HomeMy WebLinkAbout20213112.tiffRESOLUTION
RE: APPROVE WELD COUNTY INVESTMENT POLICY AND AUTHORIZE CHAIR AND
CHAIR PRO-TEM TO SIGN
WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to
Colorado statute and the Weld County Home Rule Charter, is vested with the authority of
administering the affairs of Weld County, Colorado, and
WHEREAS, the Board has been presented with an Investment Policy for the County of
Weld, Colorado, State of Colorado, by and the through the Board of County Commissioners of
Weld County, on behalf of the Treasurer's Office, with further terms and conditions being as stated
in said investment policy, and
WHEREAS, after review, the Board deems it advisable to approve said investment policy,
a copy of which is attached hereto and incorporated herein by reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld
County, Colorado, that the Investment Policy for the County of Weld, State of Colorado, by and
through the Board of County Commissioners of Weld County, on behalf of the Treasurer's Office,
be, and hereby is, approved.
BE IT FURTHER RESOLVED by the Board that the Chair and Chair Pro -Tern be, and
hereby are, authorized to sign said investment policy.
The above and foregoing Resolution was, on motion duly made and seconded, adopted
by the following vote on the 8th day of November, A.D., 2021.
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
ATTEST: djt,/f J;4 EXCUSED
Stev- oreno, Chair
Weld County Clerk to the Board
BY:
eputy Clerk
APP ED A
County A ttorney
Date of signature 1 l/152 -I
mes, Pr
Perry L. f ck
XCUSED
ike Freeman
Lori Sai
cc : TR (O47 ), ACT 00, FI()w/so/cP)
la/03421
2021-3112
TR0030
WELD COUNTY
INVESTMENT POLICY 2021
I. INTRODUCTION
Section 6-1 of the Weld County Home Rule charter was amended by the Weld County
voters on November 8, 2001, making the office of County Treasurer appointed by the
Board of Weld County Commissioners, effective January 1, 2003. In order to fulfill their
fiduciary responsibilities concerning the Treasurer's investments the Board of Weld
County Commissioners decided that an oversight committee, known as the Investment
Advisory Committee, should be created which includes the Treasurer, the Director of
Finance and Administration, CFO, the Controller, the Chair, and Chair Protem of the
Board of Weld County Commissioners.
This Investment Policy replaces any previous Investment Policy or Investment
Procedures of Weld County. The investment guidelines outlined below have been written
to comply with various regulatory requirements under which Weld County operates.
This Investment Policy was endorsed and recommended for adoption by the Weld
County Investment Advisory Committee October 2021.
II. SCOPE
The following investment policy addresses the methods, and procedures to ensure
effective and judicious fiscal and investment management of the County's funds. This
policy shall apply to the investment management of all financial assets and funds under
control of the County except for its employee retirement system fund, which is organized
and administered separately by the Weld County Retirement Board. These investment
transactions/activities are accounted for in the government's annual financial report and
include the following:
• General fund,
• Special Revenue funds,
• Debt Service funds.
• Capital Projects funds,
• Enterprise fund,
• Internal Service funds,
• Trust and Agency funds - Expendable Trust funds & Agency funds, and
• Any new fund created by the governing body, unless specifically exempted by
the governing body
2021-3112
III. INVESTMENT OBJECTIVES
All funds which are held for future disbursement shall be deposited and invested by the
County in accordance with Colorado State Statutes and ordinances and resolutions
enacted by the Board of Weld County Commissioners in a manner to accomplish the
following objectives:
1. Safety of Funds: Safety of principal is the foremost objective of the investment
program. Investments shall be undertaken in a manner that seeks to ensure the
preservation of capital in the overall portfolio. The objective will be to mitigate
credit risk and interest rate risk.
A. Credit Risk. The County will minimize credit risk, the risk of loss due
to the failure of the security issuer, by:
a. Limiting investments to the safest types of securities;
b. Pre -qualifying the financial institutions, broker/dealers, and advisors
with which the County does business, and
c. Diversifying the investment portfolio so that potential losses on
individual securities will be minimized.
B. Interest Rate Risk: The County will minimize the risk that the market
value of securities in the portfolio will fall due to changes in general
interest rates by:
a. Structuring the investment portfolio so that securities mature
sufficiently close to cash requirements for ongoing operations, thereby
minimizing the potential need to sell securities on the open market
prior to maturity and
b. Investing operating funds primarily in short- to intermediate -term
securities, approved local government investment pools, approved
money market mutual funds and repurchase agreements.
2. Liquidity of Funds: The investment portfolio shall remain sufficiently liquid to
meet all operating requirements that may be reasonably anticipated. To ensure
that adequate funds are available to pay the County's projected financial
obligations, investments will be purchased that reasonably match the anticipated
cash disbursements of the County.
Since all possible cash demands cannot be anticipated, the portfolio shall consist
largely of securities with active secondary or resale markets so that the potential
for a realized loss, if an early liquidation of a security is necessary, can be
minimized.
A core of stable funds may be identified through cash flow analysis that is
available for investing in longer -term securities. Although the market value of
these longer term securities may fluctuate significantly, the fluctuation will not
affect the liquidity of the portfolio since they can be held to maturity in all but
extreme circumstances.
3. Yield: The County's portfolio shall earn a competitive market rate of return on
available funds throughout budgetary and economic cycles. In meeting this
objective, investment management personnel will take into account the County's
investment risk constraints and cash flow needs.
The County's overall investment program shall be designed and managed with a degree
of professionalism that is worthy of the public trust. The County recognizes that no
investment is totally free of risk and that the investment activities of the County are a
matter of public record. Accordingly, the County recognizes that occasional measured
losses are inevitable in a diversified portfolio and shall be considered within the context
of the overall portfolio's return, provided that this policy has been followed and that the
sale of a security prior to maturity is in the best long-term interest of the County.
IV. DELEGATION OF AUTHORITY
Authority to manage the investment program is granted to the Treasurer derived from
Article 11 of the Weld County Home Rule Charter. Responsibility for the operation of
the investment program is hereby delegated to the Treasurer, who shall carry out
established written procedures and internal controls for the operation of the investment
program consistent with this investment policy. Procedures shall include references to:
safekeeping, delivery vs. payment, investment accounting, repurchase agreements and
banking services contracts. No person may engage in an investment transaction except as
provided under the terms of this policy and the procedures established by the Treasurer.
The Treasurer shall be responsible for all transactions undertaken and shall establish a
system of controls to regulate the activities of subordinate officials.
The Treasurer may engage the support services of outside professionals, so long as it can
be demonstrated that these services produce a net financial advantage and necessary
financial protection of the County's resources. Such services may include engagement of
financial advisors in conjunction with debt issuance, portfolio management support,
special legal representation, third party custodial services, and appraisal of independent
rating services.
V. PRUDENCE AND INDEMNIFICATION
The standard of prudence, as defined by the Colorado Revised Statutes, to be used for
managing the County's assets is the "prudent investor" rule applicable to a fiduciary,
which states that a prudent investor "shall exercise the judgment and care, under
circumstances then prevailing, which men of prudence, discretion, and intelligence
exercise in the management of the property of another, not in regard to speculation but in
regard to the permanent disposition of funds, considering the probable income as well as
the probable safety of their capital" (CR5 15-1-304, Standard for Investments.)
The Director of Finance, Treasurer and other authorized persons acting in accordance
with written procedures 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 fashion and the liquidity and the
sale of securities are carried out in accordance with the terms of this policy. The
Treasurer will be responsible for ensuring that sufficient liquidity exists to maintain the
County's operations in the event of adverse market conditions or claims.
VI. ETHICS AND CONFLICTS OF INTEREST
As noted in Section 16-9 (2) (b) of the Weld County Home Rule Charter: "Neither the
Treasurer nor employees of the Treasurer's Office shall have any proprietary interest in
any financial institution in which the County maintains deposits."
VII. ELIGIBLE INVESTMENTS AND TRANSACTIONS
All investments will be made in accordance with the Colorado Revised Statutes (CRS) as
follows CRS 11-10.5-101, et seq. Public Deposit Protection Act, CRS 11-47.101, et seq.
Savings and Loan Association Public Deposit Protection Act; CRS 11-60-101, et seq.
U.S. Agency Obligations; CRS 24-75-601, et seq. Funds -Legal Investments for
Governmental Units; CRS 24-75-603, et seq. Depositories; and CRS 24-75-701, et seq.
Local Governments -Local Government Pooling. Any revisions on extensions of these
sections of the CRS will be assumed to be part of this policy immediately upon being
enacted.
This investment policy further restricts the investment of County funds to the following
types of securities and transactions:
A. Treasury Obligations: Treasury bills, Treasury notes, Treasury bonds and
Treasury STRIPS with maturities not exceeding five years from the date of
purchase.
B. Federal Instrumentality Securities: Debentures, discount notes, global securities,
callable securities and stripped principal on coupons with maturities not
exceeding five (5) years from the date of purchase issued by the following only:
Federal National Mortgage Association (FNMA), Federal Farm Credit Banks
(FFCB), Federal Home Loan Banks (FHLB), Federal Home Loan Mortgage
Corporation (FHLMC. For the purposes of this paragraph, a `weighted average
life" will not constitute a stated final maturity.
C. Repurchase Agreements with a defined termination date of 180 days or less
collateralized by U. S. Treasury and agency securities listed in item 1 and 2 above
with a maturity not exceeding 10 years. Title must transfer to the County of Weld
or the County must have a perfected security interest. For the purpose of this
section, the term "collateral' shall mean "purchased securities" under the terms of
the County's approved Master Repurchase Agreement. The purchased securities
shall have a fixed coupon rate and an original minimum market value including
accrued interest of 102 percent of the dollar value of the transaction and the
collateral maintenance level shall be 102 percent. Collateral shall be held in the
County's custodial bank as safekeeping agent, and the market value of the
collateral securities shall be marked -to -the -market daily based on that day's bid
price.
Repurchase Agreements shall be entered into only with dealers who have
executed a Master Repurchase Agreement with the County and who are
recognized as Primary Dealers with the Market Reports Division of the Federal
Reserve Bank of New York.
Approved counterparties to repurchase agreements shall have at least a short-term
debt rating of A-1 or the equivalent and a long-term debt rating of A or the
equivalent from one on more nationally recognized organizations which regularly
rates such obligations.
D. Local Government Investment Pools authorized under CRS 24-75-701, 702 which
are managed to a stable value (usually $1 per share).
E. Certificates of Deposit or savings accounts in state or national banks or in state or
federally chartered savings and loans that are state approved depositories per CR5
24-75-603, et seq. (as evidenced by the State Banking Board) and are insured by
the FDIC. Certificates of deposit which exceed the FDIC insured amount shall be
collateralized in accordance with the Colorado Public Deposit Protection Act.
[Allow CD purchases up to the FDIC limit in US banks outside of Colorado.]
F. Negotiable Certificates of Deposit (CDs with a CUSIP number) must meet the
same rating and maturity requirements for debt securities under item F below.
G. Corporate or Municipal Debt that does not exceed five (5) years in maturity at the
time of purchase with a AAA rating; or does not exceed three (3) years in
maturity at the time of purchase if it is AA rated.
H. Commercial Paper in accordance with Colorado State statutes in 24-75-603.
I. Money Market Mutual Funds registered under the Investment Company Act of
1940 that meet Federal Securities Regulation 2A-7 standards.
Any deviation from this list must be pre -approved by the Board of Weld County
Commissioners in writing.
VIII. INVESTMENT DIVERSIFICATION
It is the intent of the County to diversify the investments in the portfolio to avoid
incurring unreasonable risks inherent in over -investing in specific instruments, individual
financial institutions or maturities. The asset allocation in the portfolio should, however,
be flexible depending upon the outlook for the economy, the securities market, and the
County's anticipated cash flow needs.
A minimum of 50% of the investment assets of the County will be maintained in those
securities listed in items A, B, C, D, and H under Eligible Investments and Transactions.
IX. INVESTMENT MATURITY AND LIQUIDITY
Investments shall be limited to maturities not exceeding five (5) years unless otherwise
approved in writing by the Board of Weld County Commissioners for special
circumstances (e.g., the reinvestment of bond proceeds). The County shall maintain at
least 10% of its total investment portfolio in instruments maturing in 90 days or less.
X. COMPETITIVE TRANSACTIONS
Each investment transaction shall be competitively transacted with broker/dealers who
have been authorized by the County. Securities shall be purchased at the then best
offering price based on the market conditions at that time.
XI. SELECTION OF BROKER/DEALERS AND FINANCIAL INSTITUTIONS
ACTING AS BROKER/ DEALERS AND FINANCIAL INSTITUTIONS
PROVIDING INVESTMENT SERVICES.
The Treasurer shall maintain a list of authorized broker/dealers and financial institutions
which are approved for investment purposes, and it shall be the policy of the County to
purchase securities only from those authorized institutions and firms.
To be eligible, a firm/investment bank, bank, or savings and loan institution must meet at
least one of the following criteria:
1. Meet the securities dealer's capital adequacy requirements of the New York
Federal Reserve Bank. The capital requirements are found in the New York
Federal Reserve Bank publication entitled, Capital Adequacy Guidelines for
Governmental Securities Dealers, or
4. Be an FDIC member and be listed as an "Eligible Public Depository" as prepared
by the State Banking Board for banks and for Savings and Loans to be approved
as an "Eligible Public Depository" by the Colorado division of Financial services.
Broker/dealers and other financial institutions will be selected by the Treasurer on the
basis of their expertise in public cash management and their ability to provide service to
the County's account. Each investment firm authorized by the Treasurer shall be a
FINRA reporting broker/dealer. Broker/Dealers shall also attest in writing that they have
received a copy of this policy.
A list of approved Broker/Dealers, Banks, and Savings & Loan institutions is included in
various "Resolutions" performed by the Board of County Commissioners of Weld
County, Colorado.
XII. SELECTION OF BANKS AND SAVINGS AND LOANS (DESIGNATION
UNDER CRS 11-10.5-106 (Banks) and CRS.11-47-105 (Savings & Loan)) AS
DEPOSITORIES AND PROVIDERS OF GENERAL BANKING SERVICES AND
ASSET POOLS AS DEPOSITORIES
The Treasurer shall maintain a list of authorized banks, savings and loans, and public
asset pools as depositories for Weld County funds which are approved by the Board of
Weld County Commissioners by resolution per CRS 30-10-708 to provide depository and
other banking services for the County. To be eligible for authorization, a bank is required
to be designated an eligible public depository by the state banking board and a savings
and loan must be designated an eligible public depository by the state commissioner of
Banking. Additionally, banks or savings and loans, in the judgment of the Treasurer, who
no longer offer adequate safety or service to the County, will be removed from the
approved list. The list will be updated annually if any changes are requested to insure
compliance. Depositories shall be selected based on ratings and competitive rates of
return.
XIII. SAFEKEEPING AND CUSTODY
The Treasurer shall approve one or more financial institutions to provide safekeeping and
custodial services for the County. A County approved Safekeeping Agreement shall be
executed with each custodian bank prior to utilizing that bank's safekeeping services. To
be eligible for designation as the County's safekeeping and custodian bank, a financial
institution shall meet the following criteria:
1. Have a Bauer rating of 3 stars or better out of possible 5 -star rating or
2. Have a PMA Financial Network, Inc. overall rating of three minus or better on a scale
of one to five with one being the highest quality for the most recent reporting quarter
before the time of selection.
Custodian banks will be selected on the basis of their safety and ability to provide service
to the County's account with competitive pricing of their safekeeping related services.
Custodian banks shall be selected through the County's procurement process, which shall
include a formal request for proposal as needed. Custodial banks should be in the highest
rating categories.
SAFEKEEPING
All purchased securities will be perfected in the name of the County. Sufficient evidence
to title shall be consistent with modern investment, banking and commercial practices.
All investment securities, except non-negotiable certificates of deposit and money market
funds, purchased by the County will be held by a PDPA eligible Colorado State bank or
delivered by either book entry or physical delivery and will be held in third -party
safekeeping by a County approved custodian bank, its correspondent New York Bank or
the Depository Trust Corporation (DTC).
All non -book entry (physical delivery) securities shall be held by Weld County's
designated custodian bank for the benefit of the county. The County may utilize the
services of the Depository Trust Corporation (DTC) as a depository for delivery of non-
wireable securities.
All custodies securities that are registered shall be registered in the name of the County or
in the name of a nominee of the County or in the name of the custodian or its nominee or,
if in a clearing corporation, in the name of the clearing corporation or its nominee.
The County's custodian will be required to furnish the County with monthly reports of
holdings of custody securities as well as an account analysis report of monthly securities
activity.
XIV. PERFORMANCE BENCHMARKS
The County of Weld shall use as a goal a dynamic benchmark rate of return or the current
money market rate for the County's fixed income investment portfolio that corresponds
to the yield for the current money market average return expressed as an annualized
basis. All fees involved with managing the portfolio should be included in the
computation of the portfolio's rate of return.
The Treasurer shall present to the Investment Advisory Committee of Weld County a
review of the current investments and the portfolio's adherence to appropriate risk levels
and a comparison between the portfolio's total return and the established investment
objectives and goals.
XV. REPORTING
Accounting and reporting on the County's investment portfolio shall conform to
Generally Accepted Accounting Principles (GAAP) and the Governmental Accounting
Standards
XVII. POLICY REVISIONS
This investment policy shall he reviewed as needed by the Director of Finance and
Treasurer and may be amended by the Investment Advisory Committee of Weld County
as conditions warrant. The data contained in the annexes to this policy may be updated by
the Treasurer as necessary, provided the changes in no way affect the substance or intent
of this policy.
Exhibit I
Authorized Personnel
The following persons are authorized to transact investment business and wire funds for
investment purposes on behalf of the Weld County:
John Lefebvre, Treasurer
Rene Fielder, Assistant Treasurer
INVESTMENT COMMITTEE
Lefebvre reasurer
Barb Connolly- C
on Warden — Finance Director
Steve Moreno - Board Chair
Sc tt K. James, Pro-Tem
November 2, 2021
Date
/163/07/
Date
/
D e
/l
Da
NOV 0 8 2021
Date
Hello