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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