HomeMy WebLinkAbout2008 10 01 First Document Distributed by Board Member Maria FairDate: October 1, 2008
ATTACHED WAS THE FIRST
DOCUMENT DISTRIBUTED BY BOARD
MEMBER MARIA FAIR TO THE BOARD
OF TRUSTEES MEMBERS AT THE
OCTOBER 1, 2008 SPECIAL MEETING.
Statement of Investment Guidelines
City of Colorado Springs
Reserve Account
The following Statement of Investment Guidelines shall apply to the funds
comprising the Reserve Account of the City of Colorado Springs. All investments
for this portfolio shall be made in accordance with Colorado State Statutes.
With the exception of authorized securities, maturity limits, liquidity requirements
and a discretionary management status, the provisions of the Investment Policy
of the City of Colorado Springs shall apply to the Reserve Account as well.
Authorized investment vehicles, eligible transactions and maturity limits for the
Reserve Account are defined below. There are no liquidity requirements for this
portfolio at this time.
• US Treasury Obligations: Treasury Bills, Treasury Notes, Treasury Bonds,
and Treasury Strips with maturities not exceeding five years from the date of
trade settlement.
Federal Instrumentality Securities: Debentures, discount notes, callable
securities, step-up securities and strips issued by the following only: Federal
National Mortgage Association (FNMA), Federal Farm Credit Bank (FFCB),
Federal Home Loan Bank (FHLB) and Federal Home Loan Mortgage
Corporation (FHLMC). Such securities' maximum maturity shall not exceed
five years from the date of trade settlement. The total investment in any one
issuer of Federal Instrumentality securities shall not exceed 30% of the
Reserve Account.
Corporate Debt of any United States dollar denominated corporation
organized and operating within the United States with a net worth in excess
of two hundred fifty million dollars. The debt must be rated by at least two
rating agencies, and the ratings must be at least AA- by Standard and Poor's,
Aa3 by Moody's or AA- by Fitch, and shall not be rated less by any service
that rates it. Such securities' maximum maturity shall not exceed three years
from the date of trade settlement. Ownership of corporate debt shall be
limited to thirty percent of the Reserve Account, with no more than five
percent of the Reserve Account held in one issuer.
• Commercial Paper rated at least A-1 by Standard and Poor's, P-1 by
Moody's or F1 by Fitch at the time of purchase by at least two services that
rate the commercial paper, and shall not be rated less by any service that
rates it. If the commercial paper issuer has senior debt outstanding, the
senior debt must be rated by each service that publishes a rating on the
issuer of at least A by Standard and Poor's, A2 by Moody's or A by Fitch.
The issuer's commercial paper program's size shall exceed $200 million.
Such securities' maximum maturity shall not exceed 270 days from the date
of trade settlement. Any issuer whose short-term ratings are placed on a
negative watchlist by any of the rating agencies will be ineligible for purchase
until a final decision on ratings is made.
Repurchase Agreements with maturities of 180 days or less collateralized
by U.S. Treasury or Federal Instrumentality securities listed above with the
maturity of the collateral not exceeding ten years. For the purpose of this
section, the term collateral shall mean purchased securities under the terms
of the City approved Master Repurchase Agreement. The purchased
securities shall have a minimum market value including accrued interest of
102 percent of the dollar value of the transaction. Collateral shall be held in
the City's custodian bank as safekeeping agent, and the market value of the
collateral securities shall be marked-to-the-market daily.
Repurchase Agreements shall be entered into only with dealers who have
executed a City approved Master Repurchase Agreement with the City and
who are recognized as Primary Dealers by the Federal Reserve Bank of New
York, or have a Primary Dealer within their holding company structure.
Repurchase Agreement counterparties, if rated, shall have ashort-term credit
rating of at least A-1 or the equivalent and along-term credit rating of at least
A or the equivalent.
The City may utilize Tri-party Repurchase Agreements provided that the City
is satisfied that it has a perfected interest in the securities used as collateral
and that the City has a properly executed Tri-party Agreement with both the
counterparty and custodian bank.
Local Government Investment Pools authorized under CRS 24-75-702,
that: 1) are "no-load" (i.e.: no commission or fee shall be charged on
purchases or sales of shares); 2) have a constant net asset value per share
of $1.00; 3) limit assets of the fund to securities authorized by state statute;
4) have a maximum stated maturity and weighted average maturity in
accordance with Rule 2a-7 of the Investment Company Act of 1940; and 5)
have a rating of AAAm by Standard and Poor's, Aaa by Moody's or AAA/V1+
by Fitch.
Money Market Mutual Funds registered under the Investment Company Act
of 1940 that: 1) are "no-load" (i.e.: no commission or fee shall be charged
on purchases or sales of shares); 2) have a constant net asset value per
share of $1.00; 3) limit assets of the fund to securities authorized by state
statute; 4) have a maximum stated maturity and weighted average maturity in
accordance with Rule 2a-7 of the Investment Company Act of 1940; and 5)
have a rating of AAAm by Standard and Poor's, Aaa by Moody's or AAA/V1+
by Fitch.
Statement of Investment Guidelines Page 2 of 3
City of Colorado Springs Reserve Account
,,. .
It is the intent of the City that the foregoing list of authorized securities be strictly
interpreted. Any deviation from this list must be preapproved by the Director of
Finance in writing.
Terri Velasquez
Director of Finance
Date
Adopted: May 14, 1998
Revised: September 8, 1999
Revised: December, 2001
Revised: March 9, 2004
Revised: May 24, 2005
Revised: July 11, 2006
Revised: April 24, 2007
Statement of Investment Guidelines Page 3 of 3
City of Colorado Springs Reserve Account