Page 403 - City of Westlake FY20 Budget

Section 11 Municipal Policies
Municipal Investment Policy

• Yield - The Town's investment portfolio shall be designed with the objective of
attaining a reasonable market yield, considering the Town's risk constraints and
cash flow needs. A reasonable market yield for the portfolio will be defined as the
six-month (180 day) U.S. Treasury Bill which compares to the portfolio's maximum
weighted average maturity of six months.

The authorized investment purchased will be of the highest credit quality and marketability
supporting the objectives of safety and liquidity. Securities, when not matched to a specific
liability, will be short term to provide adequate liquidity. The portfolio shall be diversified
to protect against market and credit risk in any one sector.
The maximum weighted average maturity of the portfolio will be no more than 180 days
and the maximum stated maturity of any security will not exceed two years. The funds are
combined for investment purposes but the unique needs of all the funds in the portfolio
are recognized and represented.

Effective cash management is recognized as essential to good fiscal management. Cash
management is defined as the process of managing monies in order to ensure maximum
cash availability. The Town shall maintain a cash management program which includes
timely collection of accounts receivable, prudent investment, disbursement of payments
within invoice terms and the management of banking services.

IV. LEGAL LIMITATIONS, RESPONSIBILITIES AND AUTHORITY
Specific investment parameters for the investment of public funds in Texas are stipulated in
the Public Funds Investment Act, Chapter 2256, Texas Government Code, (the "Act"). The
Act is attached as Exhibit A.

The Public Funds Collateral Act, Chapter 2257, Texas Government Code, specifies collateral
requirements for all public funds deposits. The Collateral Act is attached as Exhibit B.

The Interlocal Cooperation Act, Chapter 791, Texas Government Code, authorizes local
governments in Texas to participate in a Texas investment pool established thereunder.

V. DELEGATION OF INVESTMENT AUTHORITY
The Finance Director, acting on behalf of the Council, is designated as the Investment
Officer of the Town and is responsible for all investment management decisions and
activities. The Council is responsible for considering the quality and capability of staff,
investment advisors, and consultants involved in investment management and procedures.
All participants in the investment process shall seek to act responsibly as custodians of the
public trust.

The Investment Officer shall develop and maintain written administrative procedures for
the operation of the investment program which are consistent with this Investment Policy.

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