HomeMy WebLinkAboutRes 09-2001• 1, 1 1:1.� 1 1,
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WHEREAS, Chapter 2256 of the Government Code, commonly known as the "Public Funds Investment
Act," requires the city to adopt an investment policy by rule, order, ordinance, or resolution; and
WIffiREAS, the Public Funds Investment Act requires the investment officer of the city, to attend in
investment training; and
WHEREAS, the City of Anna approves the investment training course sponsored by the Texas Municipal
League; and
WHEREAS, the investment officer of the city, has attended an investment training course sponsored by the
Texas Municipal League as required by the Public Funds Investment Act; and
WHEREAS, the attached investment policy and incorporated strategy comply with the Public Funds
Investment Act and authorize the investment of city funds in safe and prudent investments.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Anna:
That the City of Anna has complied with the requirements of the Public Funds Investment Act, and the
Investment Policy, attached hereto as "Exhibit A," is hereby adopted as the investment policy of the city
effecfive July 26, 2001.
PASSED, ADOPTED AND APPROVED by the City Council of the City of Anna this 26�'day of J�
2001.
ATTEST:
Marie Evans, City Secretary
"Exhibit A'
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The investment policy of the City is to invest public funds in a manner which will provide the highest
investment return with the maximum security while meeting the daily cash flow demands of the City and
conforming to all state and local statutes governing investment of public funds.
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The investment policy applies to investment activities of all funds of the City and all funds under the
control of the City.
Funds covered by this policy are as follows:
General Fund
Capital Projects Fund
Objectives
The primary objectives, in priority order, of the City's investment activities are:
1. Safety. Safety of principal is the primary objective of the investment transaction.
Investments shall be made in a manner that seeks to ensure the preservation of capital in the overall
portfolio
2. Liquidity. The City's investment portfolio shall remain sufficiently liquid to enable the City to meet all
operating requirements, which might be reasonably anticipated.
3. Return on Investment. The City's investment portfolio will be designed with the objective of attaining
a rate of return commensurate with the City's investment risk constraints and the cash flow operating
requirements.
4. Diversification. Diversification maybe required in order that potential losses on individual securities
do not exceed the income generated from the remainder of the portfolio.
Investments will be made with judgement and care, under circumstances then prevailing, which persons of
prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation,
but for investment, considering the probable safety of their capital as well as the probable income to be
derived.
Delegation of Authority
Authority to manage the City's investment program is derived from the state statutes and City resolutions.
The City Council will, by resolution, designate the mayor as the Investment Officer to invest and reinvest
funds of the City in accordance with the City's investment policy. The Investment Officer shall be
responsible for all transactions undertaken and shall establish a system of controls to regulate subordinate
officials.
Investment Training
It is the City's policy to provide training required by the Public Funds Act, Sec. 2256.008 for the City's
Investment Officer. The Investment Officer shall attend at least on training session within twelve months
after taking office or assuming duties. Training includes education in investment controls, security risks,
strategy risks, market risks and compliance with the Public Funds act.
Ethics and Conflicts of Interest
An Investment Officer who has a personal business relationship with an entity seeking to sell an Investment
to the City will file a statement disclosing that personal business interest. An Investment Officer who is
related within the second degree by affinity or consanguinity, as determined under Chapter 573, to an
individual seeking to sell an investment to the City shall file a statement disclosing that relationship. These
statements must be filed with the Texas Ethics Commission and the City Council.
Collateralization
All hands must be insured by the FDIC or FSLIC or by collateral pledged to the extent of the fair market
value of any amount not insured To the extent not insured by the FDIC or FSLIC, City funds must be
secured by direct obligations of the United States backed by the full faith and credit of the government or
by governmental securities or obligations issued by the State of Texas, its agencies or political
subdivisions. Collateral will be held by an independent third parry, and a safekeeping receipt will be
supplied to the City. The City's bank depository will provide the City with a monthly report on the
collateral pledged, and a City representative will have the right to inspect the pledged collateral at any time.
Collateral may be substituted; however, the City must approve any substitution of collateral in writing.
Investment Policy Disclosure
A written copy of the City's investment policy shall be presented to any person seeking to sell to the City
an authorized investment. The registered principal of the business organization seeking to sell an
authorized investment shall execute a written instrument substantially to the effect that the registered
principal has received and thoroughly reviewed the investment policy of the City and acknowledged that
the organization has implemented reasonable procedures and controls in an effort to preclude imprudent
investment activities arising out of investment transactions conducted between the City and the
organization. The investment officer of the City may not buy any securities from a person who has not
delivered to the City a written document providing the above information.
Authorized Investments
Investments described below are some of those authorized by the Public Funds Investment Act and
considered suitable for investment of City funds:
1. Obligation of the United States or guaranteed by the United States. The City may invest its funds in
obligation of the United States or its agencies and instrumentality's.
2. Certificates of Deposit. The City is authorized to invest its funds in certificates of deposit or other
interest bearing accounts of any bank or savings and loan association domiciled in the State of Texas.
All certificates of deposit must be fully insured or collateralized Certificates of deposit should mature
one to twenty-four months after purchase with maturity dates falling one to two months apart.
3. Public Funds Investment Pools. The City is authorized to invest its funds in public fund investment
pools which strive to maintain a stable $1.00 net asset value and maintain either a "AAA" or "AA"
rating from a nationally recognized rating agency.
Investment Strategies
Investment strategies are developed to attain the investment objectives of the City.
General Fund and Enterprise Fund
The investment objectives of the general fund are as follows:
1. Safety of Principal
2. Liquidity. Availability of funds to meet the monthly operating expenditures of the City in accordance
with budgeted expenditures and availability of funds to meet unexpected expenditures.
To attain these objectives, investments should be short term that can be liquidated to assure adequate cash
flows as necessary. The weighted average maturity should be 180 days or less.
Capital Projects Fund
The investment objectives of the capital project fund are as follows:
1. Safety of principal
2. Availability of funds to meet construction needs of the City.
To attain these objectives, investment maturities should be structured to mature no later than the date funds
will be needed for project payments.
Debt Service Funds
Investment objectives of the debt service funds are as follows:
1. Safety of principal
2. Liquidity
3. Yield
Since payment of debt is one of the highest priorities of the City, safety of principal should be of the
highest priority when selecting an investment. To ensure safety, investments should consist of U.S.
Treasury notes and bills, public fund investment pools, and certificates of deposit. The investment should
have a weighted average maturity of 365 days or less and should be structured to insure that the necessary
amounts to retire debt on each date will mature 5 days before said due date.
Investment Reports
No less than quarterly, the Investment Officer shall prepare and submit to the City Council a quarterly
written investment report. The report must describe in detail the investment position of the City on the date
of the report, state the book value and fair market value of each separately invested asset at the beginning
and end of the reporting period by the type of asset and fund type invested. State the maturity date of each
separately invested asset at the beginning and end of the reporting period by the type of asset and fund type
invested. State the maturity date of each separately invested asset that has a maturity date. State the fund
for which each individual investment was acquired and state the compliance of the investment portfolio of
the City as it relates to the investment policies and investment strategies expressed in the City's Investment
Policy and the Public Funds Investment Act.
The report must be prepared jointly and signed by the investment officer of the City.
Compliance Audit
The City, in conjunction with its annual fmancial audit, shall perform a compliance audit of management
controls on investments and adherence to the City's Investment Policy.