Page 64 - City of Bedford FY20 Approved Budget

b. Certificates of deposit and other evidences of deposit at a financial institution that, a)
has its main office or a branch office in Texas and is guaranteed or insured by the
Federal Deposit Insurance Corporation or its successor, b) is secured by obligations
in a manner and amount provided by law for deposits of BEDFORD, or c) is placed
in a manner that meets the requirements of the PFIA.

c. Repurchase and reverse repurchase agreements whose underlying purchased
securities consist of instruments as defined in a. above and placed in compliance with
the PFIA.

d. No load money market mutual funds regulated by the Securities and Exchange
Commission that meet the requirements of the PFIA.

e. Local government investment pools, either state-administered or through joint
powers statutes and other intergovernmental agreement legislation authorized in
compliance with the PFIA.

2. Insurance, Pledged Collateral or Purchased Securities. With the exception of deposits
secured with irrevocable letters of credit at 100% of amount, all deposits of BEDFORD funds
with financial institutions shall be secured by pledged collateral with a market value equal to or
greater than 102% of the deposits, less any amount insured by the FDIC. Repurchase
agreements shall be documented by a specific agreement noting the “purchased securities” in
each agreement; such securities shall comply with the PFIA. Collateral pledged and purchased
securities shall be reviewed at least monthly to assure the market value equals or exceeds the
related BEDFORD investment.

BEDFORD shall accept only the following as pledged collateral:

a. U. S. Treasury securities;

b. Obligations of U. S. Government Agencies and Instrumentalities, including letters of
credit, which have a liquid market with a readily determinable market value, and
exclude those prohibited by the PFCA;

c. Direct or unconditionally guaranteed obligations of the State of Texas;

d. States, agencies, counties, cities, or political subdivisions naturally rated “A” or
higher.

All collateral shall be subject to inspection and audit by BEDFORD or BEDFORD’s
independent auditors.

Securities pledged as collateral shall be held by an independent third party with whom
BEDFORD has a current custodial agreement. The agreement is to specify the acceptable
investment securities as collateral, including provisions relating to possession of the collateral,
the substitution or release of investment securities, ownership of securities, and the method of

42