King City Civic Association Resolution: Finance 2012-404
SECURED FUNDS POLICY AND PROCEDURE
CC&Rs Article VI Sections 1 and 3.H; ORS 94.670; ORS 94.595
Policy
The Association shall maintain and manage all operating and reserve funds through well-established, bank/s with local (King City) branches. Long-term relationships are a priority.
To ensure all funds are FDIC insured and meet the requirements of ORS 94.670 (2) (a), Certificate of Deposit Account Registry Service (CDARS) agreements shall be maintained. There shall be one for operating funds and one for reserve funds.
CDARS is a registered service of Promontory Interfinancial Network, LLC. The service is provided through a network of participating banks throughout the country. Through a participating bank, funds exceeding the FDIC insurance limit of $250,000 (now permanent) are placed in CD's issued by other banks in the CDARS network in dollar increments below the FDIC insurance limit. There is a wide variety of maturities available from 4 weeks to 5 years. The entity owning the funds is able to work with only one bank and have access to multi-million dollar FDIC insurance coverage. CDARS also qualifies in Oregon for use with public funds.
Security and timely availability of funds takes precedence over interest rates.
All CD interest is to be paid to the principal during the maturity period.
Procedures
The CDARS agreement shall be executed by the President, Treasurer and Administrator.
The operating money market and reserve money market funds shall be maintained at a level not to exceed $100,000.
Operating fund CD's shall be purchased through the CDARS program in amounts and maturities that meet the cash flow needs of the Association throughout the year. The amounts and maturities will be determined and executed by the Administrator with consultation of the Treasurer and Finance Committee.
Reserve fund CD's shall be purchased through the CDARS program in amounts and maturities that meet the needs of the reserve projects planned for the fiscal year. The reserve money market account shall be reviewed as transfer fee deposits are made to determine when additional CD's should be purchased through the CDARS program. The amounts and maturities shall be determined and executed by the Administrator with consultation of the Treasurer and Finance Committee.
Any changes to CDARS agreements and/or the service provider must be thoroughly investigated and approved by the Finance Committee and the Board.
Criteria for such an investigation shall include identifying that the service provider has:
- Established a history of financial strength
- Met the regulatory definition of "well capitalized"
- Exceeded liquidity regulatory requirements
- Demonstrated that the CDARS accounts are managed directly through a local branch
- Verified that there are no fees or hidden costs
- Confirmed statements will be provided at month-end detailing the CD amounts and maturity dates held at each bank. amounts held at each bank
IT IS RESOLVED this ___ day of February 2012 by a majority vote of the Board of Directors and effective upon distribution of the Association's March 2012 Newsletter
King City Civic Association
By Terry Shane, President By Maxine Van Dyke, Secretary
9/14/10
Reviewed and Revised 02/14/12