Page 376 - Ord 866 Adopting a revised Fiscal Year 17-18 and new proposed Fiscal Year 18-19 budget
P. 376

Section 11 Municipal Policies
                                                                         Municipal Investment Policy



                 VI.    PRUDENCE
                        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 state:
                                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."

                        Limitation of Personal Liability -  The Investment Officer and those delegated
                        investment authority,  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 if deviations from expectations for a specific
                        security' s credit risk or market price change are reported in a timely manner and that
                        appropriate action is taken to control adverse market effects.

                 VII.   INTERNAL CONTROLS
                        The Investment Officer shall establish a system of written internal controls which will be
                        reviewed annually with the independent auditor of the Town.   The controls shall be
                        designed to prevent loss of public funds due to fraud, employee error, and
                        misrepresentation by third parties,  or imprudent actions by employees of the Town.


                 VIII.   AUTHORIZED INVESTMENTS
                        Acceptable investments under this policy shall be limited to the instruments listed
                        below.  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.

                               Obligations of the United States Government,  its agencies and
                               instrumentalities,  not to exceed two (2) years to stated maturity and excluding
                               mortgage backed securities;

                               Fully insured or collateralized certificates of deposit from a bank doing business
                               in the State of Texas and under the terms of a written depository agreement
                               with that bank, not to exceed one year to stated maturity;

                               No-load, SEC registered money market mutual funds.   No more than 80% of
                               the entity' s monthly average balance may be invested in money market funds

                               Public Funds interest bearing accounts;  and

                               Constant dollar,  AAA-rated Texas Local Government Investment Pools as
                               defined by the Public Funds Investment Act.

                        If additional types of securities are approved for investment by public funds by state
                        statute,  they will not be eligible for investment until this Policy has been amended and
                        the amended version adopted by the Council.








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