|Pursuant To The Public Funds Investment Act (30 Ilcs 235/2.5)
The Board Of Library Trustees Of The
St. Charles Public Library District
Kane & Dupage Counties, Illinois
ORDINANCE NO. 1999/00-6
An Ordinance Setting Investment Policy
Pursuant To The Public Funds Investment Act (30 Ilcs
WHEREAS, the Board of Library Trustees of the St. Charles
Public Library District, Kane and DuPage Counties, Illinois,
was duly organized and is now operating under the Public
Library District Act of 1999, 75 ILCS 16/1-1, et. seq.;
WHEREAS, it is always prudent for any public unit of
local government to have an Investment policy in place
for the purpose of safeguarding funds, equitably distributing
the investments and maximizing income of the governmental
WHEREFORE, IT IS HEREBY ORDAINED BY THE BOARD OF LIBRARY
TRUSTEES OF THE ST. CHARLES PUBLIC LIBRARY DISTRICT THAT:
I. SCOPE OF POLICY
1.1 The following Policy is hereby promulgated
for use by this District, and is based on the Illinois
State Treasurer’s recommended investment policy.
1.2 This Investment Policy applies to the investment
activities of all funds under the jurisdiction of this
District. This Investment Policy will also apply to any
new funds or temporary funds placed under the jurisdiction
of this District. Illinois State Statutes, including
30 ILCS 235/2.25, et seq. will take precedence over this
policy, except where this Policy is more restrictive,
in which case this Policy will take precedence.
2.1 The purpose of this Investment Policy
is to establish cash management and investment guidelines
for the stewardship of public funds under the jurisdiction
of this District. The specific objectives of this Policy will be as follows:
2.1. 1 Safety – the security of monies, whether
on hand or invested, shall be the primary concern of
the District Treasurer in selecting depositories or investments.
2.1.2 Liquidity – the investment portfolio shall
remain sufficiently liquid to meet all operating requirements,
which might be reasonably anticipated.
2.1.3 Return – The District Treasurer shall seek
to attain a market average or better rate of return throughout
budgetary and economic cycles, taking into account risk,
constraints, cash flows, and legal restriction on investment.
III. INVESTMENT GUIDELINES
3.1 To assist in attaining the stated
objectives, the following guidelines shall be observed:
3.1.1 Investments shall be undertaken
in a manner that seeks to insure preservation of capital
in the overall portfolio. Diversification
of investments is required
to avoid unreasonable risks.
3.1.2 The portfolio should remain sufficiently liquid
to meet operating requirements which may be reasonably
anticipated. Cash flows, actual and projected, shall
be reviewed at least quarterly.
3.1.3 To maximize earnings, all funds shall be deposited
and invested within two working days of their receipt,
at prevailing rates or better.
3.1.4 All investments shall be selected on the basis
of competitive bids, or current market rates for publicly
4.1 To avoid unreasonable risks, diversification
of the investment portfolio shall be consistent with
the objectives in the investment policy.
4.2 Commercial paper shall not exceed 10% of the investment
5.1 All investment of funds under the
control of the District Treasurer is the direct responsibility
of the District Treasurer.
5.2 The District Treasurer shall be responsible for
all transactions and shall establish a system of controls
for all authorized subordinates who are directly involved
in the assistance of such investment activities.
VI. PERFORMANCE MEASURES
6.1 The use of U.S. Treasury bills,
average Fed Fund rate, Illinois Public Treasurers Investment
Pool (IPTIP) “Illinois Fund,” or other
stable markets can be used to determine whether market average yield benchmarks
are being achieved.
VII. PERIODIC REVIEW
7.1 The District Treasurer should establish
annual independent review for internal control, which
assures compliance within the investment policy. This
be accomplished with external auditors.
8.1 All investment transactions shall be recorded by
the District Treasurer or the District Treasurer’s staff. A report will be generated regularly,
listing all active investments, location of investments displaying both current
cost and fair market value (if applicable), maturity of investments, interest
rate and other pertinent information deemed necessary. This report will be
submitted monthly to the Board.
IX. AUTHORIZED INVESTMENTS
9.1 The District shall invest in instruments as allowed
by the Public Funds Investment Act, 30 ILCS 235/2.
9.2 A summary of authorized investments is as follows:
9.2.1 Notes, bonds, certificates of indebedness, treasury
bills, or other securities, which are guaranteed by the
full faith and credit of the united States of America.
9.2.2 Bonds, notes, debentures, or other similar obligations of the united
States of America or its agencies.
9.2.3 Interest bearing accounts, certificates of deposit
or interest bearing time deposits or any other investment
constituting direct obligations of any bank as defined
by the Illinois Banking Act.
9.2.4 Short-term obligations (commercial paper) of
corporations organized in the united States with asset
exceeding $500,000,000 if:
(a) such obligations are rated at the time of purchase
within the 3 highest classifications established by at
least 2 standard rating services and which mature not
later than 180 days from the date of purchase, and
(b) such purchases do not exceed 10% of the corporation’s
92.4 Money market mutual funds registered under the
investment Company Act of 1940.
X. FINANCIAL INSTITUTIONS
10.1 The Board will have the sole responsibility to
select which financial institutions (such as IPTIP, banks, savings
and loans, credit unions and
other non-banks) will be depositories for this District.
10.2 Potential depositories will submit financial statements
to the Board annually. Financial institutions who want
to bid for investment transactions shall initially and
annually provide the following to the Treasurer: Audited
financial statements or a published Statement of Condition.
10.3 Any such financial institution, upon meeting the
requirements of the Illinois Compiled Statutes and of
this policy, may request to become a depository for this
District’s funds. The District will take into consideration
security, size, location, financial condition, service,
fees, competitiveness, and the community relations involvement
of the financial institution when choosing depositories.
11.1 At all times in order to meet the objective
of safety of capital, the District Treasurer will require deposits
in excess of the Federally insured
amount to be collateralized to the extent of One Hundred and Ten
Percent (110%) and evidenced by an approved written agreement
by a third party acting as an agent of the District.
11.2 Eligible collateral instruments
and collateral rates (market value divided by uninsured
11.2.1 Negotiable obligations of the
United States Government 110%
11.2.2 Negotiable obligations of any agency
or instrumentality of the United
States Government backed by the full faith and credit of the United
11.2.3 Negotiable obligations of the State
of Illinois which are Rated A or
better by Moody or Standard and Poors 110%
11.2.4 Negotiable obligations of this District
which are rated A or better
by Moodys or Standard and Poors 110%
11.3 The ratio of fair market value of collateral to
the amount of funds secured shall be reviewed monthly
and additional collateral will be requested when the
ratio declines below the level required.
11.4 Safekeeping of collateral shall be as follows:
11.4.1 Third party safekeeping is required for all
collateral. To accomplish this, the securities will be
held at a safekeeping depository as approved from time
to time by the District Treasurer or the Board.
11.4.2 Safekeeping will be documented by an approved
written agreement. Substitution, exchange or release
of securities held in safekeeping may be done upon five
(5) days prior written notice to the District Treasurer
and then with the approval of the District Treasurer.
11.4.3 When collateral is extended, the District Treasurer
should receive a copy of the financial institution’s
board minutes, indicating the board of directors’ approval.
XII. SAFEKEEPING OF SECURITIES
12.1 Securities, unless held physically by
the District Treasurer, require third party safekeeping by
an entity separate from where the investment is
held. The District Treasurer will have the sole responsibility
for selecting safekeeping agents. Safekeeping will be documented
by an approved written
XIII. PRUDENT PERSON STANDARD
13.1 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 probably safety of their capital as well
as the possible income to be derived.
13.2 In maintaining its investment portfolio, the District
Treasurer shall avoid any transaction that might impair
public confidence in this District.
13.3 The above standards are established as standards
for professional responsibility and shall be applied
in the context of managing the portfolio.
13.4 The District Treasurer and employees of the District
Treasurer, acting in substantial accordance with this
Investment policy and procedures as have been or may
be established, and exercising due diligence, shall be
relieved of personal liability for credit risk or market
changes of any individual security.
XIV. INTERNAL CONTROLS
14.1 Only the District Treasurer
or this Board is authorized to establish financial
accounts and investments for the office or Board.
14.2 At all times either the District Treasurer, singly,
or two, jointly, of two or more signatories as designated
by the District Treasurer or Board should be authorized
to sign on financial accounts of the office of the District
14.3 Authorized signatories are NOT permitted to reconcile
bank accounts at any time.
XV. EITHICS AND CONFLICT OF INTEREST
15.1 The Corrupt Practices Act of
the Illinois Compiled Statutes shall apply in the
case of this policy.
15.2 No person involved in the investment process shall
make any investment decision based upon personal or political
gain or consequence.
16.1 This policy may be reviewed
from time to time and revised by the Board upon
approval of the District Treasurer, so long as
any changes are approved
by the Attorney for this Board as being in conformity
XVII. CAPTIONS AND HEADINGS
17.1 The captions and headings used
herein are for the convenience of reference only
and do not define or limit the contents.
XVIII. PASSAGE AND EFFECT
18.1 This Ordinance shall be in
full force and effect from and after its passage
and approval according to law; and any resolutions
or ordinances in conflict herewith are hereby repealed;
and should any part of this Ordinance be adjudged
invalid or unconstitutional, such adjudication
shall affect only the part
of this act specifically covered thereby
and shall not affect any other provision or parts
of this act, which shall be severable therefrom.
PASSED by the Board of Library Trustees of the St. Charles
Public Library District, Kane and DuPage Counties, Illinois,
on this 12th day of January, 2000, by a vote of:
AYES: Shepro, Haines, Kriston, Huntley, Folk, Reese
/s/ Norman C. Huntley
President, The Board of Library Trustees
of the St. Charles Public Library District
Kane and DuPage Counties
/s/ Phyllis M. Kriston