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<br />. <br /> <br />e <br /> <br />I. POLICY <br /> <br />It is the policy of the City of La Porte, Texas (the "City") to administer and invest its funds in a <br />manner which will preserve the principal and maintain the liquidity through limitations and <br />diversification while meeting the daily cash flow requirements of the City. The City will invest all <br />available funds in conformance te all sl&RJtes gevemiRg tHe iRyesBReRt ef tHe City's funds, <br />iBeh:1diBg, bm Ret by ....,&'1 ef liHlitatieH, tile Pyblie FYHds IRvestHleBt Aet, CHapter 223~, TeKas <br />GeverftR'leHt Cede (tHe "f..et") with legal and administrative guidelines, seeking to optimize <br />interest earnings to the maximum extent possible. <br /> <br />II. PURPOSE <br /> <br />The purpose of this investment policy is to comply with all statutes governing the investment of <br />the City's funds and Chapter 2256 of the Government Code ("Public Funds Investment Act"), <br />which requires the City to adopt a written investment policy regarding the investment of its funds <br />and funds under its control. The Investment Policy addresses the methods, procedures and <br />practices that must be exercised to ensure effective and judicious fiscal management of the City's <br />funds. <br /> <br />III. SCOPE <br /> <br />The City will strive to earn a return on funds invested at the highest investment return possible <br />after taking in consideration the primary goals of preservation of principal and liquidity of funds <br />invested, consistent with the policy objectives described below. This investment policy applies to <br />the investment activities of the government of the City of La Porte, Texas. <br /> <br />FUNDS INCLUDED All financial assets of all funds managed by the City, including but not <br />limited to receipts of Tax Revenues, Charges for Services, Bond Proceeds, Interest Incomes, <br />Loans and Funds received by the City where the City performs a custodial function. <br /> <br />IV. OBJECTIVES <br /> <br />SAFETY The primary objective of the City's investment activity is the preservation of capital in <br />the overall portfolio. Each investment transaction shall seek fIrst to ensure that capital losses are <br />avoided, whether they are from securities defaults or erosion of market value. The City will <br />strive to minimize credit risk by limiting investments to the safest types of investments, <br />prequalifying the financial institutions and broker/dealers with which the City conducts business, <br />and diversify the investment portfolio so that potential losses on individual issuers will be <br />minimized. To minimize interest rate risk, the City will ladder the portfolio and match <br />investments with future cash requirements and invest operating funds in shorter, more liquid <br />securities and investments. <br /> <br />LIOUIDITY The City's investment portfolio will remain sufficiently liquid to enable the City to <br />meet operating requirements that might be reasonably anticipated. Liquidity shall be achieved by <br />matching investment maturities with forecasted cash flow requirements and by investing in <br />securities with active secondary markets. Because all possible cash demands cannot be <br />anticipated, a portion of the portfolio will be invested in shares of money market mutual funds or <br />local government investment pools that offer same day liquidity. <br /> <br />RISK OF LOSS PUBLIC TRUST All participants in the investment process shall seek to act <br />responsibly as custodians of the public trust. Investment Officials shall avoid any transaction that <br /> <br />2 <br />