Page 66 - City of Bedford FY21 Budget

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 custodian approved
by BEDFORD. The custodial 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 valuation of securities. The
agreement must clearly state that the custodian bank is instructed to release purchased and
collateral securities to BEDFORD in the event BEDFORD has determined that the financial
institution has failed to pay on any matured investments, or has determined that the funds of
BEDFORD are in jeopardy for whatever reason, including involuntary closure or change of
ownership. A clearly marked evidence of the pledge or legal ownership must be supplied to
BEDFORD and retained by BEDFORD.

3. Repurchase Agreements. Repurchase agreements shall be consistent with the PFIA and

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