Loading...

Operating Funds Investment Policy

Policy #007

  • Adopted: May 21, 1991
  • Effective: May 21, 1991
  • Revised: December 23, 1991
  • Revised: May 18, 1998
  • Revised: April 23, 2001
  • Revised: February 23, 2009

Scope

Kalamazoo Public Library maintains two distinct types of funds for Library purposes: (1) operating funds, containing proceeds of all taxes, fees, state aid, penal fines, gifts and grants, and other sources of revenue, and (2) an endowment fund, containing the proceeds of gifts specially designated as endowments or restricted by a donor to be not wholly expendable on a current basis.

This policy governs the investment of funds in Kalamazoo Public Library’s Operating Funds. 

Objectives

The primary objectives of this investment policy and the investment practices of operating assets, in priority order, are safety, liquidity, and return.  Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. In addition, the investment portfolio must remain sufficiently liquid to ensure the availability of those monies to complete the charter mission of Kalamazoo Public Library in a time frame dictated by both budget and programming. Last in importance is yield or the return on investment. Subject to the constraints of safety and relative liquidity, KPL will strive to maximize the return on eligible legal investment vehicles.

Delegation of Authority

The responsibility to oversee the investment of operating funds made on behalf of Kalamazoo Public Library shall rest with its board Treasurer. This shall include the responsibility to ensure compliance with stated policies and procedures by the investing agents for KPL. The Treasurer shall also review and approve procedures established in reference to fund safekeeping, wire transfer agreements, investment accounting, banking service contracts, and signature authority authorizations as part of that oversight responsibility.

Ethics and Conflict of Interest

In the event an employee or board member conducts private investment business on a regular basis with an individual with whom the employee or board member would conduct business on behalf of the Library, the board member or employee shall disclose this matter to the board.

Authorized Investments

  1. The investing agent of Kalamazoo Public Library Operating Funds may authorize the investment of excess Library funds in the following investments:
  2. Bonds, securities, and other obligations of the United States or agency or instrumentality of the United States.
  3. Certificates of deposit, savings accounts, deposit accounts, or depository receipts of an eligible financial institution or in certificates of deposit in the Certificate of Deposit Account Registry Service as authorized by Section (1), Subsection (5) of PA 20.
  4. Commercial paper rated at time of purchase within the 2 highest classifications established by not less than 2 standard rating services and that matures not more than 270 days after date of purchase.
  5. Repurchase agreements consisting of eligible investments.
  6. Bankers’ acceptances of United States banks.
  7. Obligations of this state or any of its political subdivisions that at the time of purchase are rated as investment grade by not less than 1 standard rating service.
  8. Mutual funds registered under the Investment Company Act of 1940.
  9. Obligations described in items 1 through 7 if purchased through an interlocal agreement under the Urban Cooperation Act of 1967.
  10. Investment pools organized under the Surplus Funds Investment Pool Act, 1982 PA 367.

Eligible Financial Institutions

An institution eligible to receive deposits of library operating funds or to provide investment instruments is defined as “a state or nationally chartered bank or a state or federally charged savings and loan association, savings bank, or credit union whose deposits are insured by an agency of the United States government.” The institution must maintain a principal office or branch office in Michigan operating under the laws of this state or the United States.

The board must approve all institutions used by the library’s investing agent to receive deposits of library funds. Eligible institutions shall be reviewed annually to renew their eligibility.

Reporting

The Library’s business manager shall include a statement of investments quarterly in the financial report to the Board. The Library’s business manager shall make additional information available to the Treasurer and the Finance and Budget Committee as needed.

Reference

  • Investment of Surplus Funds of Political Subdivisions, Act 20 of 1943, as amended by Enrolled Senate Act 664 
  • Surplus Funds Investment Pool Act, 1982 P.A. 367, MCL 129.141 to 129.150
  • Urban Cooperation Act of 1967, 1967 (Ex Sess) PA7, MCL 124.501 to 124.512
  • Investment Company Act of 1940, title I of chapter 686, 54 Stat. 789, 15 U.S.C.