Investment Policy

Section 100. General Policy:  It is the policy of the Library to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the Library in conforming to all state and local statutes governing the investment of public funds.

Section 101. Scope:  This policy includes all funds governed by the Board of Library Trustees.

Section 102. Prudence:  The standard of prudence to be used by investment officials shall be the “prudent person” standard.  Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in 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.

Section 103. Objective:  The primary objective, in order of priority, shall be:

• Legality - conformance with federal, state and other legal requirements.
• Safety - preservation of capital and protection of investment principal.
• Liquidity - maintenance of sufficient liquidity to meet operating requirements.
• Yield - Attainment of market rates return.

The portfolio should be reviewed periodically as to its effectiveness in meeting the Library’s need for safety, liquidity, rate of return, diversification and its general performance.

Section 104. Delegation of Authority: Management and administrative responsibility for the investment program is hereby delegated to the Treasurer of the Board of Library Trustees.

Section 105. Ethics and Conflicts of Interest: Officers, employees, and Board members involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions.  Employees, investment officials, and Board members shall disclose any material interests in financial institutions with which they conduct business.  They shall further disclose any personal financial investment positions that could be related to the performance of the investment portfolio.  Employees, officers, and Board members shall refrain from undertaking personal investment transactions with the same individual with which business is conducted on behalf of their entity. 

Section 106. Authorized Financial Dealers and Institutions: The Treasurer shall maintain a list of financial institutions authorized as depositors for funds and to provide investment services.

Should it become necessary to use an investment advisor or money manager, the Treasurer shall establish a policy regarding their selection.

Section 107. Authorized and Suitable Investments: Investments may be made in any type of security allowed for by Illinois statutes regarding the investment of public funds.

Section 108. Collateralization: Funds on deposit (checking accounts, certificates of deposit, etc.) in excess of FDIC limits must be secured by some form of collateral, witnessed by a written agreement and held at an independent-third party institution in the name of the Library.

Section 109. Safe keeping and Custody: All security transactions, including collateral for repurchase agreements, entered into by the Library shall be conducted in a manner that ensures safety.  The Library is required to keep receipts and a written record of all transactions.

Section 110. Diversification: The Library shall diversity its investments to the best of its ability based on the nature of the funds invested and the cash flow needs of those funds.

Section 111. Maximum Maturities: To the extent possible the Library shall attempt to match its investments with anticipated cash flow requirements.  Therefore, the Treasurer shall establish a maximum maturity limit for securities, unless they are matched to a specific cash flow or if the investments’ maturities are made to coincide as nearly as practicable with the expected use of the funds.

Section 112. Operational Procedures/Internal Control: The investments are perused each month noting when the investments are maturing and what the cash needs are within each fund established by the Library.  The Treasurer and Library Director/Head Administrator shall discuss the cash needs within the respective funds and project investment or reinvestment in accordance to the highest rates and terms available at that time.  The recommendations will be presented to the Board of Library Trustees at a regular board meeting for approval.  The Library Director/Head Administrator executes the trades as approved by the Board of Trustees.  No monies from any Library accounts are to be transferred into any accounts other than those accounts belonging to the Library.  Bank confirmations are to be received on all investment transactions and all transfers between funds.

Section 113. Performance Standards: This investment portfolio will be managed in accordance with the parameters specified within this policy.

Section 114. Sustainability: Material, relevant, and decision-useful sustainability factors are to be considered by the Treasurer in evaluating investment decisions, including, but not limited to: (1) corporate governance and leadership factors; (2) environmental factors; (3) social capital factors; (4) human capital factors; and (5) business model and innovation factors, as provided under the Illinois Sustainable Investing Act. (Source: P.A. 89-350, eff. 8-17-95.)

Section 115. Reporting: The Treasurer shall prepare an investment report at least monthly.  The report should be provided to the Board of Library Trustees and be available on request.  The report should be in a format suitable for review by the general public.  An annual report should also be provided to the Board.  The report shall include information regarding securities in the portfolio by class or type, book value, income earned and market value as of the report date.

Section 116. Investment Policy Adoption: The investment policy shall be adopted by the Board of Library Trustees.  The policy shall be reviewed on an annual or as needed basis.  Modifications made to the policy must be approved by the Board of Library Trustees.

Section 117. Public Review. This policy shall be made available to the public at the Library District’s offices.

This policy last revised 4/21/22

Printable version of the policy.