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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 with legal and administrative guidelines, seeking to optimize <br />interest earnings to the maximum extent possible. <br /> <br /> The purpose of this investment policy is to comply with all statutes, rules and regulations <br />, including the Public Funds Investment Act, Chapter <br />2256 of the Texas Government Code (the which requires the City to adopt a written <br />investment policy regarding the investment of its funds and funds under its control. The <br />Investment Policy addresses the methods, procedures and practices that must be exercised to <br />ensure effective and judicious <br /> <br />II. 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 investment <br />portfolio, include all financial assets of all funds managed by the City, including but not limited to <br />receipts of tax revenues, charges for services, bond proceeds, interest incomes, loans and funds <br />received by the City where the City performs a custodial function. These funds are accounted for <br /> <br /> <br /> General Fund <br /> Special Revenue Funds <br /> Debt Service Funds <br /> Capital Projects Funds <br /> Enterprise Funds <br /> Internal Service Funds <br /> <br /> Investment income will be allocated to the various funds based on their respective participation <br />and in accordance with generally accepted accounting principles. <br /> <br />III. OBJECTIVES <br /> <br /> SAFETY The primary objective of the City's investment activity is the preservation of capital and <br />the protection of investment principal in the overall portfolio. Each investment transaction shall <br />seek first to ensure that capital losses are avoided, whether they are from securities defaults or <br />erosion of market value. The City will strive to minimize credit risk by limiting investments to the <br />safest types of investments, prequalifying the financial institutions and broker/dealers with which <br />the City conducts business, and diversify the investment portfolio so that potential losses on <br />individual issuers will be minimized. To minimize interest rate risk, the City will ladder the <br /> <br /> <br /> <br />