S-954 - 10/12/1999 - FINANCE - Ordinances Supporting Documents a ,C z §y,
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Approved Omnibus Vote.
ITEM Rl~1vIOV I� MNT A: None.
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7. ,AC For Final Action):
A. APPOINTIyIFrN"I'S: No Business.
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B, ORD A LROS,QT:?tT[
O F 1 -F1- 1 '-954 ORMNANM
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TIC IN'S S TMFNT " P LIC F R. .'� AMEND INN,
ELLA" BR_ Pc3a 1cY
Public Act 90-0688,signed into law during 1998,requires that every �
unit of goverment in Illinois adapt a written investment policy by
January 1., 2000. The iegislation specifies that the investment policy
address helve different areas governing the Village's investment a
activities. Although the Village"s existing investment policy already
contains most of the requirements of P-A. 90-4688, minor
adjustments are needed in order to be in full compliance with the new
legislation. 1
The following are the recornmended revisions to the investment
policy:
• All references to the Finance Officer position have been changed
to.Finance Director, reflective of the change in title made in 1998.
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• The section titled "Return on Investments" has been removed
from the "Objeotives" section and has been moved and renamed
"Performance Standards". This change was made since the new
legislation specifically separates perfoimance standards fio n �
objectives.
« The language in the "Responsibility" section requiring the
Finance Director to establish a system of controls has been
strengthened to require that theae controls be in written form. The
VILLAGE OF OAK: BROOK.Minutes
Page 3 of 22 October 12, 1
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Cash and Investment Procedures and Internal Controls Manual
documents the controls that the Finance Department has had in
place for several years.
• The "Reporting" section now requires that market value be
reported on. the monthly Treasurer's Report. The prior
requirement that the annual report include "a projection of what
may be anticipated.in the future" has been deleted in that it is
difficult, even for investment professionals, to predict the future
of interest rates.
The section previously titled "Bidding Procedures on
Investments"has been removed from the Investment Policy and is
now addressed in the Cash and Investment Procedures and
Internal Controls Manual.
When deciding to purchase agency securities, the analysis is usually
based on the incremental yield over U.S. Treasury securities, the
i "call provisions, etc. The agency securities the Tillage has
purchased so far have been new issues, which trade at par, and are
priced the same from broker to broker. In this case competitive
bidding doesn't make sense. The situation may arise later where a
broker would hold a specific agency issue that is not widely traded but
is a good investment from a yield and call provision standpoint. In
this case competitive bidding would be very difficult when staff tries
to find another broker holding exactly the same issue.
A provision has also been. made to forgo competitive bidding when
time constraints preclude the use of competitive bidding. This
situation happens infrequently and occurs when a broker is not
available or fails to deliver their bid at the specified time. Whenever
possible and practical we will continue to seek competitive bids on all
investment purchases.
Motion by Trustee Caleel, seconded by Trustee Saving to adopt
Ordinance #1999-FI-EXI-S-954 "An Ordinance Amending The
Investment Policy For The Village Of Oak Brook, IL," as presented
and waive the full reading thereof ROLL CALL VOTE:
Ayes: 6--Trustees Butler, Caleel, Craig, Kenny, McInerney and
Savino.
Nays: 0--None.
Absent: 0—Norte. Motion Carried
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VILLAGE OF OAK BROOK Minutes Page 4 of 22 October 12, 19"