Page 309 - City of Colleyville FY22 Adopted Budget

Effect of Loss of Required Rating

An investment that requires a minimum rating does not qualify as an
authorized investment during the period the investment does not have a
minimum rating. The Investment Officers shall take all prudent measures that
are consistent with the City’s Investment Policy to liquidate the investment(s)
that does not have the minimum rating. In accordance with PFIA, the
Investment Officers shall monitor rating changes in current investments on a
periodic basis.

Investment Strategies

The investment strategy by type of fund is as follows:

(1) Operating Funds

The investment strategy for operating fund(s) is to assure that anticipated
cash flows are matched with adequate investment liquidity. A secondary
objective is to create a portfolio, which will experience minimum volatility
during economic cycles. These funds shall not have an investment with a
stated maturity greater than two years and the weighted average maturity
shall not exceed twelve months.

(2) Debt Service Funds

The investment strategy for debt service fund(s) is the assurance of
investment liquidity to cover the debt service obligations on the required
payment date. Investments purchased shall not have a stated final maturity
date which exceeds the corresponding debt service payment date.

(3) Reserve Funds

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. More restrictive provisions
contained in the bond documents will supersede provisions of this Policy.
Weighted average maturity shall be in compliance with bond requirements, as

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