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Franklin Public Library

Investment Policy

Investment Policy

To Comply With Act 20 PA 1943, as amended
Adopted November, 1998
Re-approved March, 2013
Amended  November 2020 



It is the policy of the Franklin Public Library to invest its funds in a manner which will provide the highest investment return with maximum security while meeting the daily cash flow needs of the Franklin Public Library and comply with all state statutes governing the investment of public funds.



This investment policy applies to all financial assets of the Franklin Public Library.  These assets are accounted for in the various funds of the Franklin Public Library and include the general fund and any new fund established by the Franklin Public Library.


The primary objectives, in priority order, of the Franklin Public Library’s investment activities shall be: 

  • Safety: Safety of principal is the foremost objective of the investment program.
  • Diversification: The investments will be diversified by security type and institution in order to minimize exposure to potential losses and to maintain appropriate investor protection under SPIC and/or FDIC protocols.
  • Liquidity: The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.
  • Return on Investment: The investment portfolio shall be designed with the objective of obtaining a rate of return throughout the budgetary and economic cycles, taking into account the investment risk constraints and the cash flow characteristics of the portfolio.



Authority to manage the investment program is derived from:  Public Act 164, 1877, of the State of Michigan and the By-Laws of the Board of Trustees of the Franklin Public Library.  Management responsibility is hereby delegated to the Treasurer, who shall establish written procedures and internal controls for the operation of the investment program consistent with this investment policy.  Procedures should include references to: safekeeping, delivery vs. collateral/depository agreements and banking service contracts. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Treasurer.  The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.



The Treasurer is limited to investments authorized by Public .Act 20 of 1943 as amended and may invest in the following: 

  • Bonds, securities, and other obligations of the United States of agency or instrumentality of the United States with remaining maturities of two years or less, unless purchased for a Debt Retirement or other long-term investment account.
  • Certificates of deposit of a bank which is member of the Federal Deposit Insurance Corporation and which are also eligible to be a depository of surplus funds belonging to the state under section 5 or 6 of Act No. 105 of the Public Acts of 1855, as amended, being sections 21.145 and 21.145 of the Michigan Compiled laws.



All security transactions, including financial institution deposits, entered into by the Treasurer shall be on a cash or DVP (Delivery versus Payment) basis.  Securities may be held by a third party custodian designated by the Treasurer and evidenced by safekeeping receipts as determined by the Treasurer.



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.