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Scope of Investment Policy
This Investment Policy applies to the investment activities of all funds under the statutory jurisdiction of the Will County Treasurer. All financial assets of funds of Will County (County) shall be administered in accordance with the provisions of this Policy by the Will County Treasurer.
Objectives of Investment Policy
The purpose of the Investment Policy of the County Treasurer is to establish cash management and investment guidelines for the stewardship of public funds. Specific objectives include:
- Safety of principal is the foremost objective of the Investment Policy of the County Treasurer. Each investment transaction shall seek to first ensure that capital losses are avoided, whether they be from securities defaults or erosion of market value.
- The County Treasurer shall avoid incurring unreasonable risks regarding specific security types and/or individual financial institutions.
- The County’s investment portfolio shall remain sufficiently liquid to enable the County Treasurer to meet all operating requirements, which may be reasonably anticipated in any County fund.
- The investment portfolio of the County shall be designed with the objective of meeting or exceeding the Chicago market collateralized certificate of deposit rates. The investment program shall seek to augment returns at this threshold, consistent with risk limitations identified herein and prudent investment principles.
- In managing the investment portfolio, the County Treasurer shall avoid any transaction that might impair public confidence in the government of the County. 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.
Responsibility for the Investment Policy
Management responsibility for the Investment Policy is provided by law to the County Treasurer, who shall establish procedures for the operation of an investment program consistent with this Policy. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under terms of this Policy. The County Treasurer or Deputy Treasurers shall be responsible for all transactions undertaken by their employees delegated for investment transactions.
Cash management is based upon the realization that there is a time-value to money. All monies due the County shall be collected as promptly as possible and deposited in an approved financial institution. No idle cash shall be permitted to rest uninvested.
One of the objectives of the cash management procedures is to exceed compliance with Illinois Compiled Statutes, 30-ILCS 225/1 which states: “When such deposits become collected funds and are not needed for immediate disbursement, they shall be invested within two working days at prevailing rates or better.”
The County maintains its accounting records on the basis of funds and account groups, each of which is considered a separate accounting entity. All investment transactions shall be recorded in the various funds of the County in accordance with generally accepted accounting principles as promulgated by the Government Accounting Standards Board.
It shall be the Policy of the County Treasurer to select financial institutions on the following basis:
The County Treasurer will not maintain funds in any financial institution that is not a member of the Federal Deposit Insurance Corporation. Furthermore, the County Treasurer will not maintain funds in any financial institution that does not collateralize all funds in excess of the FDIC insurable limits.
Financial institutions must meet minimum regulatory capital requirements recommended by their regulatory agency, to be eligible for investments of County Funds in excess of FDIC limits.
The County Treasurer will maintain operating and investment accounts in the financial institutions located within the County. However, approved depositories not located within the County may be used by the County Treasurer for interest rate competitive reasons or if the County financial institutions are unable to assume the deposits for any reason.
The County Treasurer will maintain for inspection current call reports for each financial institution named as depository. If, for any reason, the information furnished is considered by the County Treasurer to be insufficient, the County Treasurer may request additional data. The refusal of any institution to provide such data upon request may serve as sufficient cause for the withdrawal of County funds.
The County Treasurer may invest in any of the types of securities as approved by the Illinois Compiled Statutes.
Maturities of investments of the various funds of the County shall be determined to enable the County Treasurer to have available, sufficient cash for all operating purposes. Investments may be purchased with maturities to match cash flow needs, future projects, or liability requirements.
It is the Policy of the County Treasurer to require that funds on deposit in a Depository bank (hereinafter called Depository) in excess of FDIC insured limits, be secured by U.S. Government or U.S. Government Agencies securities, provided that the amount of the securities pledged will be not less than 102% of the fair market value of the net amount of public funds secured; and any Depository pledging securities from this section must have such securities held in book entry form in the Federal Reserve System, in a Custodian bank other than the Depository, and in an account designated by the pledging Depository as a customer account and held in safekeeping and evidenced by a safekeeping agreement; except, the Depository maintaining the tax distribution account, may maintain pledged securities for the tax distribution account and its current levy account, in an account designated as a Public Funds Collateral account. Each Depository’s internal records shall identify Will County as the owner or pledgee of the securities.
Collateral agreements will preclude the release of the pledged securities, without authorization from the County Treasurer, but they will allow for an exchange of pledged securities of like value; except that the Depository maintaining the tax distribution account may release securities, pledged for the tax distribution account and its current levy account, which exceed the fair market value of the net amount of public funds secured, without authorization from the County Treasurer.
Any Depository pledging securities under this section shall supply a monthly report at the end of each month, listing a description of the securities pledged and the market value for said securities. This report shall be signed by an officer of the Depository and shall contain verification that such pledged securities listed therein are current and up to date.
Collateral for CDARS® and Illinois Funds®
Funds invested with a Depository bank in a Certificate of Deposit Account Registry Service® or CDARS® will not require collateral.
- The Depository bank is a member of a network of FDIC-insured banks in the CDARS® program.
- The CDARS® program allocates the County Treasurer’s funds among several network banks in increments of less than $100,000 so that all funds are eligible for full FDIC protection.
- The Depository bank will collateralize funds on deposit before and after the transfer of funds to and from the CDARS® program.
Funds deposited through the Illinois Funds® will be fully collateralized in the aggregate.
- Will County as a participant in the Illinois Funds® shall have individual investment accounts representing a proportionate share of the pool assets and its respective collateral. Therefore, no collateral is separately identified for Will County’s accounts.
- Illinois Funds® secures all deposits with U.S. Treasury and/or U.S. Agency obligations at a minimum of 102% of the market value of the securities pledged.
- Annual financial audit reports of the Illinois Funds® are available from the Illinois Auditor General.
The County Treasurer shall prepare a monthly investment report that provides:
- Type of investment
- Interest rate
From time to time the County Treasurer may implement policies and improvements that might be made in the Investment Policy. Any changes shall be at the sole discretion of the County Treasurer.
The above standards are established as guidelines for professional responsibility and shall be applied in the context of managing the County’s overall portfolio. The standard of prudence to be used by the County Treasurer shall be the “prudent person” standard which states:
Investments shall be made with judgement 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 possible income to be derived.
Adopted by Will County Treasurer Pat McGuire on November 19, 2007.