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HomeMy WebLinkAboutReso 2024-3599RESOLUTION NO. 2024 - nD 11 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF SUNNY ISLES BEACH, FLORIDA, APPROVING A REVISED INVESTMENT POLICY OF THE CITY OF SUNNY ISLES BEACH, ATTACHED HERETO AS EXHIBIT "A"; AUTHORIZING THE CITY MANAGER TO DO ALL THINGS NECESSARY TO EFFECTUATE THIS RESOLUTION; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, Section 218.415, F.S., provides municipalities with the authority to invest surplus funds; and WHEREAS, the City Commission of the City of Sunny Isles Beach desired to invest surplus funds in accordance with State law by adopting an investment policy to earn higher returns on its investments; and WHEREAS, on November 17, 2005 via Resolution No. 2005-861, the City Commission adopted an Investment Policy, and subsequently revised via Resolution Nos. 2006-925 and 2009-1500; and WHEREAS, the City Commission wishes revise the Investment Policy to incorporate language regarding "pecuniary factors", including its definition. NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF SUNNY ISLES $EACH, FLORIDA, AS FOLLOWS: Section 1. Approval of a Revised Investment Policy. The City Commission hereby approves the Revised Investment Policy attached hereto as Exhibit "A". Section 2. Authorization of City Manager. The City Manager is hereby authorized to do all things necessary to effectuate this Resolution. Section 3. Effective Date. This Resolution will be become effective upon adoption. PASSED AND ADOPTED upon this 18th d4 of Janu�ry, 2024. ` Lisa Svechin, M yor ATTEST:; ` APPROVED AS TO FORM AND LEGAL SUFFICIENCY: Mauricio E6tanc6r, CM , City Clerk Alain E. Boileau, for Nabors, Giblin & Nickerson, P.A., City Attorney @BCL@ACOAE15E.doc Page 1 of 2 39 Moved by: (� /SSj�1/l�✓� �J�bel'rF/5econded by: I�, Vote: // Mayor Svechin Yes) (No) Vice Mayor Lama (Yes) (No) Commissioner Joseph (Yes) (No) Commissioner Stuyvesant Yes) (No) Commissioner Viscarra Z(Yes) (No) @13CL@ACOAE15E.doc Page 2 of 2 40 City of Sunny Isles Beach - Investment Policy PURPOSE The purpose of this policy is to set forth the investment objectives and parameters for the management of public funds of the City. These policies are designed to ensure the prudent management of public funds, the availability of operating and capital funds when needed and a competitive investment return. This investment policy applies to the investment of public funds in excess of amounts needed to meet current expenses, which includes cash and investment balances of City funds. This policy does not apply to the City's pension funds, including those funds in Chapters 175 and 185, jF.S.) or funds related to the issuance of debt where there are other existing policies or indentures in effect which govern the investment of such funds. This policy shall be construed and applied so as to comply with Section 218.415, F.S., as amended. II. INVESTMENT OBJECTIVES Investment objectives include safety of capital, liquidity of funds, and investment income, in that order. The following objectives will be applied in the management of the City's funds: A. Safety of Capital The primary objective of the City's investment program is the protection of public funds. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. Each investment transaction shall be entered into with every effort to prevent capital losses, whether they are from securities defaults, theft, or the impact of adverse market conditions. The objective will be to mitigate credit risk and interest rate risk. 1. Credit Risk - The City will minimize credit risk, the risk of loss due to the failure of the security issuer or backer, by: a) Limiting investments to the authorized securities listed in this policY!t] b) Diversifying the investment portfolio on any investments below AAA rating so that potential losses on individual securities will be minimized. 2. Interest Rate Risk - The City will minimize the risk that the market value of securities in the portfolio will fall due to changes in general interest rates, by: 411 a) Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity; b) Investing operating funds only in the authorized securities listed in this policy. B. Liquidity of Funds The City's investment strategy will provide sufficient liquidity to meet the City's operating, payroll�1 and capital requirements. To the extent possible, an attempt will be made to match investment maturities with known cash needs and anticipated cash flow requirements. Since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets. A portion of the portfolio also may be placed in money market mutual funds or local government investment pools which offer same-day liquidity for short-term funds. C. Investment Income The City's investment portfolio shall be designed with the intent of attaining a competitive rate of return throughout the budgetary and economic cycles, taking into account the City's investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. [D. _ Investment Decisions III. ETHICAL STANDARDS The standard or prudence to be applied by the Finance Director or designee shall be the "Prudent Person" rule, which states: "Investments shall be made with judgment and care, under 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 42, as the probab(e, income to be derived from the investment." The "Prudent Person" rule can be applied in the context of managing the overall portfolio. The Finance Director or designee and staff, acting in accordance with this policy and exercising due diligence, shall not be held personally responsible for a specific security's credit risk or market price changes. A. Ethics and Conflicts of Interest The City's staff involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. All employees involved in the investment process shall disclose to the City any material financial interests in financial institutions that conduct business with the City, and they shall further disclose any material personal financial/investment positions that could be related to the performance of the City's investment program. Applicable ethics standards provided by the City Charter, City Code, Section 2-11.1 of the Miami -Dade County Code Chapter 33 of the Citys Coded Ordinances), and Part III of Chapter 112, F.S., shall be complied with. C. Designation of Investment Officer The Finance Director is designated as investment officer of the City and is responsible for investment decisions and the day-to-day administration of the cash management program. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures so established. The City may request the assistance of, or appoint an outside investment manager as "Agent" for the City's cash reserves. The "Agent" for the City shall have discretion over the purchase and sale of securities within and subject to compliance with this investment policy. Such investment manager must be registered under the Investment Advisor Act of 1940. Such firm will be a national firm with a local presence. The Finance Director shall consult with the City Manager as necessary regarding the City's investment activity. ;Positions authorized as investment signatories are the City Manager, Deputy Cit�1 Manager, _and Finance Directorj. IV. LISTING OF AUTHORIZED INVESTMENTS The following investments will be permitted by this policy as consistent with Section 218.415 (16) F.S. Those investments not listed in this section are prohibited. A. United States Government Securities Negotiable direct obligations or obligations the principal and interest of which are unconditionally guaranteed by the United States Government. Such securities will include, but not be limited to the following: ► Treasury Bills 433 ► Treasury Notes ► Treasury Bonds ► Treasury Strips ► Treasury Securities - State and Local Government Series ("SLGS") ► Treasury Inflation Protection Securities ("TIPS") Portfolio Composition A maximum of 100% of available funds may be invested in the United States Government Securities with the exception of Treasury Strips which are limited to 10% of available funds. Maturity Limitations The maximum length to maturity of any direct investment in the United States Government Securities is ten (10) years from the date of purchase. B. United States Government Agencies Bonds, debentures�l or notes which may be subject to call, issued or guaranteed as to principal and interest by the United States Governments agencies. Such securities will include, but not be limited to the following: ► United States Export- Import Bank - Direct obligations or fully guaranteed certificates of beneficial ownership ► Farmer Home Administration - Certificates of beneficial ownership ► Federal Financing Bank - Discount notes, notes and bonds ► Federal Housing Administration Debentures ► FDIC guaranteed notes ("TLGP" bonds) ► Government National Mortgage Association ("GNMA") - GNMA guaranteed mortgage-backed bonds - GNMA guaranteed pass-through obligations ► General Services Administration ► New Communities Debentures - United States Government guaranteed debentures ► United States Public Housing Notes and Bonds - United States Government guaranteed public housing notes and bonds ► United States Department of Housing and Urban Development - Project notes and local authority bonds ► Federal Farm Credit Bank ("FFCB") ► Federal Home Loan Bank or its City Banks ("FHLB") ► Federal National Mortgage Association ("FNMA") ► Federal Home Loan Mortgage Corporation ("Freddie -Macs") including Federal - 44t Home Loan Mortgage Corporation participation certificates Portfolio Composition A maximum of 100% of available funds may be invested in United States Government agencies. Limits on Individual Issuers A maximum of 100% of available funds may be invested in individual United States Government agencies. Maturity Limitations The maximum length to maturity for an investment in any United States Government agency security is ten (10) years from the date of purchase. C. Interest Bearing Time Deposit or Savings Account Non-negotiable interest-bearing time certificates of deposit or savings accounts in banks organized under the laws of Florida or the United States provided that such deposits are secured by collateral as prescribed by the Florida Security for Public Deposits Act, Chapter 280, Florida Statutes. Portfolio Composition A maximum of 100% of available funds may be invested in non-negotiable interestpbearing time certificates of deposit. Limits on Individual Issuers A maximum of 50% of available funds may be deposited with any one (1) issuer. Limits on Maturities The maximum maturity on any certificate shall be no greater than ten (10) years from the date of purchase. D. The Florida Local Government Surplus Funds Trust Fund (State Board of Administration - SBA) Portfolio Composition A maximum of 50% of available funds may be invested in the SBA. E. Intergovernmental Investment Pools Investment Authorization Intergovernmental investment pools that are authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Section 163.01, Florida Statutes and provided that said funds contain no derivatives. Portfolio Composition A maximum of 50% of available funds may be invested in intergovernmental investment pools. 455 F. Registered Investment Companies (Money Market Mutual Funds) Registered with the Securities and Exchange Commission with the highest credit quality rating from a nationally recognized rating agency; portfolio is limited to direct obligations of the United States Government or any agency or instrumentality thereof. Portfolio Composition A maximum of 100% of available funds may be invested in money market funds. Limits of Individual Issuers A maximum of 100% of available funds may be invested with any one (1) money market fund. V. PROHIBITIONS The purchase of derivative instruments as defined by the Government Account Standards Board ("GASB") or any investment instrument which is structured to derive a rate of return from an investment source other than the originally purchased investment is strictly prohibited. VI. INVESTMENT PARAMETERS To the extent possible, the City shall attempt to match its investments with anticipated cash flow requirements. Unless matched with a specific cash flow, the City will not directly invest in securities maturing more than ten (10) years from the date of purchase. Average life will be used as the maturity for mortgage- backed securities and the intergovernmental pool investments. Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of the portfolio should be continuously invested in readily available funds such as Local Government Investment Pools, or money market funds to ensure that appropriate liquidity is maintained to meet ongoing obligations. VII. SAFEKEEPING AND CUSTODY A. Authorized Investment Institutions and Dealers The City shall only purchase investments from the State Board of Administration, Florida Municipal Investment Trust, financial institutions which are qualified as public depositories by the Treasurer of the State of Florida, primary security dealers (or their agents) as designated by the Federal Reserve Bank of New York, or by secondary securities dealers (or their agents) who act as investment banking arms of local qualified banking institutions. B. Delivery vs. Payment All trades where applicable will be executed by delivery versus payment ("DVP") to ensure that securities are deposited in an eligible financial institution prior to 463 the release of funds. Securities will be held by a third -party custodian as evidenced by safekeeping receipts. C. Bid Requirements Investments will be chosen based on liquidity needs and market conditions. The investments will be competitively bid when feasible and appropriate. Except as required by law, the bid deemed to be the most responsive to the needs of the City must be selected. D. Internal Controls The Finance Director is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the valuation of costs and benefits requires estimates and judgments by management. Accordingly, the Finance Director shall establish a process for an annual independent review as part of the annual financial audit to ensure compliance with the policies and procedures. The internal controls shall address the following points: 1. Control of collusion - Collusion is a situation where two (2) or more employees are working in conjunction to defraud their employer. 2. Separation of transaction authority from accounting and record keeping - By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved. 3. Custodial safekeeping - All securities, with the exception of certificates of deposit, shall be held with a third -party custodian; and all securities purchased by, and all collateral obtained by the City should be properly designated as an asset of the City. The securities must be held in an account separate and apart from the assets of the financial institution. No withdrawal of such securities, in whole or in part, shall be made from safekeeping except by the Finance Director as authorized herein, or by their respective designee. 4. Certificates of Deposit issued by a local bank or savings and loan association may be held in safekeeping at that institution. The institution shall issue a copy of the certificate of deposit, a safekeeping receipt, or some other confirmation of the purchase that is satisfactory to the Finance Director. This will be kept on file in the Finance Department and will indicate the amount, interest rate, issue date and maturity date of the certificate of deposit. 5. Avoidance of physical delivery securities - Book entry securities are much easier to transfer and account for since actual delivery is never taken. 47, Physical delivery securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities. 6. Clear delegation of authority to subordinate staff members - Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions. 7. Written confirmation of telephone transactions for investments and wire transactions - Due to the potential for error and improprieties arising from telephone transactions, all telephone transactions should be supported by written communications and approved by appropriate personnel. VIII. CONTINUING EDUCATION IX. The Finance Director shall annually complete eight (8) hours of continuing education in subjects or courses of study related to investment practices and products. The Finance Director shall provide a quarterly investment report to the City Manager. The report shall list investments by fund and type and include the book value, income earned and market value as of the report date. X. SECURITIES DISPOSITION A. Every security purchased under this section on behalf of the governing body of the City must be properly earmarked and: 1. If registered with the issuer or its agents, must be immediately placed for safekeeping in a location that protects the governing body's interest in the security; 2. If in book entry form, must be held for the credit of the governing body by a depository chartered by the Federal Government, the state, or any other state or territory of the United States which has a branch or principal place of business in this state as defined in s. 658.12, or by a national association organized and existing under the laws of the United States which is authorized to accept and execute trusts and which is doing business in this state, and must be kept by the depository in an account separate and apart from the assets of the financial institution; or 3. If physically issued to the holder but not registered with the issuer or its agents, must be immediately placed for safekeeping in a secured vault. XI. SALE OF SECURITIES When the invested funds are needed in whole or in part for the purposes originally 483 intended or for more optimal investments, the City may sell such investments at the then- prevailing market price and place the proceeds into the proper account or fund of City. XII. PRE-EXISTING CONTRACT Any public funds subject to a contract or agreement existing on November 19, 2009 may not be invested contrary to such contract or agreement. XII1. AUDITS Certified public accountants conducting audits of the City pursuant to, ctionI 218.39 F.S] shall report, as part of the audit, whether or not the City has complied with Section 218.415, F.S., and this Investment Policy. XIV. AUTHORIZED DEPOSITS In addition tothe investments authorized forthe City in subsection (Vill), as authorized by paragraph (23) of Section 218.415, F.S., the City may deposit any portion of surplus public funds in its control or possession in accordance with the following conditions: A. The funds are initially deposited in a qualified public depository, as defined in $ectloril 280.02, jr,- selected by the City. B. The selected depository arranges for the deposit of the funds in certificates of deposit in one (1) or more federally insured banks or savings and loan associations, wherever located, for the account of the City. C. The full amount of principal and accrued interest of each such certificate of deposit is insured by the Federal Deposit Insurance Corporation. D. The selected depository acts as custodian for the City with respect to such certificates of deposit issued for its account. E. At the same time the City's funds are deposited and the certificates of deposit are issued, the selected depository receives an amount of deposits from customers of other federally insured financial institutions, wherever located, equal to or greater than the amount of the funds initially invested by the City through the selected depository. XV. PROHIBITED INVESTMENTS The City is prohibited from investing in any company that engages in business with any countries that are on the prohibited list as part of the Protecting Florida's Investment Act (Chapter 2007-88 FS, codified as Section 215 473, F.8) .1 The City Manager may promulgate specific requirements for the implementation of this provision based upon criteria applied by the Local Government Surplus Funds Trust Fund for such purpose. 49) XVI. INVESTMENT POLICY REVIEW The Finance Director shall review this Investment Policy on an annual basis. Any recommended changes to this policy must be approved by the City Manager and subsequently by the City Commission. 50) 1/8/24, 3:15 PM Statutes & Constitution :View Statutes : Online Sunshine Select Year: 2023 v Go The 2023 Florida Statutes (including Special Session Q Title XIV Chapter 218 View Entire TAXATION AND FINANCIAL MATTERS PERTAINING TO POLITICAL Chapter FINANCE SUBDIVISIONS 218.415 Local government investment policies.—Investment activity by a unit of local government must be consistent with a written investment plan adopted by the governing body, or in the absence of the existence of a governing body, the respective principal officer of the unit of local government and maintained by the unit of local government or, in the alternative, such activity must be conducted in accordance with subsection (17). Any such unit of local government shall have an investment policy for any public funds in excess of the amounts needed to meet current expenses as provided in subsections (1)-(16), or shall meet the alternative investment guidelines contained in subsection (17). Such policies shall be structured to place the highest priority on the safety of principal and liquidity of funds. The optimization of investment returns shall be secondary to the requirements for safety and liquidity. Each unit of local government shall adopt policies that are commensurate with the nature and size of the public funds within its custody. (1) SCOPE.—The investment policy shall apply to funds under the control of the unit of local government in excess of those required to meet current expenses. The investment policy shall not apply to pension funds, including those funds in chapters 175 and 185, or funds related to the issuance of debt where there are other existing policies or indentures in effect for such funds. (2) INVESTMENT OBJECTIVES.—The investment policy shall describe the investment objectives of the unit of local government. Investment objectives shalt include safety of capital, liquidity of funds, and investment income, in that order. (3) PERFORMANCE MEASUREMENT.—The investment policy shall specify performance measures as are appropriate for the nature and size of the public funds within the custody of the unit of local government. (4) PRUDENCE AND ETHICAL STANDARDS.—The investment policy shall describe the levet of prudence and ethical standards to be followed by the unit of local government in carrying out its investment activities with respect to funds described in this section. The unit of local government shall adopt the Prudent Person Rule, which states that: "Investments should be made with judgment and care, under 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 from the investment." (5) LISTING OF AUTHORIZED INVESTMENTS.—The investment policy shall list investments authorized by the governing body of the unit of local government, subject to the provisions of subsection (16). Investments not listed in the investment policy are prohibited. If the policy authorizes investments in derivative products, the policy must require that the unit of local government's officials responsible for making investment decisions or chief financial officer have developed sufficient understanding of the derivative products and have the expertise to manage them. For purposes of this subsection, a "derivative" is defined as a financial instrument the value of which depends on, or is derived from, the value of one or more underlying assets or index or asset values. If the policy authorizes investments in reverse repurchase agreements or other forms of leverage, the policy must limit the investments to transactions in which the proceeds are intended to provide liquidity and for which the unit of local government has sufficient resources and expertise. www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0218/Sections/0218.415.html 1 ) 51 1/8/24, 3:15 PM Statutes & Constitution :View Statutes : Online Sunshine (6) MATURITY AND LIQUIDITY REQUIREMENTS.—The investment policy shall require that the investment portfolio is structured in such manner as to provide sufficient liquidity to pay obligations as they come due. To that end, the investment policy should direct that, to the extent possible, an attempt will be made to match investment maturities with known cash needs and anticipated cash-flow requirements. (7) PORTFOLIO COMPOSITION.—The investment policy shall establish guidelines for investments and limits on security issues, issuers, and maturities. Such guidelines shall be commensurate with the nature and size of the public funds within the custody of the unit of local government. (8) RISK AND DIVERSIFICATION.—The investment policy shall provide for appropriate diversification of the investment portfolio. Investments held should be diversified to the extent practicable to control the risk of loss resulting from overconcentration of assets in a specific maturity, issuer, instrument, dealer, or bank through which financial instruments are bought and sold. Diversification strategies within the established guidelines shall be reviewed and revised periodically, as deemed necessary by the appropriate management staff. (9) AUTHORIZED INVESTMENT INSTITUTIONS AND DEALERS.—The investment policy should specify the authorized securities dealers, issuers, and banks from whom the.unit of local government may purchase securities. (10) THIRD -PARTY CUSTODIAL AGREEMENTS.—The investment policy shall provide appropriate arrangements for the holding of assets of the unit of local government. Securities should be held with a third party; and all securities purchased by, and all collateral obtained by, the unit of local government should be properly designated as an asset of the unit of local government. No withdrawal of securities, in whole or in part, shall be made from safekeeping, except by an authorized staff member of the unit of local government. Securities transactions between a broker- dealer and the custodian involving purchase or sale of securities by transfer of money or securities must be made on a "delivery vs. payment" basis, if applicable, to ensure that the custodian will have the security or money, as appropriate, in hand at the conclusion of the transaction. (11) MASTER REPURCHASE AGREEMENT.—The investment policy shall require all approved institutions and dealers transacting repurchase agreements to execute and perform as stated in the Master Repurchase Agreement. All repurchase agreement transactions shall adhere to the requirements of the Master Repurchase Agreement. (12) BID REQUIREMENT.—The investment policy shall require that the unit of local government's staff determine the approximate maturity date based on cash-flow needs and market conditions, analyze and select one or more optimal types of investment, and competitively bid the security in question when feasible and appropriate. Except as otherwise required by law, the bid deemed to best meet the investment objectives specified in subsection (2) must be selected. (13) INTERNAL CONTROLS.—The investment policy shall provide for a system of internal controls and operational procedures. The unit of local government's officials responsible for making investment decisions or chief financial officer shall establish a system of internal controls which shall be in writing and made a part of the governmental entity's operational procedures. The investment policy shall provide for review of such controls by independent auditors as part of any financial audit periodically required of the unit of local government. The internal controls should be designed to prevent losses of funds which might arise from fraud, employee error, misrepresentation by third parties, or imprudent actions by employees of the unit of local government. (14) CONTINUING EDUCATION.—The investment policy shall provide for the continuing education of the unit of Local government's officials responsible for making investment decisions or chief financial officer. Such officials must annually complete 8 hours of continuing education in subjects or courses of study related to investment practices and products. (15) REPORTING.—The investment policy shall provide for appropriate annual or more frequent reporting of investment activities. To that end, the governmental entity's officials responsible for making investment decisions or chief financial officer shall prepare periodic reports for submission to the legislative and governing body of the unit of local government, which shall include securities in the portfolio by class or type, book value, income earned, and market value as of the report date. Such reports shall be available to the public. (16) AUTHORIZED INVESTMENTS; WRITTEN INVESTMENT POLICIES.—Those units of local government electing to adopt a written investment policy as provided in subsections (1)-(15) may by resolution invest and reinvest any surplus public funds in their control or possession in: www. leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0218/Sections/0218.415.html 2152 1/8/24, 3:15 PM Statutes & Constitution :View Statutes : Online Sunshine (a) The Local Government Surplus Funds Trust Fund or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act of 1969, as provided in s. 163.01. (b) Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency. (c) Interest-bearing time deposits or savings accounts in qualified public depositories as defined in s. 280.02. (d) Direct obligations of the United States Treasury. (e) Federal agencies and instrumentalities. (f) Rated or unrated bonds, notes, or instruments backed by the full faith and credit of the government of Israel. (g) Securities of, or other interests in, any open-end or closed-end management -type investment company or investment trust registered under the Investment Company Act of 1940, 15 U.S.C. ss. 80a-1 et seq., as amended from time to time, provided that the portfolio of such investment company or investment trust is limited to obligations of the United States Government or any agency or instrumentality thereof and to repurchase agreements fully collateralized by such United States Government obligations, and provided that such investment company or .investment trust takes delivery of such collateral either directly or through an authorized custodian. (h) . Other investments authorized by law or by ordinance for a county or a municipality. (i) Other investments authorized by law or by resolution for a school district or a special district. (17) AUTHORIZED INVESTMENTS; NO WRITTEN INVESTMENT POLICY.—Those units of local government electing not to adopt a written investment policy in accordance with investment policies developed as provided in subsections (1)-(15) may invest or reinvest any surplus public funds in their control or possession in: (a) The Local Government Surplus Funds Trust Fund, or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act of 1969, as provided in s. 163.01. (b) Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency. (c) Interest-bearing time deposits or savings accounts in qualified public depositories, as defined in s. 280.02. (d) Direct obligations of the U.S. Treasury. The securities listed in paragraphs (c) and (d) shall be invested to provide sufficient liquidity to pay obligations as they come due. (18) SECURITIES; DISPOSITION.— (a) Every security purchased under this section on behalf of the governing body of a unit of local government must be properly earmarked and: 1. If registered with the issuer or its agents, must be immediately placed for safekeeping in a location that protects the governing body's interest in the security; 2. If in book entry form, must be held for the credit of the governing body by a depository chartered by the Federal Government, the state, or any other state or territory of the United States which has a branch or principal place of business in this state as defined in s. 658.12, or by a national association organized and existing under the laws of the United States which is authorized to accept and execute trusts and which is doing business in this state, and must be kept by the depository in an account separate and apart from the assets of the financial institution; or 3. If physically issued to the holder but not registered with the issuer or its agents, must be immediately placed for safekeeping in a secured vault. (b) The unit of local government's governing body may also receive bank trust receipts in return for investment of surplus funds in securities. Any trust receipts received must enumerate the various securities held, together with the specific number of each security held. The actual securities on which the trust receipts are issued may be held by any bank depository chartered by the Federal Government, this state, or any other state or territory of the United States which has a branch or principal place of business in this state as defined in s. 658.12, or by a national association organized and existing under the laws of the United States which is authorized to accept and execute trusts and which is doing business in this state. www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0218/Sections/0218.415.html 3, 53 1/8/24, 3:15 PM Statutes & Constitution :View Statutes : Online Sunshine (19) SALE OF SECURITIES.—When the invested funds are needed in whole or in part for the purposes originally intended or for more optimal investments, the unit of local government's governing body may sell such investments at the then -prevailing market price and place the proceeds into the proper account or fund of the unit of local government. (20) PREEXISTING CONTRACT.—Any public funds subject to a contract or agreement existing on October 1, 2000, may not be invested contrary to such contract or agreement. (21) PREEMPTION.—Any provision of any special act, municipal charter, or other law which prohibits or restricts a local governmental entity from complying with this section or any rules adopted under this section is void to the extent of the conflict. (22) AUDITS.—Certified public accountants conducting audits of units of local government pursuant to s. 218.39 shall report, as part of the audit, whether or not the unit of local government has complied with this section. (23) AUTHORIZED DEPOSITS.—In addition to the investments authorized for local governments in subsections (16) and (17) and notwithstanding any other provisions of law, a unit of local government may deposit any portion of surplus public funds in its control or possession in accordance with the following conditions: (a) The funds are initially deposited in a qualified public depository, as defined in s. 280.02, selected by the unit of local government. (b) The selected depository arranges for depositing the funds in financial deposit instruments insured by the Federal Deposit Insurance Corporation in one or more federally insured banks or savings and loan associations, wherever located, for the account of the unit of local government. (c) The full amount of the principal and accrued interest of each financial deposit instrument is insured by the Federal Deposit Insurance Corporation. (d) The selected depository acts as custodian for the unit of local government with respect to each financial deposit instrument issued for its account. (24) INVESTMENT DECISIONS.— (a) As used in this subsection, the term "pecuniary factor" means a factor that the governing body of the unit of local government, or in the absence of the existence of a governing body, the respective principal officer of the unit of local government, prudently determines is expected to have a material effect on the risk or returns of an investment based on appropriate investment horizons consistent with applicable investment objectives and funding policy. The term does not include the consideration of the furtherance of any social, political, or ideological interests. (b) Notwithstanding any other law, when deciding whether to invest and when investing public funds pursuant to this section, the unit of local government must make decisions based solely on pecuniary factors and may not subordinate the interests of the people of this state to other objectives, including sacrificing investment return or undertaking additional investment risk to promote any nonpecuniary factor. The weight given to any pecuniary factor must appropriately reflect a prudent assessment of its impact on risk or returns. History.—s. 1, ch. 95-194; s. 2, ch. 97-9; s. 3, ch. 2000-264; ss. 66, 141, ch. 2001-266; s. 2, ch. 2005-126; s. 1, ch. 2007-89; s. 42, ch. 2008-4; s. 2, ch. 2009-140; s. 13, ch. 2023-28. Copyright © 1995-2024 The Florida Legislature • Privacy Statement • Contact Us www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0218/Sections/0218.415.html 4) 54 THE FLORIDA SENATE 2023 SUMMARY OF LEGISLATION PASSED Committee on Banking and Insurance CS/CS/HB 3 — Government and Corporate Activism by State Affairs Committee; Commerce Committee; and Reps. Rommel, Sirois, and others (CS/SB 302 by Banking and Insurance Committee and Senator Grall) The bill (Chapter 2023-28, L.O.F). addresses the provision of products and services by financial institutions, the investment of certain state and local government funds, the issuance of environmental, social, and governance (ESG) bonds, and procurement of and contracting with vendors by certain state and local entities and educational institutions. Prohibition against Engaging in Unsafe and Unsound Practices — Financial Institutions, Consumer Finance Lenders, and Money Services Businesses The bill requires financial institutions such as banks and credit unions, consumer finance lenders, and money services businesses to make decisions about the provision or denial of services based on an analysis of risk factors unique to each customer, and prohibits them from engaging in any "unsafe and unsound practice." The bill specifies that it is an "unsafe or unsound practice" to deny or cancel services to a person, or discriminate against a person in making available such services or in the terms or conditions of such services, on the basis of: • The person's political opinions, speech, or affiliations. • Except for such entities that claim a religious purpose in certain circumstances, the person's religious beliefs, exercise, or affiliations. • Any factor that is not a quantitative, impartial, and risk-based standard. • The use of any rating, scoring, analysis, tabulation, or action that considers a "social credit score" based on factors, including, but not limited to: o The person's political opinions, speech, or affiliations. o The person's religious beliefs, religious exercise, or religious affiliations. o The person's lawful ownership of a firearm. o The person's engagement in the lawful manufacture, distribution, sale, purchase, or use of firearms or ammunition. o The person's engagement in the exploration, production, utilization, transportation, sale, or manufacture of fossil fuel -based energy, timber, mining, or agriculture. o The person's support of the state or federal government in combatting illegal immigration, drug trafficking, or human trafficking. o The person's engagement with, facilitation of, employment by, support of, business relationship with, representation of, or advocacy for any person described by the aforementioned factors. o The person's failure to meet or commit to meet, or expected failure to meet, any of the following as long as such person is in compliance with applicable state or federal law: ■ Environmental standards including emissions standards, benchmarks, requirements, or disclosures. ■ Social governance standards, benchmarks, or requirements, including (but not limited to) environmental and social justice. This summary is provided for information only and does not represent the opinion of any Senator, Senate Officer, or Senate Office. CS/CS/HB 3 Page: 1 55 2023 Summary of Legislation Passed Committee on Banking and Insurance Corporate board or company employment composition standards, benchmarks, or disclosures based on characteristics protected under the Florida Civil Rights Act of 1992. Policies or procedures requiring or encouraging employee participation in social justice programing, including but not limited to diversity, equity, and inclusion training. Financial institutions, consumer finance lenders, and money services businesses regulated by the Office of Financial Regulation (OFR) must annually attest that their practices comply with the applicable requirements and limitations created by the bill. Failure to timely file the attestation is deemed a knowing and willful violation of the law. Financial institutions, consumer finance lenders, and money services businesses are subject to the following penalties and sanctions: • Those the OFR may impose under chs. 655, 516, and 560, F.S., respectively. • Enforcement actions identified in part II of chapter 501, F. S., the Florida Deceptive and Unfair Trade Practices Act, including civil actions brought by the Attorney General and criminal prosecution by a state attorney in the appropriate judicial circuit. Civil actions may include an injunction, an action seeking damages, or a civil penalty up to $10,000 per violation. The bill prohibits the OFR and the Financial Services Commission from waiving state laws in relation to unsafe and unsound business practices by state -licensed financial institutions, regardless of whether a federally chartered or regulated financial institution may engage in such unsafe and unsound practices. Prohibition against Engaging in Unsafe and Unsound — Practice Qualified Public Depositories The bill requires qualified public depositories (QPD) must comply with the requirements to provide services based on the risk factors unique to each customer and refrain from engaging in "unsound and unsafe practices." Beginning July 1, 2023, banks and savings associations must certify compliance with this requirement when filing an application to be designated or re- designated as a qualified public depository QPD. The bill provides that failure to file the required attestation is grounds for suspension or disqualification of a QPD. The bill also gives the Chief Financial Officer (CFO) authority to verify a QPD's attestation and impose penalties if it fails to timely file the attestation. The CFO can impose an administrative penalty, issue a cease and desist order to require compliance with the law, and suspend or revoke a QPD's qualification. The bill provides that if the CFO determines an affidavit is materially false, the CFO must report the finding to the Attorney General, who may bring a civil or administrative action against the QPD, and recover attorney fees and costs if the enforcement action is successful. The bill does not give the CFO "visitorial This summary is provided for information only and does not represent the opinion of any Senator, Senate Officer, or Senate Office. CS/CS/HB 3 Page: 2 56 2023 Summary of Legislation Passed Committee on Banking and Insurance powers" to inspect, examine, supervise, or regulate the affairs of federally -chartered banks or savings associations. Only the federal regulator has visitorial powers. Government Investments to be Based Solely on Pecuniary Factors The bill codifies and expands the program adopted by the State Board of Administration (SBA) in 2022 that requires, with limited exceptions, investments of certain state and local funds to be based solely on pecuniary factors. The term "pecuniary factor" is defined as a factor that is expected "to have a material effect on the risk or return of an investment based on appropriate investment horizons consistent with applicable investment objectives and funding policy. The term does not include the consideration of the furtherance of any social, political, or ideological interests." The expansion applies to all funds of state Treasury, all local government retirement plans, investments of local government surplus funds, and investment of funds raised by citizen support or direct -support organizations. The bill prohibits the person or entity responsible for making investment decisions from subordinating the interests of the beneficiaries to other objectives, and requires the weight given to any pecuniary factor to appropriately reflect a prudent assessment of its impact on risk or returns. Investment policies are required to be updated to incorporate these requirements. Investment restrictions do not apply to individual member -directed investment accounts established as part of a defined contribution plan. The bill requires state and local retirement systems to report compliance with the law on a biennial basis, beginning December 15, 2023. Local government retirement plans must report to the Department of Management Services (DMS); the SBA, on behalf of the Florida Retirement System, must report to the Governor, the Attorney General, the CFO, and the Legislature. Reports must describe governance policies and standards for the exercise of shareholder rights. DMS is directed to report incidents of noncompliance to the Attorney General, who may seek an injunction against any agency violating the reporting provisions and recover attorney fees and costs when an enforcement action is successful. Investment managers who invest public funds on behalf of state and local government entities must include a specified disclaimer in certain external communications that discuss social, political, or ideological interests that such communication does not reflect the views or opinions of the people of the State of Florida. On or after July 1, 2023, contracts with investment managers may be unilaterally terminated for failure to provide such disclaimer. The bill requires investment managers and investment advisors to annually certify compliance with the fiduciary standards set forth in the state's investment policy. Failure to timely file the certification is grounds for terminating any contract with the investment advisor or manager. Submission of a materially false certification, would be subject to sanction if they fail to timely file the required certification or if they submit a certification that is materially false. If an investment manager or advisor who does not comply with the state's fiduciary standards, the SBA must report such noncompliance to the Attorney, General, who may bring a civil or This summary is provided for information only and does not represent the opinion of any Senator, Senate Officer, or Senate Office. CS/CS/HB 3 Page: 3 57 2023 Summary of Legislation Passed Committee on Banking and Insurance administrative action against such persons and recover attorney fees and costs when an enforcement action is successful. Bond Financing — Prohibition against ESG Bonds The bill provides that bond issuers are prohibited from issuing any ESG bond. An ESG bond is defined as any bond that has been designated or labeled as a bond that will be used to finance a project with an ESG purpose, including, but not limited to, green bonds, Certified Climate Bonds, GreenStar designated bonds, and other environmental bonds marketed as promoting a generalized or global environmental objective; social bonds marketed as promoting a social objective; and sustainability bonds and sustainable development goal bonds marketed as promoting both environmental and social objectives. It includes bonds self -designated by the issuer as ESG-labeled bonds and those designated as ESG-labeled bonds by a third -party verifier. The bill also prohibits paying for a third -party verifier that certifies or verifies that a bond may be designated or labeled as an ESG bond, renders opinions or produces a report on ESG compliance, among other ESG-related services. Issuers are also prohibited from contracting with a rating agency whose ESG scores for the issuer will have a direct, negative impact on the issuer's bond ratings. The bill provides that notwithstanding the provisions prohibiting unsafe and unsound practices by financial institutions in,s. 655.0323, F.S., a financial institution may purchase and underwrite bonds issued by a governmental entity. The bill expressly applies to bonds issued and agreements made and contracts executed on or after July 1, 2023. Procurement and Contracting with Vendors — No Preference Based on Vendor's Social, Political, or Ideological Interests Beginning July 1, 2023, certain state and local government entities, and educational institutions, are prohibited from giving preference to a vendor based on the vendor's social, political, or ideological interests when procuring or contracting with them. Such entities may not request documentation relating to a vendor's social, political, or ideological interests, and any solicitation for purchases or leases must notify vendors of these provisions. If approved by the Governor, or allowed to become law without the Governor's signature, these provisions take effect July 1, 2023. Vote: Senate 28-12; House 80-31 This summary is provided for information only and does not represent the opinion of any Senator, Senate Officer, or Senate Office. CS/CS/HB 3 Page: 4 58 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF SUNNY ISLES BEACH, FLORIDA, APPROVING A REVISED INVESTMENT POLICY OF THE CITY OF SUNNY ISLES BEACH, ATTACHED HERETO AS EXHIBIT "A"; AUTHORIZING THE CITY MANAGER TO DO ALL THINGS NECESSARY TO EFFECTUATE THIS RESOLUTION; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, Section 166.21, of the Florida Statutes provides the City with the authority to invest surplus funds in certain securities; and WHEREAS, the City Commission desired to invest surplus funds in accordance with State law by adopting an investment policy to earn higher returns on its investments; and WHEREAS, on November 17, 2005 via Resolution No. 2005-861, the City Commission adopted an Investment Policy, and on May 17, 2006 via Resolution No. 2006-925, that Policy was revised; and WHEREAS, the City Commission now wishes to again revise the Investment Policy to update, eliminate and incorporate certain provisions including a divestment requirement mirrored after the State Investment Policy Guidelines which prohibits doing business with any company that engages in business with the countries of Iran and Sudan. NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF SUNNY ISLES BEACH, FLORIDA, AS FOLLOWS: Section 1. Approval of a Revised Investment Policy. The City Commission hereby approves the Revised Investment Policy attached hereto as Exhibit "A". Section 2. Authorization of City Manager. The City Manager is hereby authorized to do all things necessary to effectuate this Resolution. Section 3. Effective Date. This Resolution will be become effective upon adoption. PASSED and ADOPTED this 170i day of December 2009. Nftman S. Edelcup, ATTEST: Jane A. Hines, CMC, City Clerk 59 APPROVED AS TO FORM VOTE AS FOLLOWS: q—z)—\ Mayor Edelcup Vice Mayor Thaler Commissioner Brezin Commissioner Goodman Commissioner Scholl Moved by: Second by: (? 2 _(Yes) (No) /(Yes) (No) __LZYes) (No) (Yes) (No) Z(Yes) (No) 60 City of Sunny Isles Beach — Investment Policy PURPOSE The purpose of this policy is to set forth the investment objectives and parameters for the management of public funds of the City. These policies are designed to ensure the prudent management of public funds, the availability of operating and capital funds when needed and a competitive investment return. 1. SCOPE This investment policy applies to the investment of public funds in excess of amounts needed to meet current expenses, which includes cash and investment balances of City funds. This policy does not apply to the City's pension funds, including those funds in chapters 175 and 185 or funds related to the issuance of debt where there are other existing policies or indentures in effect which govern the investment of such funds. This policy shall be construed and applied so as to comply with Section 218.415, F.S. II. INVESTMENT OBJECTIVES Investment objectives include safety of capital, liquidity of funds and investment income, in that order. The following objectives will be applied in the management of the City's funds: A. Safety of Capital The primary objective of the City's investment program is the protection of public funds. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. Each investment transaction shall be entered into with every effort to prevent capital losses, whether they are from securities defaults, theft, of the impact of adverse market conditions. The objective will be to mitigate credit risk and interest rate risk. 1. Credit Risk — The City will minimize credit risk, the risk of loss due to the failure of the security issuer or backer, by: a) Limiting investments to the authorized securities listed in this policy b) Diversifying the investment portfolio on any investments below AAA rating so that potential losses on individual securities will be minimized. 2. Interest Rate Risk — The City will minimize the risk that the market value of securities in the portfolio will fall due to changes in general interest rates, by: Exhibit "A" 61 a) Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity; b) Investing operating funds only in the authorized securities listed in this policy. B. Liquidity of Funds The City's investment strategy will provide sufficient liquidity to meet the City's operating, payroll and capital requirements. To the extent possible, an attempt will be made to match investment maturities with known cash needs and anticipated cash flow requirements. Since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets. A portion of the portfolio also may be placed in money market mutual funds or local government investment pools which offer same-day liquidity for short-term funds. C. Investment Income The City's investment portfolio shall be designed with the intent of attaining a competitive rate of return throughout the budgetary and economic cycles, taking into account the City's investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. III. ETHICAL STANDARDS The standard or prudence to be applied by the Finance Director or designee shall be the "Prudent Person" rule, which states: "Investments shall be made with judgment and care, under 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 probably income to be derived from the investment." The "Prudent Person" rule can be applied in the context of managing the overall portfolio. The Finance Director or designee and staff, acting in accordance with this policy and exercising due diligence, shall not be held personally responsible for a specific security's credit risk or market price changes. A. Ethics and Conflicts of Interest The City's staff involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. All employees involved in the investment process shall disclose to the City any material financial interests in financial institutions that conduct business with the City, and they shall further disclose any material personal financial/investment positions that could be related to the performance of the City's investment program. Applicable ethics standards provided by the City Charter, City Code, Section 2-11.1 of the Miami -Dade County Code, and Part III of Chapter 112, F.S., shalt be complied with. C. Designation of Investment Officer 62 IV. The Finance Director is designated as investment officer of the City and is responsible for investment decisions and the day-to-day administration of the cash management program. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures so established. The City may request the assistance of, or, appoint an outside investment manager as "Agent" for the City's cash reserves. The "Agent" for the City shall have discretion over the purchase and sale of securities within and subject to compliance with this investment policy. Such investment manager must be registered under the Investment Advisor Act of 1940. Such firm will be a national firm with a local presence. The Finance Director shall consult with the City Manager as necessary regarding the City's investment activity. Positions authorized as investment signatories are the City Manager, Assistant City Manager - Services and Finance Director. LISTING OF AUTHORIZED INVESTMENTS The following investments will be permitted by this policy as consistent with Section 218.415 (16) F.S. Those investments not listed in this section are prohibited. A. United States Government Securities Negotiable direct obligations or obligations the principal and interest of which are unconditionally guaranteed by the United States Government. Such securities will include, but not be limited to the following: ➢ Treasury Bills Treasury Notes ➢ Treasury Bonds ➢ Treasury Strips ➢ Treasury Securities — State and Local Government Series ("SLGS") Treasury Inflation Protection Securities ("TIPS") Portfolio Composition A maximum of 100% of available funds may be invested in the United States Government Securities with the exception of Treasury Strips which are limited to 10% of available funds. Maturity Limitations The maximum length to maturity of any direct investment in the United States Government Securities is ten (10) years from the date of purchase. B. United States Government Agencies Bonds, debentures or notes which may be subject to call, issued or guaranteed as to principal and interest by the United States Governments agencies. Such securities will include, but not be limited to the following: 4 63 ➢ United States Export — Import Bank - Direct obligations or fully guaranteed certificates of beneficial ownership ➢ Farmer Home Administration - Certificates of beneficial ownership ➢ Federal Financing Bank - Discount notes, notes and bonds ➢ Federal Housing Administration Debentures ➢ FDIC guaranteed notes ("TLGP" bonds) ➢ Government National Mortgage Association ("GNMA") - GNMA guaranteed mortgage-backed bonds - GNMA guaranteed pass-through obligations ➢ General Services Administration ➢ New Communities Debentures - United States Government guaranteed debentures ➢ United States Public Housing Notes and Bonds - United States Government guaranteed public housing notes and bonds ➢ United States Department of Housing and Urban Development - Project notes and local authority bonds ➢ Federal Farm Credit Bank ("FFCB") ➢ Federal Home Loan Bank or its City Banks ("FHLB") ➢ Federal National Mortgage Association ("FNMA") ➢ Federal Home Loan Mortgage Corporation ("Freddie -Macs") including Federal - Home Loan Mortgage Corporation participation certificates Portfolio Composition A maximum of 100% of available funds may be invested in United States Government agencies. Limits on Individual Issuers A maximum of 100% of available funds may be invested in individual United States Government agencies. Maturity Limitations The maximum length to maturity for an investment in any United States Government agency security is ten (10) years from the date of purchase. C. Interest Bearing Time Deposit or Savings Account Non-negotiable interest bearing time certificates of deposit or savings accounts in banks organized under the laws of Florida or the United States provided that such deposits are secured by collateral as prescribed by the Florida Security for Public Deposits Act, Chapter 280, Florida Statutes. Portfolio Composition A maximum of 100% of available funds may be invested in non-negotiable interest bearing time certificates of deposit. Limits on Individual Issuers A maximum of 50% of available funds may be deposited with any one (1) issuer. 5 64 Limits on Maturities The maximum maturity on any certificate shall be no greater than ten (10) years from the date of purchase. D. The Florida Local Government Surplus Funds Trust Fund (State Board of Administration — SBA) Portfolio Composition A maximum of 50% of available funds may be invested in the SBA. E. Intergovernmental Investment Pools Investment Authorization Intergovernmental investment pools that are authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Section 163.01, Florida Statutes and provided that said funds contain no derivatives. Portfolio Composition A maximum of 50% of available funds may be invested in intergovernmental investment pools. F. Registered Investment Companies (Money Market Mutual Funds) Registered with the Securities and Exchange Commission with the highest credit quality rating from a nationally recognized rating agency; portfolio is limited to direct obligations of the United States Government or any agency or instrumentality thereof. Portfolio Composition A maximum of 100% of available funds may be invested in money market funds. Limits of Individual Issuers A maximum of 100% of available funds may be invested with any one (1) money market fund. V. PROHIBITIONS The purchase of derivative instruments as defined by the Government Account Standards Board ("GASB") or any investment instrument which is structured to derive a rate of return from an investment source other than the originally purchased investment is strictly prohibited. VI. INVESTMENT PARAMETERS To the extent possible, the City shall attempt to match its investments with anticipated 6 65 cash flow requirements. Unless matched with a specific cash flow, the City will not directly invest in securities maturing more than ten (10) years from the date of purchase. Average life will be used as the maturity for mortgage-backed securities and the intergovernmental pool investments. Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of the portfolio should be continuously invested in readily available funds such as Local Government Investment Pools, or money market funds to ensure that appropriate liquidity is maintained to meet ongoing obligations. VII. SAFEKEEPING AND CUSTODY A. Authorized Investment Institutions and Dealers The City shall only purchase investments from the State Board of Administration, Florida Municipal Investment Trust, financial institutions which are qualified as public depositories by the Treasurer of the State of Florida, primary security dealers (or their agents) as designated by the Federal Reserve Bank of New York, or by secondary securities dealers (or their agents) who act as investment banking arms of local qualified banking institutions. B. Delivery vs. Payment All trades where applicable will be executed by delivery versus payment ("DVP") to ensure that securities are deposited in an eligible financial institution prior to the release of funds. Securities will be held by a third -party custodian as evidenced by safekeeping receipts. C. Bid Requirements Investments will be chosen based on liquidity needs and market conditions. The investments will be competitively bid when feasible and appropriate. Except as required by law, the bid deemed to be the most responsive to the needs of the City must be selected. D. Internal Controls The Finance Director is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse. The internal control structure shall 'be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the valuation of costs and benefits requires estimates and judgments by management. Accordingly, the Finance Director shall establish a process for an annual independent review as part of the annual financial audit to assure compliance with the policies and procedures. The internal controls shall address the following points: 1. Control of collusion — Collusion is a situation where two (2) or more employees are 66 working in conjunction to defraud their employer. 2. Separation of transaction authority from accounting and record keeping — By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved. 3. Custodial safekeeping — All securities, with the exception of certificates of deposit, shall be held with a third -party custodian; and all securities purchased by, and all collateral obtained by the City should be properly designated as an asset of the City. The securities must be held in an account separate and apart from the assets of the financial institution. No withdrawal of such securities, in whole or in part, shall be made from safekeeping except by the Finance Director as authorized herein, or by their respective designee. 4. Certificates of Deposit issued by a local bank or savings and loan association may be held in safekeeping at that institution. The institution shall issue a copy of the certificate of deposit, a safekeeping receipt, or some other confirmation of the purchase that is satisfactory to the Finance Director. This will be kept on file in the Finance Department and will indicate the amount, interest rate, issue date and maturity date of the certificate of deposit. 5. Avoidance of physical delivery securities — Book entry securities are much easier to transfer and account for since actual delivery is never taken. Physical delivery securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities. 6. Clear delegation of authority to subordinate staff members — Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions. 7. Written confirmation of telephone transactions for investments and wire transactions — Due to the potential for error and improprieties arising from telephone transactions, all telephone transactions should be supported by written communications and approved by appropriate personnel. VIII. CONTINUING EDUCATION The Finance Director shall annually complete eight (8) hours of continuing education in subjects or courses of study related to investment practices and products. IX. REPORTING The Finance Director shall provide a quarterly investment report to the City Manager. The report shall list investments by fund and type and include the book value, income earned and market value as of the report date. 8 67 X. SECURITIES DISPOSITION A. Every security purchased under this section on behalf of the governing body of the City must be properly earmarked and: 1. If registered with the issuer or its agents, must be immediately placed for safekeeping in a location that protects the governing body's interest in the security; 2. If in book entry form, must be held for the credit of the governing body by a depository chartered by the Federal Government, the state, or any other state or territory of the United States which has a branch or principal place of business in this state as defined in s. 658.12, or by a national association organized and existing under the laws of the United States which is authorized to accept and execute trusts and which is doing business in this state, and must be kept by the depository in an account separate and apart from the assets of the financial institution; or 3. If physically issued to the holder but not registered with the issuer or its agents, must be immediately placed for safekeeping in a secured vault. XI. SALE OF SECURITIES When the invested funds are needed in whole or in part for the purposes originally intended or for more optimal investments, the City may sell such investments at the then - prevailing market price and place the proceeds into the proper account or fund of City. XII. PRE-EXISTING CONTRACT Any public funds subject to a contract or agreement existing on November 19, 2009 may not be invested contrary to such contract or agreement. XIII. AUDITS Certified public accountants conducting audits of the City pursuant to s. 218.39 shall report, as part of the audit, whether or not the City has complied with section 218.415 , F.S., and this Investment Policy. XIV. AUTHORIZED DEPOSITS In addition to the investments authorized for the City in subsection (VIII), as authorized by paragraph (23) of Section 218.415, F.S., the City may deposit any portion of surplus public funds in its control or possession in accordance with the following conditions: A. The funds are initially deposited in a qualified public depository, as defined in s. 280.02, selected by the City. B. The selected depository arranges for the deposit of the funds in certificates of deposit 9 68 in one (1) or more federally insured banks or savings and loan associations, wherever located, for the account of the City. C. The full amount of principal and accrued interest of each such certificate of deposit is insured by the Federal Deposit Insurance Corporation. D. The selected depository acts as custodian for the City with respect to such certificates of deposit issued for its account. E. At the same time the City's funds are deposited and the certificates of deposit are issued, the selected depository receives an amount of deposits from customers of other federally insured financial institutions, wherever located, equal to or greater than the amount of the funds initially invested by the City through the selected depository. XV. PROHIBITED INVESTMENTS The City is prohibited from investing in any company that engages in business with any countries that are on the prohibited list as part of the Protecting Florida's Investment Act (Chapter 2007-88 FS). The City Manager may promulgate specific requirements for the implementation of this provision based upon criteria applied by the Local Government Surplus Funds Trust Fund for such purpose. XVI. INVESTMENT POLICY REVIEW The Finance Director shall review this Investment Policy on an annual basis. Any recommended changes to this policy must be approved by the City Manager and subsequently by the City Commission. 10 69 Preview Page 1 of 2 TO: FROM: DATE: RE: City of Sunny Isles Beach 18070 Collins Avenue Sunny Isles Beach, Florida 33160 (305) 947-0606 City Hall (305) 949-3113 Fax MEMORANDUM The Honorable Mayor and City Commission Douglas Haag, Assistant City Manager - Finance 12/17/2009 Revised Investment Policy RECOMMENDATION: Approve the attached revised investment policy that includes a prohibition against doing business with any company that engages in business with the countries of Iran and Sudan. REASONS: Initially, this was intended to be only a minor change to the City's current investment policy by adding a statement to accomplish the above divestment requirement which is mirrored after the state investment policy guidelines. However, after closer review, it was felt that it was time for a `redo' of the overall investment policy which was originally adopted in 2005 and updated in 2006. Some of the changes to the policy include: • More closely align to Florida Statute, especially in the divestment area • Eliminate unnecessary items such as repurchase agreements • More clearly define delegation of authority • Eliminate redundancies in the areas of authorized investments • Eliminate inconsistencies in the areas of investment objectives, performance measurements, maturities, etc. a Eliminate areas that are not applicable to an investment policy such as interfund loans http://sibagenda.sibfl.netlagendalPreview.aspx?ltemID=136&MeetinglD=O&MeetingDate... 12/8/2009 70 Preview Page 2 of 2 This revised policy should provide the City the needed security and flexibility based on the events of the past few years. However, it is also important that the policy be reviewed periodically to see if any changes are in order. ATTACHMENTS: . Resolution . Proposed Investment Policy http://sibagenda.sibfl.net/agenda/Preview.aspx?ItemID=136&MeetingID=O&MeetingDate... 12/$/2009 71 k F F 6441 s OF 5'3 City of Sunny Isles Beach 18070 Collins Avenue Sunny Isles Beach, Florida 33160 (305) 947-0606 City Hall (305) 949-3113 Fax MEMORANDUM TO: Honorable Mayor and City Commissioners VIA: Stan Morris, City Manager FROM: Tiffany D. Neely, Finance Director DATE: January 18, 2024 RE: Revised Investment Policy RECOMMENDATION: Staff recommends approval of this Resolution. REASONS: This revision is required to be in compliance with Sec. 218.415(24) of the Florida Statutes. Investment policies are required to be updated to incorporate language regarding "pecuniary factors" along with a definition of this term. Subsection D, entitled "Investment Decisions", has been added to Section II o the investment policy for this purpose. In addition, some other minor revisions were made. This included citations being updated, grammatical errors being corrected and an additional update to the investment signatories due to personnel changes. All changes have been highlighted in the word document draft for your review. ATTACHMENTS: Resolution Revised investment Policy FL Statute 218.415 .pdf 2023 Legislative Summary of CS/CS/HB 3 - Government and Corporate Activism 2009 Investment Policy Item Number: 10.A K%3