1. SCOPE
The Board of Trustees of the Potsdam Public Library
acts as custodians of public funds and, as such, it is subject to
significant restrictions on eligible investments. In accordance with
General Municipal Law and subsequent court rulings, all funds in
the Library’s control must be invested in a limited number
of financial vehicles.
2. OBJECTIVES
The objectives of the Potsdam Public Library’s
investment activities are to adequately safeguard principal,
provide sufficient liquidity to meet all operating requirements,
and obtain a reasonable rate of return while adhering to all
applicable federal, state, and other legal requirements.
3. DELEGATION OF AUTHORITY
Responsibility for oversight of the investment program is delegated
to the Finance Committee of the Board of Trustees. This Committee
shall establish written procedures for the operation of the investment
program consistent with the investment guidelines outlined in this
policy.
4. PRUDENCE
All participants in the investment process shall seek to act responsibly
as custodians of the public interest and shall avoid any transaction
that might impair public confidence in the Potsdam 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.
All 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.
5. DIVERSIFICATION
It is the goal of the Potsdam Public Library to diversify its deposits
and investments by financial institution, by investment instrument,
and by maturity scheduling whenever prudent.
6. INTERNAL CONTROLS
The Finance Committee
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
and that transactions are executed in accordance with Board of Trustees
authorization, are recorded properly, and are managed in compliance with
applicable laws and regulations.
7. DEPOSIT OF PUBLIC FUNDS
The Potsdam Public Library has designated the
HSBC Bank of Potsdam for the deposit of public funds. The funds
are deposited into a money market account and transferred as
needed to specific checking accounts for operating purposes.
All funds are secured in accordance with the provisions of General
Municipal Law §10.
8. COLLATERALIZING OF DEPOSITS
All deposits of the Potsdam Public Library,
including, but not limited to, certificates of deposit and special
time deposits, which are in excess of the amount insured under
the provisions of the Federal Deposit Insurance Act shall be
secured in accordance with General Municipal Law §10.
- A pledge of “eligible securities” with an aggregate “market
value” or as provided by General Municipal Law §10, equal
to at least the aggregate amount of the public deposits for which collateral
is being sought.
- A pledge of a pro rata portion of a pool of eligible
securities, as defined by General Municipal Law §10, having in the aggregate a market value
at least equal to the aggregate amount of public deposits from all officers
making deposits within the state at such bank or trust company, together
with a security agreement from the bank or trust company. Such security
agreement shall comply with the provisions of General Municipal Law §10.
- 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.
- An eligible surety bond payable to the Library for an amount at
least equal to 100% of the aggregate amount of deposits and the agreed
upon interest, if any, executed by an insurance company authorized
to do business in New York State, whose claims-paying ability is
rated in the highest rating category by at least two nationally recognized
statistical rating organizations.
9. SAFEKEEPING AND COLLATERALIZATION
Eligible securities used for collateralizing
deposits shall be held by the depository and/or a third party bank
or trust company subject to security and custodial agreements in accordance
with the provisions of General Municipal Law §10.
10. PERMITTED INVESTMENTS
10.1 As authorized by General Municipal Law §11,
the Potsdam Public Library authorizes the Finance Committee to invest
monies not required for immediate expenditure, except monies the investment
of which is otherwise provided for by law, in instruments becoming
payable within such time as the proceeds shall be needed to meet expenditures
for which such monies were obtained, which may include one or more
of the following types of investments.
- special time deposit accounts in commercial
banks and trust companies located and authorized to do business in
New York State;
- certificates of deposit in commercial banks
and trust companies located and authorized to do business in New
York State;
- 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;
- with approval of the State Comptroller, obligations
issued pursuant to Local Finance Law §24 or §25 by any
municipality, school district or district corporation other than
the Potsdam Public Library;
10.2 All investment obligations shall be payable or redeemable at
the option of the Potsdam 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 or notes, shall be payable or redeemable at the option of
the Potsdam Public Library.
10.3 Except for
gift, grants, or bequests given to the Library as a true trust, which
are subject to the “prudent investor” provisions
of Estates, Powers and Trusts Law §§11-2.2 and 11-2.2, even
privately acquired funds are subject to these investment limitations.
11. AMENDMENT OF INVESTMENT POLICY
Potsdam Public Library shall have the power to
amend its investment policy from time to time in accordance with the
provisions of General Municipal Law §39.
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