Investment Policy Statement (IPS)
1.SCOPE
The Board of Trustees of the Pound Ridge Library acts as custodians of public funds and, as such, it is subject to restrictions on eligible investments. In accordance with General Municipal Law and subsequent court rulings, all funds in the Library’s control must be invested in a limited number of financial vehicles.
- OBJECTIVES
The objectives of the Pound Ridge Library’s investment activities are to:
- adequately safeguard principal;
- provide sufficient liquidity to meet all operating requirements; and
- obtain a reasonable rate of return while adhering to all applicable federal, state, and other legal requirements.
- DELEGATION OF AUTHORITY
Responsibility for administration of the investment program is delegated to the Finance Committee of the Board of Trustees with the assistance of the Library Director. This Committee shall establish written procedures for the operation of the investment program by majority vote of the quorum of the Board of Trustees and consistent with the investment guidelines outlined in this policy.
- PRUDENCE
All participants in the investment process shall seek to act responsibly as custodians of the public interest and shall avoid any transaction that creates undue risk and might impair public confidence in the Pound Ridge Library to govern effectively. 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 safety of the principal as well as the probable income to be derived. All participants involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program or which could impair their ability to make impartial investment decisions.
- DIVERSIFICATION
It is the policy of the Pound Ridge Library to diversify its deposits and investments by financial institution, by investment instrument, and by maturity scheduling.
- INTERNAL CONTROLS
The Finance Committee, with the assistance of the Library Director, is responsible for establishing and maintaining an internal control structure to provide reasonable, but not absolute, assurance that deposits and investments are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with Board of Trustees authorization, are recorded properly, and are managed in compliance with applicable laws and regulations.
- DEPOSIT OF PUBLIC FUNDS
Annually, pursuant to a resolution adopted by an affirmative vote of a majority of the total membership of the Board, the Treasurer, coordinating with the finance committee, shall designate at least one bank as defined by the banking law and located and authorized to do business in New York for the deposit of public funds. The funds are deposited into a money market account and transferred as needed to a checking account for operating purposes. All funds are secured in accordance with the provisions of General Municipal Law §10.
The treasurer, coordinating with the finance committee, may purchase treasury notes maturing within one year and/or certificates of deposit from banks and trust companies as defined by the banking law and located and authorized to do business in New York. All certificates of deposit will be FDIC insured up to the current FDIC insurance limits and no one bank will have more than those limits allow. Maturities will be staggered to maintain sufficient cash reserves for current operating expenses.
- COLLATERALIZING OF DEPOSITS
All deposits of the Pound Ridge Library, including certificates of deposit and special time deposits, which are in excess of the amount insured under the provisions of the Federal Deposit Insurance Act shall be secured in accordance with General Municipal Law §10. Examples of the type of collateralization may include the following:
- A pledge of “eligible securities” with an aggregate “’market value” or as provided by General Municipal Law §10, equal to at least the aggregate amount of the public deposits for which collateral is being sought.
- A pledge of a pro rata portion of a pool of eligible securities, as defined by General Municipal Law §10, having in the aggregate a market value at least equal to the aggregate amount of public deposits from all officers making deposits within the state at such bank or trust company, together with a security agreement from the bank or trust company. Such security agreement shall comply with the provisions of General Municipal Law §10.
- An eligible “irrevocable letter of credit” issued by a qualified bank, other than the bank with the deposits, in favor of the Library for a term not to exceed 90 days with an aggregate value equal to 140% of the aggregate amount of deposits and the agreed upon interest, if any. A qualified bank is one whose commercial paper and other unsecured short-term debt obligations are rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization or by a bank that is in compliance with applicable federal minimum risk-based capital requirements.
- An eligible surety bond payable to the Library for an amount at least equal to 100% of the aggregate amount of deposits and the agreed upon interest, if any, executed by an insurance company authorized to do business in New York State, whose claims-paying ability is rated in the highest rating category by at least two nationally recognized statistical rating organizations.
- SAFEKEEPING AND COLLATERALIZATION
Eligible securities used for collateralizing deposits shall be held by the depository and/or a third party bank or trust company subject to security and custodial agreements in accordance with the provisions of General Municipal Law §10.
- PERMITTED INVESTMENTS
10.1 As authorized by General Municipal Law §11, the Pound Ridge Library authorizes the Finance Committee to invest monies not required for immediate expenditure, except monies the investment of which is otherwise provided for by law, in instruments becoming payable within such time as the proceeds shall be needed to meet expenditures for which such monies were obtained, which may include one or more of the following types of investments.
- special time deposit accounts in commercial banks and trust companies located and authorized to do business in New York State;
- certificates of deposit in commercial banks and trust companies located and authorized to do business in New York State;
- obligations of the United States of America;
- obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by the United States of America;
- obligations of the State of New York;
- with approval of the State Comptroller, obligations issued pursuant to Local Finance Law §24 or §25 by any municipality, school district or district corporation other than the Pound Ridge Library;
10.2 All investment obligations shall be payable or redeemable at the option of the Pound Ridge Library within such times as the proceeds will be needed to meet expenditures for purposes for which the monies were provided and, in the case of obligations purchased with the proceeds of bonds or notes, shall be payable or redeemable at the option of the Pound Ridge Library within two years of the date of purchase.
10.3 Except for gift, grants, or bequests given to the library as a true trust, which are subject to the “prudent investor” provisions of Estates, Powers, and Trusts Law §§11-2.2 and 11-2.2, even privately acquired funds are subject to these investment limitations.
- AUTHORIZED FINANCIAL INSTITUTIONS AND DEALERS
All financial institutions with which the Library conducts business must be creditworthy. Banks shall provide their most recent Consolidated Report of Condition (Call Report) at the request of the Pound Ridge Library. Security dealers not affiliated with a bank shall be required to be classified as reporting dealers affiliated with the New York Federal Reserve Bank as primary dealers.
- PURCHASE OF INVESTMENTS
The Treasurer and by majority vote of the quorum of the Board of Trustees to contract for the purchase of investments directly, including through a repurchase agreement, from an authorized trading partner or by utilizing an ongoing investment program with an authorized trading partner pursuant to a contract authorized by the governing board.
- REVIEW AND AMENDMENT OF INVESTMENT POLICY STATEMENT
The Finance Committee, with the assistance of the Library Director, shall review the Investment Policy annually, based on the Library’s fiscal year of January 1 – December 31. The Pound Ridge Library Board of Trustees shall have the power to amend this Investment Policy as needed in accordance with the provisions of General Municipal Law §39.
The Treasurer and Finance Committee are
Revised and approved by the Pound Ridge Library Board of Trustees, May 13, 2003
Policy approved by the Pound Ridge Library Board of Trustees, November 10, 2009
Policy approved by the Pound Ridge Library Board of Trustees, December 20, 2011
Policy approved by the Pound Ridge Library Board of Trustees, April 2, 2013
Policy revised and approved by the Pound Ridge Library Board of Trustees, July 23, 2024
