Page 446 - FortWorthFY22AdoptedBudget

Each counter party to a repurchase transaction is required to execute the Bond Market
Master Repurchase Agreement and to provide collateral at a 102% margin and held by
an independent third party custodian approved by the Trustee. The Master Repurchase
Agreement must be fully executed before any transaction is initiated. Collateral will be
evidenced by safekeeping reports/receipts clearly denoting Permanent Fund ownership
from the independent safekeeping agent.

Authorized Collateral
As authorized by the Public Funds Collateral Act and further restricted by this Policy,
acceptable collateral for time and demand deposits and repurchase agreements shall
include only:

− obligations of the U.S. Government, its agencies and instrumentalities
including mortgage backed securities and CMO that pass the bank test,
and

− obligations of any US state, city, county or authority rated at least A by
two nationally recognized statistical rating organizations.

Collateral will be monitored at least monthly by the Trustee, and each month Trustee
will send City a document listing any current collateral and its market value.

X. DIVERSIFICATION

The City as beneficial owner of the Permanent Fund recognizes that investment risks
can result from issuer defaults, market price changes, or various technical complications
leading to temporary illiquidity. Risk is controlled through portfolio diversification. The
strategy for diversification will be guided by the circumstances then prevailing but will
generally be:

Range Target

Cash, Cash Equivalents, and Fixed Income 30-55% 39%

US Obligations
US Agencies/Instrumentalities
Depository Certificates of Deposit
Commercial Paper
Local Government Investment Pools
Money Market Mutual Funds Municipal Obligations
Corporate Obligations (Max. 20.00%)
Asset Backed Securities (Max 10.00%)
Repurchase Agreements

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