Page 402 - City of Westlake FY20 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.

• • Liquidity - T Th he e T To ow wn n' 's s i in nv ve es st tm me en nt t p po or rt tf fo ol li io o w wi il ll l r re em ma ai in n s su uf ff fi ic ci ie en nt tl ly y l li iq qu ui id d t to o e en na ab bl le e
i it t t to o m me ee et t a al ll l o op pe er ra at ti in ng g r re eq qu ui ir re em me en nt ts s w wh hi ic ch h m mi ig gh ht t b be e r re ea as so on na ab bl ly y a an nt ti ic ci ip pa at te ed d. .
I In nv ve es st tm me en nt t d de ec ci is si io on ns s w wi il ll l b be e b ba as se ed d o on n c ca as sh h f fl lo ow w a an na al ly ys si is s o of f a an nt ti ic ci ip pa at te ed d
e ex xp pe en nd di it tu ur re es s. .

• 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.

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