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CITY OF LA PORTE, TEXAS
<br />NOTES TO THE FINANCIAL STATEMENTS (continued)
<br />Note 2 - Deposits (Cash) and Investments
<br />Authorization for Deposits and Investments
<br />The Texas Public Funds Investment Act (PFIA), as prescribed in Chapter 2256 of the Texas Government
<br />Code, regulates deposits and investment transactions of the City.
<br />In accordance with applicable statutes, the City has a depository contract with an area bank (depository)
<br />providing for interest rates to be earned on deposited funds and for banking charges the City incurs for
<br />banking services received. The City may place funds with the depository in interest and non-interest
<br />bearing accounts. State law provides that collateral pledged as security for bank deposits must have a
<br />market value of not less than the amount of the deposits and must consist of: (1) obligations of the United
<br />States or its agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3)
<br />other obligations, the principal and interest on which are unconditionally guaranteed or insured by the
<br />State of Texas; and/or (4) obligations of states, agencies, counties, cities, and other political subdivisions
<br />of any state having been rated as investment quality by a nationally recognized investment rating firm and
<br />having received a rating of not less than A or its equivalent. City policy requires the collateralization level
<br />to be at least 102% of market value of principal and accrued interest.
<br />The Council has adopted a written investment policy regarding the investment of City funds as required
<br />by the Public Funds Investment Act (Chapter 2256, Texas Government Code). The investments of the
<br />City are in compliance with the City’s investment policy. The City’s investment policy is more restrictive
<br />than the PFIA requires. It is the City’s policy to restrict its direct investments to obligations of the U.S.
<br />Government or U.S. Government Agencies, fully collateralized certificates of deposit, bankers’
<br />acceptances, mutual funds, repurchase agreements and local government investment pools. The
<br />maximum maturity allowed is five years from date of purchase. The City’s investment policy does not
<br />allow investments in commercial paper, collateralized mortgage obligations, floating rate investments or
<br />swaps.
<br />Deposit and Investment Amounts
<br />The City's cash and investments are classified as: cash and cash equivalents and restricted cash and
<br />investments. The cash and cash equivalents include cash on hand, fully collateralized deposits with
<br />financial institutions and in a privately-managed public funds investment pool account (TexPool, TexStar
<br />and LOGIC). The restricted cash and investments are assets restricted for specific use.
<br />The following schedule shows the City’s recorded cash and investments at year-end:
<br />Total Fair Value
<br />Governmental
<br />Internal Service Business Type
<br />Funds
<br />FundsActivities
<br />Cash deposits5,534,049$ 331,686$ 504,752$
<br />Investment Pools25,914,810 2,619,285 2,737,778
<br />US Agency Securities17,300,195 1,901,617 3,272,518
<br />$ 4,852,58848,749,054$ 6,515,048$
<br />3/5/2015
<br />$ 4,852,588$ 4,852,588$ 4,852,588$ 4,852,588$ 4,852,588$ 4,852,588$ 4,852,588$ 6,515,048$ 6,515,048$ 6,515,048$ 6,515,048
<br />
<br />48,749,05448,749,05448,749,054$ 6,515,048
<br />Draft 3/5/20153/5/20153/5/2015
<br />Draft 3/5/20153/5/20153/5/2015
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