Page 238 - Colleyville FY19 Budget

to the yield on the applicable bonds sold by the City. The rebate provisions
state that periodically (not less than once every five years and not later than
sixty days after maturity of the bonds), the City is required to pay the United
States Treasury a rebate of any excess earnings. These restrictions require
extreme precision in the monitoring and record keeping of investments,
particularly in computing yields to ensure compliance. Failure to comply can
dictate that the bonds become taxable, retroactively from the date of
issuance.

The investment strategy for bond funds which fall under the arbitrage
provisions of the Tax Reform Act of 1986, is that the City will attempt to earn
maximum allowable bond yield with market conditions permitting.

Reporting Requirements

The Investment officers shall issue a written report quarterly to the Audit
Committee and City Council concerning the City's investment transactions for
the preceding quarter and describing in detail the investment position of the
City as of the end of the quarter indicating the market values of all investments
held during the quarter. The report shall list for each investment held during
the quarter: the purchase price of the investment, the par value of the
investment, the market value of the investment at the beginning of the
quarter, market value of the investment at the end of the quarter, and fully
accrued interest for the period. The portfolio shall be marked to market
monthly and market pricing information is to be obtained through the use of
appropriate external third party software, third party safekeeping service, or
a third party independent pricing service. This report shall be in compliance
with provisions of the Act, as amended. The report shall be signed by the
investment officers and state its compliance with the Act and adopted
investment policy strategy. The quarterly investment reports must be
reviewed annually by the City’s external audit firm as a part of the City’s
annual audit and reported to the City Council.

Training Requirements

In accordance with the Act (2256.005 and 2256.008), the Investment officers
shall attend 10 hours of investment training within 12 months of assuming
duties and 8 hours not less than once in a two-year period that begins on the
first day of the City’s fiscal year and consists of the two consecutive fiscal
years after that date. The investment officers shall complete ten hours of
training every two years as required by the Act. This training may be obtained
from the a source approved by the Texas State Board of Public Accountancy

233