Investment Policy

(STRUCTURED IN CONFORMANCE WITH CHAPTER 708, LAWS OF 1992)

SCOPE

This investment policy applies to all monies and other financial resources available for investment.

OBJECTIVES

The primary objectives of the Center Moriches Free Public Library’s investment activities are, in priority order:

• To conform with all applicable Federal, State and other legal requirements (legal). 
• To adequately safeguard principal (safety).
• To provide sufficient liquidity to meet all operating requirements (liquidity). 
• To obtain a reasonable rate of return (yield).

DELEGATION OF AUTHORITY

The Library’s Board of Trustees’ responsibility for administration of this investment program is delegated to the Director or her designee.  Established procedures shall include an adequate internal control structure to provide a satisfactory level of accountability based on a data base or records incorporating description and amounts of investments, transaction dates, and other relevant information and regulate the activities of subordinate employees.

DIVERSIFICATION

It is the policy of the Center Moriches Free Public Library to diversify its deposits and investments by financial institution, by investment instrument, and by maturity scheduling.

INTERNAL CONTROLS

It is the policy of the Center Moriches Free Public Library for all monies collected by any officer or employee of the Library to transfer those funds to the financial office for deposit in a timely manner. The Director or her designee 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, that transactions are executed in accordance with management’s authorization and recorded properly, and are managed in compliance with applicable laws and regulations.

DESIGNATION OF DEPOSITORIES

The banks authorized for the deposit and investment of Library monies shall be approved annually by the Board of Trustees at their reorganization meeting.

The Library shall diversify its deposits with a minimum of two institutions and shall not exceed $7,000,000 in deposits with any institution.

DEPOSIT OF FUNDS

The Director, or a designee, is authorized to deposit all available funds in the short-term account that they feel best meets the Library’s current financial needs.  Funds may only be deposited into accounts that are FDIC insured with pledged collateral.  

The Director, or a designee, is to report the deposit of all Library funds to the Board of Trustees in the monthly financial report.

The Board of Trustees expects that the Director, or designee, will deposit all available Library funds into authorized accounts in a timely manner.

COLLATERALIZING OF DEPOSITS

In accordance with the provisions of General Municipal Law ss10, all deposits of the Library, including certificates of deposit and special time deposits, in excess of the amount insured under the provisions of the Federal Deposit Insurance Act shall be secured by one of the following:

1. By a pledge of “eligible securities” with an aggregate “market value” as provided in General Municipal Law ss10, equal to the aggregate amount of deposits from the categories designated in the Appendix to this policy.
2.   By an eligible “irrevocable letter of credit” issued by a qualified bank, other than the bank with deposits in favor of the Center Moriches Free Public Library, for a term not to exceed 90 days with an aggregate value equal to 140% of the aggregate amount of the 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.

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.

The security agreement shall provide that eligible securities are being pledged to secure Library deposits together with agreed upon interest, if any, and any costs or expenses arising out of the collection of such deposits upon default.  It shall also provide the conditions under which the securities may be sold, presented for payment, substituted or released and the events which will enable the Center Moriches Free Public Library to exercise its rights against the pledged securities.  

The custodial agreement shall provide that securities held by the bank or trust company, or agent of and custodian for the Library, will be kept separate and apart from the general assets of the custodial bank or trust company and will not, in any circumstances, be commingled with or become part of the backing for any other deposit or other liabilities. The agreement should also describe that the custodial shall confirm the receipt, substitution or release of the securities.  

The agreement shall provide for the frequency of reevaluation of eligible securities and for the substitution of securities when a change in the rating of a security may cause ineligibility.  Such agreement shall include all provisions necessary to provide the Library a perfected interest in the securities.

PERMITTED INVESTMENTS

Authorized by General Municipal Law ssll, the Library authorizes the Director or her designee to invest monies not required for immediate expenditure for terms not to exceed its projected cash flow needs in the following types of investments:  Money Market accounts, certificates of deposit, savings accounts and checking accounts.

All investment obligations shall be payable or redeemable at the option of the Library within such times as the proceeds will be needed to meet expenditures for purposes for which the monies were provided.

Appendix

Schedule of Eligible Securities

1. Obligations issued, or fully insured or guaranteed as to the payment of principal and interest, by the United States of America, an agency thereof or a United States government sponsored corporation.
2. Obligations partially insured or guaranteed by any agency of the United States of America, at a proportion of the Market Value of the obligation that represents the amount of the insurance guaranty.
3. Obligations issued or fully insured or guaranteed by the State of New York, obligations issued by a municipal corporation, school district or district corporation of such State or obligations of any public benefit corporation which under a specific State statute may be accepted as security for deposit of public monies.
4. Obligations issued by states (other than the State of New York) of the United States rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization.
5. Obligations of counties, cities and other governmental entitis of a state other than the State of New York having the power to levy taxes that are backed by the full faith and credit of such governmental entity and rated in one of the three highest rating categories by at least one nationally recognized statistical rating.  

 

Approved by the Board of Trustees on 7/13/21