HomeMy WebLinkAboutRESOLUTION 1982-133Suggested by: Administration
CITY OF KENAI
RESOLUTION NO. 82-133
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA,
RESCINDING RESOLUTION NO. 78-3, AND ESTABLISHING NEW
COLLATERALIZATION REQUIREMENTS FOR THE INVESTMENT OF PUBLIC
FUNDS.
WHEREAS, the City of Kenai currently has collateralization
requirements, as set forth in Resolution No. 78-3, which allows
the City to accept State and Municipal bonds and notes, U.S.
Government obligations, and loans ae collateral for the
investment of City monies, and
WHEREAS, the purpose of collateralization requirements is to
assure maximum security, and to provide the greatest interest
revenue consistent with safety, and
WHEREAS, the City believes that the acceptance of loans as
collateral is an unnecessary :isk.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
KENAI, ALASKA, as follows:
Section 1: Resolution No. 78-3 is rescinded.
Section Z: Collateral will be required to secure one
hundred percent (100%) of all investments of the City of Kenai on
any sum in excess of the amount insured by the F.D.I.C.,
F.S.L.I.C., or similar U.S. Government insurance.
Section 3: The City of Kenai will accept various amounts of
the basic types of collateral listed below. Any one or a
combination of collateral types may be pledged as security with
the following percentages of par value.
State
and Municipal Bonds and Ili
Required for
t00% Deposit,
1.
Alaska issues
100%
of
par
2.
Federally Guaranteed Project Notes -
Alaska issues
100%
of
par
3.
Other States to rating or better)
120%
of
par
4.
U.
City of Kenai Issues
S. GoveraMgat QILIJgdtjons
100%
of
par
1.
Direct Obligations
100%
of
par
2.
Federal Agency Issues
100%
of
par
3.
Federally Guaranteed Project
Notes - Other
100%
of
par
&€gl"aA: Any change in pledged collateral, except for par
value substitutions, will require a release from the City of
Kenai. .._ _
Section 5.s All collateral shall he held by a third party
trustee (bank or other financial institution).
Section 6s The City of Kenai reserves the right to chance
MEMO TO: Kenai City Council
FROM: Charles A. Brown 4,Q
DATE: December 8, 1982
RE: Collateralization of City investments
Resolution No. 82-133 changes the City's collateralization
requirements on City investments. The present require-
ments (Resolution No. 78-3) are attached for comparison.
Major changes would be:
1) State and Municipal Bonds and Notes; 3. Other
States: Baa rating changed to A rating.
2) Loans: The entire category is deleted.
3) Section 4: A new section requiring all
collateral he held by a third party.
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A RFSOLUTIn: nF TNF rnt.'\C'It, OF TTTF f TTy nF VFW, AT,ARVA, rSTpnT,TST1J r,
COLLATE RALIZATION RFOUIT;F.IWNTS FOR TIM T',!VrS'M1FtiT nF PTTRT,Ir FTT\Tn.
IVFFRF.AS, the 1976-77 ITanagemont I,Ptter recommended the. establishment of
collateralization requirements for nublic funds invpsted by the rite of venai, and
WHEREAS, the purpose of collateralization reauirernents is to assure maximum security
for the investment of public funds, and to nrovide the vreatest interest revPnrrP
consistent with safety.
NOW, TFF.RRFORE, RF IT RFSOT,VFn by the rouncii of the city of vonni, Alaska
as follows:
Section 1: Collateral will be rPouired to secure one hundrPrT nPrrent (10(1%)
of all investments of the City of Venal on any sum in excess of the amount
insured by the F.D.I,C, or F.R.i„T,r., insurance.
Section 2: The City of Kenai will accent various amounts of the basic tvnPs
of collateral listed below. Any one or a combination of collateral types may
be pledged as security with the following nercentaees of par value.
Required for
State and Municinal Ponds and *Totes 1009-, of T)Pnosit
1.
Alaska Issues
100 A of par
2.
Federally Guaranteed Project Votes -
Alaska issues
1008: of par
3.
Other States (Raa rating or better)
120 of par.
4.
City of Kenai Issues
50% of par
U.S. Government nblif-rations
1.
Direct Obligations
100° of par
2.
Federal Agency issues
100% of par
3.
Federally Guaranteed Project
Notes - Other
100° of Oar
Loans
1.
Federally insured or guaranteed
loans (FNA, eRA & VA)
100° of nnr
2.
Private insured Inans
(a) Uninsured portion of nrivate
Insured loans
133-1/31-. of nar
3.
Secured loans uo to throe -fourths
of the total collateral required
133-1/3° of nor
t-Olutio n "n. 73-3 , bairn ?_
Loan Restrictions
1. All loans must be senured by nrnnr•rty in Alaska.
2. Private mortenve insuranoe cmmnanies must have in e-ness of
$4 billion of mnrtgage insuranoe in force and must be suhinet to
State regulatory authority.
3. Secured loans (loans secured by real estate) must:
(a) have an orivinal balance of not less than 4tI0,0n0 nor more
than 5500, 000 except that the minimum should not annly to
mobile home loans. The aagreKate of loans to any borrower
shall not exceed S500,0O0.
(b) not be: more than 90 days delinquent, extended at anv time,
classified by internal or external auditors. Quch loans must
be immediately replaced with eligible collateral.
4. For those banks nledeinz loans to cenurP ritv of Kenai irnrestments,
a certified listing of loans pledged by tvne must he received by the
City of Kenai no later than the loth day of the followine month.
Section 3: Any change in t)ledzpd collateral, oxcnnt for par value substitutions,
will require a release from the rity of Kenai
Section 4: The City of Kenai reserves the rieht to change collateral requirements
at any time.
PASSED BY THE COUNCIL OF THE CITY OF KFNAI, AI.ARKA, this ath day of Tanuarv,
1978.
VINIM 0IRRILLY, r*TAYnR
ATTEST:
Sue,.C. Peter, City Clerk