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Home My WebLink AboutRESOLUTION 17-010CRESOLUTIONNO.17-01WHEREAS,inApril,1993,theBoardofTrustee’softheTownofEstesPark,ColoradoapprovedanInvestmentPolicy(amended);andWHEREAS,itisadvisabletoregularlyreviewtheInvestmentPolicy.NOW,THEREFORE,BEITRESOLVEDBYTHEBOARDOFTRUSTEESOFTHETOWNOFESTESPARK,COLORADOTHAT:1.TheBoardherebyapprovestheInvestmentPolicydatedMay5,2001,aspreparedbyFinanceOfficeBrandjord,andattachedasExhibit“A”.INTRODUCED,READ,ANDPASSEDBYTHEBOARDOFTRUSTEESOFTHETOWNOFESTESPARKonthis8thdayofMay,2001.TOWNOFESTESPARK,COLORADOATTEST:TownClerk 00 APPROVED’ExL.,.oit‘A”[MAY—829011TownofEstesParkTOWNOfESTESPARKInvestmentPolicy_BOARDOFTRUSTEESMay8,2091LScopeThispolicyappliestotheinvestmentofshort-tennoperatingfundsandlonger-Iennfluids,includinginvestmentsofemployees’investmentretirementfluidsandproceedsfromcertainbondissues.1.PoolingofFundsExceptforcashincertainrestrictedandspecialfunds,theTownofEstesParkwillconsolidatecashbalancesfromallfluidstomaximizeinvestmentearnings.Investmentincomewillbeallocatedtothevariousfundsbasedontheirrespectiveparticipationandinaccordancewithgenerallyacceptedaccountingprinciples.H.GeneralObjectivesTheprimajyobjectives,inpriorityorder,ofinvestmentactivitiesshallbesafety.liquidity,andyield:1.SafetySafetyofprincipalistheforemostobjectiveoftheinvestmentprogram.Investmentsshallbeundertakeninamannerthatseekstoensurethepreservationofcapitalintheoverallportfolio.Theobjectivewillbetomitigatecreditriskandinterestraterisk.a.CreditRiskTheTownofEstesParkwillminimizecreditrisk,theriskoflossduetothefailureofthesecurityissuerorbacker,by:•Limitinginvestmentstothesafesttypesofsecurities•Pre-qualifyingthefinancialinstitutions,broker/dealers,intemiediaiies,andadviserswithwhichtheTownofEstesParkwilldobusiness•Diversilringtheinvestmentportfoliosothatpotentiallossesonindividualsecuritieswillbeminimized.b.InterestRateRiskTheTownofEstesParkwillminimizetheriskthatthemarketvalueofsecuritiesintheportfoliowillfallduetochangesingeneralinterestrates,by:•Structuringtheinvestmentportfoliosothatsecuritiesmaturetomcclcashrequirementsforongoingoperations,therebyavoidingtheneedtosellsecuritiesontheopenmarketpriortomaturity•Investingoperatingfundsprimarilyinshorter-termsecurities,andlocalgovernmentinvestmentpools.2.LiquidityTheinvestmentportfolioshallremainsufficientlyliquidtomeetalloperatingrequirementsthatmaybereasonablyanticipated.Thisisaccomplishedbystructuringtheportfoliosothatsecuritiesmatureconcurrentwithcashneedstomeetanticipateddemands(staticliquidity).Furthermore,sinceallpossiblecashdemandscannotbeanticipated,theportfolioshouldconsistlargelyofsecuritieswithactivesecondaryorresalemarkets(dynamicliquidity).Aportionoftheportfolioalsomaybeplacedinmoneymarketfluidsorlocalgovernmentinvestmentpoolswhichoffersame-dayliquidityforshort-tern’fluids.3.YieldTheinvestmentportfolioshallbedesignedwiththeobjectiveofattainingamarketrateofreturnthroughoutbudgetaryandeconomiccycles,takingintoaccounttheinvestmentriskconstraintsandliquidity 0VILL__i 00needs.Returnoninvestmentisofsecondaryimportancecomparedtothesafetyandliquidityobjectivesdescribedabove.ThecoreofinvestmentsarelimitedtorelativelylowrisksecuritiesinanticipationofearningafairreturnrelativetotheriskbeingassumedilLStandardsofCare1.PrudenceThestandardofpmdencetobeusedbyinvestmentofficialsshallbethe“prudentperson”standardandshallbeappliedinthecontextofmanaginganoverallportfolio.InvestmentsshaJibemadewithjudgmentandcare,undercircumstancesthenprevailingwhichpersonsofprodence,discretionandintelligenceexerciseinthemanagementoftheironaffairs,notforspeculation,butforinvestment,consideringtheprobablesafetyoftheircapitalaswellastheprobableincometobederived2.EthicsandConflictsofInterestOfficersandemployeesinvolvedintheinvestmentprocessshallrefrainfrompersonalbusinessactivitythatcouldconflictwiththeproperexecutionandmanagementoftheinvestmentprogram,orthatcouldimpairtheirabilitytomakeimpartialdecisions.Employeesandinvestmentofficialsshalldiscloseanymaterialinterestsinfinancialinstitutionswithwhichtheyconductbusiness.TheyshallfurtherdiscloseanypersonalflnanciaVmvestmentpositionsthatcouldberelatedtotheperfonnanceoftheinvestmentportfolio.EmployeesandofficersshallrefrainfromundertakingpersonalinvestmenttransactionswiththesameindividualwithwhombusinessisconductedonbehalfoftheTownofEstesPark3.DelegationofAuthorityAuthoritytomanagetheinvestmentprogramisgrantedtotheFinanceOfficer,andderivedfromSection24-75-601.CR5.ResponsibilityfortheoperationoftheinvestmentprogramisherebydelegatedtotheFinanceOfficer,whoshallactinaccordancewithestablishedwrittenproceduresandinternalcontrolsfortheoperationoftheinvestmentprogramconsistentwiththisinvestmentpolicy.Proceduresshouldincludereferencesto:safekeeping,deliveryvs.payment,investmentaccounting,wiretransferagreements,andcollateral/depositoryagreements.NopersonmayengageinaninvestmentbansactonexceptasprovidedunderthetermsofthispolicyandtheproceduresestablishedbytheFinanceOfficer.TheFinanceOfficershallberesponsibleforalltransactionsundertakenandshallestablishasystemofcontrolstoregulatetheactivitiesofsubordinateofficials.IV.SafekeepingandCustody1.AuthorizedFinancialDealersandInstitutionsAlistwillbemaintainedoffinancialinstitutionsauthorizedtoprovideinvestmentservices.Allfinancialinstitutionsandbroker/dealerswhodesiretobecomequalifiedforinvestmenttransactionsmustsupplythefollowingasappropriate:oAuditedfinancialstatementsoProofofNationalAssociationofSecuritiesDealers(NASD)certificationoProofofstateregistrationoCertificationofhavingreadandunderstoodandagreeingtocomplywiththeTownofEstesPark’sinvestmentpolicy.Anannualreviewofthefinancialconditionandregistrationofqualifiedfinancialinstitutionsandbroker/dealerswillbeconductedbytheFinanceOfficer.2.InternalControlsTheFinanceOfficerisresponsibleforestablishingandmaintaininganinternalcontrolstrocuiredesignedtoensurethattheassetsoftheTownofEstesParkisprotectedfromloss,theftormisuse.Theinternalcontrolstructureshallbedesignedtoprovidereasonableassurancethattheseobjectivesaremet.Theconceptofreasonableassurancerecognizesthat(1)thecostofacontrolshouldnotexceedthebenefitslikelytobederivedand(2)thevaluationofcostsandbenefitsrequiresestimatesandjudgmentsbymanagemeitAccordingly,theFinanceOfficershallestablishaprocessforanannualindependentreviewbyanexternalauditortoassurecompliancewithpoliciesandprocedures.Theinternalcontrolsshalladdressthefollowingpoints:oControlofcollusion 4.I.....:.*1;00I...II)-..- o0oSeparationoftransactionauthorityfromaccountingandrecordkeepingoCustodialsafekeepingoCleardelegationofauthoritytosubordinatestaffmembers3.Deliveryvs.PaymentAlltradeswhereapplicablewillbeexecutedbydeliveryvs.payment(DVP)toensurethatsecuritiesaredepositedinaneligiblefinancialinstitutionpriortothereleaseofhinds.Securitieswillbeheldbyathird-partycustodianasevidencedbysafekeepingreceipts.V.SuitableandAuthorizedInvestments1.InvestmentTypesConsistentwithSection24-75-601.CR.5,thefollowinginvestmentswillbepermittedbythispolicy:oU.S.governmentobligations,U.S.governmentagencyobligations,andU.S.governmentinstrumentalityobligations,whichhavealiquidmarketwithareadilydeterminablemarketvalue;oCertificatesofdepositandotherevidencesofdepositatflnaxialinstitutionswithapreferenceforlocalcompetitivefinancialinstitutions;oInvestment-gradeobligationsofstate,provincialandlocalgovernmentsandpublicauthorities;andoLocalgovernmentinvestmentpools,eitherstate-admiruszemdorthroughjointpowersstatutesandotherintergovernmentalagreementlegislation.2.CollateraflzadonWhereallowedbystatelaw(11-10.5-106,107through110,CR5.),hillcollateralizationwillberequiredoncertificatesofdepositandotherexcessdepositsinfinancialinstitutions.VI.InvestmentParameters1.DiversificationTheinvestmentsshallbediversifiedby:olimitinginvestmentstoavoidoverconcentrationinsecuritiesfromaspecificissuerorbusinesssector(excludingU.S.Treaswysecurities),olimitinginvestmentinsecuritiesthathavehighercreditrisks,oinvestinginsecuritieswithvaryingmaturities,andocontinuouslyinvestingaportionoftheportfolioinreadilyavailablefindssuchaslocalgovernmentinvestmentpools(LOWs),and/ormoneymarketfindstoensureliquidity.2.MaximumMaturitiesTotheextentpossible,theTownofEstesParkshallattempttomatchitsinvestmentswithanticipatedcashflowrequirements.Reservehindsandotherhindswithlonger-terminvestmenthorizonsmaybeinvestedinsecuritiesexceedingfive(5)yearsifthematurityofsuchinvestmentsaremadetocoincideasnearlyaspracticablewiththeexpecteduseofhinds.TheintenttoinvestinsecuritieswithlongermaturitiesshallbedisclosedinwritingtotheTownBoard,andapprovedbytheTownBoard.VII.Reporting1.MethodsTheFinanceOfficershallprepareaninvestmentreportonaregularbasistotheTownAdministrator,includingamanagementswnmaiythatprovidesananalysisofthestatusofthecurrentinvestmentportfolioandtransactionsmade.ThismanagementsununarywillbepreparedinamannerwhichwillallowtheTownAdministratortoascertainwhetherinvestmentactivitiesduringthereportingperiodhaveconformedtotheinvestmentpolicy.Thereportwillincludethefollowing:oListingofindividualsecuritiesheldattheendofthereportingperiod.oListingofinvestmentbymaturitydate.oPercentageofthetotalportfoliowhicheachtypeofinvestmentrepresents.2.PerformanceStandardsTheinvestmentportfoliowillbemanagedinaccordancewiththeparametersspecifiedwithinthispolicy.Theportfolioshouldobtainamarketavengerateofreturnduringamarket/economicenvironmentofstableinterestrates.VIILPolicyConsiderations ••.•.7.-I.‘C.——_.—i‘_I—.—‘:_4)’.-.IIis._—-F-III.j•‘4.—.5-.-,5’.7-00-Jri.-.—I-IiI _IIII-.——it,..—, 001.ExemptionAnyinvestmentcurrentlyheldthatdoesnotmeettheguidelinesofthispolicyshallbeexemptedfromtherequirementsofthispolicy.Atmaturityorliquidation.suchmoniesshallbereinvestedonlyasprovidedbythispolicy.2.AmendmentsThispolicyshallbereviewedonanannualbasis.AnychangesmustbeapprovedbytheFinanceOfficerandanyotherappropriateauthority,aswellastheindividual(s)chargedwithmaintaininginternalcontrols. 00