Policy 6070: Investment Policy
This investment policy applies to all monies and other financial resources available for investment on its own behalf or on behalf of any other entity or individual. The Board's intent is for the investment policy to be in full compliance with the Chapter 708 of the laws of 1992.
The primary objectives of the Chappaqua Central School District investment policy are, in priority order,
- to conform with all applicable federal, state and other legal requirements (legal);
- to adequately safeguard principal (safety);
- to provide sufficient liquidity to meet all operating requirements (liquidity); and
- to obtain a reasonable rate of return (yield).
DELEGATION OF AUTHORITY
The Chappaqua Board of Education delegates responsibility for administration of the investment program to the Treasurer who shall establish written procedures for the operation of the investment program consistent with these investment guidelines. Such procedures shall include an adequate internal control structure to provide a satisfactory level of accountability based on a data base or records incorporating description and amounts of investments, transaction dates, and other relevant information and regulate the activities of subordinate employees.
All participants in the investment process shall act responsibly as custodians of the public trust. 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 safety of the principal as well as the probable income to be derived.
All participants involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.
It is the policy of the Chappaqua School District to diversify its deposits and investments by financial institution, by investment instrument, and by maturity scheduling.
DESIGNATION OF DEPOSITORIES
The banks and trust companies authorized for the deposit of monies are reviewed and approved by the Board at its annual reorganization meeting.
COLLATERALIZING OF DEPOSITS
In accordance with the provisions of General Municipal Law, §10, all deposits of the Chappaqua Central School District, including certificates of deposit and special time deposits, in excess of the amount insured under the provisions of the Federal Deposit Insurance Act shall be secured:
By a pledge of "eligible securities" with an aggregate "market value" of 102% of the aggregate amount of deposits from the following categories.
- Obligations issued or fully insured or guaranteed as to the payment of principal and interest by the United States of America, an agency therefore or a United States government sponsored corporation.
- Obligations partially insured or guaranteed by any agency of the United States of America, at a proportion of the market value of the obligation that represents the amount of the insurance or guaranty.
- Obligations issued or fully insured or guaranteed by the State of New York, obligations issued by a municipal corporation, school district or district corporation of such state or obligations of any public benefit corporation which under a specific state statue may be accepted as security for deposit of public monies.
- Such other instruments of securities as may, from time to time, be legally permissible collateral for deposit of both New York School District and municipal corporation monies.
SAFEKEEPING AND COLLATERALIZATION
Eligible securities used for collateralizing deposits shall be held by a third party bank or trust company subject to security and custodial agreements.
The security agreement shall provide that eligible securities are being pledged to secure Chappaqua Central School District deposits together with agreed upon interest, if any, and any costs or expenses arising out of the collection of such deposits upon default. It shall also provide the conditions under which the securities may be sold, presented for payment, substituted or released and the events which will enable the Chappaqua Central School District to exercise its rights against the pledged securities. In the event that the securities are not registered or inscribed in the name of the Chappaqua Central School District, such securities shall be delivered in a form suitable for transfer or with an assignment in blank to the Chappaqua Central School District or its custodial bank.
The custodial agreement shall provide that securities held by the bank or trust company, or agent of and custodian for, the school district, will be kept separate and apart from the general assets of the custodial bank or trust company and will not, in any circumstances, be commingled with or become part of the backing for any other deposit or other liabilities. The agreement should also describe that the custodian shall confirm the receipt, substitution or release of the securities. The agreement shall provide for the frequency of revaluation of eligible securities and for the substitution of securities when a change in the rating of a security may cause ineligibility. Such agreement shall include all provisions necessary to provide the school district a perfected interest in the securities.
As authorized by general municipal law, §11, the Chappaqua Central School District authorizes the Treasurer to invest moneys not required for immediate expenditure for terms not to exceed its projected cash flow needs in the following types of investments:
- Special time deposit accounts;
- Certificates of deposit;
- Obligations backed by the full faith and credit of the United States of America;
- Obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by the United States of America;
- Obligations backed by the full faith and credit of the State of New York;
- Obligations issued pursuant to LFL §24.00 or 25.00 (with approval of the State Comptroller) by any municipality, school district or district corporation other than the Chappaqua Central School District;
- Obligations of public authorities, public housing authorities, urban renewal agencies and industrial development agencies where the general State statutes governing such entities or whose specific enabling legislation authorizes such investments.
- Certificates of Participation (COPs) issued pursuant to GML §109-b.
- Obligations of this school district, but only with any moneys in a reserve fund established pursuant to GML §§6-c, 6-d, 6-e, 6-g, 6-h, 6-j, 6-k, 6-l, 6-m or 6-n.
All investment obligations shall be payable or redeemable at the option of the Chappaqua Central School District within such times as the proceeds will be needed to meet expenditures for purposes for which the moneys were provided.
AUTHORIZED FINANCIAL INSTITUTIONS AND DEALERS
The Chappaqua Central School District shall maintain a list of financial institutions and dealers approved for investment purposes and establish appropriate limits to the amount of investments which can be made with each financial institution or dealer. All financial institutions with which the Chappaqua Central School District conducts business must be credit worthy. Banks shall provide their most recent Consolidated Report of Condition (Call Report) at the request of the Chappaqua Central School District. Security dealers not affiliated with a bank shall be required to be classified as reporting dealers affiliated with the New York Federal Reserve Bank, as primary dealers. The Treasurer is responsible for evaluating the financial position and maintaining a listing of proposed depositories, trading partners and custodians. Such listing shall be evaluated at least annually.
PURCHASE OF INVESTMENTS
The Treasurer is authorized to contract for the purchase of investments:
- Directly, including through a repurchase agreement, from an authorized trading partner.
- By participation in cooperative investment program with another authorized governmental entity pursuant to Article 5G of the General Municipal Law where such program meets all the requirements set forth in the Office of the State Comptroller Opinion No. 88-46, and the specific program has been authorized by the governing board.
- By utilizing an ongoing investment program with an authorized trading partner pursuant to a contract authorized by the Chappaqua Board of Education.
All purchased obligations, unless registered or inscribed in the name of the Chappaqua Central School District, shall be purchased through, delivered to and held in the custody of a bank or trust company. Such obligations shall be purchased, sold or presented for redemption or payment by such bank or trust company only in accordance with prior written authorization from the officer authorized to make the investment. All such transactions shall be confirmed in writing to the Chappaqua Central School District by the bank or trust company. Any obligation held in the custody of a bank or trust company shall be held pursuant to a written custodial agreement as described in General Municipal Law, §10.
The custodial agreement shall provide that securities held by the bank or trust company, as agent of and custodian for, the Chappaqua Central School District, will be kept separate and apart from the general assets of the custodial bank or trust company and will not, in any circumstances, be commingled with or become part of the backing for any other deposit or other liabilities. The agreement shall describe how the custodian shall confirm the receipt and release of the securities. Such agreement shall include all provisions necessary to provide the local government a perfected interest in the securities.
Adopted by the Board of Education: January 24, 1995