Page 182 - PowerPoint Presentation

MUNICIPAL INVESTMENT POLICY

I. POLICY STATEMENT
It is the policy of the Town of Westlake (the “Town") that the administration of its funds and
the investment of those funds shall be handled as its highest public trust. Investments shall
be made in a manner which will provide the maximum security of principal invested through
limitations and diversification while meeting the daily cash flow needs of the Town and
conforming to all applicable state and Town statutes governing the investment of public
funds. The receipt of a market rate of return will be secondary to the requirements for
safety and liquidity.

It is the intent of the Town to be in complete compliance with local law and the Texas Public
Funds Investment Act (the "Act", Texas Government Code 2256). The earnings from
investments will be used in a manner that best serves the public trust and interests of the
Town.

II. SCOPE
This Investment Policy applies to all the financial assets and funds held of the Town.

Any new funds created by the Town will be managed under the provisions of this Policy
unless specifically exempted by the Town Council and this Policy.

III. OBJECTIVES AND STRATEGY
It is the policy of the Town that all funds shall be managed and invested with four primary
objectives, listed in order of their priority: safety, liquidity, diversification and yield. These
objectives encompass the following.

• Safety of Principal - Safety of principal is the foremost objective of the Town.
Investments shall be undertaken in a manner that seeks to insure the preservation of
capital in the overall portfolio. The suitability of each investment decision will be
made on the basis of safety.

• Liquidity - The Town's investment portfolio will remain sufficiently liquid to enable it
to meet all operating requirements which might be reasonably anticipated.
Investment decisions will be based on cash flow analysis of anticipated expenditures.

• Diversification - Diversification is required in the portfolio's composition.
Diversification of the portfolio will include diversification by maturity and market
sector and will include the use of a number of broker/dealers or banks for
diversification and market coverage. Competitive bidding will be used on each sale
or purchase.

• Yield - The Town's investment portfolio shall be designed with the objective of
attaining a reasonable market yield, taking into account 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.

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