Page 285 - Colleyville FY21 Budget

The investment strategy for reserve fund(s) is the assurance of investment
liquidity adequate to cover the debt service obligations not funded by debt
service funds on the required payment date. Investment of reserve funds are
controlled by their ordinance, resolution or indenture, and Federal and State
law. Bond documents must be examined for each issue, for potential
differences with this policy concerning investment instruments, maximum
maturity or average life restrictions, call dates or sinking fund redemptions,
and applicable arbitrage yields and rebate liability. Provisions contained in the
bond documents will supersede provisions of this policy. Weighted average
maturity shall be incompliance with bond requirements, as stated.

Reserve funds will be invested using a more conservative approach than the
current standard investment strategy when arbitrage rebate rules require
refunding excess earnings. All excess earnings received will be segregated to
allow a proper determination of interest income to be used in the arbitrage
calculation.

(4) Special Project or Special Purpose Funds

The investment strategy for special projects or special purpose fund
portfolio(s) will have as their primary objective to assure that anticipated cash
flows are matched with adequate investment liquidity. The city’s final maturity
dates of securities held shall not exceed the estimated project completion
date. Funds in excess of defined construction payment schedules shall be
limited to a maximum final maturity date of three years.

Maturity limitations for single issue reserve funds shall not exceed the sooner
of five (5) years, the call provisions of the bond ordinance, or the final maturity
of the bond issue.

Annually, the City Council shall formally review the Investment Policy and
investment strategy contained with the Policy and record in writing that it has
reviewed the Policy and record any changes to either the policy or strategy.

A. Diversification

The City will attempt to limit the risk of loss through diversification of its
portfolio and to achieve the aforementioned investment strategies by
diversification of instruments.
Diversification by Instrument of Portfolio Maximum Percent

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