§ 14-58-309 - Legislative findings.
14-58-309. Legislative findings.
(a) The State of Arkansas has investment policies which allow the Treasurer of State and others to prudently invest cash funds in low risk investments which outperform those investments currently permitted by law for municipalities. Larger municipalities and groups of municipalities having in excess of one billion dollars ($1,000,000,000) in real property valuation have the ability to hire employees with expertise to direct investments pursuant to state investment policy, which is the same authority as investments authorized by state banks. If similar authority were given to larger municipalities or groups of municipalities having in excess of one billion dollars ($1,000,000,000) in real property valuation, it would assist them to balance their budgets without a tax increase. It is hereby found and determined that larger municipalities or groups of municipalities having in excess of one billion dollars ($1,000,000,000) in real property valuation should be given authority to invest pursuant to state laws governing permissible investments by the State of Arkansas, which would allow them to improve their rate of return over the return on investments currently authorized and would assist them in balancing their budgets without a tax increase.
(b) (1) Cities of the first class which have real property valuation in excess of four hundred million dollars ($400,000,000) or groups of municipalities having in excess of one billion dollars ($1,000,000,000) in real property valuation may invest cash funds in securities as outlined in 23-47-401 pursuant to an investment policy adopted by its governing body.
(2) (A) Investments shall be made with the judgment and care under prevailing circumstances that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation but for investment, considering the probable safety of the capital and the probable income to be derived.
(B) Investment of funds shall be governed by the following investment objectives, in order of priority:
(i) Preservation and safety of the principal;
(ii) Liquidity; and
(iii) Yield.
(3) In determining whether an investment officer has exercised prudence with respect to an investment decision, the determination shall be made taking into consideration:
(A) The investment of all city funds or funds under the officer's control over which the officer had responsibility, rather than a consideration as to the prudence of a single investment; and
(B) Whether the investment decision was consistent with the city's or group's written investment policy.