§ 39. Investment policies for local governments. 1. Each local
government, which for purposes of this section shall include counties,
cities, towns, villages, school districts including boards of
cooperative educational services and district corporations, within the
meaning of that term as set out in subdivision three of section
sixty-six of the general construction law, or any other governmental
subdivision of the state, shall by resolution adopt a comprehensive
investment policy which details the local government's operative policy
and instructions to officers and staff regarding the investing,
monitoring and reporting of funds of the local government. The
investment policy shall be annually reviewed by the local government.

2. Funds of the local government, for purposes of this section, shall
consist of all moneys and other financial resources available for
investment by the local government on its own behalf or on behalf of any
other entity or individual.

3. The investment policy adopted by the local government shall
include, but not be limited to, the following:

(a) A list of the permitted types of investments of the local
government, which shall be consistent with the appropriate provisions of
law relating to the local government and any additional requirements
pursuant to any contract with bondholders and noteholders or established
by the local government.

(b) Procedures and provisions to secure in a satisfactory manner the
local government's financial interest in investments.

(c) Standards for written agreements pursuant to which investments are
made. Such standards shall be consistent with the appropriate provisions
of law relating to the local government and any additional requirements
pursuant to any contract with bondholders and noteholders or established
by the local government.

(d) Procedures for the monitoring, control, deposit and retention of
investments and collateral.

(e) Standards for security agreements and custodial agreements with
banks or trust companies authorized to do business in the state of New
York, pursuant to which obligations and collateral are held by such
banks and trust companies for the local government. Such standards shall
be consistent with the appropriate provisions of law relating to the
local government and any additional requirements pursuant to any
contract with bondholders and noteholders or established by the local
government.

(f) Standards for the diversification of investments, including
diversification with respect to the permitted types of investments
listed in accordance with paragraph (a) of this subdivision and to the
firms with whom the local government transacts business. Such standards
may also specify the maximum percentage of moneys available for
temporary investment or the maximum dollar amount that the local
government is authorized to invest in any one permitted type of
investment or pursuant to transactions with any one firm.

(g) Standards for the qualification of firms with whom the local
government transacts business, such as criteria covering
creditworthiness, experience, capitalization, size and any other factors
that make a firm capable and qualified to transact business with the
local government.

(h) For purposes of this section, the term "firm" shall include, but
not be limited to, a bank or trust company as defined in subdivision one
of section ten of this chapter, the lead participant of a cooperative
investment agreement as defined in subdivision one of section
forty-nine-c of this chapter, and the seller of an obligation that is
purchased pursuant to a repurchase agreement.

4. Each local government shall have the power to amend its investment
policy from time to time in accordance with the provisions of this
section.