05-23-11 Regular Meeting of La Porte City Council

Browse Search

secured by pledged collateral. In order to anticipate market changes and provide a level of security for all funds, the required minimum collateral level will be ::, . : .. • :,- : - • • . - of deposit shall be collateralized with a market value equal to no less than 102% of the deposits plus accrued interest less than an amount insured by FDIC. Rcpurchasc agreements shall be monitored daily. Collateral levels should be monitored an maintained by the financial institution. E ffee of t he plcdgcd collateral shall be maintained by the Director of Finance or a third party financial institution. Repurchase agreements shall be documented by specific agreement noting the collateral pledged in each agreement and should be monitored daily. Collateral shall be reviewed monthly to assure the market value of the securities pledged equals or exceeds the related bank balances. Collateral shall always be held by an independent third party with whom the City of La Porte has a current custodial agreement. Evidence of the pledged collateral shall be maintained by a written agreement. A safekeeping receipt must be supplied to the City of La Porte for any transaction involving sales /purchases /maturities of securities and/or underlying collateral, which the City of La Porte will retain. The right of collateral substitution is granted provided the substitution has prior approval of the City and is followed by the delivery of an original safekeeping receipt to the City, and replacement collateral is received prior to the release of original collateral. COLLATERAL DEFINED The City of La Porte shall accept only the following securities as collateral: A. FDIC insurance coverage; B. United States Treasuries and Agencies; C. Texas State, City, County, School or Road District bonds with a remaining maturity of ten received a rating of not less than A or its equivalent; C. Obligations, including letters of credit, of the United States or its agencies and instrumentalities. ED. Other securities as approved by the Fiscal Affairs Committee. SUBJECT TO AUDIT All collateral shall be subject to inspection and audit by the Director of Finance or the City's independent auditors_ IX. SAFEKEEPING AND CUSTODY SAFEKEEPING AGREEMENT All securities owned by the City shall be held in the City's designated third party safekeeping. The third party custodian shall be required to issue safekeeping receipts to the City listing each specific security, description, maturity, cusip number yield and/or coupon and other pertinent information. Each safekeeping receipt shall clearly indicate that the instrument is held for the City of La Porte. All safekeeping arrangements shall be documented by the Investment Officer. DELIVERY VERSUS PAYMENT All investment transactions, with thc exception of local - - - - - - - -, - . .. . - . • - , shall be pH-el:lased executed using on a the delivery versus payment— methed basis. That is, funds shall not be wired or paid until verification has been made that the collateral was received by the Trustee. The collateral shall be held in the name of the City or held on behalf of thc City. The Trustee's records shall assure the 11