Page 374 - Ord 866 Adopting a revised Fiscal Year 17-18 and new proposed Fiscal Year 18-19 budget

Section 11 Municipal Policies
Municipal Investment Policy

I. POLICY STATEMENT
It is the policy of the Town of Westlake ( the “ Town") 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 Town and conforming to all applicable state and Town statutes
governing the investment of public funds. The receipt of a market rate of return will
be secondary to the requirements for safety and liquidity.

It is the intent of the Town to be in complete compliance with local law and the Texas
Public Funds Investment Act (the "Act", Texas Government Code 2256). The earnings
from investments will be used in a manner that best serves the public trust and
interests of the Town.

II. SCOPE
This Investment Policy applies to all the financial assets and funds held of the Town.

Any new funds created by the Town will be managed under the provisions of this
Policy unless specifically exempted by the Town Council and this Policy.

III. OBJECTIVES AND STRATEGY
It is the policy of the Town that all funds shall be managed and invested with four
primary objectives, listed in order of their priority: safety, liquidity, diversification and
yield. These objectives encompass the following.

Safety of Principal - Safety of principal is the foremost objective of the Town.
Investments shall be undertaken in a manner that seeks to insure the
preservation of capital in the overall portfolio. The suitability of each
investment decision will be made based on safety.

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eennaabbllee iitt ttoo mmeeeett aallll ooppeerraattiinngg rreeqquuiirreemmeennttss wwhhiicchh mmiigghhtt bbee rreeaassoonnaabbllyy
aannttiicciippaatteedd.. IInnvveessttmmeenntt ddeecciissiioonnss wwiillll bbee bbaasseedd oonn ccaasshh ffllooww aannaallyyssiiss ooff
aannttiicciippaatteedd eexxppeennddiittuurreess..

Diversification - Diversification is required in the portfolio' s composition.
Diversification of the portfolio will include diversification by maturity and
market sector and will include the use of a number of broker/ dealers or banks
for diversification and market coverage. Competitive bidding will be used on
each sale or purchase.

Yield - The Town' s investment portfolio shall be designed with the objective of
attaining a reasonable market yield, considering the Town' s risk constraints and
cash flow needs. A reasonable market yield for the portfolio will be defined
as the six-month ( 180 day) U.S. Treasury Bill which compares to the portfolio' s
maximum weighted average maturity of six months.

The authorized investment purchased will be of the highest credit quality and
marketability supporting the objectives of safety and liquidity. Securities, when not
matched to a specific liability, will be short term to provide adequate liquidity. The
portfolio shall be diversified to protect against market and credit risk in any one sector.

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