The city adopts this investment policy (the “investment
policy”), which establishes the investment policy and goals
of the city. The information has been prepared and will be used by
the city council and staff as a guide in attaining the investment
goals set forth in the investment policy and at the same time complying
with the rules and regulations governing the investment of public
funds.
(2002 Code, sec. 1.601)
The city's investment policy includes the following objectives:
safety of capital, liquidity, diversification, and standard of care.
In selecting investments for city funds, the following procedures
shall be implemented:
(1) Safety of capital.
(A) Invest in securities which are backed by the full faith and credit
of the United States government, such as U.S. treasury bills, etc.;
(B) Invest in securities which are agencies of the U.S. government, such
as agency discount notes (Federal Farm Credit Bank, Federal Home Loan
Bank Board, etc.);
(C) Obtain a certificate of collateralization for all funds in excess
of $100,000.00 on deposit in a bank, savings and loan or other qualified
financial institution; and
(D) Obtain all necessary certificates of deposit when investing in bank
CDs.
(2) Liquidity.
Maintain an amount equal to two months' operating
costs in a qualified money market fund for the use of day-to-day operating
costs and select securities with maturity dates which ensure the timely
availability of funds as discussed below.
(3) Diversification.
The city will maintain no more than
twenty-five percent (25%) of the sum of all its funds in one investment
such as TEXPOOL or other similar “pool” funds.
(2002 Code, sec. 1.603)
The city council/staff will complete the following steps in
connection with investing city funds:
(1) Bids.
A minimum of three bids will be obtained from
investment banking firms, an assortment of banks, savings and loans,
or other qualified depositories on the current yield.
(2) Selection of investment.
After obtaining bids for investments,
the investment which provides the highest yield and meets the other
investment criteria of the city will be purchased.
(3) Length of investment.
Copies of the CD implied forward
rates and U.S. treasury bill implied forward rates reports as published
by Bloomberg will be obtained, which the staff will use as a guide
in determining the length of investments. The funds will be invested
for such lengths of time which ensure availability of funds to meet
debt service requirements and the day-to-day operations of the city.
(2002 Code, sec. 1.604)