§ 2-165. Investment management.

(a)

The objectives of the city's investment and cash management program shall be to:

(1)

Safely invest city funds to the fullest extent possible.

(2)

Maintain sufficient liquidity to meet cash flow needs.

(3)

Attain the maximum yield possible consistent with subsections (1) and (2) above.

(b)

The city will limit its investments to the safest type of securities permitted by state law. These shall include those which:

(1)

Have insurance on the principal guaranteed by the Federal Deposit Insurance Corporation (FDIC).

(2)

Have security on the principal in the form of bonds or other interest-bearing securities of the U.S. government or its agencies.

(3)

Have security on the principal in the form of bonds or other interest-bearing securities of the state, or its agencies or political subdivisions as defined by state law.

(c)

Investments shall be made by the city administrator, or designated representative, on the basis of competitive offers and bids in order to obtain the highest available rates in accordance with subsections (a) and (b) of this section. In order to keep administrative costs as low as possible, investments of less than one hundred thousand dollars ($100,000.00) may be made through a current depository bank. For investments exceeding one hundred thousand dollars ($100,000.00), banking institutions shall be contacted by telephone and asked to provide an interest yield quote by return telephone call within sixty (60) minutes. The institution offering the highest interest yield in accordance with the other security requirements will be notified immediately of the city's investment decision. The bids of each institution shall be recorded and kept on file for a period of at least one (1) fiscal year.

(d)

In the event of identical interest yield bids, the city may break the tie by the use of an objective method to be determined by the city.

(e)

In the event no quotes are received from a banking institution in the city insured by the FDIC, the city may invest its funds in any banking institution insured by the FDIC in the state meeting the security requirements of subsection (b) of this section.

(f)

Clear title to the principal of and collateral backing for any investment shall be maintained by the city or by a third-party safekeeping agent under agreement to the city.

(g)

The city may specify monthly investment yield payments in order to enhance cash flow and investment returns.

(h)

The city administrator, or designated representative, shall be responsible for administering the city's investment and cash management program in accordance with state law and city ordinances.

(i)

The city administrator, or designated representative, shall provide the mayor and board of directors with monthly investment information. The information shall include type of investment, purchase date, maturity date, face value, rate of interest, amount of interest earned and institution where the funds are invested.

(Code 1976, § 2-128)

State law reference

Determination of depositories, A.C.A. §§ 19-8-106, 19-8-107.