Page 232 - Colleyville FY19 Budget

The investment strategy by type of fund is as follows:

(1) Operating Funds

The investment strategy for operating fund(s) is to assure that anticipated
cash flows are matched with adequate investment liquidity. A secondary
objective is to create a portfolio, which will experience minimum volatility
during economic cycles. These funds shall not have an investment with a
stated maturity greater than two years and the weighted average maturity
shall not exceed eighteen months.

(2) Debt Service Funds

The investment strategy for debt service fund(s) is the assurance of
investment liquidity to cover the debt service obligations on the required
payment date. Investments purchased shall not have a stated final maturity
date which exceeds the corresponding debt service payment date. The
weighted average maturity shall not exceed one year.

(3) Reserve Funds

The investment strategy for reserve fund(s) is the assurance of investment
liquidity adequate to cover the debt service obligations not funded by debt
service funds on the required payment date. Investment of reserve funds are
controlled by their ordinance, resolution or indenture, and Federal and State
law. Bond documents must be examined for each issue, for potential
differences with this policy concerning investment instruments, maximum
maturity or average life restrictions, call dates or sinking fund redemptions,
and applicable arbitrage yields and rebate liability. Provisions contained in the
bond documents will supersede provisions of this policy. Weighted average
maturity shall be incompliance with bond requirements, as stated.

Reserve funds will be invested using a more conservative approach than the
current standard investment strategy when arbitrage rebate rules require
refunding excess earnings. All excess earnings received will be segregated to
allow a proper determination of interest income to be used in the arbitrage
calculation.

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