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 primary objectives of the Library’s investment activities 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).
III. DELEGATION OF AUTHORITY
The governing board’s responsibility for administration of the investment program is delegated to the director or his/her designee 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 seek to act responsibly as custodians of the public trust and shall avoid any transactions that might impair public confidence in the North Shore Public Library to govern effectively. 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.
AII 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 North Shore Public Library to diversify its deposits and investments by financial institution, by investment instrument, and by maturity scheduling.
VI. INTERNAL CONTROLS
It is the policy of the North shore public Library for all monies collected by any officer or employee of the Library to transfer those funds to the Head of Accounts and Personnel within 3 days of deposit, or within the time period specified in law, whichever is shorter.
The director or his/her designee 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 managements authorization and recorded properly, and are managed in compliance with applicable laws and regulations.
VII. DESIGNATION OF DEPOSITORIES AND PRIMARY DEALERS
The Board of Trustees will annually authorize the bank and trust companies as depositories for monies and investment and primary dealers for repurchase agreements.
VIII. COLLATERALIZING OF DEPOSITS
In accordance with the provisions of General Municipal Law 510, all deposits of the North Shore Public Library 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” as provided by GML’10, equal to the aggregate amount of deposits from the categories designated in Appendix A to the policy.
- By an eligible “irrevocable letter of credit” issued by a qualified bank, other than the bank with the deposits in favor of the library, 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 or by a bank that is in compliance with applicable federal minimum risk-based capital requirements.
IX. SAFEKEEPING AND COLLATERALIZATION
Eligible securities used for collateralizing deposits shall be held by the depositary and or 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 the Library deposits together with the 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 Library to exercise its rights against the pledged securities. In the event that the securities are not registered or inscribed in the name of the Library, such securities shall be delivered in a form suitable for transfer or with an assignment in blank to the North Shore Public Library 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 Library, 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 Library a perfected interest in the securities.
X. PERMITTED INVESTMENTS
As authorized by General Municipal Law g11, the North shore Public Library authorizes the director or his/her designee to invest monies 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;
- 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;
All investment obligations shall be payable or redeemable at the option of the North Shore Public Library within such times as the proceeds will be needed to meet expenditures for purposes for which the monies were provided and, in the case of obligations purchased with the proceeds of bonds and notes, shall be payable or redeemable at the option of the North Shore Public Library within two years of the date of purchase.
XI. AUTHORIZED FINANCIAL INSTITUTIONS AND DEALERS
The North Shore Public Library 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. Al financial institutions with which the Library conducts business must be credit worthy. Bank shall provide their most recent Consolidated Report of Condition (Call report) at the request of the North Shore Public Library. 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 director or his/her designee is responsible for evaluating the financial position of and maintaining a listing of proposed depositaries, and trading partners and custodians. Such listing shall be evaluated at least annually.
XII. PURCHASE OF INVESTMENTS
The director or his/her designee is authorized to contract for the purchase of approved investments from eligible bank or trust companies and, through a repurchase agreement, from an authorized trading partner. All purchased obligations, unless registered or inscribed in the name of the Library, 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 North Shore Public Library 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 Library, 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 Library a perfected interest in the securities.
XIII. REPURCHASE AGREEMENTS
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 bank 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
APPENDIX A: SCHEDULE OF ELIGIBLE SECURITIES
Obligations issued, or fully insured or guaranteed as to the payment of principal and interest, by the United States of America, an agency thereof 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 statute may be accepted as security for deposit of public monies.