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person who has not delivered a signed Certification Form. The Fiscal Affairs Committee shall at <br /> least annually review, revise, and adopt a list of qualified broker /dealers and other financial <br /> institutions that are authorized to engage in investment transactions with the City. (Exhibit A) <br /> COMPETITIVE BIDDING All investment transactions must be competitively transacted and <br /> executed with broker /dealers or financial institutions that have been authorized by the City. The <br /> City will obtain at least three competitive offers. Exception: New issues will not be required to <br /> be competitively transacted as all broker /dealers would show the same price and yield. <br /> VIII. COLLATERAL <br /> COLLATERALIZATION OF PUBLIC DEPOSITS Collateralization requirements are governed <br /> by the Texas Government Code Chapter 2257 (Public Funds Collateral Act). All bank deposits, <br /> certificates of deposit, and repurchase agreements shall be secured by pledged collateral. In order <br /> to anticipate market changes and provide a level of security for all funds, the required minimum <br /> collateral level will be a market value equal to no less than 102% of the deposits. Collateral <br /> levels should be monitored and maintained by the financial institution. Repurchase agreements <br /> shall be documented by specific agreement noting the collateral pledged in each agreement and <br /> should be monitored daily. Collateral shall be reviewed monthly to assure the market value of the <br /> securities pledged equals or exceeds the related bank balances. <br /> Collateral shall always be held in the City's name by an independent third party with whom the <br /> City of La Porte has a current custodial agreement. Evidence of the pledged collateral shall be <br /> maintained by a written agreement. A safekeeping receipt must be supplied to the City of La <br /> Porte for any transaction involving sales /purchases /maturities of securities and /or underlying <br /> collateral, which the City of La Porte will retain. The right of collateral substitution is granted <br /> provided the substitution has prior approval of the City and is followed by the delivery of an <br /> original safekeeping receipt to the City, and replacement collateral is received prior to the release <br /> of original collateral. <br /> COLLATERAL DEFINED The City shall accept only the following securities as collateral: <br /> A. FDIC insurance coverage; <br /> B. United States Treasuries and Agencies; <br /> C. Obligations, including letters of credit, of the United States or its agencies and <br /> instrumentalities. <br /> D. Other securities as approved by the Fiscal Affairs Committee. <br /> SUBJECT TO AUDIT All collateral shall be subject to inspection and audit by the Director of <br /> Finance or the City's independent auditors. <br /> IX. SAFEKEEPING AND CUSTODY <br /> SAFEKEEPING AGREEMENT All securities owned by the City shall be held in the City's <br /> designated third party safekeeping. The third party custodian shall be required to issue <br /> safekeeping receipts to the City listing each specific security, description, maturity, cusip number <br /> yield and/or coupon and other pertinent information. Each safekeeping receipt shall clearly <br /> indicate that the instrument is held for the City of La Porte. All safekeeping arrangements shall <br /> be documented by the Investment Officer. <br /> 7 <br />