1993-22039-Resolution No. 93-061 Recorded 7/1/1993k
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BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COU Y, OREGON
A Resolution Adopting* ®1 ��y�n.
the Investment Policy * fir! 0
for Deschutes County, * ``
Oregon. * `r
RESOLUTION NO. 93-061
WHEREAS, the Board of County Commissioners of r\:P.scfiites
County, Oregon and the Deschutes County Treasurer find Vit,::, ni-the
best interest of the public of Deschutes County, Oregon, to":invest
public funds in a manner which will provide the highest investment
return with the maximum security while meeting the daily cash flow
demands of the operations of all Deschutes County services; and
WHEREAS, the Deschutes County Treasurer is designated as the
portfolio manager; and
WHEREAS, all funds will be invested in compliance with ORS 294
and other applicable statutes pursuant to the investment policy;
now, therefore,
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF
DESCHUTES COUNTY, OREGON, as follows:
Section 1. That the document entitled "Investment Policy,
Deschutes County" approved by the Deschutes County Treasurer, be
adopted and implemented as the investiment policy of the County.
DATED this 30th day of June, 1993.
BOARD OFICOUNTY COMMISSIONERS
OF D TES COUNTY, OREGON
�OMITHROOPI Chair
ATTEST: NAKY POPE
G
N EN, Commissioner
m rte, i�7� Lei
Recording Secretary BARRY H. SLAUGHTE , Commissioner
jAPPRO ED:
I
EN RAS- , reasurer
,VACROFIIMED
1 - RESOLUTION NO. 93-061 (6/30/93) -�✓'�
JUL 141993
1993
0127-O3:jo
Investment Policy
Deschutes County
Policy:
The Deschutes County Treasurer i s the portf of i o Manager. I t i s the pol i cy
of Deschutes County to invest public funds in a manner which will
provide the highest investment return with the maximum security while
meeting the daily cash flow demands, and conforming to all State statues
governing the investment of public funds and this investment policy.
Scope:
This investment policy applies to all activities of Deschutes County with
regards to investing the financial assets of all funds listed on the
Treasurer's fund summary report for which investment authorization has
been given, including but not limited to the following funds: General Fund,
Special revenue funds; Enterprise funds; Capital project funds, Debt
Service funds, Unsegregated tax fund, Service District funds and Trust and
Agency funds
Funds will be invested in compliance with ORS 294, other applicable
statutes, and this policy.
Cash will be co -mingled for investment opportunities.
Funds of other agenci es, j uri sdi cti ons, di stri cts or enti ti es f or whi ch the
County Treasurer serves as custodian will not be invested without
written authorization from the governing body of the Agency, stating
which funds Deschutes County is authorized to invest.
Investment Objectives:
1. The primary objective of Deschutes County's investment
activities is the preservation of capital and the protection of investment
principal.
2. In investing public funds, the County will not assume
unreasonsable investment risk to obtain current investment income.
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012'7-03b7
3. The County's investment portfolio will remain sufficient liquid to
enable the County to meet all operating requirements that might be
reasonably anticipated.
4. The County will diversify its investments to avoid incurring
unreasonable risks regarding specific security types or individual
financial institutions.
5. The County's investments will be in compliance with all statutes
governing the investment of public funds
6. The County's investments will be designed with the objective of
attaining a market rate of return throughout budgetary and economic
cycles.
Delegation of Authority
The County Treasurer is the portfolio manager. The portfolio manager is
responsible for the daily cash management and investment decisions and
activities.
In the absence of the Treasurer, the Deputy Treasurer will have the
authority to transfer funds between the Local Government Investment pool
and the County's general operating accounts. The Deputy Treasurer will
also have the authority to purchase or sell all approved investments.
Investment Limitations
Specific investment types shall not exceed the percentage of the total
investment portfolio indicated below. All securities are also included on
the list of "US Government and Agency Securities for Local Government
Investments under ORS 294.035 and 294.040". This list is maintained by
the Office of the Oregon State Treasurer.
Securities issued by a single financial institution (Bankers Acceptance
and Time certificates of deposits) will be limited to 25 of the total
portfolio.
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0127-05:jS
US Treasury bills, notes, strips and bonds 100%
US Government Agency Discount notes and bonds 75%
Local government investment pool 100%
(Up to limit of $10 million with exception of
of pass-through funds)
Bankers Acceptance 50
(Oregon Financial Institutions)
Nonnegotiable time certificates - 25%
Commercial Bank
(Investment will not be more than 10% of
the total deposits of any single institution)
Nonnegotiable time certificates - Savings/Loan
FDIC insured $100,000 maximum
Repurchase Agreements (less than 30 days) 10%
(Securities concerned must be priced at 102%
of market value and must be US Treasury or Federal
Agency securities. A master repurchase agreement
is required)
Commercial Paper -single issuer 10%
(A-2/13-2 or better, Oregon issuer)
Maturity Scheduling:
To the extent possible, the County ►,till attempt to match its investments
with anticipated cash flow requirements using the following guidelines:
Maturitu
Under 30 days
Under 90 days
Under 180 days
Under 365 days
Percent of Portfolio
10% minimum
25% minimum
75% minimum
100%
No investment security shall have a maturity of more than 12 months
unless so authorized by Board of Commission Order in which case the
maturity shall not exceed 18 months.
The investment portfolio operates on a policy of buying securites and
holding them until their specified maturity date, but during certain
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012'7-033'
market conditions when it becomes advantageous, the Portfolio Manager
may sell securities prior to their maturity date and reinvest the proceeds
in higher yielding instruments.
Safekeeping and Collateralization
Investment securities purchased by the Portfolio Manager will be
delivered by either book entry or physical delivery, and held in third party
safekeeping by a bank Trust Department. The Trust Department of the
bank wi 11 be consi dered to be a thi rd party f or the purposes of saf ekeepi ng
of securities purchased f ram that bank. The purchase and sale of all
securities will be on a payment versus delivery basis. The primary agent
shall issue a safekeeping receipt to the Treasurer listing the specific
instrument, rate,maturity and other pertinent information. All other
repurchase agreemnts shall require safekeeping and a master repurchase
agreement.
Deposit -type securities (i.e. certificates of deposit) shall be
collateralized through the Collateral Pool Manager as required by ORS
295.015 for any amount exceeding FDIC coverage recognizing that ORS
295.015 requires only 25% collateral. Other investments shall be
collateralized by the actual security held in safekeeping by the primary
agent.
Qualified Institutions:
The Portfolio Manager shall maintain a list of all authorized institutions
which are approved for investment purposes. The Portfolio Manager may
request periodic financial statements and related information as to the
credit worthiness of each institution on the approved list.
Prudence
The standard of prudence to be used by the County Treasurer in the context
of managing the overall portfolio shall be the prudent investor rule, which
states, "Investments shall be made with judgement and care, under
circumstances then prevailing, which persons of prudence, discretion and
intelligence exercises in the management of their own affairs, not for
specul ati on, but f or i nvestment, consi deri ng the probabl a saf ety of thei r
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capital as well as the probable income to be derived." 0127-0400
Indemnity Clause
The County shall defend and indemnify The County Treasurer and staff
from personal liability for losses that might occur pursuant to
administering this investment policy as long as the County Treasurer and
staff exercise prudence in accordance with this policy.
Performance Evaluation:
The performance of the County's portfolio shall be measured against the
performance of the Oregon Local Government Investment pool using the
monthly net yield or the 90 day Treasury bill rate as an index.
ACCOUNTING METHOD
Investments will be carried at cost. Gains or losses from investments
will be credited or charged to investment income at the time of sale.
Premiums or discounts on securities will be amortized over the life of the
securities.
An investment fee of 5% of the total interest earned for the month will be
deducted and credited to the County general fund each month. After
deducting the investment fee, interest earnings will be credited on the
last day of each month to the funds from which the investment was made
based on the average daily balance in the fund.
All investment transactions shall be accounted for by journal entry.
Proper accounting controls will be maintained over the term of the
investment.
The Independent County auditor shall annually audit the investments
according to generally accepted auditing standards and this Policy.
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REPORTING REQUIREMENTS 0127-0401
The Portfolio Manager will generate daily and monthly reports for
administrative purposes and for use by the Director of Administrative
Services. In Addition a quarterly performance report for the Board of
County Commissioners will be generated.
REVIEW
This policy shall be reviewed and modified, if appropriate, annually by the
Deschutes County Board of Commissioners unless staff, County needs, or
market changes warrant an earlier review.
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AUTHORIZED
FINANCIAL INSTITUTIONS
BANKS
Bank of America
United States National Bank of Oregom
First Interstate Bank of Oregon
Western Bank
Bank of the Cascades
SAVINGS AND LOANS
Pacific First Federal Savings and Loan
OTHER
Oregon Local Government Investment Pool
0127-043
SUMMARY OF INVESTMENTS
U.S. Treasury Issues:
1. U.S. Treasury Bills
2. U.S. Treasury Notes
3. U.S. Treasury Bonds
4. U.S. Treasury Strips
Treasury Bills: Considered the most secure short-term investment
because of their guarantee by the U. S. Government. Minimum $10,000,
increments of $5,000 thereafter. Auction mailable in 3,6, and 12 month
maturities. Market purchases available in one ;geek to one year maturities
(294.035 (2) ).
Treasury Notes: Considered the most secure medium -type investment
because of their guarantee by the U.S. Government. Minimum $1,000 or
$5,000 dependi ng on maturi ty. Aucti on purchases avai 1 abl e i n 2 -10 year
maturities. Market purchases available one week to 10 years maturities
(ORS294.035 (2) ORS 294.135).
Treasury Bonds: Auction purchases available in 30 year maturities,
market purchases available one geek to 30 year maturities. Minimum
denomination $1,000 (294.035 (2), ORS 294.135).
Treasury Strips: Zero coupon U.S. Government guaranteed securities.
Minimum investment $1,000. Strips are created by separating the interest
(coupon) and principal (the note or bond itself), thereby creating zero
coupon securities that are sold at a discount and pay interest at maturity.
(ORS 294.035 (2), ORS 294.135).
Securities of U.S. Government Agencies and U.S. Government
sponsored Enterprises (Agencies):
Considered the next most secure investment after Treasuries. Most are
not U.S. Government guaranteed, but are chartered and supervised by the
U.S. Government. Minimum $1,000 to $1,000,000 depending on enterprise
and maturity. Maturities from one week to 40 years (ORS294.035 (2),
ORS294.135).
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012'7-0464
1. Student Loan Marketing Association (Sallie Mae) discount notes,
fixed and floating rate notes, zero coupon notes
2. Federal Home Loan Banks (FHLB) discount notes, fixed and
floating rate notes, bonds
3. Federal Farm Credit Banks (FFCB) consolidated systemwide
discount notes, fixed and floating rate notes, bonds
4. Federal Home Loan Mortgage Corporation (Freddie Mac) discount
notes, debentures,notes
5. Federal National Mortgage Association (Fannie Mae) discount
notes, debentures, notes
6 Resolution funding Corporation (Ref corp) Strips and bonds- 30
year issues - principal collateralized by US treasury's,
interest payments backed by US Treasury
BANKERS ' ACCEPTANCES:
Irrevocable unconditional guarantee of the accepting bank.
Acceptance may only be guaranteed by "qualified financial institutions",
meaning a financial institution that is located in the State of Oregon,
1 i censed to do a banki ng busi ness and not requi red under ORS 295.018 to
maintain a reserved deposit of collateral having a value not less than 110
percent of its public fund deposits. Minimum investment $20,000 to
$100,000. (ORS 294.035 (1 1) ).
CERTIFICATE OF DEPOSIT:
FDIC insured to $100,000, 25% collateralized and guaranteed by the
issuing bank. Minmum $500 to $100,000. Maturities from 14 days through
five years. Non-negotiable, significant penalty for early withdrawal. (ORS
294.035 (7) ).
MONEY MARKET ACCOUNTS:
FDIC insured to $100,000, 25% collateralized and guaranteed by the
bank of deposit. Minimum initial deposit of $1,000 to $5,000. Interest
generally paid monthly, interest calculation varies from simple interest
to daily compounding. (ORS 294.035 (7) ).
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0127-04o5
REPURCHASE AGREEMNTS:
Purchase of U.S. Treasury and or Agency securites with simultaneous
agreement to resell from one to ninety days in the future. Standard
Master Repurchase Agreement approved by the Public Securities
Association must be on file with the counter -party before entering in to
such transactions. (ORS 294.135 (2) ).
LOCAL GOVERNMENT INVESTMENT POOL:
No minimum investment, $20,000,000 maximum investment.
$1,000,000 same-day transaction, unlimited transaction amount with one
or more day's note. Rate fluctuates daily (ORS 294.810).
COMMERCIAL PAPER:
Unsecured promissory notes issued primarily by Industrial firms and
Finance Companies. Available from certain Oregon Corporations rate A -
2/P -2 or better by Standard and Poor's and Moody's. (ORS294.035 (12),
(13) )
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