CITY OF CHICAGO
LORI I l.IGHTI-OOT
MAYOR
June 25,2021
TO THE HONORABLE, THE CITY COUNCIL OF THE CITY OF CHICAGO
Ladies and Gentlemen:
At the request of the City Treasurer, I transmit herewith an ordinance amending the Municipal Code to update the City's Investment Policy.
Your favorable consideration of this ordinance will be appreciated.
Very truly yours,
ORDINANCE
WHEREAS, The City of Chicago (the "City") is a home rule municipality as defined in Article VII, Section 6 ofthe Illinois Constitution; and
WHEREAS, Pursuant to its home rule power, the City may exercise any power and perform any function relating to its government and affairs including the power to regulate for the protection ofthe public health, safety, morals, and welfare; and
WHEREAS, One ofthe main functions ofthe Office ofthe City Treasurer is to invest the City's portfolio to get the best rate of return while protecting the principal; and
WHEREAS, The City's investment policy along with the internal policy of the Office of the City Treasurer sets forth the types of investments that the Office ofthe City Treasurer can make with the City's portfolio funds; and
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHICAGO:
SECTION 1. Section 2-32-520 ofthe Municipal Code of Chicago is hereby amended by deleting the language stricken through and by inserting the language underscored, as follows:
2-32-520 Authorized investments.
The Comptroller and Treasurer jointly shall have authority to use any and all funds in the City treasury which are set aside for use for particular purposes and not immediately necessary for such purposes, for the purchase ofthe following classes of investments:
(Omitted text is unaffected by this ordinance)
(b) United States treasury bills and other non interest non-interest bearing general obligations ofthe United States or United States government agencies when offered for sale at a price below the face value of same, so as to afford the City a return on such investment in lieu of interest;
(Omitted text is unaffected by this ordinance)
(f) Certificates of deposit of banks or savings and loan associations designated as municipal depositories which are insured by federal deposit insurance or demand deposits in hanks or savings and loan associations designated as municipal depositories which are insured by federal deposit insurance; provided that any amount ofthe deposit in excess ofthe federal deposit insurance shall be either: (1) fully collateralized at least -1-03- 100 percent by: (i) marketable United States government securities marked to market at least monthly; (ii) bonds, notes, or other securities constituting the direct and general obligation ofany agency or instrumentality of the United States: or (iii) bonds, notes or other securities constituting a direct and general obligation ofany county, township, city, village, incorporated town, municipal
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corporation, or school district-; of the State of Illinois-; or of any other state, or of any political subdivision or agency of the State of Illinois or of any other state which are rated in either the AAA or AA rating categories by at least two accredited ratings agencies and maintaining such rating during the tenn of such investment; or (2) secured by a corporate surety bond issued by an insurance company licensed to do business in Illinois and having a claims-paying rating in the top rating categoiy as rated by a nationally recognized statistical rating organization and maintaining such rating during the term of such investment; or (3) fully collateralized at least +02- 100 percent by an irrevocable letter of credit issued in favor of the City of Chicago by the Federal Home Loan Bank, provided that the Federal Home Loan Bank's short-term debt obligations are rated in the highest rating categoiy by at least one accredited ratings agency throughout the term ofthe certificate of deposit or deposit;
(Omitted text is unaffected by this ordinance)
(k) Except where otherwise restricted or prohibited, a non-interest-bearing savings account, non interest bearing non-intercst-bearing cheeking account or other non-interest bearing demand account established in a national or state bank, or a federal or state savings and loan association, when, in the detemiination of the Treasurer, the placement of such funds in the non-interest bearing account is used as compensating balances to offset fees associated with that account that will result in cost savings to the City;
(1) (1) Bonds of companies organized in the United States with assets exceeding $1,000,000,000 $500,000,000 that, at the time of purchase, are rated not less than two ratings above investment grade, or equivalent rating, by at least two accredited ratings agencies. Investments authorized by this subsection (1) shall, at the time of purchase, not exceed 35 percent ofthe total holdings across all funds (with no more than 35 percent of the total portfolio authorized by this subsection (1)(1) invested in any one market sector, out of a total market sector pool consisting of finance, energy, technology, consumer products, manufacturing, healthcare and transportation) and the maturity shall not exceed 30 years;
(Omitted text is unaffected by this ordinance)
(n) United States dollar denominated debt instruments of foreign sovereignties that, at the time of purchase, are rated within 4 intermediate credit ratings ofthe United States sovereign credit rating by at least two accredited ratings agencies, but not less than an A rating A- rating or equivalent rating. The investments authorized by this subsection (n) shall, at the time of purchase, not exceed 5 J_0 percent ofthe total holdings across all funds, and the maturity shall not exceed 30 years;
(Omitted text is unaffected by this ordinance)
(p) Bonds registered and regulated by the Securities and Exchange Commission and for which the full faith and credit of the State of Israel is pledged for payment: provided that the bonds have an A rating A- rating or above or equivalent rating by at least two accredited ratings agencies. The bonds authorized by this subsection (p) shall, at the time of purchase, not exceed 1 percent ofthe total holdings across all funds, and the maturity shall nol exceed 30 years;
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(q) Bonds, notes, debentures, or other similar obligations of agencies of the United States rated, at the time of purchase, no less than AAA by at least two accredited rating agencies;
(Omitted text is unaffected hy tin's ordinance)
SECTION 2. Section 2-32-525 ofthe Municipal Code of Chicago is hereby amended by deleting the language stricken through and by inserting the language underscored, as follows:
2-32-525 Minimum credit quality.
Exclusive of investments made pursuant to Section 2-32-520(r), the total holdings across all funds held by the Treasurer shall have no less than an overall average rating of Aal on a quarterly basis, as rated by two accredited rating agencies Aa or equivalent rating without regard to any refinement or gradation of rating category by numerical modifier or otherwise on a quarterly basis.
SECTION 3. This ordinance shall take full force and effect upon its passage and publication.
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