E2
Investments
Approved: 01/26/1999

To Comply With Act 20 PA 1943, as amended

It is the policy of Ypsilanti District Library to invest its funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow needs of the Ypsilanti District Library and complying with all state statues governing the investment of public funds.

This investment policy applies to all financial assets of the Ypsilanti District Library. These assets are accounted for in the various funds of the Ypsilanti District Library and include the general fund, special revenue funds, debt service funds, capital project funds, enterprise funds, internal service funds, trust and agency funds and any new fund established by the Ypsilanti District Library.

Primary objective, in priority order, of the Ypsilanti District Library’s investment activities shall be:

Safety – 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.

Diversification – The investments will be diversified by the security type and institution in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.

Liquidity – The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.

Return on Investment – the investment portfolio shall be designed with the objective of obtaining a rate of return throughout the budgetary and economic cycles, taking into account the investment risk constraints and the cash flow characteristics of the portfolio.

Delegation of Authority to Make Investments

Authority to manage the investment program is derived from the following: Board Resolution #99-01. Management responsibility for the investment program is hereby delegated to the Board Treasurer and the Library Director, who shall establish written procedures and internal controls for the operation of the investment program consistent with this investment policy. Procedures should include references to: safekeeping, delivery vs payment, investment accounting, repurchase agreements, wire transfer agreements, collateral/depository agreements and banking service contracts. No person may engage in an investment transaction, on behalf of the library except as provided under the terms of this policy and the procedures established by the Finance Committee and the Library Director. The Board Treasurer and Library Director shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.

The Ypsilanti District Library is limited to investments authorized by Act 20 or 1943, as amended.

Safekeeping and Custody – This provision will confirm that the securities are physically safe.

All security transactions, including collateral for repurchase agreements and financial institution deposits, entered into by the Ypsilanti District Library shall be on a cash (or delivery vs payment) basis. Securities may be held by a third party custodian designated by the treasurer and evidenced by safekeeping receipts as determined by the treasurer.

Prudence

Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise the management of their own affairs, not for speculation, but for investment considering the probable safety of their capital as well as the probable income to be derived.