The Avon Lake Public Library’s Investment Policy is developed and implemented in accordance with Senate Bill 81 and Section 135, “Uniform Depository Act,” of the Ohio Revised Code (O.R.C.). This Investment Policy applies to all active, interim and inactive funds that the Library has received, and is held accountable for, from all public and private sources.
Investment Authority Defined
The Investing Authority will be the Clerk-Treasurer, Deputy Clerk-Treasurer or such Officer or employee of the Library as the Avon Lake Public Library Board shall designate. The individuals comprising the “Investing Authority” are authorized to execute deposit/investment decisions and/or transactions in accordance with limits as directed by the Library Board of Trustees. The Investing Authority shall act only in accordance with the direction of the Board as described in this Investment Policy. The Library’s Clerk-Treasurer is responsible for establishing investment procedures consistent with this policy, and for establishing written internal controls designed to prevent losses arising from fraud, errors, imprudent actions by an employee, misrepresentation by third-parties or unanticipated changes in financial markets.
Ethics and Conflicts of Interest
Employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the Library’s investment program, or that could impair their ability to make impartial decisions.
The Investment Policy shall be presented to, reviewed and approved annually by the Avon Lake Public Library’s Finance Committee and Board of Trustees in open public meetings as prescribed by State of Ohio law.
Any laws enacted by the State of Ohio that affect the Avon Lake Public Library’s Investment Policy shall, upon their effective date, supersede any and all provisions to the contrary in this Investment Policy.
The Investing Authority shall make investments in good faith, in a manner reasonably believed to be in or not opposed to the best interests of the Library, and with the exercise of that degree of care that an ordinarily prudent person in a like position would use under similar circumstances. The prudent person standard requires that the Investing Authority seek investments that will achieve the prescribed objectives set forth in the Investment Policy.
Maintaining the Public Trust
The Investing Authority shall act as the custodian of the public trust in all deposit/investment program activities. The Investing Authority shall recognize that the deposit/investment program is subject to public review and evaluation. The overall deposit/investment program shall be managed with a degree of professionalism that is worthy of the public trust.
The following deposit/investment objectives will be applied in the management of funds of the Avon Lake Public Library:
Preservation of Principal
The deposit/investment program shall preserve capital and protect investment principle within defined parameters.
Maintenance of Liquidity
The deposit/investment program shall maintain sufficient liquidity to meet reasonably anticipated fiscal operating requirements on an on-going basis throughout the fiscal cycle.
Maximization of Income
The deposit/investment program shall strive to attain the best total return or yield on deposited and invested funds of the Library as is reasonable and prudently achievable within defined parameters.
Minimization of Risk
All attempts shall be made to minimize risks inherent in investment through diversification so as to eliminate the risk of loss resulting from an over-concentration of funds in a specific maturity, issuer, industry, geographic area, or class of securities.
Minimization of Costs
All attempts shall be made to minimize the costs of financial transactions related to implementing investment strategies.
The Investing Authority may deposit and/or invest in the following instruments at a price not to exceed the fair market value of the specific investment instrument:
Bills, notes, bonds, or other obligations of, or guaranteed by the United States, or those for which the faith of the United States is pledged for payment of principal and interest thereon.
Bills, notes, bonds or other obligations or securities issued by any U.S. Government Agency, whether or not guaranteed by the United States including, but not limited to Federal National Mortgage Association, Federal Farm Credit Bank, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Government National Mortgage Association, Student Loan Marketing Association, etc.
Certificates of deposit, including but not limited to passbook accounts, in any eligible institution insured by the Federal Deposit Insurance Corporation and having an office within the 50 U.S. states.
Checking and savings accounts, including money market deposit accounts, in any eligible institution insured by the Federal Deposit Insurance Corporation and having an office located within the territorial limits of the State of Ohio. The amount of Library funds in depository accounts at any one eligible institution shall not exceed the amount insured by the Federal Deposit Insurance Corporation. (12 C.F.R. 330.15)
Bonds or other obligations of the State of Ohio that are rated A or better by Moody’s or SP-1 or better by Standard and Poor’s, or its equivalent.
No-load money market mutual funds consisting exclusively of Treasury or Federal Agency obligations and Repurchase Agreements secured by Treasury, or Federal Agency obligations made through eligible institutions.
Repurchase Agreements collateralized as required by the Ohio Revised Code with Treasury or Federal Agency obligations and made through eligible institutions for no longer than thirty days.
STAR Ohio, the State Treasury Asset Reserve of Ohio.
As is reasonably prudent, the Investing Authority will attempt to match deposits/investments with anticipated cash flow requirements to take best advantage of prevailing economic and market conditions. No bond, bond mutual fund, or regular money market fund investment shall have a maturity date, or average maturity date, of more than five (5) years from its date of purchase, unless the investment is matched to specified obligation or debt of the Library. Individually purchased bonds and obligations shall not carry any provisions for call before maturity. Any Investment made must be entered into with a reasonable expectation to be held to maturity unless defined opportunities exist to better achieve deposit/investment objectives denoted in this Investment Policy.
Authorized Financial Institutions and Broker/Dealers
Any financial institution located within the State of Ohio as defined by O.R.C. 135.03 is eligible to serve as an approved depository and/or investment provider contingent upon having an active executed Depository Agreement on file with Investing Authority. Four (4) times per year, a depository is required to supply the Investing Authority the amount of public monies deposited by the Investing Authority and secured pursuant to division (B), (135.181) of the O.R.C. and the total market value of the pool of securities pledged to secure public monies held by the depository, including those deposits by the Library.
The Investing Authority shall deal only with brokers or dealers who are registered as such with The Securities and Exchange Commission and, which are licensed as a dealer with the Ohio Division of Securities and as defined in O.R.C. 135.03. Such brokers or dealers should also be members of the National Association of Securities Dealers, Inc. Securities brokers and dealers shall be utilized only after an analysis performed by the Investing Authority has revealed that the broker or dealer is adequately financed to conduct business with the Library, and that there are no regulatory actions or issues nor lawsuits pending that would materially affect the firm’s business.
The Clerk-Treasurer shall maintain a current list of financial institutions and security brokers or dealers who have been specifically authorized by the Board of Trustees to provide services to the Library.
Certification by all Parties
The Investing Authority shall distribute a copy of this Investment Policy and any revisions or updated versions to each of the eligible institutions and brokers and dealers desiring to do business with the Library. It shall be the responsibility of the designated officer of each eligible financial institution, broker, and dealer to certify that they have reviewed this Investment Policy and agree to comply with this Investment Policy’s content and all applicable State of Ohio and Federal laws. Furthermore, the aforementioned officer shall agree to disclose any potential conflicts or risks to Library funds that could arise out of financial transactions between the financial institutions, brokers, and dealers and the Library.
This Investment Policy, along with any future revisions or updates, will be filed with the Auditor of State, Attention: Clerk of the Bureau, P.O. Box 1140, Columbus, Ohio 43216-1140, in accordance with State of Ohio Law.
Credit of Interest
Interest will be credited to each fund on which it was earned.
The Clerk-Treasurer will report at each regularly scheduled meeting of the Board of Trustees the results of such investments, showing interest credited to the proper accounts and fund. The Clerk-Treasurer will also calculate and periodically report to and as directed by the Board the yields or rates of return on the Library’s deposits and investments.
March 13, 2003