Chapter 5.02
INVESTMENT OF BOROUGH FUNDS

Sections:

5.02.010    General investment policy.

5.02.020    Authority.

5.02.030    Hold harmless.

5.02.040    Eligible moneys.

5.02.050    Investments.

5.02.060    Collateralization.

5.02.070    Investments placed.

5.02.080    Maturities.

5.02.085    Sale of borough-held notes.

5.02.090    Reports.

5.02.010 General investment policy.

Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of public funds, not for speculation, but for investment, considering the probable safety of capital, and the yield to be derived. Of primary importance is safety of capital, with yield being a secondary consideration. Each investment transaction shall seek to avoid capital losses from securities defaults or erosion of market value. [Ord. 550 § 5, 1989.]

5.02.020 Authority.

The finance director, or his designee in his absence, is the borough official responsible for investments. The assembly may, by resolution, establish additional criteria including, but not limited to, financial solvency ratios for depository banks, limitations on securities, and collateralization requirements not inconsistent with the Charter or borough ordinances to govern the investment of borough funds. [Ord. 550 § 5, 1989.]

5.02.030 Hold harmless.

The borough will hold the borough’s finance director and his designee harmless with regard to losses on investment transactions undertaken in accordance with the borough charter, borough ordinances and other investment policies authorized by the assembly by resolution. [Ord. 550 § 5, 1989.]

5.02.040 Eligible moneys.

Subject to any restrictions that may exist as to the derivation of the funds, all moneys in all borough funds are eligible for investment. [Ord. 550 § 5, 1989.]

5.02.050 Investments.

Investments shall be restricted to the following:

A. Treasury bonds, bills, notes, or other general obligation evidences of indebtedness of the United States or an agency or instrumentality of the United States, or of the State of Alaska, or of other states of the United States, or of this borough, of other cities of the state, and of boroughs of this state.

B. Fully insured certificates of deposit, savings deposits, and other interest-bearing deposit accounts in member banks insured by the Federal Deposit Insurance Corporation (FDIC) or the Federal Savings and Loan Insurance Corporation (FSLIC).

C. Fully collateralized certificates of deposits, savings deposits, or other interest-bearing deposit accounts of member banks insured by the Federal Deposit Insurance Corporation (FDIC) or the Federal Savings and Loan Insurance Corporation (FSLIC). Such deposits shall be fully collateralized for any amount of the deposit in excess of the FDIC or FSLIC insurance limits then in force.

D. Repurchase agreements where the general checking balance at the end of each business day is used to buy a security (as allowed under WMC 5.02.050(A), (B) or (C)) from the bank and held overnight. The bank agrees to repurchase the security at the beginning of the next business day and deposit back to the general checking. All repurchase agreements must meet all the investment guidelines as described in this chapter. [Ord. 563 § 4, 1990; Ord. 555 §§ 4, 5, 1990; Ord. 550 § 5, 1989.]

5.02.060 Collateralization.

All deposits that require collateralization shall be in accordance with the following requirements:

A. The market value of collateral must be maintained during the life of the investment at a level equal to or greater than the deposit.

B. All collateral securities must be delivered to and held by a third-party trustee bank under a written trust agreement.

C. An undivided interest in the securities pledged as collateral must be granted to the borough.

D. The trust agreement shall provide that upon trustee’s receipt of written notice that the depository is in default of repayment of any deposit of borough funds or any part thereof, the trustee shall deliver to the designated official of the borough upon his order, all or such part of the collateral securities held by the trustees as directed.

E. Securities which may be used as collateral are limited to negotiable treasury bills, notes and other general obligation evidences of the indebtedness of the United States or any agency of the United States or of the State of Alaska or a municipality of the state. [Ord. 550 § 5, 1989.]

5.02.070 Investments placed.

A. Investments may be placed with or through the following financial institutions:

1. Member banks insured by the FDIC or FSLIC; and/or

2. Broker dealers that are members of the New York Stock Exchange (NYSE), members of the Securities Investor Protection Corporation (SIPC) and registered broker dealers in Alaska.

B. To facilitate convenient placement of investments, borough funds up to a combined limit of $300,000 may be temporarily deposited for a period not to exceed 20 days in a cash management account or U.S. Government Securities money market fund sponsored by the financial institution through which such investments are being placed. [Ord. 555 § 6, 1990; Ord. 550 § 5, 1989.]

5.02.080 Maturities.

All investments shall have maturities measured from the date of purchase which do not exceed five years, except for investments that shall be put to specific uses (such as defeasance of debt or establishment of a linking fund) where the matching or maturity to the use is most important. [Ord. 583 § 4, 1992: Ord. 550 § 5, 1989.]

5.02.085 Sale of borough-held notes.

The borough may sell any presently held or future borough financed notes by bid or request for proposal process upon terms approved by the assembly through public process. [Approved by passage of Proposition No. 1 at regular election on October 5, 2004, as authorized by initiative petition certified on July 26, 2004.]

5.02.090 Reports.

The finance director shall prepare and submit to the borough assembly, at least once each quarter and otherwise upon request, a status report on all borough investments. [Ord. 550 § 5, 1989.]