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HomeMy WebLinkAboutExhibit 2 - R-01-44847-o1-27£ 3/28/01 RESOLt)'ION NO. O 1 " 448 A RESOLUTION OF THE MIAMI CITY COMMISSION. WITH ATTACHMENT (S) , ADOPTING TIM ,iNVVSTMEI? POLICY OF THE CITY OP MIAMI, PLORIZA0 ATTACHED AND INCORPORATED, PURSUANT TO THE STATE OF FLORIDA'S INVESTMENT OF PUBLIC FUNDS ACT TO ESTABLISH H aummams FOR THE INVESTMENT AND MANAGEMENT OF PUBIC FUNDS; FURTHER O'IHHCTINC THE CITY MANAGER TO IMMEDIATELY IMPLEMENT THE GUIDELINES CONTAINED IN THE POLICY. WHEREAS, the state of Florida signed into law the Revised Investment of: Public Funds Act {2]8.4]5, Florida Statutes (200a) ] to provide uniform guidelines for the investment of public funds by muniai,palitiee, school districts, counties, and special distric.te$ and WHEREAS, the Act specifically establishes investment policy guidelines, limitations, and conditions for the investment of the assets of local retirement plans, and of other public funds available to unite of local governments and authorizes the Florida Department of Banking and, Finance to withhold certain '.41/1411COMP (5) MIT/AMU! OTT sSIOw MEMO OF MAY t 0 funds from local eg ,vexnmenta which tail to meet the requirements of the Statute/ and WUERE,AS, the City Commiesion wir hes to comply with the mandates of the Investment of Public Funds Act by adopting and implementing an investment polity for the City of Miami; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OP THE CITY OF MANI, FLORIDA: Section 1. The reoitals and ti.ndings contained to the Preamble to this Resolution are hereby adopted by reference and incorporated as if fully set forth in this Section. Section 2.. The . rives cent Policy of the City of F.lori.da, attached and inoorpq rated, ie adopted pursuant to the State of Florida's Investment of Public • Funds Act to establish guidelines for the investment and management of public fund€. Section 3. The City Manager is directed to immediately implement the guidelines contained in the in the Policy. Page of3 O1 448 Section 4 This Resolution ,.hall become effect .ve immediately upon ite adoption and signature of the t4 yonli PASSED ADOPTED this �.i)t h day of . 2401'.°.. . ATTEST: EJOE CAROLLO, MAYOR. � f aiiiiositioce tW& Code Soo. 240, ol000 thr Mayor not indbeteapPreVel Of Ispisollon signino it in t *signaled fed One • ;., said legisfat«nNovato aeire with th�{e���� claps of tart 110 1 F� the cats • lesion Aa AleyOr IstaiRr :7l lf'4..R �N TALTER J .VOSMAN CITY CLERK ASP W5191. ;:ESSS TO P AND CORRECTNESS : . Waft r { VILARELLD .°:�''�r •;�"tea s�•} t ,! ,y p2 za- • If the Mayor does not sign .thus Resolution, it etwal beconse'at*![rctive aG :the end of ten calendar days from the date ziw WAS Vigt$040, and tkdOpteda Ott the .Mayor vetoes this Resolution. : shall become effective i�ml 3iately upon override of the veto by the 'City (3011uni681Gn, 91- 448 Page 3 of 3 • CVVES` ] J ENT, i ()I try' 01 1 448 1 DPW 1. PURPOSI3 11. CIE INVISTh4ENT oanicriVI?S DELEGATION OF AUTHORITY eAor CiMtent. • V. STANDARDS OF PRUDENCE. VI,. ETHICS AND CONH iCTS OP INTEREST VII. INTERNAL CONTROLS ANI) INVESTMENT OCEDURD VIII. CONTINUING EDUCATION IX. AUTHORIZED INVESTMENT INSTrI .FTIONS AND 1)EAU,URS X. MATURITY AND LIQUIDITY Y REQUIREMENTS X1. COMPETITIVE, SELECTION OF INVESTMENT INSTRUMENTS X11. AUTI IORIZEU INVESTMENTS AND PORTFOLIO COMPOSITION XIII. DERIVATIVES ANVJ REVERSE REPURCHASE AGREEMENTS X1V. PERFORMANCE, MEASUREMENTS XV. REPORTING TING XVI, THIRD -PARTY CUSTODIAL AGREEMENTS XVIL INVESTMENT POLICY ADOPTION City ofMland Investment Policy Page „3 3 3 4, 4 S 5 3 5 6 6 14 15 15 16 16 • x. PURPOSE • Investment Polley ityyof 11'tiarnj Florida The purpose of this policy is to sot forth the investment objectives and parameters for the management of public rums *Mc City of Miutttf, Florida (hereinafter "City„). These policies are designed to safeguard the City's funds, the availability of ai rating and capital funds when needed, and an ittvesttttcnt return competitive with comparable funds and financial marker indices. 0. SCOPE In accordance with Suction 2 iR.41$, Florida Stables, this investment policy apples; to all cash and investments held or controller by the City and shad be identified as "goners] operating funds" of the City with the exception of the City's Pension Funds, Deferred Contperisntion & Section 4010) Plans, and funds related to the issuance of delft where there are other existing policies or indentures in effect for . such #bads. Additionally, any future revenues, whi h have OMkn pry investme it requirements conflicting with this Investment Fahey and funds held by slate agencies (c.g., Department of Revenuer), ore not subject to the provisions of this. policy. 111, INVESTMENT OW#s, rivES gely.,selvm it t The foremost objective of this investment program is the safety of the principal of arose fluids within the portfolios. investment transactions shall seek to keep capital losses at a minimum, whether they are from securities defaults or erosion of market value. 'lb attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated front the minainder of the portfolio,. From time to ti7no, purities may be traded for other similar securities to improve yield, maturity or credit risk. For these minsitetions, a loss may he ineurred for accounting purposes provided any of the following occurs with respect to the replacement security: A. Yield bus been increased, or it3. Maturity has been reduced, or lengthen C. Quality orthe investment has boon improved. City of tbt i#mi Investment Policy O 1 448 Page • • Maintenance of 1ti of ly The portfolios shall be rntanaged in such a manner that funds lire available to rncet reasonably anticipated cash flow requirements in an orderly 'manner, Periodical cash flow analyses will be completed to order to ensure that the portfolios are positioned to provide sufficient liquidity, ttrt� n yejtr i n; Investment portfolios shall be designed with the objective of attaining a market rate ofreturn throughout budgt.}lary and ve011eirk cycles, taking alto account the investment risk constraints and liquidity needs. Return on investment is of least importance covered to the safety and liquidity objectives described above, The core of investments is limited to relatively low risk securities in anticipation of earning a fair r turn r'ltttive to the risk bong u,sumcd,. IV. DELEGATION OF AtJT11QRITY In accordance with the City's Administrative Policies, the responsibility for providing oversight and dirce:nion in regard to the mamigerncttl of the investment program resides with the City's Filnantee Director. The thin gtt,teseit responsibility for all City fonds in the investment program and investment tnnnsactiori:r t dole<gateti to the Finance Director or designee,. The Finance Director shall establish written procedures for the operation attic investment pertfolio and u system of internal ncnunting and administrative ixiftroi$ to regulate the activities of employees. The Cily may employ an Investment Advisor 'v assist in Managing some of the City's portfolios. Such Investment Advisor mum be re.Tisterkel under the Investment Ariviaorx At of 1940. V, STANDARDS (W PRVOE CE The standard of prudence to bc used by investment officials shall he the 'Prudent Person' standard and shall be applied in. the context of managing the overall inve;slnent program. Investment officers acting in ;went -dance with written pro edures And this investment policy and exercising. due diligence shall be relieved of personal responsibility for un individual security's credit risk or market price: changes, provided deviations fruits ex�otation. arc moiled tea the Dire etor of Finance' in a tier *ly fitsbion and the Liquidity and the sale of securities are carried Otis rn aeaorclancc with. the terms of this policy. The "Prudent Person" rule status the fallowing: Investments shall be made with Judgment and rare, under circumstances then prevailing. which persons of prudcnc e, discretion and lilts lii,g nne exercise in the maangctt nt oI their own affairs, not fbr speculation, hut for investment, considering the prahatile safety of their capital as well as the probable income to be derived from the investment, While the standard of prudence to be used by investetncttt officials who arc officers or employees is the "Prudent person" suindord. any person or firm hired or retained to invest, monitor, or advise concerning these assess shall be hold to the higher standard of "Prudent zapen". The standard shall be that in investing and reinvesting moneys and in itceladring: retaining, managing,. and disposing of investments of these: funds, the eontractar shaft exercise; the judgment, care, skill, prudence, and diligence tinder the circumstances then pre.;valuing, which persons oCprudence, discretion, and intelligence, uctinj in a IUce rapacity and familiar with sod] Matters wotrlci use in the conduct of an enteriWise of like character and with like aims by diversifying the investments of the funds, so us tea minimize the reds, considering the probable juvenile as well as the probable safety of their aspire!. City of Minim Investment Polley O.F •' 448 Page • VI. ETHICS AND CONFLICTS OF INTEREST employees involved in the investment process shall tvfrattt i'otra personal business activity that could conflict with proper execution of the investment program, or which, could impair fir ability to make impartial investment decisions. Also, employees involved in the investment process shall disclose to the City Nlaua ar any material financial inlcrests in financial lststitutona that conduct business with the City, and they shall further disclose any matcrtal personal fmancialtinvestrrient positions that could he related to the performance of the City's investment program. VII, INTERNAL CONTROLS.. AND INVESTMENT PROCEDURES The Finance Director shall establish a system of internal controls arid operational procedures that are in writing and made a part of the City'S Operational procedures, The internal controls should be designed to prevent losses of Rinds, which aright arise front fraud, employee error, and misrepresentation, by third parties, or imprudent actions by employee's. The written procedures should include refcrcnec to sattkecping, repurchase agreements, separation of transaction authority from accounting and rccordtceeping, wire transfer agreements, booking service contracts, collateral/depository agreements. and delr ry-v,piv ert" procedures. No person may engage in an investment transaction except t ras •authorind under the terns of this policy, Independent auditors as a normal part of the annual fwnatxeria1 audit to the City shall conduct a review of the system of internal controls to ensure compliance with policies and procedures. VI CONTINUING EDUCATION The Finance Director, .. 'l reaoure-r, and appropriate staff shall annually complete 8 hours of continuing inuir g education in subjects or courses of study related to investment practices and products, IX, AUTHORIZED INVESTMENT INSTITUTIONS AND DEALERS Authorized City staff shall only purchase ssectrrtties from the following financial and investment institutions. A Certifiestes of Deposit or Savings Accounts These investments may only be purchased front public depositories qualified by the Treasurer of the State of Florida, in accordance with Chapter280, Florida Statutes, R. Overnight Repurchase Agreement Collateral for the City's "Sweep Accounts" shall be held at City's depository bank that rteuat be a State Qualified public .depository. City of Miami Investment Policy i 448 Page 5 C. All tither Investments For purchases and saes of securities by the City, dealer designated as "Primary Securities Make by the Federal Reserve. Bank of blew York or from direct issuers of commercial paper and bankers' acceptances will be utilized, and all epprov'cc1 non.primary securities deniers that quality under Securities and Exchange Cumntugsiort Rule ISC3-1 (uniform net capital rule) must provide the following infurmetiosi prior to exeouting investment trades with the City: 1. Annual thiamin] statement, as well as most recent quarterly .statement, 2. Regulatory history. through either the Office of the Comptroller of thc• Currency for dealer hanks., or the NASD felt` securities f rrzrs. 3. Statement ()forty pending lawsuits materially effecting the li m's business, Each Dealer's representative will be required to complete the "City's Investment Firm Cerlifteation Formprior to the City conducting any business with titer Dealer or its representative. X. MATURITY AND LIQUIDITY REQUIREMENTS To the extent possible, an attempt will be made to ,ttcic'h inrestEnont maturities with blown cash needs and antiei ated cash low requirements. A. )Maturity Guidelines Securities purchased by or on behalf of the City shall have u final maturity of five (5) years or less from: the date o1'purchase, The overall weighted average duration of principal morn for the portfolio shall be Ions than three (3) years. The maturities of the underlying securities or repurchase agreement will follow the requirements of the Master RinatecthaSVAgrccttu�nt, B. Liquidity Requirements In order to target the day-to-day expenditure; needs of the City, $3,0O004 will be the targeted cash balance in the City's depusi'tmy hunk. All funds in the depository bank will be "swept" mch night into a fully collateralized repurchase agreement account. COMI1ETITIVE SELECTION OF INVESTMENT INSTRUMENTS Alter the Finance Director or Desigtic:tr has determined the approximate maturity -date based on cash flow needs arid market conditions anti has analyxcd end. selected ono or more optimal types of investments, a minimum of three I31 qualified banks andfor approved bract/dealers must be contacted and asked to provide bidsfoffers skis securities in gitesticros. Bids will be held in confidence until the bid deetmAI to best rnect the invcsiment.objeetivt s is determined and selectee). However, if obtaining bidskifters are not feasible and appropriate, securities may be purchased utilizing the comparison to cuttent market price method on an exception busks. Acceptable current market price providers include, but arc oat halite(' to: A. Te lerete Inferination System City ntMiami Investment Pulley O1 448 Pep Criallett • • B. I3loomberg Information Systems C. Wall Street Journal or a comparable nationally recognized financial publication providing daily market pricing D. Daily market pricing provided by the City's custodian or their correspondent institutions The Finance Director or designee shall utilta the competitive bid process to select the securities to be purchased or sold. Selection by comparison to it Curr an market price, as indicated above, shall only be utilized when. in judgment of the Finance Director or designee, competitive kidding would inhibtt the ,sctfiotr process. Examples of when this method may be used include: A. When time constraints due to unusual cii•vwnstuaces preclude the use of the competitive bidding process B. When nn active market exists for the issue being traded due to the age or depth of the issue C. When a security is unique tau single dealer, for example, a private placement D. When the transut:lion involves new issues or issues in the "wheat issued" market Overnight t,weep repurchase agreements ment. will not be bid, but may be placed with the ity's depo&itory stank relating, to the demand aceount for which the repurchase agreement was purchased. t, AtJT11UR..IZftD JNVES IVIESTS AND PORTFOLIO COMPOSITION Investments :should be tnadc subjee:t to the cash flow needs and such cash flows arc subject to revisions as market conditions and the City's heeds change. However, when the invested Hinds are ueedcii in whale or in part for the purpose origfully intended or for more optimal investffrcnts, the Finance Director or designee may sell the inn'estnrent at the then -prevailing market price and place the proceed into the proper account at the City's custodian. The fallowing are the investment requirements and allocation limits nn security types, issuers, and maturities as established by the City, Diversification strategies within the established guidelines shall be reviewed and revtscd periodically as necessary by the Investment C mmi`ttee. The Investment Continitte . Threstor of Finance or d ignee shall have the option to further restrict investment poreez tsges from time to ttrr a based on market conditions, risk and diversif iontion investment strategics. The percentage allocations requirements for investment types .and issuers are calculated bused on the original cost of each investment. Investments not listed in this policy are prohibited. A. The Florida I .oe.al (overran ent Surplus Funds Trust Fund ('SBA") 1. Investment Authorization The Finance Director or designee may Invest in the SttA. 2. Portfolio Composition city ofMion a tovestairnt Policy 01 448 f�a t• 7 • • • A maximum of 200% of available funds may be invested in the SBA. United States Government Securities 1. Purchase Authorization The Jtnancc Director or designee may invest in negotiable direct obligations, Or obligations the principal and interest of which aro unconditionally guaranteed by the United States Government. Such securities will include, but not be limited to the following: Gash Management Dills Treasury Securities - State and Loos! Government dies ("SLOS1 Treasury .Bills Treasury Notes Treasury Bonds Treasury Strips 2. Portfolio Composition A maximum of 100% of available Rinds may be invested in the United States Government Securities with the csaaptlen of Treasury Strips are limited to 10% of available funds. 3. Maturity Limitations The maximum length to maturity of any direct investment in the United Staters [Government Securities is five (5) years from the data of pttrreitgse. +C, United States C vernMent Agencies 1, Purchase Authorization The Finance 1)hector or designee nnay invest in bonds, debentures, notes or callables issued or guaranteed by the United States Governments agencies, provided such obligations fire backed by the full faith and credit of the united States Government. Such securities will include, but not be limited to the &flowing: United States Vapor]. - import hank -Direct obligations or fully guaranteed.certificates ofbenciltoial ownership Farmer Home Administration -Certificaos of benefielal ownership Federal Financing Bard -Discount notes, notes and bonds Federal liowding Administration Debentures Goverment Notional Mortgage Association (GNIvMA) QC}: IAA guaranteed mortgage -booked bonds .CiNMA guaranteed pass -through obligations City of Miami Investment Policy 448 Peas • General Services Administration United Statues Maritime Administration Guaranteed -Title XI Financing New Communities Debentures tures -United States Government guaranteed de bcntures United States Public Housing Notes and Bonds -United Stu Government guaranteed public housingrota and bands United States Department of 'lousing and Urban Development project notes and Wad authority bonds 2. PortfolioComposition A maximum of 5O% of available funds may be invested in United States Government agencies, 3. Limits on Individual Issuers A maximum of 10% of available iimds may be invested in individual United States Government agencies. 4, Maturity Limitations The maximum length to maturity for au investment in any United States Government agency security is five (5) years from thc date of purchase, D. Peden Instrumentalities (United States Govomment sponsored agencies) Peirehasc Authoriaatiun The Finance Director or designee may invest in bonds, debentures, notes or csllablca issued or guaranteed by United States Government sponsored agencies (Federal Instrumentalities) which are non-fullfaith and credit agencies .limited to the following; Federal Fax Credit Batik (H CO) Federal Homo Loan Bank or its City tanks (PH1.B) federal National Mortgage Association (FNMA) i cderal #inure Loan Mortgage Corporation (Freddie -Macs) including Federal - Itome t.oazt Mortgage C nporation participation certificates 2. Portfolio Composition !rr MAXIMUM Of 100% of available funds may be invested in Federal Instrumentalities. 3. Limits on Individual issuers A maximum of 25% of available funds may be invested in itny one issuer, 4. Maturity Limitations City of Muni lnvc tmer►t Policy 01 448 Pacn9 nzat • The maximum length to maturity for an investment in any Federal Instrumentality security is five (5) years from the date of purchase. 0, Interest Bearing Time Deposit or Saving Accounts 1, Purchase Authorization The Fluency Director or designee may invest in non-negotiable interest bearing time certificates of deposit or savings ttecounts in banks organized under the taws of this state and/or in national banks organized under the laws of the United States and doing business and situated in the State of Florida, provided that any such deposits are secured by the Florida Sirityx for Poblic Deposits Act, Chapter 280, Florida Statutes. Additionally, the hank shall not be fisted with uny recognized credit timid inforntatii n service. 2. Portfolio Composition A maximum of 10% of available funds may be invested in non negotiable interest bearing time eertiflcatcs of deposit. 3. Limits on Individual Issuers A maximum of 10©% of available funds may be deposited with any one issuer. 4. The maximum minority en ntny certiiicete shall be no grater than one (1) year from the date of purchase. F. Reperchase Agreements 1. Purchase Authorization a. The Finance Direotar or designee may invest in repurchase agreements composed of only those investments authorized in Section XIU3, C, and D. All firms are required to sign the City's Mester Repurchase Agreement prior to the execution of a repurchase agreement trap action. b. A third party custodian with whom the City has a current custodial agreement shall hold the collateral for all repurchase agreements with u term longer than one (i) business day. A clearly marked receipt that shows evidence of ownership must be supplied to the Finance Director or designee and retained. C. Securities authorized for collaterat mast have maturities under ten (10) years And with market value for Ibe principal And accrued interest of 102 percent of the value and thr the terra of the repurehese agreement, immaterial sitar/ lerrn deviations from 102 percent requirement are lwrmissible only upon the approval of the Finance Director or designee. 4. The overnight sweep arrangem rut shall adhere to the agreement between the City and the City's depository ban'k,. City of Miami lavesruneni Policy 0 1 — 4,48 Page 10 2. Prrtt°lioComposition A maximum of 20% of available fonds may be invested in repurchase agrc rents excluding one (I) business day agreements and overnight sweep agreements, 3. Limits on individual issuers A maximum of 10% of available funds may be invested with any one institution excluding one (1) business day agreements and overnight sweep agreements, 4. Limits on Maturities The maximum length to maturity of any repurchase: agreement is 90 .days from the date of purchase. O. Commercial Paper 1. Purc'nora Authorization The Finance Director or designee may invest in commercial paper of any United States company that is rated, at the time or purchase, "Frirtto•t" by Moody's and "A•1" by Standard & Poor's (prima commercial paper). If the commercial paper is backed by a letter of credit ("LOC"), the longterm debt of the LOC provider must be rated "A' or better by at least two nationally re agnizcd rating agencies. 2. portfolio Composition A maximum of 35% of available funds may be directly invested in prime commercial paw• 3, Limits on Individual issuers A maximum of 10% of available funds may be invested with any ono issuer, 4. Maturity Limitations The maximum length to maturity for prime commercial paper shall be 270 days from the date ofpurehasc. H. Corporate Notes I. Purchase Authorization City of Miami The Pinarnce Director or designee may invest in corporate notes issued by corporations organirrdl and operating within the United Slates or by depositary institutions licensed by the United States that have a long terns debt rating, at the time or purchase, al e minimum "Au" by Mondy's and a mitimtun long tenn debt rating of 'AA" by Standard & Poor's. !moment Policy Qi' 448 leash • • 2, Portfolio Composition A maximum of 25% of available funds may be directly invested in borate notes. 3, Limits on Tnclividual Issuers A rximirntof ltl% of available funds may be invested with any one issuer. 4. Maturity Limitations The maximum length to maturity for corporate notes shall be (2) two years from the date of purchase, Bankers' Acceptances 1. Purchase Authorization The }'inanee Director or designee may invest in. Bankers' Acceptances issued by a domestic bank or a federally chartered domestic office of a foreign back, which arc eligible for purcbase by the fedi sal Reserve System, at the time Or purchase, the short. term Enter is rated, at a minimum, "P- "by Moody's inivstors Services and "A-1" Standard & Poor's, 2. .portfolio Composition A maximum of 10% of available fundsmayhe directly invested in Bankers' Acceptances 3. Limits oii Individual Issuers A maximum of 5",41 of available funds may be invested with any one issuer.- 4. Maturity l.tnitaticsnns The maximum length to maturity for Bankers' Acceptances shall he 180 days from the date of purchase. J. State and/or Local Covet -meta Taxable arsdtor Tax-tixempt Dirt L Purchase Authorization The Finance Director or designee may invest in state and/or local government taxable. andfor tax-exempt deist, general obligation and/or revenue bonds, rated at 14114 "Aa" by Moody's and "AA" by Standard & Poor'a for long-term debt. or rated at least "M1tl#2". by Moody's and "SI-2" by Standard & Poor`s for xhorrrtcrm debt. 2. 'Portfolio Composition A maximum of 2$% of available funds may be invested in taxable and tax-exempt general Obligation bonds. City of Mkoni Investmein Policy o 4 48 'rage 12 Timeqrg • A maximum of IO% of available funds may be invested in taxable and tax.exempt Revenue and r"sxcise tax bonds of the various municipalities of the State of Florida, provided none of audit securities have been in default within five (5) years prior to the date of purchase. 3. Maturity Limitations A maximum length to maturity fbr an investment in any state or local government debt wearily is (2) two years from the date ofpurchase. 1 , , Registetvd investment Companies (Money Mary Mutual bends) I. InveStrlitni Atxtl�txu tiara The Finance Director or designee may invest in slats in open.end arid no.lr l money 111,1114401 Rots provided such funds are registered under the Federal Investment Company Act of 1 O and operate in accordance with 17 CkP.A. 1270,2a.7, which stipulates that money market funds must have an average weighted maturity of 90 days or lass. Portfolio Composition A maximum of 20% of available funds may be invested in money market funds, 3. LAMAS of Imlividual issuers A maximum of 10% of available funds may be 'vested with any one money market mod, Rating Requirements The money market funds shall be rated "Ake ur "AAman or biter by Standard & Pc r's, or the equivalent by another rating agency. " 5, Due i)iligenve Requirements A thorough reVit:w of any money market fund la rewired prier to investing. and on a continual basis. There shall be a questionnaire developed by the Finance Director or designee that will contain a list of questions that divers the major aspects of any investment pool/fund. L. Intergovernmental Investment Pool 1, Investment Autbri atiwn City ofMiarnt Investment policy 01 4 The Finance Director ar designee may invest in intergovernmental investment pools that are authorized pursuant to the Honda Interlace! Cooperation Act, as provided in Section 'Ohl, Florida Statutes and provided that said hauls contain no derivatives. 2, Portfolio Composition A maximum of' 25% of available fluids may be invested in intergovernmental investment pools. 3. Due Diligence Requirements A thorough review of any investment po efuud is required prior to investing, and on at continual basis. There shall be a gttastinimaire developed by the Finance Director or Designee that will contain a list of gtre.stions drat covers the major expects or any investment pool/fund. XIit. DERIVATIVES AND REVERSE W PIJ tCBASR AGREE.MEN S 11.hc City* may invest in investment products that include the use of derivatives as .long as the dollar amount invested by the investment product is minuscule to the total dollar amount invested by th investment product. The Finance Director or designee shall develop sufficient Understanding of the derivative products and have the cxpertisc tc manage them, A "derivative" is defined us a fintrnciai instrument the value of which depends nn, or is derived from, the value of one or MOM underlying assets or indices or asset values. if the Finance Director approves the vise °!reverse repurchase agreement* or ether forms of leverage, the investment shill be limited to transactions in which the preeeeds are intended to provide ligtucttty and for which the City has sufficient resources and expertise to manager them. XIV. PERVO3[ ANCE MEASUREMENTS In order to assist in the evaluation or the portfolios' performance, the City will use performance benchmarks for shurwenn and tang•term portfolios. The rrre of benchmarks will allow rite City to 'Measure its returner against other investors in the same mer1 its. A. The short -tor m investment portfolio shall be designed with the annual objective of erforeding the weighted average return (net book value rale of return) of the Florida Local Government Surplus ,txunds Trust Fund (SRA), The long-term investment portfolio shall be.dosigned with the annual objective of exceeding the return of the Merritt Lynch 14 Year Treasury Index compered to the portfolios total rate of return, The Merrill Lynch l.4 Year Treasut`y Index represents all U.S. Treasury securities maturing over one year, but tents than three years. This maturity range is an appropriate benchmark based on the objectives ei'the City. 104 REPORTING City of Miamf Investment Polky 01 *• 448 Vs" 14 • A, 1'he Pittance Director or designee will prepare quarterly investment reports, Schedules in the quarterly report should include the following: I. A listing of individual securities .held at the end of the: reporting period 2. Percentage ot'available fonds represented by cacti investment type. 3, Coupon, discount or taming rntc 4, Average life or duration and final maturity of all investmcnts S. Par value, and market Naha II, Aimuai investment Report C)n an anniuil basis, the Finance Director shall prepare and submit to the City Commission a written report on all invested funds. The annual report shall provide all, but not limited to. the following: a complete list of All invested funds, name or type of security in which the funds are invested, the amount invested. thy maturity date, earned income, the book value, the market value and this yield on each investment. The: annual report will show performative on both a book value and total rate of return basis and wilt coritpare file results too the above...stated performance benchmarks, All riivestntrnls shall tie t portt°d at fair value: per CASE. standard~;. lnvarstrnem reports shall he available to the public, C. investment Committee The City shall how an investment committee comprised of the Finance Director, Assistant Finance Director, Treasurer, tenet Investment Coordinator to report to this committee as often as requested, Reports shall be prepared and distributed to the committer quarterly. XVI, TI1IRI)-PA TV c sropIAt AGREEMENTS Securities, with the exception of certificates atdepoaits, shall be held with it third party t;tistodiani and all securities purchased by, and all eollhteral obtained by; the City should he properly designated as an asset of the City.. The securities muss be held in an account separate and apart from the assets tftt'he financial institution. A third party custodian is defined us- any bank depository chartered by the federal Government. the State off Honda, or any other state or tcrritu y of the iUnited State..s which bas a branch or principal place of business to ibe Stalet>f Florida as defined in Section 6 8.12, Florida Statutes,. or by a national association organized- and existing under the laws of the drilled Stout which is atithuriicd to accept and -execute trusts and ►epoch is doing business in flu State ofFturida. Certificates of deposits will be placed in. the provider's safekeeping department tor the term of the deposit. 'rho ou todian shall ncoept transaction instructions only from those persons wine hate bin duly authorized by the Director of Finance and which authorization has been provided, 'rsa writing, to the custodian, No withdrawal of'sectrrines. in whole- or in pun, shall be made from safekeeping, shall be permitted unless by such a duly authorized person. The custodian shall provide the Finance Director or designee with safekeeping receipts that provide 'detail information on the securities held by the custodian. In addition; life custodian shall report at least City of M sanri Westmont Polley 448 Pogo 1S quarterly and the Finance Director or designee shall verify the reports. Security tratisactians between a broker/dealer and the custodian involving the purchase or sale of securities by transfer of money or securities must be made an u "delivery vs. payment" basis, if applicable, to ensure that the custodian will have the security or money, as appropriate, in hand at the conclusion of the transaction. Only after receiving written authorization from the Director of Finance shall the City Treasurer be authorized to deliver sccurities "OW, Scur'ities held as collateral shaft be beld fret and clear of any liens. XVII, INVESTMENT POLICY ADOPTION Thc investment policy shall be adopted by City resolution, The D1teet r ofFinan , Treasurer, and The Investment Committee shall review ibe policy annually and the City Commission shall approve any modification made thermic. PASSED D AND ADOPTED BY THE CITY t7OMMTSSION ON ATTEST: WALTER I. FOREMAN CITY CLERK Approved as to Corm and correctness ALIJAND. O ViLAll L° CITY ATTORNEY City of Miami ItnvitmentPolicy JOE CAROLLO, MAYOR .01 448 nasal;