Article I: General Policy.
It is the policy of the Cook Memorial Public Library District “(Library)” or “(CMPLD)” to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the Library while conforming to all state and local statutes governing the investment of public funds. The authority of the Library Board of Trustees to control and invest public funds is defined in the Illinois Public Funds Investment Act [30 ILCS 235/1 et seq.] and the investments permitted are described therein.
Article II: Scope.
This policy includes all funds governed by the Board of Library Trustees.
Article III: Delegation of Authority.
Management and administrative responsibility for the investment program is hereby delegated to the Treasurer of the Board of Library Trustees or the Treasurer’s appointed delegate. For purposes of this policy, the Treasurer hereby appoints the Library Director and/or Finance Director as its designated delegates. Those individuals who are responsible for the management and administrative responsibility of the Library’s investment program are referred to as Investment Officials in this policy.
Article IV: Prudence.
The standard of prudence to be used by investment officials shall be the “prudent person” standard. 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 probable safety of their capital, as well as the probable income to be derived. Investment Officers, acting in accordance with this Policy and the written procedures of the Library, and exercising due diligence, shall be relieved of personal responsibility for a security’s credit risk or market price/value changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
Article V: Objective(s).
- The primary objective(s), in order of priority, shall be:
- Legality – conformance with federal, state and other legal requirements.
- Safety – preservation of capital and protection of investment principal.
- Liquidity – Maintenance of sufficient liquidity to meet operating requirements.
- Yield – Attainment of market rates return.
- Simplicity of management.
- The portfolio should be reviewed periodically as to its effectiveness in meeting the Library’s need for safety, liquidity, rate of return, diversification and its general performance.
Article VI: Ethics and Conflicts of Interest.
All Investment Officials shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. The Investment Officials shall disclose to the Library Board any material financial interest in financial institutions that conduct business with the Library, and they shall further disclose any personal financial investment positions that could be related to the performance of the investment portfolio. The investment officials shall subordinate their personal investment transactions to those of the investment portfolio, particularly with regard to the time of purchases and sales.
Article VII: Authorized Financial Institutions.
Qualified and licensed financial institutions shall be selected which qualify as depositories or custodians under Illinois Law. In making these selections, the Library District shall consider the financial stability and strength of the institutions and the availability of financial data regarding the institution.
Should it become necessary to select an investment or money manager, at least three firms shall be considered prior to selection. Interviews may be conducted by the Board as a whole or by delegated Trustees and/or staff. The final selection will be made by the Board.
Article VIII: Authorized and Suitable Investments.
Investments may be made in any type of security allowed for by Illinois statutes regarding the investment of public funds. Consistent with the GFOA Policy Statement on State and Local Laws Concerning Investment Practices, the following investments will be permitted by this policy if and to the extent permitted by the Public Funds Investment Act (30 ILCS 235/1 et seq.).
U.S. Government obligations, U.S. Government agency obligations, and U.S. government instrumentality obligations, which have a liquid market with a readily determinable market value;
Interest-bearing savings accounts, interest-bearing certificates of deposit, interest-bearing time deposits or any other investments constituting direct obligations of any bank as defined by the Illinois Banking Act (205 ILCS 5/1 et seq.)
Interest bearing bonds of any county, township, city, village, incorporated town, municipal corporation, or school district of the State of Illinois, or any other state, or of any political subdivision or agency of the State of Illinois or of any other state, whether the interest earned thereon is taxable or tax- exempt under federal law. The bonds shall be registered in the name of CMPLD or held under a custodial agreement at a bank. The bonds shall be rated at the time of purchase within the 4 highest general classifications established by a rating service of nationally recognized expertise in rating bonds of states and their political subdivisions.
Short term obligations of corporations organized in the United States with assets exceeding $500,000,000 if (i) such obligations are rated at the time of purchase at one of the three highest classifications established by at least two standard rating services and which mature not later than three years from the date of purchase, (ii) such purchases do not exceed 10% of the corporation’s outstanding obligations and (iii) no more than one-third of the public agency’s funds may be invested in short term obligations of corporations.
Money market mutual funds [registered under the Investment Company Act of 1940 (15 U.S.C. A. 80a-1 et seq., provided that the portfolio of any such money market mutual fund is limited to obligations described in paragraph A of this subsection and to agreements to repurchase such obligations.
Local governmental investment pools, either state-administered or through joint powers statutes and other intergovernmental agreement legislation.
Investment derivatives of the above instruments shall require authorization of the Board. (See the GFOA Recommended Practice on “Use of Derivatives by State and Local Governments,” 1994)
Article IX: Collateralization.
Funds on deposit (checking accounts, certificates of deposit, etc.) in excess of FDIC limits must be insured with proof of such provided to Library or secured by some form of collateral, witnessed by a written agreement and held at an independent-third party institution in the name of the CMPLD.
Article X: Safekeeping and Custody.
All security transactions, including collateral for repurchase agreements, entered into by the CMPLD shall be conducted in a manner that ensures safety. CMPLD is required to keep receipts and a written record of all transactions.
Article XI: Diversification and Maturation.
CMPLD shall diversify its investments to the best of its ability based on the nature of the funds invested and the cash flow needs of those funds. Diversification can be by investment type, number of institutions invested in, and or length of maturity.
Article XII: Operational Procedures/Internal Control.
The investments are perused each month noting when the investments are maturing and what the cash needs are within each fund established by CMPLD. The Treasurer and Library Director shall discuss the cash needs within the respective funds and project investment or reinvestment in accordance to the highest rates and terms available at that time, any trades necessary shall be executed by the Library Director. No monies from any CMPLD accounts are to be transferred into any accounts other than those accounts belonging to CMPLD. Bank confirmations are to be received on all investments transactions and all transfers between funds.
Article XIII: Performance Standards.
This investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a comparable rate of return during a market economic environment of stable interest rates. Portfolio performance should be compared to benchmarks with similar maturity, liquidity and credit quality as the portfolio. The investment portfolio, in times of stable interest rates, shall be measured against the interest rate paid on a money market account at the financial institution which is the largest depository.
Article XIV: Reporting.
The Treasurer or designee shall prepare an investment report at least monthly which shall contain a summary of all accounts/investments opened and/or closed during the period. The report should be provided to the Board of Library Trustees and be available on request. The report should be in a format suitable for review by the general public. An annual report should also be provided to the Board. The report shall include information regarding securities in the portfolio by class or type, book value, income earned and market value as of the report date.
Article XV: Investment Policy Adoption.
The investment policy shall be adopted by the Board of Library Trustees. The policy shall be reviewed on an as needed basis. Modifications made to the policy must be approved by the Board of Library Trustees.