Chapter 3.5
INVESTMENT OF IDLE FUNDS
Sections:
3.5.02 Investment of idle funds.
3.5.03 Procedures and restrictions.
3.5.04 Custody and safekeeping.
3.5.06 Interest on time deposits.
3.5.01 Purpose and goals.
It is the purpose of this statement to set forth the public policies of the city relating to the investment of public moneys, and establish procedural requirements as to investment management practice. The objective of the investment policy and program of the city shall be as follows:
(a) The safeguarding of all public moneys shall be of the highest priority. Public money shall not be invested or managed in any matter which would jeopardize the safety of the principal.
(b) Consistent with the requirement of safety, the objective of the investment program shall be to aggressively manage and invest all public moneys to maximize net earnings, consistent with the public responsibility to secure maximum, safe investment return possible from moneys assigned to its stewardship, to relieve demands on the property tax and to otherwise reduce the cost of public services. (Code 1996 § 1-701)
3.5.02 Investment of idle funds.
Temporarily idle moneys of the city not currently needed may, in accordance with the procedure hereafter described, be invested in:
(a) Temporary notes or no-fund warrants of the city;
(b) Time deposits, open accounts or certificates of deposit in commercial banks or trust companies which have offices located in the city. If no commercial bank or trust company is located in the city, then in commercial banks or trust companies which have offices located in Cherokee County, or in the counties of the state of Kansas adjacent to Cherokee County, as provided for, and subject to the restrictions of, K.S.A. 12-1675;
(c) Time certificates of deposit with state or federally chartered savings and loan associations which have offices located in the city;
(d) Repurchase agreements with commercial banks, trust companies, or state or federally chartered savings and loan associations with offices located in the city, for direct obligations of, or obligations that are insured by, the United States government or any agency thereof. If no commercial bank, trust company, or state or federally chartered savings and loan association has an office in the city, then in any commercial bank, trust company, or state or federally chartered savings and loan association with offices located in Cherokee County. If no such commercial bank, trust company, or state or federally chartered savings and loan association will enter into such an agreement at or above the interest rate set out by K.S.A. 12-1675(b)(4), then such repurchase agreements may be entered into with commercial banks, trust companies, or state or federally chartered savings and loan associations which have offices located in the state of Kansas;
(e) United States treasury bills or notes with maturities as the governing body shall determine, but not exceeding six months. Investments may be made in U.S. treasury bills or notes only if no eligible bank, trust company, or state or federally chartered savings and loan association can or will make the investments authorized in subsections (b) and (c) of this section at interest rates equal to or greater than the average yield before taxes received on 91-day U.S. treasury bills or the maximum rates such banks, trust companies or savings and loan associations may pay on investments authorized under subsections (b) and (c) of this section, whichever is lower. (K.S.A. 12-1675. Code 1996 § 1-702)
3.5.03 Procedures and restrictions.
The city clerk shall periodically report to the governing body as to the amount of money available for investment and the period of time such amounts will be available for investment, and shall submit such recommendations as deemed necessary for the efficient and safe management of city finances. The recommendations of the city clerk shall provide for an investment program which shall so limit the amounts invested and shall schedule the maturities of investments so that the city will, at all times, have sufficient moneys available on demand deposit to assure prompt payment of all city obligations. (Code 1996 § 1-703)
3.5.04 Custody and safekeeping.
Securities purchased pursuant to this chapter shall be under the care of the city clerk, city treasurer and mayor and shall be held in the custody of a state or national bank or trust company, or shall be kept by such officers in a safety deposit box of the city in a bank or trust company. Securities in the original or receipt form held in the custody of a bank or trust company shall be held in the name of the city, and their redemption, transfer, or withdrawal shall be permitted only upon the written instruction of the city officers. Securities not held in the custody of a bank or trust company shall be personally deposited by such officer in a safety deposit box in the name of the city in a bank or trust company, access to which shall be permitted only in the personal presence and under the signature of two of the above named officers. (Code 1996 § 1-704)
3.5.05 Sale or transfer.
If, in order to maintain sufficient moneys on demand deposit in any fund as provided in BSMC 3.5.03, it becomes necessary to transfer or sell any securities of such funds, the officers specified in BSMC 3.5.04 may transfer said securities to any other fund or funds in which there are temporarily idle moneys, or shall sell such securities, and for such purpose they shall have authority to make any necessary written direction, endorsement or assignment for and on behalf of the city. (Code 1996 § 1-705)
3.5.06 Interest on time deposits.
The city clerk shall deposit the interest earned on invested idle funds to the general fund, unless otherwise required or authorized by law.
Ref. See K.S.A. 12-1677, and amendments thereto.
(Code 1996 § 1-706)