Page 237 - Colleyville FY19 Budget

Pledged Collateral Ratio

1. U.S. Treasury bills, notes, and bonds
a. maturing within 1 year 102%
b. maturing in 1-5 years 105%
c. maturing in more than 5 years 110%

2. Actively traded U.S. Government Agency securities
a. maturing in less than 1 year 103%
b. maturing in 1-5 years 107%
c. maturing in more than 5 years 115%

3. GNMA mortgage pass through securities 115%

4. Entities in the State of Texas bonds

General Obligation Bonds
a. maturing in less than 1 year 102%
b. maturing in 1-5 years 105%
c. maturing in more than 5 years 107%

Revenue Bonds
a. maturing in less than 1 year 105%
b. maturing in 1-5 years 110%
c. maturing in more than 5 years 115%

Collateral shall be audited annually be the City's independent auditor and may
be audited by the City at anytime during normal business hours of the
safekeeping bank.

Arbitrage

The Tax Reform Act of 1986 places limitations on the City's yield from
investing certain tax-exempt bond proceeds, debt service funds and reserve
funds. The rebate provisions require that the City compute earnings on
investments from certain issues of bonds on a periodic basis to determine if
rebate is required.

To determine the City's arbitrage position, the City is required to calculate the
actual yield earned on the investment of the funds and compare it to the yield
that would have been earned if the funds had been invested at a rate equal

232