Section 5.04. Criteria.

 

(1)  A cemetery authority shall give due consideration to both long term and short term cash flow needs in selecting alternative investments. The following classes of alternative investments are permissible:

(a) Corporate bonds or bonds or other instruments of indebtedness issued or guaranteed by governmental units in the United States, provided that the bonds or instruments of indebtedness are rated AA or above by Standard & Poor's or by Moody's Investor Services. Once one or more of these instruments drops below an A rating and remains below that rating for 2 consecutive quarters, the cemetery authority shall divest those instruments within 180 days or proceed under par. (e) .

(b) Publicly traded preferred or common stock of regulated utilities in the United States whose debt is rated AA or above by Standards & Poor's or by Moody's Investor Services. Once the debt rating of the issuing utility drops below an A rating and remains below that rating for 2 consecutive quarters, the cemetery authority shall divest those instruments within 180 days or proceed under par. (e) .

(c) Fully insured certificates of deposit issued by banks, savings and loan associations, or credit unions located in the United States which are federally insured. Certificates of deposit which are only partially insured are permissible in commercial banks rated BC or above by Thomson Bank Watch, Inc.

(d) Mutual funds, if at least 80 percent of monies in the mutual fund are invested in one or more of the instruments in pars. (a) to (c) .

(e) Such other investments which the board determines will provide safety equal to or greater than the investment classes described in pars. (a) to (d) .

(2)  A cemetery authority shall consider diversification of investments. No cemetery authority may purchase or otherwise invest in one of the instruments in sub. (1) (a) to (c) if the percentage of the care fund invested in the instruments sold by a specific corporation, governmental unit, or financial institution immediately after such purchase or investment will exceed 50 percent of the total market value of the care fund, except for investments in or guaranteed by the United States government, and except for fully insured certificates of deposit in sub. (1) (c) .

(3)  No cemetery authority may invest in any entity or company in which an officer or trustee of the cemetery authority is a shareholder who beneficially owns, holds, or has the power to vote 5 percent or more of any class of securities issued by the entity or company.

(4)  No cemetery authority may invest in any entity or company in which a spouse or child of an officer or trustee of the cemetery authority or other family member who receives one-half of his or her support from an officer or trustee is a shareholder who beneficially owns, holds or has the power to vote 5 percent or more of any class of securities issued by the entity or company.

CR 12-021 : cr. Register August 2012 No. 680 , eff. 9-1-12.