3. Delegation of Authority:

a. The Agency’s responsibility for administration of the investment program is delegated to the Chief Financial Officer (CFO) who shall administer the investment program consistent with these investment guidelines.

4. Prudence:

a. All participants in the investment process shall seek to act responsibly as custodians of the public trust and shall avoid any transaction that might impair public confidence in the Agency to act effectively.

b. Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudent 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.

c. 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

5. Diversification:

a. It is the policy of the Agency to diversify its deposits and investments by financial institution, by investment instrument, and by maturity scheduling.

6. Internal Controls:

a. It is the policy of the Agency for all moneys collected by any officer or employee of the Agency be transferred to the CFO within five (5) days of receipt, or within the time period specified in law, whichever is shorter.

b. The Agency is responsible for establishing and maintaining an internal control structure to provide reasonable, but not absolute, assurance that deposits and investments are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management’s authorization and recorded properly, and are managed in compliance with applicable laws and regulations.

c. The Agency shall provide for an annual independent audit of its investment practices. This audit may be completed as a component of any other audit of the Agency provided that the audit complies with the requirements of this section. An audit under this section should be conducted in accordance with generally accepted government auditing standards and should detail:

– The scope and objectives of the Agency’s investments
– Any material weaknesses found in the Agency’s internal controls
– A description of all non-compliance with the Agency’s investment policies or other rules or regulations
– A statement of positive assurance of compliance on the items tested and a statement of any material deficiency or finding, if any.

7. Designation of Depositories:

a. The banks and trust companies authorized for the deposit of monies shall be designated at the Agency’s annual meeting.

8. Collateralizing of Deposits:

a. In accordance with the provisions of General Municipal Law, all deposits of the Agency, 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:

1. 1. 1. By a pledge of “eligible securities” with an aggregate “market value” as provided by GML ’10, equal to the aggregate amount of deposits from the categories designated in Appendix A to the policy; or
      2. By an eligible “irrevocable letter of credit” issued by a qualified bank other than the bank with the deposits in favor of the government for a term not to exceed 90 days with an aggregate value equal to 140% of the aggregate amount of deposits and the agreed upon interest, if any. A qualified bank is one whose commercial paper and other unsecured short-term debt obligations are rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization of by a bank that is in compliance with applicable federal minimum risk-based capital requirements; or
      3. By an eligible surety bond payable to the government for an amount at least equal to 100% of the aggregate amount of deposits and the agreed upon interest, if any, executed by an insurance company authorized to do business in New York State, whose claims – paying ability is rated in the highest rating category by at least two nationally recognized statistical rating organizations.

9. Safekeeping and Collateralization:

a. Eligible securities used for collateralizing deposits shall be held by the depository bank or trust company subject to Security and Custodial Agreements.

b. A Security Agreement shall provide that eligible securities are being pledged to secure Agency 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 Agency to exercise its rights against the pledged securities. In the event that the securities are not registered or inscribed in the name of the Agency, such securities shall be delivered in a form suitable for transfer or with an assignment in blank to the Agency or its depository bank or trust company.

c. A Custodial Agreement shall provide that securities held by the bank or trust company, or agent of and custodian for, the Agency, will be kept separate and apart from the general assets of the depository 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. The Agreement shall include all provisions necessary to provide the local government a perfected interest in the securities.

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10. Permitted Investments 

a. As authorized by General Municipal Law, ’11, the Agency authorizes the CFO 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 of the United States of America such as U.S. Treasury Bills/Securities;
– 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 of the State of New York;
– Obligations issued pursuant to Local Finance Law ‘24.00 or ‘25.00 (with approval of the State Comptroller) by any municipality, school district or district corporation other than the Agency;
– 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 local government, 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, and 6-n.

b. All investment obligations shall be payable or redeemable at the option of the Agency within such times as the proceeds will be needed to meet expenditures for purposes for which the moneys were provided and, in the case of obligations purchased with the proceeds of bonds or notes, shall be payable or redeemable at the option of the Agency within two years of the date of purchase.

11. Authorized Financial Institutions and Dealers:

a. The Agency shall designate financial institutions and dealers approved for investment purposes and establish appropriate limits to the amount of investments which can be made with any such financial institution or dealer. All financial institutions with which the local government conducts business must be credit worthy.

b. Consolidated Report of Condition (Call Report) at the request of the Agency. 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.

12. Purchase of Investments:

a. The Agency shall contract for the purchase of investments:

1. Directly, including through a Repurchase Agreement, from an authorized trading partner.
2. By participation in a 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 Agency.
3. By utilizing an ongoing investment program with an authorized trading partner pursuant to a contract authorized by the Agency.

b. All purchased obligations, unless registered or inscribed in the name of the Agency, 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 Agency 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 Section 10.

c. The Custodial Agreement shall provide that securities held by the bank or trust company, as agent of and custodian for, the Agency, will be kept separate any 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.

d. The Custodial Agreement shall include all provisions necessary to provide the Agency a perfected interest in the securities.

13. Repurchase Agreements:

a. Repurchase Agreements are authorized subject to the following restrictions:

– All repurchase agreements must be entered into subject to a Master Repurchase Agreement.
– Trading partners are limited to banks or trust companies authorized to do business in New York State and primary reporting dealers.
– Obligations shall be limited to obligations of the United States of America and obligations guaranteed by agencies of the United States of America.
– No substitution of securities will be allowed.
– The custodian shall be a party other than the trading partner.