2011 budget summary - St. Louis County

St. Louis County shall have a depositary contract and pledge agreement with each safekeeping bank thatwill comply with the Financial Institutions, Reform, Recovery, and Enforcement Act of 1989 (FIRREA).This will ensure that St. Louis County’s security interest in collateral pledged to secure deposits isenforceable against the receiver of a failed financial institution.SAFEKEEPING AND CUSTODYAll security transactions entered into by St. Louis County shall be executed on a delivery-versus-payment(DVP) basis to ensure that securities are deposited in eligible financial institutions prior to the release offunds. All securities shall be perfected in the name of the St. Louis County Treasurer and shall be held bya third party custodian designated by the Treasurer and evidenced by safekeeping receipts.DIVERSIFICATIONSt. Louis County will diversify by security type and institution. Security types shall be diversified tominimize the risk of loss resulting from over concentration of assets in a specific maturity, specific issuer,or specific class of securities. Diversification strategies shall be established and periodically reviewed.Specific percentages are as follows:a. U. S. Treasury securities………………………………….…..…..up to 100%b. U. S. Agency securities..….…..……….……………..…....no more than 60%c. Collateralized Interest Bearing Checking……………..…..no more than 50%d. Collateralized Certificates of Deposit…..………………....no more than 50%e. Collateralized Repurchase Agreements…………………...no more than 50%f. U.S. Agency Callable securities……………………..…….no more than 35%g. Commercial Paper………………………………………...no more than 10%h. Bankers Acceptances……………………………………...no more than 10%For initial investment of bond proceeds, the diversification percentages listed above also apply. Theselimits will not apply to reinvestment of bond proceeds.Investment in any single issuer of U.S. Agency Securities will be limited to 40% of the total amount inthe U.S. Agency Securities category. Investment transactions with a single institution will be limited to35% of the total portfolio.MAXIMUM MATURITIESTo the extent possible, St. Louis County will attempt to match its investments with anticipated cash flowrequirements. Investments in commercial paper shall mature and become payable not more than onehundred eight days (180) from the date of purchase. Investments in repurchase agreements shall notexceed a maturity of ninety days (90) from the date of purchase. All other investments shall mature andbecome payable not more than five (5) years from the date of purchase. The weighted average days tomaturity (or weighted average days to call) of the portfolio shall not exceed 900 days (2.5 years). Incalculating weighted average maturity, callable securities priced above par shall be averaged to the nextcall date.For the investment of County bond proceeds, all investments will match anticipated cash flow needs witha maximum maturity not to exceed the anticipated final expenditure date.- 301 -