What is CLASS?
CLASS (Cooperative Liquid Assets Securities System) is a short-term, highly liquid cash management program, designed specifically for public-sector funds, that provides you the opportunity to invest funds on a cooperative basis in short-term investments which are carefully selected to yield favorable returns while providing maximum liquidity and safety.
Wisconsin CLASS is defined by the terms of an Intergovernmental Agreement (the Intergovernmental Agreement) between various Wisconsin governmental and public entities who choose to participate (the Participants) and Cutwater Investor Services Corp. (CISC, the Program Administrator). The Lead Participant, appointed in the Trust Agreement, selects and enters into formal agreements with all of the consultants to the investment program, including the Program Administrator and the Custodian
(see below).
Who can participate in Wisconsin CLASS?
Participation is available currently to any Wisconsin political subdivision as authorized under state and local law to participate in the Intergovernmental Agreement.
What are the program’s objectives?
Wisconsin CLASS seeks to maximize the following characteristics in all its investments: safety, liquidity, convenience, and competitive rates of return.
Safety: Several security features are in place to protect you against fraud or error. Only designated officials may conduct transactions for you, and funds will be wired only to previously designated accounts. All conversations are recorded for accuracy and verification. As a further safety measure, an Letter of Credit (LOC), posted with the Custodian, provides funds for withdrawals, to the extent that the sale price of any securities sold is less than the amortized cost.
Wisconsin CLASS invests public-sector funds only in securities which are legally permitted under Wisconsin Law. To further ensure safety, the terms of the portfolio investments are carefully balanced to correspond with anticipated cash flow needs and to minimize the effect of potential financial market volatility.
Liquidity: You may conduct transactions (deposits, withdrawals or transfers) on any normal business day. All portfolio investments are carefully selected to ensure that cash is available whenever needed. There is never a penalty for withdrawals of invested funds including all accrued interest. There are no limits on the dollar amount or number of daily transactions, except that total daily withdrawals may not exceed the total balance on deposit. There is no minimum balance requirement or transaction size.
Convenience: To make your cash management simple and efficient, Wisconsin CLASS includes many features (designed by public-sector financial experts) that make it easy to access account information and simplify record keeping. You may make account transactions on any business day, using CISC's toll-free phone number, toll-free fax number or internet connection (Client Connection).
Any transaction made with the proper notification to CISC before 11:00 am CST on a business day will be posted and, if appropriate, begin earning interest on that day; transactions made after 11:00 am CST will be posted the next business day. All transactions are confirmed by same-day fax or email. You may also execute transaction notifications in advance, to anticipate important draw dates. This "pre-dating" function avoids timing problems and ensures that cash is available to meet specific payroll or other cash needs.
You may establish any number of Wisconsin CLASS accounts to track and parallel your own internal fund accounting structures. Although all investment and payment forms have been designed to be simple and user friendly, we can also customize account information to meet special needs. You may contact CISC's client service desk on any business day to get specific account information or for other assistance.
You will receive comprehensive monthly statements that provide a detailed account history, including daily account activity, transaction numbers, rate summaries, pledged collateral and a portfolio holding report. These statements have been designed specifically to facilitate public-sector fund accounting, and to establish a clear accounting and audit trail for your investment records.
Yield: By participating in a cooperative investment program, you can take advantage of certain economies of scale relative to transaction and clearance costs as well as custody arrangements. Overall portfolio performance is enhanced by the different cash flow cycles of the various Participants, which create longer average investment maturities than you could achieve by investing alone-resulting in an increase in the aggregate portfolio yield. The portfolio strategy is to be fully invested each night to maximize yields.
Participation in Wisconsin CLASS also allows you to benefit from the professional investment advisory services provided to the Board of Representatives and Custodian by CISC and Cutwater Asset Management Corp.
Yields will fluctuate as market conditions change. Past performance is no guarantee of future results.
How is the program administered?
Board of Directors : The program Participants and Custodian elect Representatives to the Board of Directors, which is at all times responsible for all Wisconsin CLASS investment decisions. The Board of Directors in turn allocates to the Custodian, working through the Program Administrator, authority for the daily investment activities of the program.
Program Administrator: Cutwater Investor Services Corp. serves as the Wisconsin CLASS Program Administrator, subject to the overall supervision of the Lead Participant and, with respect to investment transactions, under the direction of the Custodian. CISC and its sub-adviser, Cutwater Asset Management Corp. (an SEC-registered investment adviser), provide proposed investment strategies to the Custodian, who in turn directs them to make investment transactions on behalf of the program Participants.
In addition to investment advisory services, CISC provides various administrative functions including processing of securities transactions, program record keeping, portfolio valuation, and other client-related services.
The Wisconsin CLASS Regional Marketing Director is Dick Choyke, who maintains an Office in Cedarburg, Wisconsin. Mr. Choyke has over 18 years of financial services experience with Shay Investments, Shearson Lehman Brothers and First Federal Bank. Prior to joining Cutwater, he served as a vice president with the financial advising firm of Evensen Dodge and as Managing Director of Evensen Dodge Investment Advisors. He has also served as an Assistant Professor of Business at the University of Wisconsin at Stevens Point where he won Faculty Member of the Year honors. Mr. Choyke is a member of the Wisconsin Government Finance Officers Association (WIGFOA) and former member of its Board of Directors, a member of the Minnesota GFOA as well as its Technology Committee, a member of the Michigan GFOA and its Accounting Standards Committee, a member of the Illinois GFOA, a member of the Tennessee GFOA, and a member of the Michigan Municipal Treasures Association. He holds the Registered Investment Advisor designation and security licenses 7, 63, and 65. He received his bachelor’s degree from Black Hills State University and his master’s degree from Indiana Northern University.
Custodian and Investment Adviser: The Wisconsin CLASS Custodian (Wells Fargo Bank, N.A.) is responsible for the receipt and safekeeping of all cooperatively invested program assets, which are held in a segregated account until maturity or sale. The Custodian, based on investment advice provided by Cutwater Investor Services Corp., determines the program’s investment strategy on a daily basis.
Auditors: An annual independent audit of Wisconsin CLASS is conducted by PricewaterhouseCoopers, and copies are available to any participant upon request. Cutwater Investor Services Corp. will also provide information regarding your account(s) to your auditors if you so desire.
What must you do to participate?
In order to participate in Wisconsin CLASS, the Intergovernmental Agreement must be approved by the appropriate governing body of the political sub-division. When Cutwater Investor Services Corp. has received and processed the fully executed Participation Certificate, it will notify the Custodian and start the procedures necessary for you to begin your active participation in the program.
How are transactions handled?
Any transaction (deposit, withdrawal or transfer) made with the proper notification to Cutwater Investor Services Corp. before 11:00 am CST will be posted on that day; transactions made after 11:00 am will be posted the next business day. All transactions receive same-day confirmation.
What about program fees?
All expenses related to operating Wisconsin CLASS are encompassed in our single management fee, which is deducted from portfolio earnings prior to the recording of daily investment results. All rates are net of fees.
Investment guidelines
Wisconsin CLASS invests cooperative funds only in securities which are legal for public funds investment in Wisconsin. Wisconsin CLASS also limits investments to obligations of the United States or of federal agencies guaranteed by the United States unless otherwise noted in the Intergovernmental Agreement. Permitted investments and their terms are detailed in the Intergovernmental Agreement.
What are the Legal sources?
The Wisconsin law firm of Michael Best & Friedrich has advised CISC that the investment of public funds pursuant to the March 1, 1996 Intergovernmental Agreement is in compliance with Wisconsin law.