1992-01-13 Regular Meeting - Laserfiche WebLink

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• • CITY OF LA PORTE INTER-OFFICE MEMORANDUM T0: Robe T. Herrera, City Manager FRO Jeff Litchfield, Director of Finance DATE: January 7, 1992 SUBJECT: Participation in TexPool TexPool is a local government investment pool managed by the State Treasurer. It is a very efficient means for the City to increase the yield on its portfolio while at the same time maintaining the safety and liquidity of principal that is required by a prudent cash manager. In order for us to participate in TexPool, the City Council needs to adopt an ordinance approving the Investment Policy and also pass a resolution that allows us to participate. I plan to present both for Council consideration at the January 13, 1992 City Council meeting. The operation of TexPool is very simple. We will be able to wire funds back and forth between the City and the pool on a daily basis. Investments earn interest on a daily basis and is credited to the fund at the end of the month. The attached chart shows a comparison of the monthly interest average for the City and TexPool for the last fiscal year. As you can see, there are six months where the bar that represents TexPool's rate exceeds the line that represents the City's rate. If we had been a member of TexPool during the last year, those would have been the months where we would have participated in the fund. In retrospect, I went back and calculated our investments as if we had participated in TexPool during those months and found that we would have earned an additional $56,000. The goals of TexPool are set forth in the attached information statement and their eligible investments follow the same state law as our proposed investment policy. To give you a further example of yield, the quote for a T-bill purchased today is 3.95 and the TexPool rate is 5.05.