Resolution 2010-042
RESOLUTION NO. 2010- 42
A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS
OF COLLIER COUNTY, FLORIDA, CREATING AN ENDOWMENT
TRUST FUND TO ENSURE THAT ADEQUATE FUNDS ARE
A V AILABLE TO MANAGE THE CARACARA PRAIRIE
PRESERVE IN PERPETUITY SO THAT SUCH FUNDS WILL NOT
BE USED FOR OTHER PURPOSES WHICH IS A PREREQUlSTE
TO GENERATE PANTHER HABITAT CREDITS ON THE
PROPERTY FOR THE PURPOSE OF MITIGATING
ENVIRONMENTAL IMPACTS CREATED BY COUNTY
PROJECTS AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, on December 17,2007, Collier County acquired approximately 367.7
acres of real property ("Property") for use in the Conservation Collier program in
accordance with Ordinance No. 02-63, as amended ("Conservation Collier Implementation
Ordinance); and
WHEREAS, Collier County desires to also use the Property to generate Panther
Habitat Units ("PHUs") in order to mitigate environmental impacts created by County
projects; and
WHEREAS, the concurrent use of the Property in the Conservation Collier
program and to generate PHUs is consistent with the goals, objectives and policies of the
Conservation Collier program; and
WHEREAS, the Conservation Collier Implementation Ordinance established a
Conservation Collier Management Trust Fund for the preservation, enhancement,
restoration, conservation and maintenance of properties acquired for use in the
Conservation Collier program; and
WHEREAS, United States Fish and Wildlife Services ("USFWS") requires Collier
County to create a separate endowment trust to ensure that adequate funds are available to
manage the Caracara Prairie Preserve in perpetuity as a prerequisite to the generation of
PHUs; and
WHEREAS, USFWS standard approved documents, as modified for use by Collier
County, for the creation of the trust, investment policy and trust assets are attached hereto
as Exhibits HA," HB,H He," "D," and "E," respectively.
NOW, THEREFORE BE IT RESOLVED BY THE BOARD OF COUNTY
COMMISSIONERS OF COLLIER COUNTY, FLORIDA, that:
I. An endowment fund/trust is established to ensure that adequate funds are
available to manage the Caracara Prairie Preserve in perpetuity and not used for other
purposes as more specifically described in Exhibits "A," "8," "C," "D," and "E," attached
hereto,
This Resolution is
adoption this . Q,->,(c\ day
;, ..
adopted after motion; second and majority vote favoring
Fe bhU ~' 2010.
~ARD OF COUNTY COMMISSIONERS
OF COLLIER COUNTY, FLORIDA
Dy F~]~llA~
ATTEST: ,,' ."he
DWIGH,1'B. BROC,kl;.CLERK
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Assistant County Attorney
2
Exhibit "A"
ESTABLISHMENT OF THE CARACARA PRAIRIE PRESERVE
CONSERV A nON BANK ENDOWMENT FUND TRUST
RECITALS
A. The United States Fish and Wildlife Service (the "Service") and the Collier County
Board of County Commissioners ("Collier County") have entered into the Caracara
Prairie Preserve Conservation Bank Agreement (the "Conservation Bank
Agreement"), dated , wherein the Service approved the
Caracara Prairie Preserve Conservation Bank project (the "Conservation Bank")
described below, which will be established and operated by Collier County.
B. Collier County is the owner and/or agent of approximately 367.7 acres of real
property (the "Property") located in Collier County, Florida, and more completely
described in Exhibit "B" attached hereto, The Property comprises the Conservation
Bank,
C. Pursuant to the Conservation Bank Agreement, Collier County has agreed to and is
obligated to manage and maintain the Property in perpetuity to preserve its habitat
and conservation values for the federally-listed Florida panther (Puma conca/or
caryi) and crested caracara (Caracara cheriway) ( the "Covered Species") and
other species that are dependent on the Property in accordance with the
Conservation Bank Agreement and other related documents, including, but not
limited to, a conservation easement (the "Conservation Easement") granted by
Collier County and Corkscrew Regional Ecosystem Watershed Land and Water
Trust to the Caracara Prairie Preserve Endowment Fund Trust and a Habitat
Management Plan (the "Management Plan"), as approved by the Service. The
Conservation Bank Agreement and its related documents are incorporated herein by
reference.
D. Pursuant to the Conservation Bank Agreement and the authority of the Service, the
Collier County Clerk of Courts ("Finance Director") is authorized and directed to
establish a separate cost center within Conservation Collier Fund 174, Funds
budgeted annually within this cost center will be specifically dedicated for the
management costs of the Caracara Prairie Preserve property for the interim period
through credit sell out. The Finance Director will transfer into the cost center a
minimum lump sum amount equal to $408,600 from Conservation Collier Land
Management Fund 174 Reserves.
E. Pursuant to the Conservation Bank Agreement and the authority of the Service,
Collier County is authorized and directed to establish a separate endowed account
(the "Endowment Fund"), with, among other things, funds that Collier County
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collects from the sale and/or conveyance of conservation credits on the Property,
Upon bank establishment, the Board will deposit into the Endowment Fund a
minimum amount equal to $370.45 per conservation credit sold until the principal
of the Endowment Fund totals $763,200.
F, The accrued interest and earnings from the Endowment Fund shall be used
exclusively to fund the permanent management and maintenance of the Property,
The Finance Director shall provide to the Service an annual "Financial Report of
the Trust," as more particularly described in Section 3,5 of this document.
G, Collier County intends to establish a trust, Caracara Prairie Preserve Conservation
Bank Endowment Fund Trust (the "Trust"), and to contribute to the Trust certain
assets that shall be held therein. The assets shall consist of, but will not be limited
to, the Conservation Easement, the Interim Management Account, and the
Endowment Fund.
H, Collier County will receive, manage, and distribute monies to protect and maintain
the Property in accordance with the Conservation Bank Agreement and its related
documents, including, but not limited to, the Management Plan.
I. Collier County has developed and agrees to abide by an investment policy (the
"Investment Policy"), as set forth in Exhibit "C," to protect the corpus of the
Endowment Fund principal. The direct investment decisions for the Trust Fund will
be in accordance with the Collier County Investment Policy described in Exhibit
"D".
NOW, THEREFORE, IN CONSIDERATION of the foregoing Recitals and the
following covenants and obligations herein contained, Collier County hereby establishes
the Trust and agrees that the Trust shall be comprised, held and disposed of as follows:
1. Establishment of Trust
1,1 Assignment to Trust. Collier County hereby agrees to assign to the
Trust the assets described in Exhibit "E," attached hereto.
1,2 Trust Estate. Collier County agrees to hold, administer, and distribute
any and all property transferred to the Trust at any time (the "Trust
Estate") in trust in accordance with the terms and conditions of this
Trust Document.
2. Distribution of Trust Estate
The Finance Director will hold and distribute the income and principal
of the Trust Estate as follows:
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2.1 Distributions of Income and Principal. The Finance Director will
distribute the income and principal, in accordance with Section 4,2 of
this document, to or for the benefit of Collier County or an assignee in
a manner consistent with the purposes and intent of the Conservation
Bank Agreement and its related documents, including, but not limited
to, the Management Plan, The County Manager or designee is
authorized to request distributions to or for the benefit of the Grantor
and/or the Service to pay any costs and expenses reasonably incurred
in and related to the management of the Property, including, but not
limited to, property taxes, contracts, equipment, materials, and
signage, and in a manner consistent with the Conservation Bank
Agreement, the Conservation Easement, and the Management Plan,
2,2 Benefit/Detriment. Collier County acknowledges that the income,
expenses, gains and losses of this Trust inure to the benefit/detriment
of the Caracara Prairie Preserve Conservation Bank and its habitat
values, Pursuant to the Conservation Bank Agreement, Collier County
will establish the Trust and manage, among other things, the
Endowment Fund and make distributions to or for the benefit of
Collier County so that Collier County may fulfill its obligations under
the Conservation Bank Agreement.
2.3 Transfer of Propertv. It is anticipated that the Endowment Fund will
be used for the purposes of maintaining the Property as set forth in the
Conservation Bank Agreement and the Management Plan. Collier
County acknowledges that the Property may be transferred to a third
party or otherwise. I f the Property is transferred, however, this
transfer must be concurred with by the Service. This concurrence will
not be unreasonably withheld by the Service. Collier County may
transfer the Endowment Fund to another party upon written agreement
between Collier County and the Service.
2.4 Interim Management Account. The Interim Management Account
shall be maintained by Collier County until such time that the
Endowment Fund Target Amount is achieved, at which time the
Interim Management Account may be terminated and all funds
(excepting interest to be retained by Collier County) shall be
transferred to the Endowment Fund.
2.5 Endowment Fund. Collier County will not be authorized to withdraw
or otherwise transfer the principal of the Endowment Fund without
written approval from the Service.
2.6 Termination of Trust. It is anticipated that the Trust will last in
perpetuity because the obligation to manage and maintain the Property
and to fund the costs and expenses associated with the management
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and maintenance of the Property are obligations that continue in
perpetuity as covenants running with the land, If, however, the
purposes of the Trust have been fulfilled, and it becomes necessary to
terminate the Trust, the assets may be retained by Collier County or
may be distributed a) to an organization determined by the Internal
Revenue Service to be tax exempt for one or more purposes within the
meaning of Section 501(c)(3) of the Internal Revenue Code or
corresponding section of any future federal tax code or b) to the
Service or federal government for a public purpose,
3. Trustee
3.1 Appointment of Trustee, The Collier County Board of County
Commissioners is hereby appointed as Trustee.
3.2 Appointment of Successor Trustee bv the USFWS. If the Collier
County Board of County Commissioners fails to uphold and adhere to
the practices and principles of this Trust Agreement, the Conservation
Bank Agreement and its related documents, including, but not limited to,
the Management Plan and the Conservation Easement, and/or the
Investment Policy, upon thirty (30) days advance written notice to the
Trustee by the USFWS, the Trustee shall be removed, and the Grantor
and the USFWS may appoint a Successor Trustee,
3.3 Appointment of Successor Trustee bv Court, If no one is appointed by
the provisions of the preceding subparagraphs because there is no one
able and willing to act as a Trustee, a court of competent jurisdiction
shall appoint a successor Trustee,
3.4 Dutv of Successor Trustee. No Trustee shall have any responsibility for
the acts or omissions of any prior Trustee or any duty to investigate the
accounts or administration of any prior Trustee or any duty to take
action to obtain redress for any breach of fiduciary duty of any prior
Trustee.
3.5 Accounting to USFWS. The Trustee, or its designee, shall render
periodic accounts of the administration of the Trust to the USFWS. In no
event, however, shall the accounting be rendered less than once each
year in the "Financial Report of Trust. " The Financial Report of Trust
(the "Financial Report") shall consist of copies of the Trust's monthly
statements and an annual trust accounting that shall include annual
reports regarding expenditures and reimbursements as well as income
and contributions, The USFWS' written approval of the Financial Report
shall be a complete approval protection of the Trustee as to all matters
and transactions stated or shown by the accounting. The failure of the
USFWS to transmit to the Trustee either (I) the written approval of such
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accounting, or (2) a written objection to the accounting with reasons
specified, within ninety (90) days after the Trustee's submission of the
Financial Report to the USFWS shall constitute the USFWS' approval.
3.6 Replacement of Trustee, A Trustee, including any corporate Trustee,
shall cease acting as a Trustee and a Successor Trustee shall be
appointed by the Grantor and the USFWS to replace the Trustee upon
the occurrence of anyone of the following events:
(a) The dissolution of a corporate Trustee as determined by applicable
state law,
(b) The bankruptcy of a Trustee. The term "bankruptcy" shall include
any of the following: (i) the filing ofa voluntary petition under any
federal or state law for the relief of debtors including the filing of a
voluntary petition under any Chapter of Title I I of the United States
Code; (ii) the continued pendency of an inyoluntary proceeding
under any such law on the 60'" day after its filing, or the entry of an
order for relief under any such involuntary proceeding, whichever
occurs first; (iii) the making of a general assignment for the benefit
of the Trustee's creditors; (iv) the seizure by a sheriff, receiver or
trustee of a substantial portion of the Trustee's assets.
(c) The Trustee notifies the USFWS in writing thirty (30) days prior to
the intended transfer of the Trustee's responsibilities to a USFWS
approved third-party entity,
(d) The USFWS proves that the Trustee has acted with gross negligence
or willful misconduct.
3.7 Bond of Trustee, No bond shall be required of any Trustee, absent an
affirmative showing of good cause to a court having jurisdiction over the
Trust.
3.8 Liability of Trustee. No Trustee, Co-Trustee or Successor Trustee shall
be personally liable for a Trustee's acts or failure to act, except for
willful misconduct or gross negligence.
4, Management Powers
4.1 Amend the Investment Policy. Collier County may from time to time
amend the Investment Policy upon written approval of the Service.
4.2 Power to Act. To carry out the Investment Policy and fulfill the
purposes of the Trust, the Board of County Commissioners through its
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County Manager or designee shall have the power to do the following
acts, to the extent consistent with Florida law:
(a) Insure the Trust Estate against damage or loss and Collier County
against liability.
(b) Request disbursements from the Trust to pay the costs of
undertaking activities for the perpetual management of the
Conservation Bank in accordance with the Conservation Bank
Agreement and its related documents, including, but not limited to,
the Management Plan, The County Manager or designee is also
authorized to request sums from the Trust to reimburse persons for
the costs of management expenditures and to refund Collier
County such amounts as the Service specifies in writing,
(c) Execute and deliver all instruments, which will accomplish or
facilitate the exercise of the powers vested in Collier County.
(c) Act without court approval if the action is otherwise proper.
5, General Administrative Provisions
The following general administrative provisions shall govern the Trust:
5.1 Governing Law: Severability. The validity and construction of any
provision of the Trust shall be governed by the laws of the State of
Florida, If any provision of the Trust is determined to be invalid or
unenforceable, the remaining provisions hereof shall nevertheless be
carried into effect.
5.2 Spendthrift. No interest in the principal or income of this Trust shall
be transferred, assigned, anticipated, encumbered or subject to claims
of creditors or others or to legal process prior to its actual receipt by
the beneficiary,
5,3 Uniform Principal and Income Act. The allocation of receipts and
expenses between principal and income accounts shall be governed by
the Florida Uniform Principal and Income Act, as amended. The
Finance Director shall determine how to allocate receipts or expenses
that are not governed by the Act or defined or specified in the
Conservation Bank Agreement and in this Trust Document.
5.4 Entire Agreement. This Trust Document constitutes the entire
agreement and understanding between the parties. This Trust
Document supersedes all prior and contemporaneous agreements,
representations or understandings regarding the Endowment Fund, if
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any, whether written or oral, with the exception of those provisions of
the Conservation Bank Agreement and its related documents,
including, but not limited, to the Conservation Easement and
Management Plan.
5.5 Notices. The individual named below shall be the representative (the
"Representative") of Collier County for purposes of this Trust
document. Notices shall be made in writing and may be delivered in
person, by mail, by telecopy (facsimile), or by electronic mail (email),
Notices shall be effective only when received at the address of the
appropriate Service representative to be notified, Any change in the
contact information for the Representative shall be communicated in
writing to the Service within ten (l0) business days of the change.
Collier County Board of County Commissioners
Conservation Collier Program
Attn: Principal Environmental Specialist
3301 Tamiami Trail
Naples, FL 34112
If to the Service:
U.S. Fish and Wildlife Service
Attn: Field Supervisor
South Florida Ecological Services Office
1339 20th Street
Vero Beach, Florida 32960-3559
5,6 Nondiscrimination, In the performance of obligations and
responsibilities under this Trust Document, Collier County will not
discriminate against any person because of race, color, national origin,
handicap, religion, or gender.
5.7 No Obligation. Nothing in this Trust Document may be construed to
obligate the United States or the Service to any current or future
expenditure of resources in advance of the availability of
appropriations from Congress,
5,8 No Limit. Nothing contained in this Trust Document is intended to
limit the authority of the Service to seek civil or criminal penalties or
otherwise fulfill its enforcement responsibilities under applicable laws,
This Trust Document is not a substitute for compliance with applicable
Federal laws.
5.9 Nonexclusive Arrangement. This Trust Document shall not make or
be deemed to make any party to the Trust Document an agent for or
the partner of any other party, This Document neither creates nor
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should it be construed to create an exclusive arrangement between the
United States and Collier County.
5.10 Irrevocable Trust. The Trust is irrevocable unless revocation IS
approved in writing by Collier County and the Service,
5.11 Amendment of Trust. The terms of the Trust may be amended at any
time as Collier County and the Service shall agree in written
instrument.
6, Definitions
6,1 Person. The term "person" includes an individual, trust, estate,
partnership, association, company, corporation, or other entity.
6,2 Principal. The terms "principal" or "corpus" mean the principal sum or
capital, as distinguished from interest or income, which constitutes the
main body of the Trust.
APPROVED:
By:
U.S, Fish and Wildlife Service
Date:
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Exhibit "B"
CARACARA PRAIRIE PRESERVE CONSERVATION BANK ENDOWMENT FUND
TRUST
PROPERTY DESCRIPTION
The Caracara Prairie Preserve Conservation Bank consists of approximately 367,7
acres located in Collier County, Florida, as more particularly described in the legal description
attached hereto.
LEGAL DESCRIPTION:
PROPERTY TAX IDENTIFICATION NUMBER: 00053080006
LEGAL DESCRIPTION:
WEST HALF (W1/2) OF SECTION 30, TOWNSHIP 46 SOUTH, RANGE
28 EAST, OF COLLIER COUNTY, FLORIDA.
AND
PROPERTY TAX IDENTIFICATION NUMBER: 00053080200
LEGAL DESCRIPTION:
NORTHWEST QUARTER (NW1/4) OF NORTHEAST QUARTER (NE1/4)
OF SECTION 30, TOWNSHIP 46 SOUTH, RANGE 28 EAST, OF
COLLIER COUNTY, FLORIDA.
Exhibit "c"
CARACARA PRAIRIE PRESERVE CONSERVATION BANK ENDOWMENT FUND
TRUST
INVESTMENT POLICY
INTRODUCTION
This Investment Policy has been adopted specifically for the Caracara Prairie Preserve
Conservation Bank Fund Trust and may be amended by the Board of County Commissioners as
necessary from time to time,
The mission of the Fund and this Investment Policy is to establish and facilitate a clear
understanding of the Fund's objectives, goals, and guidelines,
PURPOSE & OBJECTIVES
The Caracara Prairie Preserve Conservation Bank Endowment Fund Trust has been established
to provide funding for the maintenance and land stewardship of the Caracara Prairie Preserve
Conservation Bank (Project) for the protection of the natural resources on the Property and the
Florida panther (Puma conca/or caryi), crested caracara (Caracara cheriway), and other species
that are dependent on these lands in perpetuity,
This funding shall be accomplished, in accordance with the Collier County Investment Policy
(Exhibit "D"), through a prudent strategy of investment set to maintain and increase the
purchasing power of the Endowment Fund, without putting the principal value of these funds at
imprudent risk.
The Endowment Fund shall be a composite of:
I. Assets and funds generated from the sale or conveyance of conservation credits
(Principal funds).
2. Successful investment performance, in accordance with the Collier County
Investment Policy (Exhibit "D"), to primarily fund the maintenance and land
stewardship of the Project.
3, A conservative payout policy of the interest and earnings of the Endowment Fund
to ensure the annual land stewardship responsibilities and habitat management
operations of the Project.
INVESTMENT GOALS
Investment goals for the Caracara Prairie Preserve Conservation Bank Endowment Fund Trust
are to:
I. Satisfy the requirements of the Caracara Prairie Preserve Conservation Bank
Agreement and its associated documents, including the Management Plan, the
Conservation Easement and the Caracara Prairie Preserve Conservation Bank
Endowment Fund Trust Document.
2. Earn a total return of two and one-half percent or more in excess of inflation as
measured by the Consumer Price Index.
SPENDING POLICY
Distributions will be made in accordance with the Endowment Trust Document and the
Conservation Bank Agreement and its associated documents, including, but not limited to, the
Management Plan and Conservation Easement. Spending for the Project will be based upon both
annual operating and maintenance requirements and expenditures for long-term replacement of
capital improvements. Exceptions to the projected annual expenditures for the Conservation
Bank can be implemented only if they assist in the land stewardship goals of the Conservation
Bank's natural resources, while protecting the financial viability of the Endowment Fund. This
Endowment Fund is designated to support the costs related to the management, land stewardship,
and administrative costs of the Conservation Bank and the Endowment Fund only.
ASSET ALLOCATION, INVESTMENT MANAGEMENT STYLE
The target asset allocation for the investment portfolio is determined by the Finance director, in
accordance with the Collier County Investment Policy (Exhibit "D"), to facilitate the
achievement of the Endowment Fund's long-term investment objectives within the established
risk parameters.
INVESTMENT PERFORMANCE REVIEW
The County Manager or designee is required to:
I. Accept and deliver to the Finance Director, funds received from the sale or
conveyance of conservation credits on the Property.
2, Recommend guidelines ("Investment Guidelines") to the Board of County
Commissioners for a recommended Investment Policy.
3. Identify and resolve disputes between Collier County and the Service.
4, Review all policies, objectives, and guidelines annually. Any modifications to this
Investment Policy will be presented to the Service.
5. Notify the Service within thirty days (30) after the County Manager's or designee's
knowledge of a decline in the principal of the Fund after the Fund has attained
principal in the amount of $763,200 [Endowment Target Amount).
PROHIBITED TRANSACTIONS RULE COMPLIANCE
The following transactions are prohibited:
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1. Any disbursement from the Fund that would result in a reduction in the Fund's
principal unless the County Manager or designee has provided thirty (30) days
advance written notice to the Service and the Service approves such disbursement.
The Service' failure to transmit to the County Manager or designee either (l) a
written approval of the disbursement or (2) a written objection to the disbursement
within thirty (30) days of the Service' receipt of the notice shall constitute an
approval.
2, Disbursements from the Fund for any purpose inconsistent with the objectives stated
herein; in the Caracara Prairie Preserve Conservation Bank Endowment Trust
Resolution; and in the Conservation Agreement and its associated documents,
including, but not limited to, the Management Plan,
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Exhibit "D"
Collier County, Florida
Investment Policy
SCOPE
Investment policy applies to all financial assets under the direct control of the Board of
County Commissioners.
INVESTMENT OBJECTIVES
Primary Objectives:
I, Preservation of capital and protection of investment principal.
2. Maintain sufficient liquidity to meet reasonably anticipated operating and capital
requirements.
3. Match assets to liabilities, to the extent possible.
Secondary Objectives:
I. Maximize return and preserve purchasing power as measured by a noted market
index such as the Consumer Price Index,
2. Control risks and diversity investments through appropriate oversight and regular
reporting.
PERFORMANCE MEASURES
Objective is to exceed the annual yield of the Florida Local Government Surplus Trust
Fund (SBA).
PRUDENCE AND ETHICAL STANDARDS:
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. The standard of prudence to
be used by investment officials shall be the "prudent person" standard and shall be
applied in the context of managing an overall portfolio, Investment officers acting in
accordance with written procedures and the inyestment policy and exercising due
diligence shall be relieved of personal responsibility for an individual security's credit
risk or market price changes, provided deviations from expectations are reported in a
timely fashion and appropriate action is taken to control adverse developments,
Officers and employees inyolved in the investment process shall refrain from personal
business activity that could conflict with proper execution of the investment program, or
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which could impair their ability to make impartial investment decisions. Employees and
investment officials shall disclose to the Chief Financial Officer any material financial
interests in financial institutions that conduct business within this jurisdiction and they
shall further disclose any material personal financial/investment positions that could be
related to the performance of the portfolio. Employees and officers shall subordinate their
personal investment transactions to those transactions made in the portfolio, particularly
with regard to the time of purchase and sales, Employees shall also disclose any gifts or
entertainment received as a result of their employment in regard to the investments of
Collier County,
Bond swaps are appropriate when undertaken in conformity with the prudent person test
and overall portfolio objectives in order to (a) increase yield to maturity without affecting
the asset liability match; (b) reduce maturity while maintaining or increasing the yield to
maturity or (c) increase portfolio quality without affecting the asset liability match while
maintaining or increasing the yield to maturity,
The County should not, however, have a policy against selling securities at a loss if
undertaken in connection with prudent portfolio management.
AUTHORIZED INVESTMENTS
1. Florida Local Government Surplus Trust Fund (SBA)
2. US Government Securities - Direct Obligations
3. US Federal Agencies - Backed by Full Faith and Credit of US
Government
4. US Federal Instrumentalities - US Federal Agency Securities Not Backed
by Full Faith and Credit of US Government, except for Student Loan
Marketing Association
5. Certificates of Deposit - Collateralized with US Government Securities or
Federal Agencies
6. Repurchase Agreements (As defined herein)
7. Fixed Income Mutual Funds - Collateralized with US Government
Securities or Federal Agencies
8. Domestic Bankers Acceptances - Rated "AN' or higher, and inventory
based
9, Prime Commercial Paper - Rated "A-I" and "P-I".
10. Tax-Exempt Obligations - Rated "AA" or higher and issued by state or
local governments
11. Now Account - Fully collateralized in accordance with Chapter 280
Florida Statutes, limited to Depository Bank/Concentration Bank
Limitation on Variable Rate Securities - Acceptable only if the rate is a straight floating
rate that is set in a direct as opposed to inverse, relationship to a single index.
Limitations on Mortgage Securities (CMOs)
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I, Issued only by US Federal Agencies or US Federal Instrumentalities,
2, Pass the Federal Financial Investment Examination Council (FFIEC) test
at time of purchase, and
3. Have an average life or seven (7) years or less and have an absolute final
maturity or no more than fifteen (15) years at zero PSA. The term "zero
PSA" means that all interest and principal payments are guaranteed to be
made by the slated final maturity assuming no prepayments.
Specifically prohibited investments include, but are not limited to:
I, Interest only strips of mortgage backed securities
2. Leveraged bonds
3. Structured notes or financings other than mortgage securities that meet the
provisions of this investment policy (permit callable and step up coupons)
4, Variable rate securities that set a rate based on an inverse relationship to
an index
5. Variable rate debt that sets a rate based on more than a single index
MATURITY AND LIQUIDITY REQUIREMENTS
The objective will be to match investment cash flow and maturity with known cash needs
and anticipated cash flow requirements (i.e" match assets to liabilities) to the extent
possible.
Investment of funds shall have final maturities of not more than five (5) years, except for:
I. SBA - No stated final maturity
2, Certificates of Deposit - I Year
3. Repurchase Agreement - 90 Days
4. Bankers Acceptance - 180 Days
5, Prime Commercial Paper - 180 Days
6. Fixed Income Mutual Funds - No stated final maturity. However,
underlying US Government Securities and Federal Agencies have average
maturity of one year.
7. Mortgage Securities - Have an average life of seven (7) years or less and
have an absolute final maturity of no more than fifteen (15) years at zero
PSA.
Utilization of Mortgage Securities:
I. Mortgage securities shall not be used to match liabilities that are
reasonably definable as to amount and disbursement date,
2. Mortgage securities should only be used to invest funds associated with
reserves or liabilities that are not associated with a specifically identified
cash flow schedule,
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3. Mortgage securities should be used to prudently enhance the return on the
portfolio.
Exception for Refunding Bond Escrows - US Govemment Securities and Federal
Agencies deposited into an escrow in connection with the refunding of a County bond
issue can have a final maturity of more than five years,
PORTFOLIO COMPOSITION
This policy recognizes that the portfolio operates in a dynamic environment. Therefore,
in the event the maximum allowable percentages are exceeded due to cash flow demands
within the portfolio after the date of the purchase of the security, this policy does not
force the sell of the security prior to maturity.
2.
3.
4,
5.
6.
7,
8.
9.
10,
1.
Investment Type
Florida Local Government Surplus Trust
Fund (SBA).
US Government Securities
US Federal Agencies..
US Federal Instrumentalities..
Certificates of Deposit
Repurchase Agreements
Fixed Income Mutual Funds
Domestic Bankers Acceptance
Prime Commercial Paper
Tax-Exempt Obligations
Maximum
% of Portfolio
50%
100%
100%
100%
30%
20%
10%
10%
10%
10%
· Does not include bond proceeds invested in construction funds established under a
bond resolution.
Funds in the NOW ACCOUNT will not be considered a part of the portfolio for purposes
of this section,
RISK AND DIVERSIFICA TION
Collier County will diversify its investments by security type, specific maturity, dealer or
bank through which financial instruments are bought or sold. Subject to the limitations
under Portfolio Composition, the following are the limits on individual issuers or dealer
or bank:
· No limitations on SBA, Now Account, US Government Securities, US Federal
Agencies or US Federal Instrumentalities,
· Limitations on other investments are 10% of total portfolio.
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AUTHORIZED INVESTMENT INSTITUTIONS AND DEALERS
The Chief Financial Officer will maintain a list of the financial institutions authorized to
provide investment services. These shall include "primary" dealers and regional dealers
that (I) qualify under Securities & Exchange Commission Rule 15C3 (Uniform Net
Capital Rule), (2) have capital of at least $50,000,000 and
(3) haye an institutional sales office and an institutional sales professional domiciled in
Florida. No public deposit shall be made except in a qualified public depository as
established by state laws.
All financial institutions and broker/dealers who desire to become qualified bidders for
investment transactions must supply the Chief Financial Officer with the following:
I. audited financial statements,
2. certification that no material adverse events have occurred since the issue
of their most recent financial statements,
3. proof of National Association of Securities Dealers, the registration
(where applicable) or other sccurities registration,
4, proof of state registration, when required,
5. certification of having read and agreeing to abide by the Investment Policy
and depository contracts in place in Collier County, and
6, a copy of the firm's established internal oversight and review guidelines
controlling business with governmental entities,
Each financial institution and broker/dealer must also agree to notify the Chief Financial
Officer in the event of material adverse events affecting their capital adequacy, Each
institution and broker/dealer shall provide their written mark up schedule and guidelines
to the Chief Financial Officer. Each institution and broker/dealer shall disclose to the
Chief Financial Officer any proposed trade that would exceed the guidelines prior to
executing the trade.
The Chief Financial Officer shall do a background check on each broker with whom the
County does business which shall, at a minimum, consist of contacting the State or
NASD for regulatory & disciplinary dates which are maintained on brokers.
An annual review of the financial condition and registration of qualified bidders will be
conducted by the Chief Financial Officer. A current audited financial statement is
required to be on file for each financial institution and broker/dealer authorized to
provide investment services. Criteria for addition to or deletion from the lists will be
based on the following: (I) state law, Board of County Commissioners Ordinance Code,
or Investment Policy requirements where applicable, (2) perceived tinancial difficulties,
(3) consistent lack of competitivencss, (4) lack or experience or familiarity of the account
representative in providing service to large institutional accounts, (5) request of the
institution or broker/dealer, and (6) when deemed in the best interest of the Board of
County Commissioners.
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If there are at least 10 trades executed in a single year through other than a competitive
bid process, no more than 30% of the total dollar amount of sales and trades executed
through other than a competitive bid process can be conducted with a single dealer.
THIRD-PARTY CUSTODIAL AGREEMENTS
All security transactions, including collateral for repurchase agreements, entered into by
Collier County shall be conducted on a delivery-versus-payment (DVP) basis.
All securities shall be properly designated as an asset of the Board or County
Commissioners. Securities will be held by a third party custodian authorized by the
Chief Financial Officer and evidenced by safekeeping receipts or advice of the
transaction. The third party custodian shall be a third party custodian bank or other third
party custodial institution with certified fiduciary powers, chartered by the United States
Government or the State of Florida and have combined capital and surplus of at least
$100,000,000.
The Chief Financial Officer will execute third party custodial agreements approved by
the Board of County Commissioners with the banks and depository institutions. Such
agreement will include letters of authority from the Chief Financial Officer with details
as to responsibilities of each party, notification of security purchases, sales, delivery,
repurchase agreements and wire transfers, safekeeping and transaction costs, procedures
in case of wire failure or other unforeseen mishaps including liability of each party,
MASTER REPURCHASE AGREEMENTS
I. Each firm involved in a repurchase agreement must execute the County's
Master Repurchase Agreement which will be based on the Public
Securities Association (PSA) Master Repurchase Agreement.
2. A third party custodian shall hold collateral for all repurchase agreements
with a term of more than one business day.
3, Collateral requirements will be based on economic and financial
conditions existing at the time of execution, as well as the credit risk of the
institution which enters into the repurchase agreement with the County,
The market value of the collateral shall not be less than the following:
Maturity of
Backed
Securities
US Government
US Federa/ Agencies
Mortgage
Securities
and Instrumentalities-
Securities
Under I Year
I to 5 Years
Over 5 Years
101%
102%
103%
102%
103%
104%
103%
104%
105%
-Excluding mortgage backed securities.
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4. Collateral shall be marked to market at least weekly,
5. Substitution of collateral is permitted,
BID REOUIREMENT
The Chief Financial Officer shall utilize the competitive bid process to sell and purchase
securities, subject only to the exceptions noted in the Investment Policy. After the Chief
Financial Officer has determined the approximate maturity date based on cash flow needs
and market conditions and has analyzed and selected one or more optimal types of
investment, a minimum of three (3) banks or dealers must be contacted to ask for
offerings of securities that fit the investment criteria, Documentation must be collected
to insure that the securities meet Investment Policy guidelines and that price levels
executed are consistent with market levels at the time, When selling securities, a
minimum of three (3) dealer bids will be sought. Documentation of all transactions must
be maintained.
Examples of when the competitively bid process can be passed, include:
I, When time constraints due to unusual circumstances preclude the use of
the competitive bidding process,
2, When no active market exists for the issue being traded due to the age or
depth of the issue, (On a "work-out" basis).
3, When a security is unique to a single dealer, for example a private
placement.
4. When the transaction involved new issues or issues on the "when issued"
market.
If the maturing investment is a certificate of deposit, one of the contacts made shall be the
present holder of the funds subject to portfolio diversification requirements in the
Investment Policy, Due to the cost of safekeeping, one business day repurchase
agreements less than $1,000,000, and the overnight sweep repurchase agreement
associated with the Now Account will not be bid,
The Depository Bank/Concentration Bank shall be selected through a competitive process
on a periodic basis that takes into account the quality and scope of service.
INTERNAL CONTROLS
The Chief Financial Officer shall establish and monitor a set of written internal controls
designed to protect the County's financial assets and ensure proper accounting and
reporting of the transactions, The Chief Financial Officer shall establish an annual
process of independent review by an external auditor which will serve as an internal
control by assuring compliance with policies and procedures.
Internal controls will encompass at a minimum the following issues:
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1. transfers of all funds (purchases, sales, etc,),
2, separation of functions including transaction authority from accounting
and record-keeping,
3. custodial safekeeping,
4. avoidance of delivery of bearer-form or non-wireable securities,
5, delegation of authority to subordinate staff members,
6. written confirmation of telephone transactions,
7. supervisory control of employee actions,
8, identification and minimization of authorized investment officials,
9, documentation of decisions and transactions, and
10. documentation of complete description of mortgage securities purchased
and yield tables at purchase date.
CONTINUING EDUCATION
Each individual responsible for making investment decisions including the Chief
Financial Officer, shall annually complete eight hours of continuing education in subjects
or courses of study related to investment practices and products, Evidence of such
education will be maintained by each individual and available for inspection,
REPORTING
Annual, quarterly and monthly reports of assets will be presented to the Board. The
following items will be included in the reports at least annually:
I. Securities in the portfolio by type, book value, income earned, market
value, final maturity and average life,
2. Information on activity in the account, and
3, Performance based on total rate ofreturn which includes earned income as
well as realized and unrealized gains and losses,
OTHER
I. Grandfather existing securities in the portfolio to reduce the possibility of
having to sell financial assets before maturity at a loss,
2, Any and all exceptions to the Investment Policy require majority vote of
the Board of County Commissioners.
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Exhibit "E"
CARACARA PRAIRIE PRESERVE CONSERVATION BANK ENDOWMENT
FUND TRUST
TRUST ASSETS
Pursuant to the Caracara Prairie Preserve Conservation Bank Agreement, approved
by the Service, Collier County will transfer, into a separate cost center, funds
specifically dedicated for the management of the Caracara Prairie Preserve property
for the interim period through credit sell out. A lump sum amount equal to $408,600
will be transferred into the cost center from Conservation Collier Land Management
Fund 174 Reserves, Collier County shall also make deposits into the Endowment
Fund in an amount equal to $370.45 per credit sold, until the principal of the
Endowment Fund totals $763,200.
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