Investment and Public Funds Policy

In accordance with the Investment Policy adopted by the City of Columbia

PURPOSE AND SCOPE.

  • The purpose of this policy statement is to outline the responsibilities, general objectives, and specific guidelines for management of public funds by the Columbia Public Library. Its scope is all public funds of the Library.

RESPONSIBILITIES.

  • All investment policies and procedures of the Columbia Public Library will be in accordance with Illinois Law. The authority of the Library Board of Trustees to control and invest public funds is defined in the Illinois Public Funds Investment Act and the investments permitted are described therein. Administration and execution of these policies are the responsibility of the Treasurer who is hereby designated as the “chief investment officer” of the Library acting under the authority of the Library Board of Trustees.

DELEGATION OF AUTHORITY.

  • Management and administrative responsibility for the investment program is hereby delegated to the Treasurer of the Columbia Public Library Board of Trustees.

“PRUDENT PERSON” STANDARD.

  • All library investment activities shall use a “prudent person” standard of care. Investments shall be made with the Board’s approval and shall be applied in the context of managing an overall portfolio. Investment officers, acting in accordance with this Policy and the written procedures of the Library, and exercising due diligence, shall be relieved of personal responsibility for a security’s credit risk or market price/value changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

OBJECTIVES.

  • In selecting financial institutions and investment instruments to  be used, the following general objectives should be considered in the priority listed:
    • Legality (conforming with all legal requirements)
    • Safety (preserving capital and including diversification appropriate to the nature and amount of the funds)
    • Liquidity (maintaining sufficient liquidity to meet current obligations and those reasonably to be anticipated)
    • Yield (attaining a market rate of return on investments)
    • Simplicity of management

Investment of Public Funds continued…

GUIDELINES. The following guidelines should be used to meet the general investment objectives:

  1. Legality and Safety:
    • Investments will be made only in securities guaranteed by the US government, or in the FDIC insured institutions including SAIF of the FDIC. Deposit accounts in banks or savings and loan institutions will not exceed the amount insured by FDIC coverage [unless adequately collateralized pursuant to Regulations of the Federal Reserve regarding custody and safekeeping of collateral].
    • Authorized investments include and will primarily consist of: Certificates of Deposit, Treasury Bills and other securities guaranteed by the US Government, participation in the State of Illinois Public Treasurer’s Investment Pool, and any other investments allowed under State law that satisfy the investment objectives of the library.
  2. Liquidity:
  • In general, investments should be managed to meet liquidity needs for the current month plus one month (based on forecasted needs) and any reasonably anticipated special needs.
  1. Yield-Return on investment:
  • Within the constraints on Illinois law, considerations of safety, and this investment policy, every effort should be made to maximize return on investments made. All available funds will be placed in investments or kept in interest bearing deposit accounts.
  1. Simplicity of management:
  • The time required by library administrative staff to manage investments shall be kept to a minimum.

REPORTING.

  • Investments, fund balances and the status of such accounts will be reported at each regularly scheduled meeting of the Library Board and at least quarterly include information regarding securities in the portfolio by class or type, book value, income earned, and market value as of the report date. At least annually, the Chief Investment Officer shall review this Policy for any needed modifications and report to the Board on the investment portfolio, its effectiveness in meeting the Library’s need for safety, liquidity, rate of return, diversification and general performance. The reports will be available to the general public upon request.

INTERNAL CONTROLS.

  • In addition to these guidelines, the Chief Investment Officer shall establish a system of internal controls and written operational procedures designed to prevent loss, theft, or misuse of funds.

AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS:

  • Any investment advisors, money managers and financial institutions shall be considered and authorized only by the action of the Board of Library Trustees upon the recommendation of the Chief Investment Officer. The Chief Investment Officer will maintain a list of financial dealers and institutions to provide investment services.

CONFLICTS OF INTEREST

  • Officers involved in the investment process shall refrain from personal business activities that might conflict with the proper execution and management of this investment program, or that could impair their ability to make impartial decisions, or that could give the appearance of impropriety.

Explanation: Philip Lensine of Kavanagh, Scully, Sudow, White and Frederick, PC developed the above Investment of Public Funds Policy at the request of the Illinois System Directors.

The Columbia Public Library makes investments as designated by the donor. Donations to the Building Funds are sent to the “Columbia Public Library Building Fund.” Donations for books are used for the purchase of books, etc.

Donations to the Memorial Endowment Fund are invested. The Columbia Public Library Board of Trustees advises the trust company of any changes in investments. Example: A request to put some funds into government bonds. The library can only use the interest from the Memorial Endowment. As instructed by the Columbia Library Board of Trustees, interest is sent to the City of Columbia for deposit in the “Columbia Public Library Building Fund.” The interest money is used for any building emergencies or repairs and for mortgage payments on any current building project. Quarterly reports are received by the Treasurer and are reviewed by the Library Board of Trustees.

Investment and Public Funds Policy – Reviewed 02/10/04

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