportlng w1ll be by fund or lnvestDent category.The reportLng to the Penslon Boards wl11 lnclude quarterly cash andlnvestBent posltlons, along wlth quarterly cash and investment transactLons.The latter report ls a statutory report and w111 be prepared for the villageTreasurer.
Dated January 18, 1988