This policy addresses the methods, procedures, and practices which must be exercised to ensure effective and judicious fiscal and investment management of the District's funds. This Investment Policy shall apply to all funds and liquid assets held by the District.
Operating Cash and Reserves
The District will maintain a minimum cash reserve equal to or greater than six months of approved and budgeted expenses. The District has also established specific funds for operations, long term projects, and capital reserves. All cash in excess of established reserve funds shall be available for investment purposes unless required to be held separately by law, regulation, or other binding agreement. The investment income derived from the pooled investment account or accounts shall be placed in defined reserved accounts and or be made available for further investment.
At all times, the District shall keep and maintain the following cash and financial accounts:
Cash- Petty cash held within the Districts facilities. To be used to address day to day miscellaneous expenses.
Checking Account- Used to make payments and accept inbound funds from various sources.
Reserve Accounts- Established accounts, designed to manage funds money’s for program or project efforts. Placement of funds Money’s into these accounts would not be available for general investment. These funds will be held in institutions established and approved by Colorado law providing the safest form of investment available to the District.
Movement of funds in and out of the above referenced accounts shall be governed by by Library District By-Laws and Policies.
Investment Objectives
The District's funds are to be invested and maintained in accordance with all applicable District policies, Colorado statutes, and Federal regulations, and in a manner designed to accomplish the following objectives:
- Preservation of capital and protection of investment principal.
- Maintenance of sufficient liquidity to meet anticipated cash flows.
- Attainment of a market value rate of return.
- Diversification to avoid incurring unreasonable market risks.
- Transparency of the District's investments, and assets.
- Staying in compliance with the investment policy and plan.
Delegation of Authority
The Trustees have granted to the District's Director, authority for managing the District's investment program and for implementing this Investment Policy. The Director, working with the appointed Treasurer of The Clearview Library District Board of Trustees, will make investment decisions and present those decisions to the full board for approval prior to any change in investment strategy. The Director shall obtain concurrence from the Library Board President and Treasurer for any investment funds movement. No person may engage in an investment transaction except as provided under the terms of this Investment Policy and as stipulated in the Clearview Library District ByLaws.
The District may engage the support services of outside investment advisors in regard to its investment program, so long as it can be demonstrated that these services produce a net financial advantage or necessary financial protection of the District's financial resources.
Prudence
The standard of prudence, as defined by the Colorado Revised Statutes, to be used for managing the District's assets is the "prudent investor" standard applicable to a fiduciary, which states that a prudent investor "shall exercise the judgment and care, under circumstances then prevailing, which men of prudence, discretion, and intelligence exercise in the management of the property of another, not in regard to speculation but in regard to the permanent disposition of funds, considering the probable income as well as the probable safety of capital." (Colorado Revised Statutes 15-1-304, Standard for Investments.)
The District's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The District recognizes that no investment is totally riskless and that the investment activities of the District are a matter of public record. Accordingly, the District recognizes that occasional measured losses may occur in a diversified portfolio and shall be considered within the context of the overall portfolio's return, provided that adequate diversification has been implemented and that the sale of a security is in the best long- term interest of the District.
The Director acting in accordance with this policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion to the Trustees and appropriate action is taken to control adverse developments.
Ethics and Conflicts of Interest
The Clearview Library District Board of Trustees and employees who are involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the District's investment program or which could impair or create the appearance of an impairment of their ability to make impartial investment decisions. The Board of Trustees and employees shall disclose to the Director and or Treasurer any material financial interest they have in a financial institution that conduct business with the District, and they shall subordinate their personal investment transactions to those of the District.
Authorized Securities and Transactions
All investments will be made in accordance with the Colorado Revised Statutes (C.R.S.) as follows: C.R.S. 11-10.5-101, et seq. Public Deposit Protection Act; C.R.S. 11-47-101, et seq. Savings and Loan Association Public Deposit Protection Act; C.R.S. 24-75-601, et. seq. Funds - Legal Investments; C.R.S. 24-75-603, et seq. Depositories; and C.R.S. 24-75-701and 702, Investment Funds - Local Government Pooling. Any revisions or extensions of these sections of the statutes will be assumed to be part of this Investment Policy immediately upon being enacted.
Investment Diversification
It is the intent of the District to diversify the investments within the portfolio to avoid incurring unreasonable risks inherent in over-investing in specific instruments, individual financial institutions or maturities. The asset allocation in the portfolio should be flexible depending upon the outlook for the economy, the securities markets and the District's anticipated cash flow needs. While the asset allocation in the portfolio is flexible, the District shall have restrictions on both portfolio and issuer concentration limits. In the event the District would like to invest outside of these parameters, board approval is required.
Investments
As stated in C.R.S. 24-75-601.1 (1) Any guaranteed investment contract, guaranteed interest contract, annuity contract, or funding agreement if, at the time the contract or agreement is entered into, the long-term credit rating, financial obligations rating, claims paying ability rating, or financial strength rating of the party, or of the guarantor of the party, with whom the public entity enters the contract or agreement is, at the time of issuance, rated in one of the two highest rating categories by two or more NRSROs.
Competitive Transactions
Each investment transaction shall be competitively transacted with authorized broker/dealers/banker. At least three broker/dealers/banker shall be contacted for each transaction and their bid and offering prices shall be recorded.
If the District is offered a security for which there is no other readily available competitive offering, quotations for comparable or alternative securities will be documented.
Transactions that are executed through an external investment advisor are presumed to meet these requirements. The external investment advisor will maintain the competitive pricing and documentation for the transactions they execute for the District.
Reporting
The Treasurer will provide a report regarding the performance of all investments to the Board of Trustees on an annual basis.
Policy Revisions
Amendments to the Investment Policy must be approved by a super-majority (4 of 5 trustees).
Adopted January 26, 2023