Chapter 5.12
INVESTMENT POLICY

Sections:

5.12.010    Definitions.

5.12.020    Authorized investments.

5.12.010 Definitions.

When used in this chapter, the following words and phrases shall have the meanings set forth in this section:

“Bank” means a state or federally chartered commercial or mutual bank, savings and loan association or credit union located in the United States and having insurance of accounts through the appropriate insuring agency of the United States.

“Certificate of deposit” means a nonnegotiable certificate of deposit or other depository agreement issued or to be issued to the city by a bank.

“Government obligations” means interest-bearing obligations of the United States, or for the payment of principal and interest on which the full faith and credit of the United States are pledged.

“Moody’s” means Moody’s Investors Service, its successors and assigns, or if such organization shall be dissolved or liquidated or shall no longer perform the functions of a securities rating organization, any other nationally recognized securities rating organization designated by the finance director.

“Rated bank” means a bank:

1.    Whose short-term obligations are rated at all times “A-1” or better by S&P and “P-1” or better by Moody’s;

2.    Whose letters of credit secure third-party debt issues rated at least “A” by S&P or Moody’s; or

3.    Which is a subsidiary of a one-bank holding company all of whose commercial paper has the highest rating given by S&P or Moody’s or whose long-term debt issues are rated at least an “A” by S&P or Moody’s.

“S&P” means Standard & Poor’s Ratings Group, its successors and assigns, or, if such organization shall be dissolved or liquidated or shall no longer perform the functions of a securities rating organization, any other nationally recognized securities rating organization designated by the finance director. (Ord. 08-29 § 6, 2008; Ord. 01-56 § 2: Prior code § 6.30.010)

5.12.020 Authorized investments.

A.    In order to provide maximum security for the investment of city funds and to provide the greatest interest revenue consistent with safety, only the following investments of city funds will be authorized:

1.    Government Obligations. Shares of SEC registered money market mutual funds conforming to Rule 2a-7 of the Investment Company Act of 1940 that invest primarily in direct obligations of the United States and repurchase agreements backed by those obligations, and rated in the highest category by S&P and Moody’s.

2.    Commercial Paper. Having original maturities of not more than two hundred seventy (270) days and rated at all times “A-1” or better by S&P and “P-1” or better by Moody’s; and bearing interest at a rate at least twenty-five basis points (.25%) above the rate of interest on United States Treasury obligations of the same maturity at the time of purchase.

B.    Interest bearing obligations of a corporation, or of any state of the United States of America or any political subdivision thereof, which obligations at all times are rated at least “AA” by S&P or Moody’s; provided, that any such obligation of a corporation shall bear interest at a rate of at least twenty-five basis points (.25%) above the rate of interest on the United States Treasury obligations of the same maturity at the time of purchase.

C.    Certificates of deposit of any rated bank; provided, that such certificates of deposit are:

1.    Fully insured by an appropriate insuring agency of the United States; and

2.    To the extent not so insured, collateralized with government obligations held by a third party custodian, in an amount equal to one hundred two percent (102%) of the principal and unpaid accrued interest.

D.    Repurchase agreements with primary dealers or rated banks, collateralized with government obligations held by a third-party custodian, in an amount equal to one hundred two percent (102%) of the principal and unpaid accrued interest.

E.    The Alaska Municipal League Investment Pool, Inc. (Ord. 01-56 § 3: prior code § 6.30.020)