The URL can be used to link to this page

Home My WebLink AboutR91-12332 FINANCE - INYESTM~T POLICY RESOLUTION NO. 91-123 A RESOLUTION OF THE CITY OF PLAINVIEW, TEXAS, ADOPTING AN INVESTMENT POLICY. Whereas, the City Council desires to establish prudent investment policies; and ~ Whereas, the City Council has reviewed the follOwing investment policy and believes its enactment would be to the financial benefit of the City of Plainview: Now, therefore be it resolved that the City of Plainview, Texas, hereby adopts and implements the following investment policy: I. Scope This investment policy applies to financial assets of all funds including the following: General Fund Special Revenue Fund Capital Projects Funds Enterprise Funds Debt Service Funds Special Assessments Funds Internal Service Funds Other City funds that may be created. II. Objective The Primary objective of the City's investment activity is the preservation of capital in the overall portfolio. Each investment transaction shall seek to first ensure that capital losses are avoided, whether they be from securities defaults or erosion of market Value. The City's investment portfolio will remain sufficient liquid to enable the City to meet operating requirements that might be reasonably anticipated. Liquidity shall be achieved by matching investment maturities with forecasted cash flow requirements and by investing in securities with active secondary markets. The City's cash management portfolio shall be designed with the objective of regularly exceeding the average rate of return on the current U.S. Treasury Bill, yield of like maturity. The investment program shall seek to augment returns above this threshold consistent with risk limitations identified herein and prudent investment principles. Funds held for future capital projects shall be invested in securities that reasonably can be expected to produce enough income to offset inflationary construction cost increases. However, such funds shall never be exposed to market price risks or default risks that would jeopardize the assets available lof4 33 to accomplish their stated ,objective, or be invested in a manner inconsistent with applicable federal and state regulations. III. ResponsibiliW and Control Management responsibility for the investment program is hereby delegated to the Director of Finance, who shall establish written procedures for the operation of the investment program, consistent with this investment policy. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. All persons involved in investment activities will be referred to as investment offirdal.g. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Director of Finance. The Director of Finance shall be responsible for all transactions undertaken, and sbal! establish a system of controls to regulate the activities of subordinate investment officials. The Director of Finance shall submit quarterly an investment report that summarizes recent market conditions, economic developments and anticipated investment conditions. The report shall summarize the portfolio in term~ of investment securities, maturities, risk characteristics and other features. The report shall explain the quarter'S total investment return and compare the return with budgetary expectations. Within sixty (60) days of the end of the Fiscal Year, the Director of Finance shall present an annual report of the investment activity. The annual report shall include 12 - month and separate quarterly comparison of returns, and shall suggest improvements that might be made in the investment program. Investments shall be made with exercise of due care, 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. Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impart~a! investment decisions. Employees and investment officials sball disclose to the City Manager any materi~] financial interests in financial institutions that conduct business within this jurisdiction, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the City's portfolio. Employees and officers slqall subordinate their personal investment transactions to those of this jurisdiction, particularly with regard to the timing of purchases and sales. IV. Investments The City of Plainview shall use any or all of the following types of investments as authorized by Texas Public Funds Investment Act Art. 842a-2 as amended: (1) Obligations of the United States of America, its agencies and instrumentalities. 2of4 34 (2) Direct obligations of the State of Texas and agencies thereof. (3) Other obligations, the principal and interest on which are unconditionally guaranteed or insured by the State of Texas or the United States, its agencies and instrumentalities~ (4) (5) Obligations of States, agencies, thereof, counties, cities, and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of no less .than "A" or its equivalent. Certificates of deposit, of state and national banks doing business in Texas, guaranteed or insured by the Federal Deposit Insurance Corporation or its successor or secUred by obligations described in (1) through (4) above, and pursuant to.Art. 2529(b)-]~, as amended, and that have market value no 'less than the principal plus accrued interest of the the certificates. (6) (7) Fully collateralized direct repurchase agreements with a defined termination date secured by obligations described in (1) through. (5) above with a market value of not less than the amount of the funds disbursed and pledged with a third party other than an agent for the pledgor. Repurchase Agreements must be purchased through a primary government securities dealer, as defined by the Federal Reserve, or a bank domiciled in Texas. No more than ten per cent (10%) of the portfolio's total assets shali be invested in repurchase agreements at any given time. Common Trust Funds or comparable devices owned or administered by banks domiciled in this State and whose assets consist exclusively of all or a combination of (1) through (6) above. Competitive bids must be solicited from at least three banks for this investment. Bids must first be solicited from the local banks, and if those banks do not offer this service, the City can solicit bids from banks in other Counties, and then the State. Bids may be solicited orally. (8) Money Market Investment Accounts (9) (lO) Negotiable Order of Withdrawal (NOW) Accounts. Investment pools authorized by the Texas Interlocal Cooperation Act. "Tex Pool" which is administered by Texas State Treasurer and "Local Government Investment Fund for Texas" are examples. V. Selection of Banks and Dealers Depositories shall be selected through the City's banking services procurement process, which shall include a formal request for proposals issued at least once every three years. In selecting depositories, the credit worthiness of institutions shall be considered, and the Director of Finance shall conduct a comprehensive review of prospective depositories credit characteristics and financial history. 3 of 4 35 Banks and Saving and Loan Associations seeking to establish eligibility for the City's competitive certificate of deposit purchase program, shall submit financial statements, evidence of Federal insurance and other information as required by the Director of Finance. VII. Safekeeping and Custody Ail deposits and investments of City funds other than direct purchases of U.S. Treasury or U.S. Agencies notes shall be secured by pledged collateral with a market value equal to at least 100 per cent of the deposits plus accrued interest. Securities eligible to be used as collateral for City funds are those authorized by the Texas Public Funds Collateral Act. Pledged Securities shall be held in joint name safekeeping by a third party approved by the City of Plainview. Written authorization by the City of Plainview to allow release of pledged securities from joint safekeeping by a third party shall be required. PASSED AND APPROVED this the 8th day of October, 1991. E. V. Ridlehuber, Mayor ATTEST: Kai~en McBeth, City Secretary APPROVED AS TO CONTENT: Norman Huggins,//Dfrector of Finance APPROVED AS TO FORM: Wally Hatch, City Attorney 4of4