The fiscal year of the city is hereby designated as beginning
with the first (1st) day of October of each year and ending the last
day of September next ensuing thereafter.
(Ordinance adopting 1982 Code; 1982
Code, ch. 1, sec. 8)
(a)
Budget officer.
The budget officer of the city shall
be the mayor of the city.
(b)
Budget required.
The budget officer shall, with the
aid of the city secretary and counsel of the city council, annually
prepare a budget to cover all proposed expenditures of the government
of the city for the succeeding year, in accordance with sections 102.001–102.011,
Local Government Code, V.T.C.A.
(c)
Contents.
The budget shall show all expenditures proposed
and shall be carefully itemized so as to make as clear a comparison
as practicable between expenditures included in the proposed budget
and actual expenditures for the same or similar purposes for the preceding
year. The budget must also show as definitely as possible each of
the various projects for which appropriations are made in the budget
and the budgeted sums for each of such projects. The budget shall
also contain a complete financial statement of the city showing all
outstanding obligations of such city, the cash on hand to the credit
of each and every fund, the funds received from all sources during
the previous year, the funds available from all sources during the
ensuing year, the estimated revenue available to cover the proposed
budget, and the estimated rate of tax which will be required.
(d)
Cooperation required.
The mayor shall have the authority
to require any officer or other unit of the city government to furnish
such information as may, in the mayor’s discretion, be necessary
to afford proper preparation of the proposed budget.
(e)
Filing of proposed budget.
The budget shall be filed
with the city secretary not less than thirty (30) days prior to the
time the council makes its tax levy for the current fiscal year.
(f)
Public inspection of proposed budget.
The budget filed
with the city secretary shall be available for the inspection of any
taxpayer during all reasonable business hours.
(g)
Public hearing; filing of adopted budget.
A public hearing
shall be held and the budget adopted thereafter shall be filed in
accordance with section 102.006, Local Government Code, V.T.C.A.
(Ordinance adopting 1982 Code; 1982
Code, ch. 1, sec. 15)
An audit of the books of account of the city shall be made and
filed annually in accordance with sections 103.001–103.004,
Local Government Code, V.T.C.A.
(Ordinance adopting 1982 Code; 1982
Code, ch. 1, sec. 16)
(a)
It
is the policy of the city that the administration of its funds and
the investment of those funds shall be handled as its highest public
trust. Investments shall be made in a manner which will provide the
maximum security of principal invested through limitations and diversification
while meeting the daily cash flow needs of the city and conforming
to all applicable state statutes governing the investment of public
funds.
(b)
The
receipt of a market rate of return will be secondary to the requirements
for safety and liquidity. It is the intent of the city to be in complete
compliance with local law and the Texas Public Funds Investment Act
(the “Act”). The earnings from investment will be used
in a manner that best serves the interests of the city.
(Ordinance 298, sec. I, adopted 11/14/06; Ordinance 320, sec. I, adopted 11/10/09; Ordinance 325, sec. I, adopted 9/14/10; Ordinance 329, sec. I, adopted 9/13/11)
This investment policy applies to all the financial assets and
funds of the city. The city commingles its funds into one pooled investment
fund for investment purposes for efficiency and maximum investment
opportunity. The funds are defined in the city’s comprehensive
annual financial report (CAFR) and include any new funds created by
the city unless specifically exempted by the city council and this
policy.
(Ordinance 298, sec. II, adopted 11/14/06; Ordinance 320, sec. II, adopted 11/10/09; Ordinance 325, sec. II, adopted 9/14/10; Ordinance 329, sec. II, adopted 9/13/11)
(a)
It
is the policy of the city that all funds shall be managed and invested
with four primary objectives, listed in order of their priority: safety,
liquidity, diversification and yield. Investments are to be chosen
in a manner which promotes diversity by market sector, credit and
maturity. The choice of high-grade government investments and high-grade
money market instruments are designed to assure the marketability
of those investments should liquidity needs arise. To match anticipated
cash flow requirements, the maximum weighted average maturity of the
overall portfolio may not exceed six months.
(1)
Safety of principal.
Safety of principal is the foremost
objective of the city. Investments of the city shall be undertaken
in a manner that seeks to insure the preservation of capital in the
overall portfolio.
(2)
Liquidity.
The city’s investment portfolio will
be based on a cash flow analysis of needs and will remain sufficiently
liquid to enable it to meet all operating requirements which might
be reasonably anticipated.
(3)
Diversification.
Diversification of the portfolio will
include diversification by maturity and market sector and will include
the use of a number of broker/dealers for diversification and market
coverage. Competitive bidding will be used on each sale and purchase.
(4)
Yield.
The city’s portfolio shall be designed
with the objective of attaining a market rate of return, taking into
account the city’s risk constraints and the cash flow needs
of the portfolio. “Market rate of return” may be defined
as the average yield of the current six-month U.S. Treasury bill.
(b)
Effective
cash management is recognized as essential to good fiscal management.
Cash management is defined as the process of managing monies in order
to ensure maximum cash availability. The city shall maintain a comprehensive
cash management program which includes collection of accounts receivable,
prudent investment of its available cash, disbursement of payments
in accordance with invoice terms and the management of banking services.
(Ordinance 298, sec. III, adopted 11/14/06; Ordinance 320, sec. III, adopted 11/10/09; Ordinance 325, sec. III, adopted 9/14/10; Ordinance 329, sec. III, adopted 9/13/11)
Direct specific investment parameters for the investment of
public funds in Texas are found in the Public Funds Investment Act,
chapter 2256, Texas Government Code (the “Act”). The Act
is attached to Ordinance 329 as exhibit A. The Public Funds Collateral
Act, chapter 2257, Texas Government Code, specifies collateral requirements
for all public funds deposits. All investments will be made in accordance
with these statutes.
(Ordinance 298, sec. IV, adopted 11/14/06; Ordinance 320, sec. IV, adopted 11/10/09; Ordinance 325, sec. IV, adopted 9/14/10; Ordinance 329, sec. IV, adopted 9/13/11)
(a)
The
chief financial officer, acting on behalf of the city, is designated
as the investment officer of the city and is responsible for investment
management decisions and activities. The CFO is also responsible for
considering the quality and capability of staff, investment advisors,
and consultants involved in investment management and procedures.
All participants in the investment process shall seek to act responsibly
as custodians of the public trust.
(b)
The
investment officer shall develop and maintain written administrative
procedures for the operation of the investment program which are consistent
with this investment policy. Procedures will include reference to
safekeeping, and require and include the “Bond Market Master
Repurchase Agreements” (as applicable), wire transfer agreements,
banking services contracts, and other investment related activities.
(c)
The
investment officer shall be responsible for all transactions undertaken
and shall establish a system of controls to regulate the activities
of subordinate officials and staff. The investment officer shall designate
a staff person as a liaison/deputy in the event circumstances require
timely action and the investment officer is not available.
(d)
No
officer or designee may engage in an investment transaction except
as provided under the terms of this policy and procedures established.
(e)
Authorization resolution.
A trading resolution is established
with this investment policy, and attached to Ordinance 329, authorizing
the investment officer to engage in investment transactions on behalf
of the city. The persons authorized by the trading resolution to transact
business for the city are also authorized to approve wire transfers
used in the process of investing.
(Ordinance 298, sec. V, adopted 11/14/06; Ordinance 320, sec. V, adopted 11/10/09; Ordinance 325, sec. V, adopted 9/14/10; Ordinance 329, sec. V, adopted 9/13/11)
(a)
“Prudent person” standard.
The standard
of prudence to be used in the investment function shall be the “prudent
person” standard and shall be applied in the context of managing
the overall portfolio. This standard states: “Investments shall
be made with judgment 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 expected income to be derived.”
(b)
Limitation of personal liability.
The investment officer
and those delegated investment authority under this policy, when acting
in accordance with the written procedures and this policy and in accord
with the prudent person rule, shall be relieved of personal liability
in the management of the portfolio provided that deviations from expectations
for a specific security’s credit risk or market price change
or portfolio shifts are reported in a timely manner and that appropriate
action is take to control adverse market effects.
(Ordinance 298, sec. VI, adopted 11/14/06; Ordinance 320, sec. VI, adopted 11/10/09; Ordinance 325, sec. VI, adopted 9/14/10; Ordinance 329, sec. VI, adopted 9/13/11)
(a)
Generally.
The investment officer shall establish a
system of written internal [controls] which will be reviewed annually
with the independent auditor of the city. The controls shall be designed
to prevent loss of public funds due to fraud, employee error, misrepresentation
by third parties, unanticipated market changes, or imprudent actions
by employees of the city.
(b)
Cash flow forecasting.
Cash flow forecasting is designed
to protect and sustain cash flow requirements of the city. Supplemental
to the financial and budgetary systems, the investment officer will
maintain a cash flow forecasting process designed to monitor and forecast
cash positions for investment purposes.
(Ordinance 298, sec. VII, adopted 11/14/06; Ordinance 320, sec. VII, adopted 11/10/09; Ordinance 325, sec. VII, adopted 9/14/10; Ordinance 329, sec. VII, adopted 9/13/11)
Acceptable investments under this policy shall be limited to
the instruments listed below and as further described by the Public
Funds Investment Act:
(3)
Certificates
of deposit.
(4)
Money
market mutual funds.
(5)
Local
government investment pools.
(Ordinance 298, sec. VIII, adopted 11/14/06; Ordinance 320, sec. VIII, adopted 11/10/09; Ordinance 325, sec. VIII, adopted 9/14/10; Ordinance 329, sec. VIII, adopted 9/13/11)
