Chapter 1.96
INVESTMENT POLICY
Sections:
1.96.040 Strategy and objectives.
1.96.060 Delegation of authority.
1.96.070 Ethics and conflicts of interest.
1.96.080 Authorized financial dealers and institutions.
1.96.090 Authorized investments.
1.96.100 Safekeeping and custody.
1.96.140 Performance standards.
1.96.160 Monitoring and adjusting the portfolio.
1.96.170 Distribution of interest income.
1.96.010 Policy.
It is the policy of the city of Ritzville to invest public funds in a manner that will provide the highest investment return with maximum security while meeting the daily cash flow demands on the treasury and conforming to all Washington statutes governing the investment of public funds. (Ord. 941, 1997).
1.96.020 Scope.
A. This investment policy applies to all financial assets of the city. These funds are accounted for in the city’s annual financial report and include:
1. General fund;
2. Special revenue funds;
3. Capital project funds;
4. Enterprise funds;
5. Trust and agency funds;
6. Any new fund created by the council, unless specifically exempted by the council.
B. This investment policy applies to all transactions involving the financial assets and related activity of all the foregoing funds. (Ord. 941, 1997).
1.96.030 Objectives.
Investments will 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.
The standard of prudence to be used by the investment office will be the “prudent person” and shall be applied in the context of managing an overall portfolio. The investment officer acting in accordance with this policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely manner and appropriate action is taken to control adverse developments. (Ord. 941, 1997).
1.96.040 Strategy and objectives.
A. The primary investment strategy will be to invest excess idle cash within the constraints of this policy in order to increase interest earnings. This will be done in a manner that supports the city’s primary purpose of providing services to the public.
B. The primary objectives, in priority order, of the city’s investment activities shall be:
1. Safety. Safety of principal is the foremost objective of the city. Investments of the city of Ritzville shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.
2. Liquidity. The city’s investment portfolio will remain sufficiently liquid to enable the city to meet all operating and debt service requirements that might be reasonably anticipated.
3. Return on Investment. The city’s investment portfolio will be designed with the objective of attaining a market rate of return throughout the budgetary and economic cycles, taking into account the city’s investment risk constraints and the cash flow characteristics of the portfolio. Investment of tax exempt borrowing proceeds and of any debt service funds will comply with the “arbitrage” restrictions of Section 148 of the Internal Revenue Service Code of 1986. (Ord. 941, 1997).
1.96.050 Definitions.
As used in this chapter:
“Agencies” means federal agency securities.
“Amortization” means the reduction of principal (of debt) at regular intervals.
“Asked” means the price at which securities are offered.
“Bankers’ acceptance (BA)” means a draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer.
“Basis points” means the smallest measure used in quoting the yield of bonds. One basis point equals .01 percent of yield. For example, a bond that changed from three percent to 3.25 percent changed 25 basis points. One basis point for one year on $1,000,000 would earn $100.00.
“Bid” means the price offered for securities.
“Bond” means a written promise to pay (debt) a specified sum of money (called principal or face value) at a specified future date (called the maturity date(s)) along with the periodic interest paid at a specified percentage of the principal (interest rate). Bonds are typically used for long-term debt.
“Bond anticipation notes” means short-term interest-bearing notes issued in anticipation of bonds to be issued at a later date. The notes are retired from proceeds of the bond issue to which they are related.
“Bond equivalent yield (BEY)” means a yield that equates monthly pay mortgage-backed securities to semiannual payment bonds.
Broker. A “broker” brings buyers and sellers together for a commission paid by the initiator of the transaction or by both sides; he does not position. In the money market, brokers are active in markets in which banks buy and sell money and in interdealer markets.
“Cash flow budget” means a projection of the cash receipts and disbursements anticipated during a given time period. Typically, this projection covers a year and is broken down into separate projections for each month, week and/or day during the year.
“Certificate of deposit (CD)” means a time deposit with a specific maturity evidenced by a certificate. Large denomination CD’s are typically negotiable.
“Collateral” means securities, evidence of deposit or other property that a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies.
“Collateral mortgage obligation (CMO)” means multiclass security collateralized by whole loans or regular mortgage securities whose cash flows are paid through to meet debt service on the CMO bond.
“Companion” means a support tranche, with average life variability, that absorbs much of the risks inherent in a CMO so that the “supported tranches” are protected from prepayment risk.
“Comprehensive annual financial report (CAFR)” means the official annual report for the city of Ritzville. It includes five combined statements for each individual fund and account group prepared in conformity with GAAP. It also includes supporting schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material and a detailed statistical section.
“Coupon” means (1) the annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value; (2) a certificate attached to a bond evidencing interest due on a payment date.
Dealer. A “dealer,” as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account.
“Debenture” means a bond secured only by the general credit of the issuer.
“Delivery versus payment (DVP)” means there are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.
“Discount” means the difference between the cost price of a security and its value at maturity when quoted at lower than face value. A security selling below original offering price shortly after sale is also considered to be a discount.
“Discount securities” means noninterest-bearing money market instruments that are issued at a discount and redeemed at maturity for full face value, i.e., U.S. Treasury bills.
“Diversification” means dividing investment funds among a variety of securities offering independent returns.
“Duration” means the measurement of sensitivity of a security’s market value or price. It is the average time until receipt of the weighted present value of the cash flows, expressed in years.
“Factor” means the decimal number representing the proportion of the outstanding principal balance of a security to its original certificate amount currently remaining.
“Federal credit agencies” means agencies of the federal government set up to supply credit to various classes of institutions and individuals, e.g., savings and loans, small business firms, students, farmers, farm cooperatives, and exporters.
“Federal deposit insurance corporation (FDIC)” means a federal agency that insures bank deposits, currently up to $100,000 per deposit.
“Federal funds rate” means the rate of interest at which federal funds are traded. This rate is currently pegged by the Federal Reserve through open market operations.
“Federal Home Loan Banks (FHLB)” means the institutions that regulate and lend to savings and loan associations. The Federal Home Loan Banks play a role analogous to that played by the Federal Reserve Banks vis-a-vis member commercial banks.
Federal National Mortgage Association (FNMA). FNMA, like GNMA, was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development, HUD. It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.
“Federal Open Market Committee (FOMC)” consists of seven members of the Federal Reserve Board and five of the 12 Federal Reserve Bank Presidents. The president of the New York Federal Reserve Bank is a permanent member, while the other presidents serve on a rotating basis. The committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of government securities in the open market as a means of influencing the volume of bank credit and money.
“Federal Reserve System” means the central bank of the United States created by Congress and consisting of a seven-member Board of Governors in Washington, DC, 12 regional banks, and about 5,700 commercial banks that are members of the system.
“Float” means the amount of money represented by checks outstanding and in the process of collection.
“Floaters” means a tranche with a variable coupon rate that adjusts periodically and is set by an index plus a margin such as Eleventh District COFI + 125, Libor + 70, and I YR CMT + 125.
“Freddie Mac” means mortgage-backed issuer created in July, 1970.
“Full faith and credit” means a pledge of the general taxing power of a government to repay debt obligations (typically used in reference to bonds).
General Obligation Bonds. When a government pledges its full faith and credit to the repayment of the bonds it issues, then those bonds are “general obligation (GO) bonds.” Sometimes the term is used to refer to bonds that are to be repaid from taxes and other general revenues.
“Government National Mortgage Association (GNMA or Ginnie Mae)” means securities guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations and other institutions. Security holder is protected by the full faith and credit of the U.S. government. Ginnie Mae securities are backed by FHA, VA, or FMHM mortgages. The term “passthroughs” is often used to describe Ginnie Maes.
“Interest only (IOs)” means a strip of the total interest cash flow. These instruments are priced on an absolute yield basis.
“Inverse floaters” means a tranche with a variable coupon that moves inversely with the coupon on the floater. A result of this type structure is that the weighted average coupon rate of the inverse and the floater remains constant.
“Internal control” means a plan of organization for purchasing, accounting, and other financial activities which, among other things, provides that: the duties of employees are subdivided so that no single employee handles a financial transaction from beginning to end; proper authorizations from specific responsible officials are obtained before key steps in the processing of a transaction are completed; and records and procedures are arranged appropriately to facilitate effective control.
“Investment” means securities and real estate purchased and held for the production of an income in the form of interest, dividends, rentals, or base payments.
“Investment instrument” means the specific type of security which a government purchases and holds.
Limited Liability Bonds. When a government issues bonds that do not pledge the full faith credit of the jurisdiction, it issues “limited liability bonds.” Typically, pledges are made to dedicate one specific revenue source to repay these bonds, or some other special repayment arrangements are made.
Liquidity. A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes.
“Local government investment pool (LGIP)” means the aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment.
“Market value” means the price at which a security is trading and could presumably be purchased or sold.
“Master repurchase agreement” means a written contract covering all future transactions between the parties to repurchase-reverse repurchase agreements that establishes each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller-borrower.
“Maturity” means the date upon which the principal or stated value of an investment becomes due and payable.
“Money market” means the market in which short-term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded.
“Open market operations” means purchases and sales of government and other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve’s most important and most flexible monetary policy tool.
“PAC band” means the range of prepayments under which the PAC tranche is guaranteed to repay the principal. Type I bands – 200 percent PSA wide; Type II bands – 100 percent PSA wide.
“Payment window” means the length of time between the first and last scheduled payments on the bond.
“Performance standards” means specific quantitative measures of work performed within an activity or program (i.e., total interest earned). Also a specific quantitative measure of results obtained through a program or activity (i.e., comparison of portfolio yield to six-month treasury bill).
“Planned Amortization Class (PAC)” means a guaranteed (under a specific range of prepayment rates) principal repayment schedule bond with tremendous average life stability. Currently, Type I PACs and Type II PACs exist.
“Pool” means a group of mortgages underlying a specific mortgage backed security (MBS) issue.
“Portfolio” means collection of securities held by an investor.
“Premium” means the amount by which a security is selling above par.
“Primary dealer” means a group of government securities dealers that submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealer includes Securities and Exchange Commission (SEC) registered securities brokers/dealers, banks and a few unregulated firms.
“Principal only (POs)” means a tranche of only principal cash flows.
“Prudent person rule” means an investment standard. This rule assumes investments will be made with the judgment and care 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.
“Public securities association (PSA)” means a measure of the rate at which mortgage loans are being repaid; the higher the PSA, the faster the prepayments.
“Qualified public depositories” means a financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the Public Deposit Protection Commission (PDPC) eligible collateral having a value of not less than its maximum liability and which has been approved by the PDPC to hold public deposits.
“Rate of return” means the yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond or the current income return.
“Real Estate Mortgage Investment Conduit (REMIC)” means a pass-through tax entity that can hold mortgages, secured by any type of real property, and issue multiclass ownership interests to investors in the form of passthrough certificates, bonds, or other legal forms. Since the Tax Reform Act of 1986, most all CMOs have been issued as REMICs.
“Repurchase agreement (REPO)” means a holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use REPOs extensively to finance their positions. Exception: When the Federal Reserve is said to be doing REPOs, it is lending money, that is, increasing bank reserves.
“Safekeeping” means a service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vaults for protection.
“Secondary market” means a market made for the purchase and sale of outstanding issues following the initial distribution.
SEC Rule 15c3-1. See “Uniform net capital rule.”
“Securities and Exchange Commission (SEC)” means an agency created by Congress to protect investors in securities transactions by administering securities legislation.
“Stated maturity” means a predetermined final maturity date that cannot be altered by prepayments.
“Targeted amortization class (TAC)” means a tranche structured so that its payment schedule protects the investor from prepayment increases and provides the investor with a low to moderate rate volatility outlook with protection against extension risk if prepayments slow down. Average life extension is possible when prepayments increase within TAC range. Additional TAC structures include Stable TACS, Regular TACS, Reverse TACS, and High Yield TACS.
“Tax anticipation notes” means notes issued in anticipation of taxes that are usually retired from taxes collected.
Tranche. Also known as “piece.” Each CMO is constructed with a specific number of tranches, each with unique characteristics.
“Treasury bills” means a noninterest-bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.
“Treasury bond” means long-term U.S. Treasury securities having initial maturities of more than 10 years.
“Treasury notes” means an intermediate term coupon-bearing U.S. Treasury securities having initial maturities of one to 10 years.
“Uniform net capital rule” means the Securities and Exchange Commission’s requirement that member firms as well as nonmember broker/dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called the “net capital rule” and “net capital ratio.” Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities. Liquid capital includes cash and assets easily convened into cash.“Vanilla” means a straight sequential pay tranche.
“Weighted average life” means the weighted average number of years from the security’s issuance until each principal dollar is returned to the investor.
“Yield” means the rate of annual income return on an investment, expressed as a percentage. Income yield is obtained by dividing the current dollar income by the current market price for the security. “Net yield” or “yield to maturity” means the current income yield minus any premium above par or plus any discount from par in the purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. (Ord. 941, 1997).
1.96.060 Delegation of authority.
Management responsibility for the investment program is delegated to the clerk/treasurer. The clerk/treasurer will be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. (Ord. 941, 1997).
1.96.070 Ethics and conflicts of interest.
Officers and employees 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. Employees and investment officials shall disclose to the council any material financial interests in financial institutions that conduct business within this jurisdiction, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the city’s portfolio. Employees and officers shall subordinate their personal investment transactions to those of the city of Ritzville, particularly with regard to the time of purchases and sales. (Ord. 941, 1997).
1.96.080 Authorized financial dealers and institutions.
It is the intent of the clerk/treasurer to conduct his/her investment transactions with several competing, reputable investment securities broker/dealers and financial institutions.
The clerk/treasurer will maintain a list of financial institutions, as required by the Public Deposit Commission, authorized to provide investment services (RCW 39.58.080). In addition a list will also be maintained of approved security broker/dealers who maintain an office in the state of Washington. These may include “primary” dealers or regional dealers that qualify under Securities and Exchange Commission Rule 15c3-1 (uniform net capital rule). No public deposit shall be made except in a qualified depository in the state of Washington. Total deposits may not exceed that depository’s net worth (RCW 39.58.130). (Ord. 941, 1997).
1.96.090 Authorized investments.
A. Certificates, notes, bonds or other obligations of the United States. RCW 36.29.020; 43.84.080. (Treasury bills, bonds.)
B. Obligations of U.S. agencies or of any corporation wholly owned by the government of the United States. RCW 36.29.020; 43.84.080. (Government National Mortgage Association bonds. Small Business Administration bonds.)
C. Federal Home Loan Bank notes and bonds. RCW 36.29.020; 43.84.080.
D. Federal Land Bank bonds. RCW 36.29.020; 43.84.080.
E. Federal National Mortgage Association notes, debentures and guaranteed certificates of participation. RCW 36.29.020; 43.94.080.
F. Notes or bonds secured by mortgage that the Federal Housing Administrator has insured or made a commitment to insure in obligations of national mortgage associations. RCW 39.60.010.
G. Debentures issued by the Federal Housing Administrator. RCW 39.60.010.
H. Bonds of the Home Owner’s Loan Corporation. RCW 39.60.010.
I. Obligations of any other government-sponsored corporation whose obligations are or may become eligible as collateral for advances to member banks as determined by the Board of Governors of the Federal Reserve System. RCW 36.29.020; 43.84.080. (Federal Farm Credit Banks consolidated system-wide bonds and discount notes. Federal Home Loan Mortgage Corporation bonds and discount notes. Student Loan Marketing Association bonds and discount notes. Export-Import Bank bonds. Maritime Administration bonds.)
J. Bonds of the state of Washington and any local government in the state of Washington, which bonds have at the time of investment one of the three highest credit ratings of a nationally recognized rating agency. RCW 39.59.010.
General obligation bonds of a state other than the state of Washington and general obligation bonds of a local government other than the state of Washington, which bonds have at the time of investment one of the three highest ratings of a nationally recognized rating agency. RCW 39.59.010.
K. Bonds or other obligations issued by a housing authority pursuant to the housing authorities’ law of this state or issued by any public housing authority or agency in the United States. RCW 35.82.220.
L. Bonds or warrants of the state of Washington. RCW 35.39.030.
M. Washington State Housing Finance Commission bonds. RCW 43.180.190.
N. Port district revenue bonds and notes issued under authority of Chapter 53.34 RCW. RCW 53.34.150.
O. Bonds or other obligations issued by a metropolitan corporation pursuant to Chapter 35.58 RCW. RCW 35.58.510.
P. State, county, municipal, or school district bonds, or warrants of taxing districts of the state. Such bonds and warrants shall be only those found to be within the limit of indebtedness prescribed by law for the taxing district issuing them and to be general obligations. RCW 43.84.080.
Q. General obligation or utility revenue bonds or warrants of any city or town in the state. RCW 35.39.030.
R. The city’s own bonds or warrants of a local improvement district that are within the protection of the local improvement guaranty fund law. RCW 35.39.030.
S. The city’s own local improvement installation notes that are within the protection of the local improvement guaranty fund law. RCW 35.45.150.
T. Interim financing warrants of a local improvement district that is within the protection of the local improvement guaranty fund law for the benefit of the general fund. RCW 35.39.034.
U. Subject to the arbitrage provisions of Section 148 of the Federal Internal Revenue Code or similar provision concerning the investment of state and local money and funds, the following mutual funds and money market funds:
1. Shares of mutual funds with portfolios consisting of only United States government or United States government guaranteed bonds issued by federal agencies with average maturities of less than four years, or bonds described in RCW 39.59.020(1) or (2), except that bonds otherwise described in RCW 39.59.020(1) or (2) shall have one of the four highest ratings of a nationally recognized rating agency;
2. Shares of money market funds with portfolios consisting of only bonds of states and local governments or other issuers authorized by law for investment by local governments, which bonds have at the time of investment one of the two highest credit ratings of a nationally recognized rating agency;
3. Shares of money market funds with portfolios consisting of securities otherwise authorized by law for investment by local governments. RCW 39.39.030.
V. Bankers’ acceptances purchased on the secondary market. RCW 43.94.080, 36.29.020.
W. Any investments authorized by law for the treasurer of the state of Washington or any local government of the state of Washington but, except as provided in Chapter 39.58 RCW, such investments shall not include certificates of deposit (CD) of banks or bank branches not located in the state of Washington. RCW 39.59.020. (Ord. 941, 1997).
1.96.100 Safekeeping and custody.
All security transactions, including collateral for repurchase agreements, entered into by the city of Ritzville shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by a third-party custodian designated by the clerk/treasurer.
Repurchase agreements may be entered into on a safekeeping basis only if a master agreement with the bank or trust department providing the safekeeping is first obtained and it very clearly establishes that the bank/trust is acting as third-party agent for the clerk/treasurer, not the broker/dealer arranging the repurchase agreements. Such third party safekeeping arrangements will be documented with a signed agreement between the clerk/treasurer and the bank/trust involved assuring that the clerk/treasurer has absolute control over the securities once they are delivered to safekeeping and that the dealer does not have access to them under any circumstances. (Ord. 941, 1997).
1.96.110 Diversification.
It is the policy of the city to diversify its investment portfolio to eliminate the risk of loss resulting from overconcentration of assets in a specific maturity, a specific issuer, or a specific class of securities.
|
Diversification by Instrument: |
Max % of Portfolio |
|
U.S. Treasury Obligations (Bills, notes and bonds) |
100% |
|
U.S. Government Agency Securities and Instrumentalities of Government- Sponsored Corporations |
100% |
|
Municipal Bonds |
50% |
|
Bankers’ Acceptances (BAs) |
20% |
|
Certificates of Deposits (CDs) |
|
|
*Commercial Banks |
100% |
|
*Savings and Loan Associations |
10% |
|
Local Government Investment Pool |
25% |
|
Federated Money Market Fund (Sweep account at Security State Bank) |
25% |
|
Diversification by Financial Institution: |
|
|
Bankers’ Acceptances (BAs) |
No more than 10% of total portfolio with one institution |
|
Certificates of Deposits (CDs), Commercial |
No more than 33% of total portfolio with one institution |
|
Certificates of Deposit (CDs), Savings and Loan Associations |
No more than $100,000 with one institution |
|
Local Government Investment Pool |
No more than 25% of the portfolio |
(Ord. 941, 1997).
1.96.120 Maturities.
To the extent possible, the city will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the city will not directly invest in securities maturing more than four years from the date of purchase. (Ord. 941, 1997).
1.96.130 Internal control.
The clerk/treasurer shall establish a process of independent review by an external auditor. This review will provide internal control by assuring that policies and procedures are being followed. Such review may also result in recommendations to change operating procedures to improve internal control. (Ord. 941, 1997).
1.96.140 Performance standards.
The city of Ritzville investment portfolio will be designed with the objective of regularly exceeding the average return on six-month U.S. Treasury bills, or the average on Federal Reserve funds, whichever is higher. These indices are considered benchmarks for riskless investment transactions and therefore comprise a minimum standard for the portfolio’s rate of return. The investment program shall seek to augment returns above this threshold, consistent with risk limitations identified herein and prudent investment principles.
The clerk/treasurer’s intent is to have 100 percent of the city’s idle cash invested at all times. (Ord. 941, 1997).
1.96.150 Reporting.
The clerk/treasurer will provide the mayor and council with a quarterly report of investment holdings for their review and approval. An informal report of monthly ongoing investment activity will be given to the mayor and council if requested. (Ord. 941, 1997).
1.96.160 Monitoring and adjusting the portfolio.
The clerk/treasurer will routinely monitor the contents of the portfolio, the available markets, and the relative values of competing instruments. Securities will be bought and sold to obtain market yield through both transaction gains and interest earnings when the option is available. (Ord. 941, 1997).
1.96.170 Distribution of interest income.
As per RCW 35.39.034, monies determined available for investment may be invested on an individual fund basis or may, unless otherwise restricted by law, be commingled within one common investment portfolio for investment. All interest income generated by an investment portfolio thus commingled shall be deposited in the current expense fund. (Ord. 1087 § 1, 2005).