presented by indiana treasurer of state’s office

Presented by Indiana Treasurer of State’s

Office

Safety, Liquidity, & Yield

Diversification of Investments

DDA Checking Accounts Negotiable order of withdrawal (NOW) accounts

Passbook savings accounts Certificates of Deposit (CDs) Money market accounts Any interest-bearing account that is authorized

and offered by a financial institution in the course of

its respective business

Make sure your deposit accounts are PDIF insured Are they public funds? IC 5-13-4-20Fees & funds in the possession of a “public officer” by the virtue of that office Is the financial institution an approved depository?www.in.gov/tos/files/ALLDEP.pdfPDIF covers losses above FDIC limits

FDIC coverage of $250,000 per depositor (Until 12-31-13)

New program FDIC’s Transaction Account Guarantee program (TAGP) Unlimited FDIC coverage Interest rate limited to 0.50% Your bank must be a participant in the program Slated to expire 06-3-10

Special Rules for Political Subdivisions Must establish transaction accounts in depositories with branches within political boundaries Exception for political subdivisions that cross county lines or those without a depository within its boundaries (or only one) Doesn’t apply to county hospitals

Every investing officer must obtain quotes on the specific rate of interest for the term of the certificate of deposit

The quote may be taken by phone

The quote must be recorded in a memorandum and retained as a public record

The deposit shall be placed with the depository quoting the highest rate of interest

If two depositories offer the same quote, the investing officer has the discretion

Can invest in CDs from any depository on state’s approved list if county commissioners of political subdivision fiscal body passes resolution authorizing it (renewed every 2 years)

Money market mutual fund requirements Must be rated AAA, or its equivalent, by Standard & Poor’s or Aaa, or it equivalent by Moody’s

Purchases, sells, or holds direct obligations of the United States Treasury or other obligations issues by a federal agency, a federal instrumentality or a federal government

sponsored enterprise Must be purchased through an institution on the state’s approved depository list Must have a final stated maturity of one day The mutual fund’s investments can’t exceed 50% of funds held,

except a county treasurer may exceed limit if 10 days prior to

property tax due date and property tax settlement distribution

date

Securities backed by the full faith and credit of the United States Treasury or fully guaranteed by any of the following:

The United States Treasury (Notes, t-bills, and bonds)

Federal agency (Government National Mortgage Agency)

Federal Instrumentality

Federal government sponsored enterprise (Federal Home Loan Bank)

Discount notes issued by a federal agency, a federal instrumentality, or a government sponsored enterprise

Use of a broker-dealer that is SEC licensed Use of a custodial bank that is on the state’s approved depository list or has combined capital and surplus of at least $10 million Securities may have a maximum maturity of 2 years Securities lending

Securities may be lent for extra income as long as its

collateralized by cash or securities issued, insured, or

guaranteed by the federal government or a federal

agency

An agreement involving the purchase and guaranteed resale of securities Can be a one time commitment or an ongoing commitment Must have a final stated maturity of one day (overnight) Must be fully collateralized Must be made through a depository on the state’s approved depository list

County – Board of Commissioners & County Treasurer

Marion County – County Treasurer, County Auditor, County Assessor, City Controller, Mayor, President of the School Board

City – Executive and fiscal body

Town – Fiscal Body

Other – Fiscal body of each political subdivision not a county, city or town

Each local board of finance SHALL meet annually after the first Monday and on or before the last day of January and do the following:

From the board’s membership elect a president &

secretary Receive and review the report required by IC 5-13-7-7 Review the overall investment policy The report must contain a summary of all investments

made during the previous calendar yearConsult your county attorney or counsel regarding this

requirement

Check costs, check processing, deposit processing, Automated Clearing House (ACH), and wire transfers

Are usually not customized for all customers, majority

of financial institutions offer them. This allows room to

negotiate costs with your financial institution, not

always but sometimes.

Lockbox is the collecting, processing, and reporting of payments provided by a financial institution to a client.

Some custom reports available Not a of lot margin for negotiating costs if customizations are doneDirect Deposit is an electronic payment system to a payee’s bank account (Great for payroll.)

Remote Capture/Image Transmission is the process of scanning and transmitting electronic images of paper checks to financial institutions

A report is created by batch with amounts, payee names, serial numbers, and etc. exhibited Paper checks can be retained and then destroyed after 15 days

Funds are directly deposited to your operating account Daily deposit deadline extended Quicker access to funds for investment purposes Earlier notification of returned items Online access to check images and deposits

Online Banking allows you instant access to your account

To do wire transfers and moving of funds Can assist with setting a daily cash position for investing purposes Can assist with reducing paper checks if funds are

moved on line

Positive Pay allows a customer to provide copies of outstanding checks to a financial institution, which then compares payee names, amounts, endorsers, and check numbers to paper checks presented for payment. If a discrepancy is found between the information provided to the bank and the paper checks being cashed, the customer can deny the payment of the check

Reduces fraud Financial institutions can stop the images of questionable checks so no check needs to be returned, which reduces costs

Imaging Services is offered by most financial institutions or they have a relationship with a vendor that will allow a customer to view items on line or by CD

Reduces storage, paper usage, research time, and cuts

overall costs Recommended for documents of all kinds

Sweep Account allows excess funds in a checking account to be placed in an overnight repurchase agreement or a NOW account, which earns a rate of of interest on the funds.

Financial institutions do automatically overnight

and return funds back to your checking account the next day.

Charge Card Payments can be accepted by county organizations, schools, or town by joining the State of Indiana’s charge card contract with Metevante, Inc.

Contact: Lottie Hooyer Contract Manager Indiana Department of Administration Indiana Government Center South 402 W. Washington St., RM W468 Phone Number 317.234.0067 [email protected]

E-Check is another electronic payment process that can be done through a web application or the sliding of a debit card at the time of purchase by a customer.

Courier Fees incurred for the deliver or pick-up of paper checks or financial reports handled by your financial institution or third party can be negotiated. Also, look at consolidating pick-up/drop-off points as a way to reduce costs

Multiple elected officials working together to leverage costs associated with using the same financial institutions or vendors (Example County Treasurer & County Auditor)

Kim Logan Deputy Treasurer

Indiana Treasurer of State’s Office

302 W. Washington St., IGC-S E016

Indianapolis, IN 46204317-233-0921

[email protected]/tos/

Jim Holden Chief Deputy Treasurer

& General Counsel Indiana Treasurer of State’s

Office200 W. Washington St., 242


[email protected]/tos/

The primary mission of the Indiana Bond Bank is to

assist local government or qualified entities with the

process of issuing debt.

Created by the Indiana General Assembly in 1984

Self-supporting quasi-governmental entity

A seven member board governs the Bond Bank

The State Treasurer statutorily serves as Chairman of the Board

The director of the Indiana Finance Authority statutorily serves as a board member

The Governor appoints five board members

Hoosier Equipment Lease Purchase Program (HELP)

Advance Funding Program

Pool Program

New Programs

Indiana Bond Bank has issued $18.2 billion in bonds/notes since its inception

$2.57 billion outstanding Financing Conduit The Bond Bank purchases bonds and notes from communities and in turn sells its own obligations

to the open market The pooling process allows communities to realize savings that are achieved by sharing of fixed

costs and economies of scale

Fiscal Year # of Issues Amount

2003 17 $2,045,252,073

2004 18 $2,928,333,298

2005 10 $1,151,790,000

2006 13 $822,565,000

2007 4 $785,945,000

2008 7 $1,378,970,000

2009 13 $1,696,373,000

Lease essential equipment Competitive interest rates

Fixed to treasury yields Contact the Bond Bank for interest rates

Repayment flexibility Annually Semi-annually Quarterly Monthly

Option to escrow

Since 1991

Assisted over 200 communities

Over $180 million in equipment

Four program underwriters

Title to asset passes to entity upon completion of lease

term

Fire Trucks Police Cars Ambulances Tandem Trucks Computers Phone Systems Safety/Security Equipment 911 Emergency Equipment/Systems

Garbage Trucks Snow Plows Sewer Vacs Radio Equipment Voting Machines Buses Portable Classrooms Book Mobiles And much more…

Fiscal Year Amount closed

2003 $ 31,592,073

2004 $ 13,188,599

2005 $ 14,781,235

2006 $ 10,369,221

2007 $ 9,064,113

2008 $ 6,429,905

2009 $ 4,755,968

Fiscal Year = July 1–June 30

1.79% one-year interest rate was among the lowest

published in Indiana

Highest Standard & Poor’s short-term credit ratings

Program size and participants increased

Flexible draw and pre-payment options

Provide $357 million to over 122 governmental

entities throughout Indiana

1.25% interest rate

79 participants

$161 million notes

Closed on June 25, 2009

Series

2004

Series

2005

Series

2006

Series

2007

Series

2008

Series

2009

Program Size in Millions

$843 $537 $296 $460 $522 $357

# of Participants

173 126 110 114 119 122

Entity RateAll Inclusive

1.29%

2.52%

3.44%

3.68%

2.39%

1.79%

Applications:

Cash Flow Statements: Participant Resolution/ Ordinance Adopted: Interim Funds Distributed: Closing/Funds Distributed: Midyear Program

Due Date

10/09/2009

10/30/2009

11/23 – 12/4/2009

1/05/2010

1/28/2010

June 2010

Long Term Debt Program

Typical Uses

Construction of Essential Use Facilities

Acquisition/Improvement/Expansion:

Utility systems

Building projects

Assisted over 200 communities

Issued pooled debt of over $440 million

Revenue Bonds

Debt Service Coverage of at least 125%

General Obligation Debt

Property Taxes used for repayment

Building Corporations – Lease revenues

Indiana Bond Bank Rating “AA”

Utilize Bond Bank experience in issuing debt

Reduced cost of issuance

Flexible Terms: 7 to 30 years

Projects over $150,000

Year AA BBB Difference

2010 0.42 2.16 (1.74)

2014 2.01 3.79 (1.78)

2019 3.14 4.92 (1.78)

2024 3.56 5.19 (1.63)

2029 3.86 5.34 (1.48)

2034 4.13 5.44 (1.31)

2039 4.20 5.49 (1.29)

Qualified Entities (QE) gain access to capital markets

Economic savings by issuing bonds using IBB’s higher credit rating

Estimated annual savings for each QE range from $5,000 -

$10,000 on million dollar bond issues

Savings based upon QE underlying credit rating and other factors

Use as a budgeting tool to guard against rising fuel prices

Allows smaller entities to pool their fuel budgets to create an effective hedge size (42,000 gallons)

Share program costs for cost efficiency

Experience of IBB Staff/Professionals from 2009 Fuel Hedge Program

2009 – Participants were 2nd class cities

2010 – Expanded to Schools and County Government

Common School Fund

Qualified School Construction Bonds (QSCB’s)

Economic Recovery Zone Bonds

Dan Huge Executive DirectorIndiana Bond Bank

10 W Market St., Ste 2980Indianapolis, IN 46204

[email protected] www.in.gov/tos/bond/

Authorized by the Indiana General Assembly’s passage of Indiana Code § 5-13-9-11 during its 2007 session. TrustINdiana allows local units as well as the State of Indiana to invest in a common pool of assets that preserves the principal, remains highly liquid, and maximizes the return on the investment. Key characteristics

Investing in Indiana, Indiana Banks High quality investments, e.g. treasuries, agencies,

CP Professional money management-MBIA Municipal Investors Services Corp. 1.00 NAV

Pool features protect the safety of your funds

Public sector funds invested only in securities allowed by Indiana law

Assets held in a third-party custody account solely for

TrustINdiana funds

Fund management by professionals with over 20 years of public sector expertise

Audited annually by an independent auditing firm

At least 50% of funds held in A1/P1 Indiana Banks

Funds are available when needed

Put dollars in today, get them out tomorrow with interest

100% liquidity

Daily access to funds with no withdrawal penalties

Maximum Weighted Average Maturity (WAM) of 60 days or less

Active portfolio management ensures that cash is readily available

TrustINdiana is designed with convenience in mind

Access: Any business day

Transactions executed by toll-free phone, fax, or secure internet access

Client Connection: Feature offers on-line access to transactions, rates, account statements, and reports

Ability to set up pending transactions

Read-only access available

Funds can be transferred via wire or ACH

TrustINdiana is actively managed and seeks to achieve

the highest yield available

Greater investment options and diversification than

available to local units

Active fund management by professionals with

extensive public sector expertise

Returns calculated and paid daily

Features

No minimum balance

No limits on number of transactions

No limits on transaction size

No hidden fees or charges

No withdrawal penalties

Account Information

Detailed monthly statements

Unlimited number of sub-accounts to track funds by purpose (Operating Funds, Bond Proceeds, Reserve Funds, etc.)

Simple structure for annual audit process

Daily rate notifications

Kelly M. Mitchell, DirectorTrustINdiana

Office of the Treasurer of Indiana242 State House, 200 W Washington St.


[email protected]

What is the Indiana Board for Depositories? What is the Public Deposit Insurance Fund (PDIF)? What are considered “public funds”? What institutions are eligible to become a state depository? What happens if a bank fails? Have any depositories closed recently?

Quasi-governmental Agency Created in 1937 by IC 5-13-12 in response to bank failures during the Great Depression Keeps a list of approved depositories Manages the operation of the PDIF The Treasurer is the Secretary/Investment Managers Governor, or his designee, is the Chairman

Insurance fund Covers the full amount of public funds over and above

the amount covered by the FDIC Deposit accounts Approved depositories According to IC 5-13

Unique to Indiana and a benefit to public entities

0.2% - 0.4% higher interest rate on public deposits $300 million in assets Funded by fees on banks holding public funds

Definition from IC 5-13-4-20:IC 5-13-4-20"Public funds“Sec. 20. "Public funds" means all fees and funds of whatever kind or character coming into the possession of any public officer by virtue of that office. The term does not include:

support payments made to the clerk of a circuit court

under IC 31-16-9 (or IC 31-1-11.5-13 before its repeal);

or

proceeds of bonds payable exclusively by private

entity.

Public Officer defined by IC 5-13-4-21

IC 5-13-4-21

"Public officer“

Sec. 21. "Public officer" means any person elected or appointed to any office of the state or any political subdivision. "Public officer" includes an officer of all boards, commissions, departments, institutions, and other bodies established by law to function as a part of the government of the state or political subdivision that are supported wholly or partly by appropriations of money made from the treasury of the state or political subdivision or that are supported wholly or partly by taxes or fees. "Public officer" does not include an officer of an independent body politic and corporate set up as an instrumentality of the state but not constituting a political subdivision.

Any person elected or appointed to any political subdivision An officer of all:

Boards Commissions Departments Institutions Other bodies that function as a part of a political subdivision Supported wholly or partly by: Appropriations from the treasury of the

political subdivision Taxes and fees

A bank headquarter in Indiana or a national bank with a branch in Indiana A federal charted savings association with a headquarter in Indiana or a branch in Indiana A federal charted savings bank with a headquarter in Indiana or a branch in Indiana

A state charted credit union in Indiana that has assets of $3 million dollars or more with a headquarter in Indiana or a branch in Indiana

199 depositories www.in.gov/tos/files/ALLDEP.pdf

There are $11.5 billion in public funds in Indiana’s public depositories

Department of

Financial Institutions

Attorney General

Auditor of State

Department of


Public Officer

Newspaper

Public Officer

Judge

Board for Depositorie

s

Public Officer

Department of


Attorney General

Auditor of State

Department of


Public Officer

Newspaper

Public Officer

Judge


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Public Officer

Indiana Department of Financial Institutions (DFI) will determine the amount of public funds on deposit at the closed depository and certifies that information to Indiana Attorney General’s Office, (AGO) the Indiana Auditor of State’s Office, (ASO) and the public entity, public officer, that has the funds in the depository

Department of


Attorney General

Auditor of State

Department of


Public Officer

Newspaper

Public Officer

Judge


s

Public Officer

Within 10 days after receiving certification, the public officer shall furnish to the AGO and the ASO the following:

Verified statements on the amount of their funds in closed depository

Certified copies of the resolutions under which the deposits were made

Additional information that might be requested by the AGO and ASO

Department of


Attorney General

Auditor of State

Department of


Public Officer

Newspaper

Public Officer

Judge


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Public Officer

The Attorney General and Auditor of State will determine the amount covered by the PDIF, and provide their decision to the public officers, the DFI and the BFD.

Department of


Attorney General

Auditor of State

Department of


Public Officer

Newspaper

Public Officer

Court


s

Public Officer

The DFI Publishes the decision of the AGO and ASO

After the publication, the Public Officer has 10 days to appeal to a court.

After the 10 days has expired, or a court rules for or against the AGO and ASO decision.

Department of


Attorney General

Auditor of State

Department of


Public Officer

Newspaper

Public Officer

Judge


s

Public Officer

20 Days 10 Days 50 Days 10 Days

While we will attempt to provide the funds as quickly as possible, it could take up to 90 days after a depository is closed to receive funds. It could be longer if the decision is challenged in court.

Irwin Union State Bank & Peoples Community Bank ALL deposits of both banks were assumed by the First Financial Bank in Hamilton, OH. Therefore, there was NO loss to the public entities or the PDIF

Pat Hastings, Executive DirectorIndiana Board for Depositories

One North Capitol Ave., Suite 444Indianapolis, Indiana 46204

[email protected]

www.in.gov/tos/deposit/index.htm

presented by indiana treasurer of state’s office

Documents

deposit accounts

transaction accounts

depository list

united states treasury

public funds

political subdivisions

county treasurer

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