Chapter VI
INVESTMENT POLICY OF THE TOWN OF HIGHLAND Revised 10/21
Rule 1.0 General policy. Revised 10/21
Rule 2.0 Scope. Revised 10/21
Rule 3.0 Standard of investment practice and review. Revised 10/21
Rule 4.0 Investment policy objectives and permissible instruments. Revised 10/21
Rule 5.0 Performance standards. Revised 10/21
Rule 6.0 Ethics and conflicts of interest. Revised 10/21
Rule 7.0 Reporting and frequency of policy review. Revised 10/21
Rule 1.0 General policy. Revised 10/21
It is the policy of the town of Highland, office of the clerk-treasurer to invest public funds in a manner which will provide the highest investment return, with the maximum security while meeting the daily cash flow demands of the town of Highland including its several executive departments and their associated political subdivisions and conforming to the statutes of the state of Indiana, including but not limited to IC 5-13-9 et seq. [Ord. 1749 § 4 (Exh.), 2021].
Rule 2.0 Scope. Revised 10/21
This investment policy applies to all financial assets of the town of Highland, including its several executive departments and their associated political subdivisions. These funds are accounted for in the annual comprehensive financial report of the town of Highland and include:
(A) The following governmental funds of the unit:
(1) General fund.
(B) The following special revenue funds of the unit:
(1) Parks and recreation fund.
(2) Hydrant rental fund.
(3) Motor vehicle highway (MVH) fund.
(4) Local road and streets (LR&S) fund.
(5) Sanitary district special operating fund.
(6) Law enforcement continuing education fund.
(7) Innkeeper tax fund.
(8) Unsafe building fund.
(9) Solid waste district grant fund.
(10) Federal forfeiture/seized assets fund.
(11) Local forfeiture/seized assets fund.
(12) Law enforcement block grant fund.
(13) Redevelopment general fund.
(14) Traffic and children safety grant fund.
(15) Special events nonreverting fund.
(16) Special centennial fund.
(17) Public safety LIT fund.
(18) Economic development LIT fund.
(C) The following governmental capital project funds of the unit:
(1) Municipal cumulative capital development (MCCD) fund.
(2) Capital cumulative improvement (CCI) fund.
(3) Municipal cumulative street fund.
(4) All bond proceeds funds, which include:
(a) Corporation capital fund.
(b) Sanitary district capital fund.
(c) Waterworks district capital fund.
(d) Redevelopment capital fund.
(5) Parks and recreation nonreverting capital fund.
(6) Gaming revenue fund.
(D) The following enterprise funds of the unit:
(1) Waterworks operating fund.
(2) Waterworks improvement fund.
(3) Sewage works operating fund.
(4) Sanitary sewer extension fund.
(5) Sewage improvement fund.
(E) The following debt service (sinking) funds of the unit:
(1) Waterworks district bond and interest fund.
(2) Wastewater (sewage) works bond and interest fund.
(3) Sanitary district bond and interest fund.
(4) Sanitary district bond and interest fund exempt from tax caps.
(5) Corporation bond and interest fund.
(6) Corporation bond and interest fund exempt from tax caps.
(7) Redevelopment bond and interest exempt from tax caps.
(8) Parks district bond and interest fund.
(9) Parks district bond and interest fund, exempt from tax caps.
(10) All capital lease funds.
(F) The following fiduciary (trust and agency) funds of the unit:
(1) Police pension 1925 fund.
(2) Park escrow fund.
(3) Intergovernmental association fund.
(4) Insurance premium expenditure fund.
(5) Improvement escrow fund.
(6) Utility consumer deposits fund.
(7) Parks donation fund.
(8) Civil donation fund.
(9) Gasoline expenditure fund.
(10) Telephone expenditure fund.
(11) Traffic and law violations agency fund.
(12) Capital projects escrow agency fund.
(G) The following internal service fund(s):
(1) Information and communications technology fund.
(H) Grant funds (direct or advance) subject to any terms of the grant. [Ord. 1749 § 4 (Exh.), 2021].
Rule 3.0 Standard of investment practice and review. Revised 10/21
Investments shall be made with judgement and care under the 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 subject to the deposit and investment guidelines set forth in Chapter 3.40 HMC and IC 5-13-9 et seq. [Ord. 1749 § 4 (Exh.), 2021].
Rule 4.0 Investment policy objectives and permissible instruments. Revised 10/21
The primary objectives, in priority order, of the town of Highland’s investment activities shall be:
(A) Safety. Safety of principal is the foremost objective of the investment program. Investments of the town of Highland, its executive departments and their associated political subdivisions shall be undertaken in a manner that seeks to ensure the preservation of capital. To obtain this objective, diversification to the extent that such is consistent with Indiana investment and deposit law is required. As stated in IC 5-13-9 et seq., investments are limited to the following instruments set forth and described in Chapter 3.40 HMC.
(B) Liquidity. Investments of the town of Highland, its executive departments and their associated political subdivisions shall be undertaken in a manner that enables it to remain sufficiently liquid in order to meet all operating disbursing requirements and/or capital projects disbursing requirements which might be reasonably anticipated. To obtain this objective, cash flows estimates and project expensing timetables will be developed to the extent that such is consistent with Indiana investment and depository law and Chapter 3.40 HMC. In addition, the following guidelines will be observed:
(1) Where the demand for funds is not scheduled or where higher liquidity is desirable or necessary, the investing officer will as much as possible utilize instruments such as an LGIP, an investing pool authorized pursuant to IC 5-13-9-11, or other investment instrument that permits the greatest liquidity and fund movement without corresponding loss of return or penalty;
(2) Investments for funds deemed available for periods of over 25 days, the investing officer will as much as possible utilize time instruments such as certificates of deposits or similar instruments that provide a greater yield and preserve safety for funds for which liquidity is less critical;
(3) In order to balance the objectives of liquidity and minimize idleness of fund balances, all operating cash should be maintained as much as possible in interest bearing draft, checking or negotiable orders of withdrawal accounts;
(4) In all cases, subject to this policy, all investment instruments will be chosen in the context of the prevailing economic and market conditions, which may modify the time periods set forth in this section;
(5) Pursuant to IC 5-13-9-5.7, the total investments outstanding under Chapter 3.40 HMC are limited to not more than 25 percent of the total portfolio of public funds invested by the municipality, including balances in transaction accounts.
(C) Return on Investment. The investment portfolio of the town of Highland, its executive departments and their associated political subdivisions shall be designed or undertaken with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the town’s investment risk constraints and the cash flow characteristics. [Ord. 1749 § 4 (Exh.), 2021].
Rule 5.0 Performance standards. Revised 10/21
The investment portfolio will be designed to obtain a market average rate of return during budgetary and economic cycles, taking into account the entity’s investment risk constraints established by IC 5-13-9 et seq. and cash flow needs.
(A) Market Yield. The municipality’s investment strategy is to combine a combination of active and passive activities. The passive strategy is to utilize as much as possible interest bearing checking accounts for operational moneys of the various funds and executive units of the municipality. In addition, the unit will employ as much as possible a diverse investment methodology, some of which is set forth in Rule 4(B).
Based upon this strategy, the basis used by the clerk-treasurer to determine whether market yields are being achieved shall be the 90 days Treasury bills rate. [Ord. 1749 § 4 (Exh.), 2021].
Rule 6.0 Ethics and conflicts of interest. Revised 10/21
Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officials, including the clerk-treasurer, shall disclose to the office of the clerk-treasurer and to the fiscal body any material financial interests in financial institutions that conduct business within this jurisdiction and they shall further disclose any large personal financial/investment positions that could be related to the performance of the entity’s portfolio. [Ord. 1749 § 4 (Exh.), 2021].
Rule 7.0 Reporting and frequency of policy review. Revised 10/21
(A) Public Reporting. The clerk-treasurer will provide from time to time, to be available to the public and to the municipal fiscal body, providing relevant information regarding the investment activities for the preceding fiscal year just ended. This may be in the form of the reporting in the annual financial report.
(B) Periodic Review of Policy. The fiscal body and the fiscal officer will review the investment policy periodically and make such changes as may be required by state law, by action of the town’s fiscal body or as may be desirable to optimize the investing function for the public interest.
(C) Expiration. This policy will be in force until its expiration on October 1, 2025, unless revised, renewed or repealed sooner by the fiscal body. [Ord. 1749 § 4 (Exh.), 2021].