Page 377 - Ord 866 Adopting a revised Fiscal Year 17-18 and new proposed Fiscal Year 18-19 budget

Section 11 Municipal Policies
Municipal Investment Policy

Delivery versus Payment - All investment security transactions shall be conducted on
a delivery versus payment ( DVP) basis to assure that the Town has control of its assets
and/ or funds at all times.

IX. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
Securities broker/ dealers may be primary or regional broker/ dealers and will meet
other criteria as determined by the Investment Officer including state registration and
completion of a Town Broker/ Dealer questionnaire ( attached as Exhibit D). The
following criteria must be met by authorized firms.
annual provision of an audited financial statement,
proof of certification by the National Association of Securities Dealers ( NASD)
proof of current registration with the Texas State Securities Commission, and
completion of the Town' s broker/ dealer questionnaire.

Every bank and broker/ dealer with whom the Town transacts business will be provided
a copy of this Investment Policy to assure that they are familiar with the goals and
objectives of the investment program. The firm will be required to return a signed
copy of the Certification Form ( attached as Exhibit C) certifying that the Policy has
been received and reviewed and only those securities approved by the Policy will be
sold to the Town.

X. DIVERSIFICATION AND MATURITY LIMITATIONS
It is the policy of the Town to diversify its investment portfolio. Invested funds shall be
diversified to minimize risk or loss resulting from over-concentration of assets in a
specific maturity, specific issuer, or specific class of securities. Diversification strategies
shall be established and periodically reviewed.

XI. SAFEKEEPING AND COLLATERALIZATION
The laws of the State and prudent treasury management require that all purchased
securities be bought on a delivery versus payment ( DVP) basis and be held in
safekeeping by either an approved, independent third party financial institution or the
Town' s designated depository.

Securities Owned by the Town - All safekeeping arrangements shall be approved by
the Investment Officer and an agreement of the terms executed in writing. The
safekeeping bank may not be within the same holding company as the bank from
which the securities are purchased. The custodian shall be required to issue original
safekeeping receipts to the Town listing each specific security, rate, description,
maturity, CUSIP number, and other pertinent information.

Collateral - Collateralization shall be required on all bank time and demand deposits
for principal and accrued interest amounts over the FDIC insurance coverage of
100,000 ( by tax identification number). To anticipate market changes and provide a
level of additional security for all funds, collateral with a market value equal to 102%
of the total deposits are required. The pledging bank will be made contractually
liable for monitoring and maintaining the collateral levels at all times. All collateral will
be held by an independent third-party bank outside the holding company of the
bank, pledged to the Town.

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