Investment Policy

Introduction

The Shaker Heights Public Library’s Investment Policy is developed and implemented in accordance with Senate Bill 81 and Section 135, “Uniform Depository Act,” of the Ohio Revised Code. This Investment Policy applies to all active, interim and inactive funds that the library has received, and is held accountable for, from all public and private sources.

The ultimate goal is to maximize return while preserving principal.  This policy applies to all funds of the Library.

Investing Authority

The Investing Authority of Shaker Heights Public Library will be the fiscal officer, deputy fiscal officer or such other officer or employee of the library as the board shall designate. The Investing Authority shall act only in accordance with the wishes of the board as described in this investment policy.

Legislative Changes

Any state of Ohio legislative action that further restricts or permits allowable maturities, investment type or percentage allocations will, upon effectiveness, be incorporated into the Shaker Heights Public Library’s Investment Policy and shall supersede any and all previous applicable language.

Investment Philosophy

The Investing Authority shall make investments in good faith, in a manner reasonably believed to be in or not opposed to the best interests of the library, and with the exercise of that degree of care that an ordinarily prudent person in a like position would use under similar circumstances. The prudent person standard requires that the Investing Authority seek investments that will achieve the prescribed objectives set forth in this Investment Policy.

Maintaining the Public Trust

The Investing Authority shall act as the custodian of the public trust in all deposit/investment program activities. The Investing Authority shall recognize that the deposit/investment program is subject to public review and evaluation. The overall deposit/investment program shall be managed with a degree of professionalism that is worthy of the public trust.

All participants involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.

For purposes of this policy, “personal business activity” shall mean any involvement whatsoever in any business, including but not limited to banking, investment sales or management, brokerages, or referral activities.

At no time shall an employee or trustee involved in the investment process benefit financially from any investments made on behalf of the Library.

Objectives

The following deposit/investment objectives, in order of priority, will be applied in the management of funds of the Shaker Heights Public Library.

  • Preservation of Principal – The deposit/investment program shall preserve capital and protect investment principle within defined parameters.
  • Maintenance of Liquidity – The deposit/investment program shall maintain sufficient liquidity to meet reasonably anticipated fiscal operating requirements on an on-going basis throughout the fiscal cycle.
  • Minimization of Risk – All attempts shall be made to minimize risks inherent in investment through diversification so as to eliminate the risk of loss resulting from an over-concentration of funds in a specific maturity, issuer, industry, geographical area, or class of securities.
  • Maximization of Income – The deposit/investment program shall strive to attain the best total return or yield on deposited and invested funds of the library as is reasonable and prudently achievable within defined parameters.
  • Minimization of Costs – All attempts shall be made to minimize the costs of financial transactions related to implementing investment strategies.

Types of Investments

All eligible investments are detailed in ORC Chapter 135.

Length of Investment

As is reasonably prudent, the Investing Authority will attempt to match deposits/ investments with anticipated cash flow requirements to take best advantage of prevailing economic and market conditions. No bond, bond mutual fund, or regular money market fund investment shall have a maturity date, or average maturity date, of more than five (5) years from its date of purchase, unless the investment is matched to a specified obligation or debt of the library. Individually purchased bonds and obligations shall not carry any provisions for call before maturity. Any investment made must be entered into with a reasonable expectation to be held to maturity unless defined opportunities exist to better achieve deposit/investment objectives denoted in this Investment Policy.

Authorized Financial Institutions

Eligible financial institutions are defined in ORC Section 135.01.  A depository agreement with each financial institution must be in place before any financial transactions can occur.  This agreement shall be for a period allowed by law.  This agreement must contain a commitment by the financial institution to invest the Library’s funds only in instruments defined in ORC section 135, the Uniform Depository Act for public funds and the Library’s investment policy.

The Investing Authority shall deal only with brokers or dealers who are registered as such with the Securities and Exchange Commission and who are licensed as a dealer with the Ohio Division of Securities and as defined in ORC 135.03. Such brokers or dealers should also be members of the National Association of Securities Dealers, Inc. Securities brokers and dealers shall be utilized only after an analysis performed by the Investing Authority has revealed that the broker or dealer is adequately financed to conduct business with the library.

Reporting

The Fiscal Officer shall include a report summarizing total investments in the monthly financial statements provided to the Board of Trustees.

Certification by All Parties

If the Library chooses investments other than Star Ohio and StarPlus, the Library shall distribute a copy of this investment policy and any revisions or updated versions to each of the eligible financial institutions and brokers and dealers desiring to do business with the library. It shall be the responsibility of the designated officer of each eligible financial institution, broker, and dealer to certify that they have reviewed this investment policy and agree to comply with all applicable Ohio and federal laws. Furthermore, the aforementioned officer shall agree to disclose any potential conflicts or risks to library funds that could arise out of financial transactions between the financial institutions, brokers, and dealers and the library.

Filing Requirements

If the Library chooses investments other than STAR Ohio and StarPlus, the Library  will file this investment policy, along with any future revisions or updates, with the Auditor of State in accordance with Ohio law.

Approved by the Shaker Heights Public Library Board of Trustees 9/9/96, 4/13/2010, 5/9/11, 4/7/2014, 8/20/2018