NY Gen Mun L § 43 (2021)
2021 New York Laws GMU - General Municipal Article 3-A - Cooperative Investments 43 - Required Elements of a Cooperative Investment Agreement.

§  43.  Required elements of a cooperative investment agreement. Every cooperative investment  agreement  shall  contain,  at  a  minimum,  the following:   1.      a   description   of  the  creation,  membership,  powers  and responsibilities  of the governing board of the  cooperative  investment agreement  as  set  forth  in sections forty-four and forty-five of this article.   2. a statement  designating  one  of  the  participants  as  the  lead participant.   Moneys   to  be  invested  pursuant  to  the  cooperative investment  agreement  and  the  investments  made   pursuant   to   the cooperative  investment  shall  be  held  in  the  custody of   the lead participant on behalf of all the  participants.  Moneys  or  investments held   in  the  custody  of  the  lead  participant  on  behalf  of  the participants shall not be commingled with other moneys or investments of the lead participant.   3. a statement that each participant shall have an undivided  interest in  moneys and investments held by the lead participant on behalf of the participants in the proportion that the total  amount  of  contributions made  by  that participant bears to the total amount of contributions by all the participants.   4. a statement of the investment policy applicable to investments made pursuant to  the agreement.  This investment policy shall conform to the requirements of section thirty-nine  of  this  chapter  and  shall  also include:  (a)  a  statement  of  the governing board's intention to maintain the value of each participant's interest in the cooperative investments at a stable value of one dollar,  (b) a statement of the types  of  investments  authorized  by  section eleven  of  this  chapter  in  which  moneys  may  be invested under the agreement and, if deemed appropriate, further limitations pertaining  to matters   such   as the use of repurchase agreements and the purchase of variable rate and structured obligations,  (c)  a  statement  of  the  maximum  time  remaining  to  maturity  of individual  investments  permitted  under  the agreement and the maximum weighted average maturity   of all  investments  made  pursuant  to  the agreement  as  are  deemed  necessary  to  fulfill the investment policy stated in the agreement and  to ensure that a  participant's  investment will  be  available when needed to meet expenditures; provided, however, that the maximum time remaining to maturity   of individual  investments shall  not  exceed  three  hundred  ninety-seven  days  and  the maximum weighted average maturity of all investments  shall  not   exceed  sixty days.  Compliance  under  the  cooperative investment agreement with the maturity limitations stated in this subdivision shall be  deemed  to  be compliance  with the requirements of paragraph a of subdivision three of section eleven of this chapter, and  (d)  standards  for  the  diversification  of  investments,  including diversification with respect to types of investments and firms with whom the governing board transacts business.   5.  the  participants' rights   to   make   contributions and  receive distributions,  the  frequency with which earnings will be   distributed to  the  participants,  and the circumstances, if   any,  under which  a participant's rights to make contributions or receive distributions  may be limited or deferred.   6.  a  description  of  the  manner  in which expenses incurred by the governing board in administering the cooperative  investment  agreement, including,  but  not  limited  to, the cost of procuring the services of professionals to assist the governing  board,  the  compensation  of  an executive   director,   if   one   is  appointed,  and  other  costs  of  administering the investments made pursuant to the agreement, are to  be apportioned among the participants.   7.  a  description  of the methodology, including, but not limited to, the amortized cost method, that will be utilized to establish the  value of  each  participant's  interest  in  investments  made pursuant to the agreement, including the value of contributions  and distributions,  and the calculation of yield thereon.   8.    a  provision requiring that the market value of investments made pursuant to the agreement shall  be  determined  at  least  monthly  and whenever the method  of valuation authorized  by  the agreement does not accurately   reflect  the  value  of  participants'  interests  in  such investments.   9. a provision requiring that, at least once a month, the portfolio of investments made pursuant to the agreement be tested for sensitivity  to changes  in interest rates. This provision must require that the testing methodology adopted by the board  be  reasonably  designed  to  reliably quantify  the effect   of   a   change   in interest rates on the market value of the portfolio.   10.  a  provision  requiring  that  the  governing  board  secure   an irrevocable  letter  of  credit  in  an  amount  sufficient to cover any potential  losses  as  quantified pursuant  to the  testing described in subdivision nine of this section. The cost of such irrevocable letter of credit shall be deemed to  be  an  expense  incurred  by  the  board  in administering the investments made pursuant to the agreement.   11.  a statement that the governing board may procure  the services of professionals such as an administrator, investment advisor,  independent auditor,  custodial bank, and any  other professional  services it deems appropriate  to  assist  the   governing   board   in   fulfilling   its responsibilities   under   the   agreement,   provided   that:  (a)  the professionals  who  will  render  such  services,  individually      and collectively,  shall  meet  all qualifications deemed appropriate by the governing  board;   (b) the procurement of such  services  shall  be  in compliance  with  section one  hundred  four-b  of this chapter, subject to a request for proposal process at least every three years;  (c)   the contracts   for   such   services   shall  ensure  compliance  with  the requirements of sections ten and eleven of this  chapter;  and  (d)  the charges,    fees and   other compensation   for any  contracted services shall be clearly stated in written service contracts.   12. a  provision  requiring  that  each  participant  receive  written confirmation of each  contribution made  by  or distribution made to the participant  no  later  than the following business day after which  the contribution  or distribution occurs.   13. a provision requiring that  each  participant  receive  a  monthly statement  that  sets  forth the following information for the preceding month: (a) all activity  by  the  participant;  (b)  the  value  of  the participant's  interest under the agreement at the  beginning and end of the month; and  (c) an itemization of all  investments  held  under  the agreement   as   of the end  of the month, including the market value of each investment as of that date.   14. a provision  requiring  that  each    participant  and  the  state comptroller   receive  immediate  notification    of  any    event    or circumstance that may require a deferral of distributions or  may  cause investment  losses not anticipated by  the  investment policy and of any other material adverse event relating to the investments  made  pursuant to the agreement.   15.  a provision requiring that a certified public accountant annually conduct an audit,  in  accordance  with  generally  accepted  government auditing  standards,  of  the  activities  undertaken  pursuant  to  the  agreement. A copy of this annual audit  shall  be  distributed  to  each participant  and  to  the state comptroller within ninety days after the close of the fiscal year established under the agreement.   16. a provision requiring  that  each  participant  annually  receive, and each prospective participant  receive  prior  to their participation in  the    agreement,  an  information statement that includes,   at   a minimum,  the following:  (a) a brief history of the agreement;  (b)   a description    of    the  organization  and  terms  of  the  cooperative investment agreement, including the powers and responsibilities of   the governing   board  and  the qualifications of any professionals retained under the   agreement; (c) a description of the  investment  objectives, policies  and  practices  contained in the agreement   including   those pertaining  to liquidity,  methodology  for determining    participants' interests,  distribution  of    earning and calculation of yield;  (d) a description of the current investments held under the agreement;  (e)  a listing of any fees or charges to be incurred  by  participants; and (f) a  description of the required procedures for initiation and termination of participation in the agreement.   17. a provision requiring  that  all  participants   receive at  least once  a  year  a   report detailing the following  information  for  the preceding  twelve months:  (a)  the portfolio of  investments  currently held  pursuant  to  the  agreement,  including, for each investment, the market  value,   time remaining   to   maturity,   interest  earned  and realized,  and  unrealized gains and losses;  (b) the overall investment results, yield and weighted average maturity; (c) a  list of   the  fees paid  for  all  professional services procured  under the agreement; and (d) a statement of all other expenses incurred by the governing board in administering the investments made pursuant to the agreement.   18. a provision requiring that,  if  the  governing  board  obtains  a rating  from  a  nationally  recognized statistical rating organization, such rating and any subsequent changes  therein  be  disclosed  to  each participant.