cash & investments policy recommendation finance committee january 28, 2014
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Cash & Investments Policy Recommendation
Finance CommitteeJanuary 28, 2014
Overview of discussion
• NC municipal survey
• Governance • NC General Statutes• Local Government Commission
(LGC)
• Policy objectives
Other NC Cities
Cash & Investments Policy
UnitYes, has
formal policy No formal policyCary X Concord X Wilmington X Charlotte XWilson XWinston-Salem X Greenville X
Governance
§ NCGS 159-30
A local government may deposit at interest or invest all or part of the cash balance of any fund.
The investment program shall be so managed that investments and deposits can be converted into cash when needed.
Governance
LGC Policy Manual for local government cash & investments
Objectives of investment activity
Safety - preservation of capital
Liquidity - available when needed
Yield - maximize return subject to othe priorities
Local - invest with local banks, when appropriate
Diversification - balanced portfolio
Priority
Safety
High risk
investments are
not allowed
Safety - preservation of capital
Liquidity - available when needed
Yield - maximize return subject to othe priorities
Local - invest with local banks, when appropriate
Diversification - balanced portfolio
Priority
Liquidity
$15 million of
approximately
$100 million
available to pay
recurring bills
Safety - preservation of capital
Liquidity - available when needed
Yield - maximize return subject to othe priorities
Local - invest with local banks, when appropriate
Diversification - balanced portfolio
Priority
Yield
Challenging in
current rate
environment
Safety - preservation of capital
Liquidity - available when needed
Yield - maximize return subject to othe priorities
Local - invest with local banks, when appropriate
Diversification - balanced portfolio
Priority
Diversification and local investment($ millions)
$4.5
$16.5
$8.6
$7.6
$11.2 $17.5
$0.3
$34.1 CD's
Comm Paper
Fed Farm Credit
Fed Home Loan Bank
Fed Home Loan Mort
Fed National Mort
US Treasury
Liquid funds
* At June 30, 2013
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