Code of Ordinances

of Union County, Illinois.

Ordinance Chapter: Article IV - Investment Policy

The invest­ment pol­i­cy has been adopt­ed by ordi­nance.  The pol­i­cy shall be reviewed on an annu­al basis by the Trea­sur­er, and any mod­i­fi­ca­tions made there­to shall be made by ordinance.

The Trea­sur­er shall pre­pare an invest­ment report at least month­ly.  The report should be pro­vid­ed to the Coun­ty Board and avail­able upon request. The report should be in a for­mat suit­able for review by the gen­er­al pub­lic.  An annu­al report should also be pro­vid­ed to the Coun­ty Board.  A state­ment of the mar­ket val­ue of the port­fo­lio shall be issued to the Coun­ty Board quarterly.

The 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 main­tained by the Illi­nois Pub­lic Treasurer’s Invest­ment Pool (IPTIP).

The Trea­sur­er is respon­si­ble for estab­lish­ing and main­tain­ing an inter­nal con­trol struc­ture designed to insure that the assets of the Coun­ty are pro­tect­ed from loss, theft or mis­use.  The inter­nal con­trol struc­ture shall be designed to pro­vide rea­son­able assur­ance that these objec­tives are met.  The inter­nal con­trols shall address the fol­low­ing points:

(A) Con­trol of collusion.

(B) Sep­a­ra­tion of trans­ac­tion author­i­ty from accounting.

(C) Cus­to­di­al safekeeping.

(D) Writ­ten con­fir­ma­tion of tele­phone trans­ac­tions for invest­ments and wire transfers.

To the extent pos­si­ble, the Coun­ty shall attempt to match its invest­ments with antic­i­pat­ed cash flow require­ments.  Unless matched to a spe­cif­ic cash flow, the Coun­ty will not direct­ly invest in secu­ri­ties matur­ing more than two (2) years from the date of purchase.

Reserve funds may be invest­ed in secu­ri­ties exceed­ing two (2) years if the matu­ri­ty of such invest­ments are made to coin­cide as near­ly as prac­ti­ca­ble with the expect­ed use of the funds.

The Coun­ty shall diver­si­fy its invest­ments to the best of its abil­i­ty based on the type of funds invest­ed and the cash flow needs of those funds.  Diver­si­fi­ca­tion can be by type of invest­ment, num­ber of insti­tu­tions invest­ed in, and length of maturity.

All secu­ri­ty trans­ac­tions, includ­ing col­lat­er­al for repur­chase agree­ments, entered into by the Coun­ty, shall be con­duct­ed on a deliv­­­ery-ver­­­sus-pay­­­ment (DVP) basis.  Secu­ri­ties will be held by an inde­pen­dent third par­ty cus­to­di­an des­ig­nat­ed by the Trea­sur­er and evi­denced by safe­keep­ing receipts and a writ­ten cus­to­di­al agreement.

Col­lat­er­al­iza­tion may be required, at the dis­cre­tion of the Coun­ty, on all funds held in banks or sav­ings and loans above the insured lim­its pro­vid­ed by the FDIC or FSLIC.  In order to antic­i­pate mar­ket changes and pro­vide a lev­el of secu­ri­ty for all funds, the col­lat­er­al­iza­tion lev­el will be a min­i­mum of one hun­dred two per­cent (102%) of mar­ket val­ue of prin­ci­pal and accrued interest.

Invest­ments may be made in any type of secu­ri­ty allowed for in Illi­nois statutes regard­ing the invest­ment of pub­lic funds.  Invest­ments shall be made that reflect the cash flow needs of the fund type being invested.

The Trea­sur­er will main­tain a list of finan­cial insti­tu­tions autho­rized to pro­vide invest­ment ser­vices.  In addi­tion, a list will also be main­tained of approved secu­ri­ty brokers/dealers select­ed by creditworthiness.

Offi­cers and employ­ees involved in the invest­ment process 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.

Man­age­ment and admin­is­tra­tive respon­si­bil­i­ty for the invest­ment pro­gram is here­by del­e­gat­ed to the Trea­sur­er who may estab­lish writ­ten pro­ce­dures for the oper­a­tion of the invest­ment program.

The pri­ma­ry objec­tive, in order of pri­or­i­ty, shall be:

(A) Legal­i­ty.  Con­for­mance with fed­er­al, state and oth­er legal requirements.

(B) Safe­ty.  Preser­va­tion of cap­i­tal and pro­tec­tion of invest­ment principal.

(C) Liq­uid­i­ty.  Main­te­nance of suf­fi­cient liq­uid­i­ty to meet oper­at­ing requirements.

(D) Yield.  Attain­ment of mar­ket rates of return.

The port­fo­lio should be reviewed peri­od­i­cal­ly as to its effec­tive­ness in meet­ing the County’s needs for safe­ty, liq­uid­i­ty, rate of return, diver­si­fi­ca­tion and its gen­er­al performance.

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.

The stan­dard of pru­dence to be used by invest­ment offi­cials shall be the “pru­dent per­son” stan­dard and shall be applied in the con­text of man­ag­ing an over­all portfolio.

This pol­i­cy includes all pub­lic funds of the County.

It is the pol­i­cy of the Coun­ty 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 Coun­ty and con­form­ing to all State and local statutes gov­ern­ing the invest­ment of pub­lic funds.