HomeMy WebLinkAboutR-2003-03 amend investment policy
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RESOLUTION NO. 2003- 03
A RESOLUTION OF THE CITY OF lA PORTE, TEXAS, AMENDING AN
INVESTMENT POLICY CONFORMING TO All STATUTES GOVERNING
INVESTMENT OF THE CITY OF lA PORTE'S FUNDS, INCLUDING, BUT NOT BY
WAY OF LIMITATION, THE PUBLIC FUNDS INVESTMENT ACT, CHAPTER 2256,
TEXAS GOVERNMENT CODE; FINDING COMPLIANCE WITH THE OPEN
MEETINGS LAW; AND SETTING AN EFFECTIVE DATE THEREOF.
WHEREAS, the City of La Porte requires that funds be invested in a manner
which will preserve the principal of funds invested while meeting daily cash flow
demands of the City; and
WHEREAS, the Public Funds Investment Act requires the adoption of certain
investment policies and controls regarding the investment of its funds; and
WHEREAS, the Public Funds Investment Act further requires that the governing
body of an investing entity shall adopt a written investment policy by resolution, and
shall further state that it has reviewed the investment policy and investment strategies
adopted, and that the written policy adopted shall record any changes made to either
the investment policy or investment strategies previously adopted; and
WHEREAS, the City will endeavor to earn a return on funds invested at the
highest return possible after taking into account the primary goals of preservation of
liquidity of funds invested, consistent with the City's Investment Policy;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCil OF THE CITY OF
lA PORTE, THAT:
SECTION 1. The findings and recitations set out in the preamble to this Resolution are
found to be true and correct and that they are hereby adopted by the City Council of the
City of La Porte and made a part hereof for all purposes.
SECTION 2. The City of La Porte hereby designates the attached policy titles, City of
La Porte, Texas Investment Policy, as an official policy of the City of La Porte and that
it is hereby adopted by the City of La Porte and made a part hereof for all purposes.
SECTION 3. The City Council officially finds, determines, recites, and declares that a
sufficient written notice of the date, hour place and subject of this meeting of the City
Council was posted at a place convenient to the public at City Hall of the City for the
time required by law preceding this meeting, as required by the Open Meetings Law,
Chapter 551, Texas Government Code; and that this meeting has been open to the
public as required by law at all times during which this Resolution and the subject matter
thereof has been discussed, considered and formally acted upon. The City Council
further ratifies, approves and confirms such written notice and the contents and posting
thereof.
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INTRODUCED, READ and PASSED by the affirmative vote of a majority of the
City Council of the City of La Porte, Texas, on this the ~ day of f~ ... ,2003.
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~ RMAN L.--MALONE,
Mayor
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Martha Gillett,
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Knox W. Askins,
City Attorney
City of La Porte, Texas
Investment Policy
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A4opte~ by th,~..Ci~,CotJ'ncil
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/' \Qfthe CilY of La Porie~.;', ': "
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"~ i 'On January 13,.1??~, by:", ..'
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:, :' :. 'i Ord-ifiance No. 1802 . :.', "\ ,
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'A"'end~d ~ November 2000'
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A~~~de~ ':":r~"br~~'ry' 2003 ..
City of La Porte, Texas
Cynthia B. Alexander
Director of Finance
Shelley W olny
Investment Officer
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1. POLICY
It is the policy of the City of La Porte, Texas (the "City") to administer and invest its funds in a
manner which will preserve the principal and maintain the liquidity though limitations and
diversification while meeting the daily cash flow requirements of the City. The City will
conform to all statues governing the investment of the City's funds, including, but not by way of
limitation, the Public Funds Investment Act, Chapter 2256, Texas Government Code (the
"Act").
II. SCOPE
The City will strive to earn a return on funds invested at the highest investment return possible
after taking in consideration the primary goals of preservation of principal and liquidity of funds
invested, consistent with the policy objectives described below. This investment policy applies
to the investment activities of the government of the City of La Porte, Texas.
FUNDS INCLUDED All financial assets of all funds managed by the City, including but not
limited to receipts of Tax Revenues, Charges for Services, Bond Proceeds, Interest Incomes,
Loans and Funds received by the City where the City performs a custodial function.
m. OBJECTIVES
SAFETY The primary objective of the City's investment activity is the preservation of capital
in the overall portfolio. Each investment transaction shall'seek first to ensure that capital losses
are avoided, whether they are from securities defaults or erosion of market value.
LIOUIDITY The City's investment portfolio will remain sufficiently liquid to enable the City to
meet operating requirements that might be reasonably anticipated. Liquidity shall be achieved
by matching investment maturities with forecasted cash flow requirements and by investing in
securities with active secondary markets.
YIELD The City's cash management portfolio shall be designed with the objective of regularly
exceeding the average rate of return on the three month U.S. Treasury Bill. The investment
program shall seek to augment returns above this threshold consistent with risk limitations
identified herein and prudent investment principles.
RISK OF LOSS All participants in the investment process shall seek to act responsibly as
custodians of the public trust. Investment Officials shall avoid any transaction that might impair
public confidence in the City's ability to govern effectively. The governing body recognizes that
in a diversified portfolio, occasional measured losses due to market volatility are inevitable, and
must be considered within the context of the overall portfolio's investment return, provided that
adequate diversification has been implemented.
N. OVERSIGHT RESPONSIBILITY
Oversight Responsibility for the investment activity of the City of La Porte shall rest with the
Audit Committee and the City Manager.
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V. RESPONSmILITY AND CONTROL
DELEGATION Management responsibility for the investment program is hereby delegated to
the Director of Finance, who shall establish written procedures for the operation of the
investment program, consistent with this investment policy. Such procedures shall include
explicit delegation of authority to persons responsible for investment transactions.
SUBORDINATES All persons involved in investment activities will be referred to as
"Investment Officials." No person shall engage in an investment transaction except as provided
under the terms of this policy and the procedures established by the Director of Finance. The
Director of Finance shall be responsible for all transactions undertaken, and shall establish a
system of controls to regulate the activities of Subordinate Investment Officials.
OUARTERLY REPORTS The Director of Finance shall submit quarterly an investment report
that summarizes recent market conditions, economic developments and anticipated investment
conditions. The report shall summarize the investment strategies employed in the most recent
quarter, describe the portfolio in terms of investment securities, maturities, risk characteristics,
book values, market values and other features. The report shall explain the quarter's total
investment return and compare the return to budgetary expectations. The report shall include an
appendix that discloses all transactions during the quarter.
ANNUAL REPORTS Within 90 days of the end of the fiscal year, the Director of Finance shall
present a comprehensive annual report on the investment program and investment activity. The
annual report shall include twelve-month and quarterly comparison of returns, and shall suggest
improvements that might be made in the investment program.
PRUDENCE Investments shall be made with the exercise of due care, which persons of
prudence, discretion and intelligence exercise in the management of their own affairs, not for
speculation but for investment considering the probable safety of their own capital as well as the
probable income to be derived. Investment Officials acting in accordance with written
procedures and this investment policy and exercising due diligence shall be relieved of personal
responsibility for an individual security's credit risk or market price changes, provided
deviations from expectations are reported in a timely fashion and the liquidity and the sale of
securities are carried out in accordance with the terms of this policy.
CONFLICTS OF INTEREST Officials and employees involved in the investment process shall
refrain from personal business activity that could conflict with proper execution of the
investment program, or which could impair their ability to make impartial investment decisions.
DISCLOSURE Employees and Investment Officials shall disclose to the City Manager any
material financial interests in financial institutions that conduct business with the City of La
Porte, and shall further disclose any large financial or investment positions that could be related
to the performance of the City's portfolio. Employees and Investment Officials shall subordinate
their personal investment transactions to those of this jurisdiction, particularly with regard to the
timing of purchases and sales.
TRAINING Investment Officials shall attend at least one investment training session within 12
months after taking office or assuming duties, and shall attend an investment training session
not less than once in a two-year period and receive not less than 10 hours of instruction relating
to investment responsibilities from an independent source approved by the audit committee. For
the purposes of this policy, an "independent source" is defined as a professional organization, an
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institute of higher learning or any other sponsor other than a Business Organization with whom
the City may engage in investment transactions. Independent sources that may provide
investment training include the Government Treasurer's Organization of Texas, the University
of North Texas, the Government Finance Officers Association of Texas, or the Texas Municipal
League. Training shall be in accordance with the Public Funds Investment Act and shall include
education in investment controls, security risks, market risks, and compliance with statutes
governing the investment of public funds.
VI. INVESTMENTS
ACTIVE PORTFOLIO MANAGEMENT The City intends to pursue active versus passive
portfolio management philosophy. That is, securities may be sold before they mature if market
conditions present an opportunity for the City to benefit from the trade.
ELIGmLE INVESTMENTS Assets of funds of the government of the City of La Porte may be
invested in the following as authorized by the Public Funds Investment Act:
A. Obligations of, or Guaranteed by Governmental Entities
1. Except as provided by Subsection 2, the following are authorized investments under this
section:
a) obligations of the United States or its agencies and instrumentalities;
b) direct obligations of this state or its agencies and instrumentalities;
c) collateralized mortgage obligations directly issued by a federal agency or
instrumentality of the United States, the underlying security for which is guaranteed
by an agency or instrumentality of the United States;
d) other obligations, the principal and interest of which are unconditionally guaranteed
or insured by, or backed by the full faith and credit of, this state or the United States
or their respective agencies and instrumentalities; and
e) obligations of states, agencies, counties, cities, and other political subdivisions of any
state rated as to investment quality by a nationally recognized investment rating firm
not less than A or its equivalent.
2. The following are not authorized investments under this section:
a) obligations whose payment represents the coupon payment on the outstanding
principal balance of the underlying mortgage-backed security collateral and pays not
principal (Interest only bonded);
b) obligations whose payment represents the principal stream of cash from the
underlying mortgage-backed security collateral and pays no interest (Principal only
bonds);
c) collateralized mortgage obligations that have a final stated maturity date of greater
that 10 years; and
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d) collateralized mortgage obligations, the interest rate of which is determined by an
index that adjusts opposite to the changes in a market index.
B. Certificate of Deposit and Share Certificates
1. A certificate of deposit is an authorized investment under this Subsection if the certificate
is issued by a state or national bank domiciled in this state, a savings bank domiciled in
this state, or a state or federal credit union domiciled in this state and is:
a) guaranteed or insured by the Federal Deposit Insurance Corporation or its successor
or the National Credit Union Share Insurance Fund or its successor;
b) secured by obligations that are described by Subsection A, 1, including mortgage
backed securities directly issued by a federal agency or instrumentality that have a
market value of not less than the principal amount of the certificates, but excluding
those mortgage backed securities of the nature described by Subsection A, 2; or
c) secured in any other manner and amount provided by law for deposits of the
investing entity.
C. Repurchase Agreements
1. A fully collateralized repurchase agreement is an authorized investment under this
Subsection if the repurchase agreement:
a) has a defined termination date;
b) is secured by obligations described by Subsection A, 1, a); and
c) requires the securities being purchased by the entity to be pledged to the entity, held
in the entity's name, and deposited at the time the investment is made with the entity
or with a third party selected and approved by the entity; and
d) is placed through a primary government securities dealer, as defined by the Federal
Reserve, or a financial institution doing business in this state.
e) repurchase agreements and reverse repurchase agreements shall be entered into only
with dealers who have executed a Master Repurchase Agreement with the City.
2. In this section, "repurchase agreement" means a simultaneous agreement to buy, hold for
a specified time, and sell back at a future date obligations described by Subsection A,
I,a), at a market value at the time the funds are disbursed of not less than the principal
amount of the funds disbursed. The term includes a direct security repurchase agreement
and a reverse security repurchase agreement.
3. Notwithstanding any other law, the term of any reverse security repurchase agreement
may not exceed 90 days after the date the reverse security repurchase agreement is
delivered.
4. Money received by an entity under the terms of a reverse security repurchase agreement
shall be used to acquire additional authorized investments, but the term of the authorized
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investments acquired must mature no later than the expiration date stated in the reverse
security repurchase agreement.
D. Banker's Acceptances
1. A banker's acceptance is an authorized investment under this subchapter if the banker's
acceptance:
a) has a stated maturity of 270 days or fewer from the date of its issuance;
b) will be, in accordance with its terms, liquidated in full at maturity;
c) is eligible for collateral for borrowing from a Federal Reserve Bank; and
d) is accepted by a bank organized and existing under the laws of the United States or
any state, if the short-term obligations of the bank, or of a bank holding company of
which the bank is the largest subsidiary, are rated not less that A-lor P-I or an
equivalent rating by at least one nationally recognized credit rating agency.
E. Commercial Paper
1. Commercial paper is an authorized investment under this subchapter if the commercial
paper;
a) has a stated maturity of270 days or fewer from the date of its issuance; and
b) is rated not less than A-lor P-l or an equivalent rating by at least;
c) two nationally recognized credit rating agencies; or
d) one nationally recognized credit rating agency and is fully secured by an irrevocable
letter of credit issued by a bank organized and existing under the laws of the United
States or any state.
F. Mutual Funds
1. A no-load money market mutual fund is an authorized investment under this subchapter
if the mutual fund:
a) is registered with and regulated by the Securities and Exchange Commission;
b) provides the investing entity with a prospectus and other information required by the
Securities and Exchange Act of 1934 (15 U.S.C. Section 80a-l et seq.);
c) has a dollar-weighted average stated maturity of 90 days or fewer; and
d) includes in its investment objectives the maintenance of a stable net asset value of $1
for each share.
2. In addition to a no-load money market mutual fund permitted as an authorized investment
in Subsection 1, a no-load mutual fund is an authorized investment under this Section if
the mutual fund:
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a) is registered with the Securities and Exchange Commission;
b) has an average weighted maturity of less than two years;
c) is invested exclusively in obligations approved by this subchapter;
d) is continuously rated as to investment quality by at least one nationally recognized
investment rating firm of not less than AAA or it equivalent; and
e) conforms to the requirements set forth in Sections G, 2 and 3 relating to the eligibility
of investment pools to receive and invest funds of investing entities.
3. An entity is not authorized by this section to:
a) invest in the aggregate more than 80 percent of its monthly average fund balance,
excluding bond proceeds and reserves and other funds held for debt service, in
money market mutual funds described in Subsection F, 1 or mutual funds described
in Subsection 2, either separately or collectively;
b) invest in the aggregate more than 15 percent of its monthly average fund balance,
excluding bond proceeds and reserves in other funds held for debt service, in mutual
funds described in Subsection 2;
c) invest any portion of bond proceeds, reserves and funds held for debt service, in
mutual funds described in Subsection 2; or
d) invest its funds or funds under its control, including bond proceeds and reserves and
other funds held for debt service, in anyone mutual fund described in Subsection 1 or
2 in an amount that exceeds 10 percent of the total assets of the mutual fund.
G. Investment Pools
1. An entity may invest its funds and funds under its control through an eligible investment
pool if the governing body of the entity by rule, order, ordinance, or resolution, as
appropriate, authorizes investment in the particular pool. An investment pool shall invest
the funds it receives from entities in authorized investments permitted by this subchapter.
2. To be eligible to receive funds from and invest funds on behalf of an entity under this
chapter, an investment officer or other authorized representative of the entity an offering
circular or other similar disclosure instrument that contains, at a minimum, the following
information:
a) the types of investments in which money is allowed to be invested;
b) the maximum average dollar-weighted maturity allowed, based on the stated maturity
date, ofthe pool;
c) the maximum stated maturity date any investment security within the portfolio has;
d) the objectives of the pool;
e) the size of the pool;
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f) the names of the members of the advisory board of the pool and the dates their terms
expIre;
g) the custodian bank that will safekeep the pool's assets;
h) whether the intent of the pool is to maintain a net asset value of one dollar and the
risk of market price fluctuation;
i) whether the only source of payment is the assets of the pool at market value or
whether there is a secondary source of payment, such as insurance or guarantees, and
a description of the secondary source of payment;
j) the name and address of the independent auditor of the pool;
k) the requirements to be satisfied for an entity to deposit funds in and withdraw funds
from the pool and any deadlines or other operating policies required for the entity to
invest funds in and withdraw funds from the pool; and
1) the performance history of the pool, including yield average dollar-weighted
maturities, and expense ratios.
3. To maintain eligibility to receive funds from and invest funds on behalf of an entity under
this chapter, an investment pool must furnish to the investment officer or other
authorized representative of the entity:
a) investment transaction confirmations; and
b) a monthly report that contains, at a minimum, the following information:
1. the types and percentage breakdown of securities in which the pool is invested;
11. the current average dollar-weighted maturity, based on the stated maturity date,
of the pool;
111. the current percentage of the pool's portfolio in investments that have stated
maturities of more than one year;
IV. the book value versus the market value of the pool's portfolio, using the
amortized cost valuation;
v. the size of the pool;
vi. the number of participants in the pool;
V11. the custodian bank that is safekeeping the assets of the pool;
V111. a listing of daily transaction activity of the entity participating in the pool;
IX. the yield and expense ratio of the pool;
x. the portfolio managers of the pool; and
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Xl. any changes or addenda to the offering circular.
4. An entity by contract may delegate to an' investment pool the authority to hold legal title
as custodian of investments purchased with its local funds.
5. In this section, "yield" shall be calculated in accordance with regulations governing the
registration of open-end management investment companies under the Investment
Company Act of 1940, as promulgated from time to time by the Federal Securities and
Exchange Commission.
6. To be eligible to receive funds from and invest funds on behalf of an entity under this
chapter, a public funds investment pool created to function as a money market mutual
fund must mark its portfolio to market daily, and, to the extent reasonably possible,
stabilize a $1 net asset value. If the ratio of the market value of the portfolio divided by
the book value of the portfolio is less than 0.995 or greater than 1.005, portfolio holdings
shall be sold as necessary to maintain the ratio between 0.995 and 1.005.
7. To be eligible to receive funds from and invest funds on behalf of an entity under this
chapter, a public funds investment pool must have an advisory board composed:
a) equally of participants in the pool and other persons who do not have a business
relationship with the pool and are qualified to advise the pool, for a public funds
investment pool created under Chapter 791 and managed by a state agency; or
b) of participants in the pool and other persons who do not have a business relationship
with the pool and are qualified to advise the pool, for other investment pools.
8. To maintain eligibility to receive funds from and invest funds on behalf of an entity under
this chapter, an investment pool must be continuously rated no lower that AAA or AAA-
m or at an equivalent rating by at least one nationally recognized rating service.
EXISTING INVESTMENTS Any investments currently held that do not meet the guidelines of
this policy shall be reviewed to determine the ability to liquidate. If the investment caDDot be
liquidated because of material adverse change in the value since the time of purchase, and
holding the investment to maturity does not negatively affect disbursements or cash flow, a
recommendation of holding said investment to maturity is acceptable.
PROCUREMENT Investments of subsections A-G of this section, excluding new issues, may
be made only after competitive bids are solicited from at least three sources.
MONITORING The market value of each investment shall be obtained monthly from a source
such as the Wall Street Journal newspaper, a reputable brokerage firm or security pricing service
and reported on the monthly investment reports.
LENGTH OF INVESTMENTS The maximum stated maturity, from the date of purchase, for
any individual investment may not exceed 5 years and the maximum dollar-weighted average
maturity for the pooled fund group (investment portfolio) may not exceed 2 years.
DIVERSIFICATION It is the policy of the City of La Porte to diversify its investment
portfolios. Assets held in the common investment portfolio shall be diversified to eliminate the
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risk of loss resulting from one concentration of assets in a specific maturity, a specific issuer or
a specific class of securities. Diversification strategies shall be determined and revised
periodically by the Audit Committee.
In establishing specific diversification strategies, the following general policies and constraints
shall apply:
A. Portfolio maturities shall be staggered in a way that protects interest income from the
volatility of interest rates and that avoids undue concentration of assets in a specific maturity
sector. Securities shall be selected which provide for stability of income and reasonable
liquidity.
B. The Audit Committee shall establish strategies and guidelines for the percentage of the total
portfolio that may be invested in securities other than repurchase agreements, Treasury bill
and notes, or insured and collateralized certificates of deposits. The Audit Committee shall
conduct a semi-annual review of these guidelines, and shall evaluate the probability of
market and default risk in various investment sectors as part of its considerations;
VII. SELECTION OF BANKS AND DEALERS
BIDDING PROCESS Depositories shall be selected through the City's banking services
procurement process, which shall include a formal request for proposal (RFP) issued every two
(2) years. In selecting depositories, the credit worthiness of institutions shall be considered, and
the Director of Finance shall conduct a comprehensive review of prospective depositories credit
characteristics and financial history.
INSURABILITY Banks and Savings & Loans Associations seeking to establish eligibility for
the City's competitive certificate of deposit purchase program, shall submit financial statements,
evidence of Federal insurance and other information as required by the Director of Finance.
PRIMARY DEALERS AND APPROVED LIST For brokers and dealers of government
securities, Investment Officials shall select only those dealers reporting to the Market Reports
Division of the Federal Reserve Bank of New York, also known as "primary government
securities dealers," unless a comprehensive credit and capitalization analysis reveals that other
firms are adequately financed to conduct public business. Before engaging in investment
transactions with a broker/dealer, the Investment Official shall have received, from a Qualified
Representative of said firm, a signed Certification Form. (Exhibit B) This form shall attest that
the individual responsible for the City's account with that firm has reviewed the City's
Investment Policy and that the brokerage firm has implemented reasonable procedures and
controls in an attempt to preclude imprudent activities arising out of investment transactions
conducted between the City and the brokerage firm. The audit committee shall at least annually
review, revise, and adopt a list of qualified brokers that are authorized to engage in investment
transactions with the City. (Exhibit A)
VIII. SAFEKEEPING AND CUSTODY
INSURANCE OR COLLATERAL All bank deposits, certificates of deposit, and repurchase
agreements shall be secured by pledged collateral. Bank deposits and certificates 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. Repurchase agreements shall be
monitored daily. Evidence of the pledged collateral shall be maintained by the Director of
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Finance or a third party financial institution. Repurchase agreements shall be documented by
specific agreement noting the collateral pledged in each agreement. Collateral shall be reviewed
monthly to assure the market value of the securities pledged equals or exceeds the related bank
balances.
SAFEKEEPING AGREEMENT All safekeeping arrangements shall be in accordance with a
Safekeeping Agreement approved by the Audit Committee which clearly defines the procedural
steps for gaining access to the collateral should the City of La Porte determine that the City's
funds are in jeopardy. The safekeeping institution, or Trustee, shall be the Federal Reserve Bank
or an institution not affiliated with the firm pledging the collateral. The safekeeping agreement
shall include the signatures of the City of La Porte, the firm pledging the collateral, and the
Trustee.
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
(lO) years or less with rating from a nationally recognized investment rating frrm and having
received a rating of not less than A or its equivalent;
D. Other securities as approved by the Audit Committee.
SUBJECT TO AUDIT All collateral shall be subject to inspection and audit by the Director of
Finance or the City's independent auditors.
DELIVERY VERSUS PAYMENT Treasury Bills, Notes & Bonds and Government Agencies'
securities shall be purchased using the delivery versus payment method. 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 the City. The Trustee's
records shall assure the notation of the City's ownership of or explicit claim on the securities.
The original copy of all safekeeping receipts shall be delivered to the City.
IX. MANAGEMENT AND INTERNAL CONTROLS
The Director of Finance shall establish a system of internal controls, which shall be reviewed by
an independent auditor. The controls shall be designed to prevent losses of public funds arising
from fraud, employee error, misrepresentation by third parties, unanticipated changes in
financial markets, or imprudent actions by employees or Investment Officials of the City.
Controls and managerial emphasis deemed most important that shall be employed where
practical are:
A. Control of collusion.
B. Separation of duties.
C. Separation of transaction authority from accounting and record keeping.
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D. Custodian safekeeping receipts records management.
E. Avoidance of bearer-form securities.
F. Clear delegation of authority.
G. Documentation on investment bidding events.
H. Written conformation of telephone transactions.
I. Reconcilement and comparisons of security receipts with the investment subsidiary records.
J. Compliance with investment policies.
K. Accurate and timely reports.
L. Validation of investment maturity decisions with supporting cash flow data.
M.Adequate training and development of Investment Officials.
N. Verification of all interest income and security purchase as sell computations.
O. Review of financial condition of all brokers, dealers and depository institutions.
P. Staying informed about market conditions, changes, and trends that require adjustments in
investment strategies.
COMPLIANCE AUDIT The City of La Porte shall perform, in conjunction with its annual
financial audit, a compliance audit of management controls on investments and adherence to the
entity's established investment policies. The audit shall include a formal review of the quarterly
investment reports by an independent auditor and the results reported to the governing body by
the independent auditor. Also, the governing body shall review its investment policy and
investment strategy not less than annually and adopt a written instrument by rule, order,
ordinance, or resolution stating that it has reviewed the investment policy and strategy, and
recorded any changes made to them.
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Exhibit A
City of La Porte
Approved List of Brokers/Dealers and Investment Pools
BrokerslDealers
Coastal Securities
First Southwest Company
Harveston Securities, Inc
Duncan Williams, Inc.
Investment Pools
TexPool
LOGIC Investment Pool
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Exhibit B
BROKERlDEALER CERTIFICATION FORM
As required by Texas Government Code 2256.005 (k)
CITY OF LA PORTE, TEXAS
The City of La Porte acknowledges that the only means the firm has to preclude
imprudent investment activities arising out of transactions between the firm and
the City is to confirm that all provisions of the City's investment policy are
followed in investment transactions conducted between the firm and the City, and,
the second paragraph below should be read accordingly.
I, as a registered principal for the firm
do hereby certify that I, and the broker covering this account,
have received the investment policy ofthe City.
We acknowledge that this firm has implemented reasonable internal procedures and
controls in an effort to preclude imprudent investments between the City and the firm.
Signature
Name:
Title:
Date:
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Exhibit C
City of La Porte, Texas
Investment Strategy Statement
The City of La Porte, Texas (the "City") will strive to administer and invest its pooled
funds at the highest investment return possible while always taking into account the
primary goals of preservation of principal and liquidity of funds invested consistent with
the City's investment policy.
The City's funds, which are pooled together and constitute the investment portfolio,
include all financial assets of all funds managed by the City, including but not limited to
receipts of tax revenues, charges for services, bond proceeds, interest incomes, loans and
funds received by the City where the City performs a custodial function.
The City will never invest its funds in a security that is deemed unsuitable to the financial
requirements of the City. Maturities will be staggered in a manner that meets the cash
flow needs of the City.
The primary investment objective is the preservation and safety of principal. Each
investment transaction shall seek first to ensure that principal losses are avoided, whether
they are from security defaults or erosion of market value.
The City's investment portfolio will remain sufficiently liquid to enable the City to meet
operating requirements that might be reasonably anticipated. Liquidity shall be achieved
by matching investment maturities with forecasted cash flow requirements and by
investing in securities with active secondary markets.
The City shall always maintain a highly diversified investment portfolio in order to
reduce the amount of credit and market risk exposed to the City's portfolio.
After first considering safety and liquidity, the City's investment portfolio shall be
designed with the objective of regularly exceeding the average rate ofretum on the three
month U.S. Treasury Bill. The two-year Treasury Note may also be used to measure the
performance of the investment portfolio to the current market. The City shall seek to
augment returns above this threshold consistent with risk limitations identified in the
City's investment policy and prudent investment principles.
e
-'
REQUEST FOR CITY COUNCIL AGENDA ITEM
Requested By: C nthia B. Alexander
Source of Funds:
Department: Finance
Account Number:
Report: _Resolution: --K.....Ordinance: _
Amount Budgeted:
Exhibits: Investment Policv
Amount Requested:
Exhibits:
Budgeted Item:
YES
NO
Exhibits:
SUMMARY & RECOMMENDATION
The City Council of the City of La Porte originally adopted an Investment Policy on January 13, 1992, by Ordinance
No. 1802. The Governmental Accounting Standard's Board (GASB) Pronouncement 31 requires that a City must
present the Investment Policy to Council annually.
On January 30, 2003, the Finance Department presented the Investment Report to the Audit Committee. A few
changes have been made to the Investment Policy, which are briefly outlined below.
. Authorized Investments - The policy now requires the execution of a "Master Repurchase Agreement"
when dealing with repurchase agreements and reverse repurchase agreements. (Page 5)
. Insurance or collateral- The collateral requirement has now been increased to 102%. (Page 10)
Action Required bv Council:
Recommend that the Council approve the amended Investment Policy.
City Manager
1rf~
Date
.
.
*ZOD3-D3
RESOLUTION NO. 2Q8O'-_
A RESOLUTION OF THE CITY OF LA PORTE, TEXAS, ADOPTING AN
INVESTMENT POLICY CONFORMING TO All STATUTES GOVERNING
INVESTMENT OF THE CITY OF lA PORTE'S FUNDS, INCLUDING, BUT NOT BY
WAY OF LIMITATION, THE PUBLIC FUNDS INVESTMENT ACT, CHAPTER 2256,
TEXAS GOVERNMENT CODE; FINDING COMPLIANCE WITH THE OPEN
MEETINGS LAW; AND SETTING AN EFFECTIVE DATE THEREOF.
WHEREAS, the City of La Porte requires that funds be invested in a manner
which will preserve the principal of funds invested while meeting daily cash flow
demands of the City; and
WHEREAS, the Public Funds Investment Act requires the adoption of certain
investment policies and controls regarding the investment of its funds; and
WHEREAS, the Public Funds Investment Act further requires that the governing
body of an investing entity shall adopt a written investment policy by resolution, and
shall further state that it has reviewed the investment policy and investment strategies
adopted, and that the written policy adopted shall record any changes made to either
the investment policy or investment strategies previously adopted; and
WHEREAS, the City will endeavor to earn a return on funds invested at the
highest return possible after taking into account the primary goals of preservation of
liquidity of funds invested, consistent with the City's Investment Policy;
NOW, THEREFORE, BE IT RESOLVED BY THE CITIY COUNCil OF THE CITY OF
. LA PORTE, THAT:
SECTION 1. The findings and recitations set out in the preamble to this Resolution are
found to be true and correct and that they are hereby adopted by the City Council of the
City of La Porte and made a part hereof for all purposes.
SECTION 2. The City of La Porte hereby designates the attached policy titled, City of
La Porte, Texas Investment Policy, as an official policy of the City of La Porte and that
it is hereby adopted by the City of La Porte and made a part hereof for all purposes.
SECTION 3. The City Council officially finds, determines, recites, and declares that a
sufficient written notice of the date, hour, place and subject of this meeting of the City
Council was posted at a place convenient to the public at City Hall of the City for the
time required by law preceding this meeting, as required by the Open Meetings Law,
Chapter 551, Texas Government Code; and that this meeting has been open to the
public as required by law at all times during which this Resolution and the subject matter
thereof has been discussed, considered and formally acted upon. The City Council
further ratifies approves and confirms ~uch written notice and the contents and posting
thereof.
e
e
jo',
INTRODUCED, READ and PASSED by the affirmative vote of a majority of the
City Council of the City of La Porte, Texas, on this the II ~ day of _fff'6.; , 2000.
NOR/J/!~~(x ~~
Mayor
1!1/4Ab> dk///l
Ma ha Gillett,
City Secreta
.
.
.
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e
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: Februa
Requested By: C nthia B. Alexander
Source of Funds:
Department: Finance
Account Number:
Report:
Resolution: ~Ordinance:
Amount Budgeted:
Exhibits: Investment Policv
Amount Requested:
Exhibits:
Budgeted Item:
YES
NO
Exhibits:
SUMMARY & RECOMMENDATION
The City Council of the City of La Porte originally adopted an Investment Policy on January 13, 1992, by Ordinance
No. 1802. The Governmental Accounting Standard's Board (GASB) Pronouncement 31 requires that a City must
present the Investment Policy to Council annually.
On January 30, 2003, the Finance Department presented the Investment Report to the Audit Committee. A few
changes have been made to the Investment Policy, which are briefly outlined below.
. Authorized Investments - The policy now requires the execution of a "Master Repurchase Agreement"
when dealing with repurchase agreements and reverse repurchase agreements. (Page 5)
. Insurance or collateral- The collateral requirement has now been increased to 102%. (page 10)
Action Required bv Council:
Recommend that the Council approve the amended Investment Policy.
City Manager
.
e
AgeDda Date 1lequeaIod: J~ 13. 2003 1/
Requested By: Riehanl K R
Aoorooriation
Department: PoIiC4'
Source of Funds: Off"lCe of the
Governor, Criminal Justice Division
Account Number:
Report:
Exhibits:
Resolution: x Ordinance:
Amount Budgeted:
Amount Requested:
Budgeted Item: YES e:5
Resolution
Exhibits:
Grant Budeet
Exhibits:
Vidim RqJort to Chief
SUMMARY & RECOMMENDATION
On December 10, 2001, City Council authorized the City Manager to submit for a Victims' Assistance Discretionary
Grant from the Office of the Attorney General to create a Victims' Assistance Liaison. The City of La Porte was
awarded the grant for a 20-month period, which will end 8/31/03. This new position has proved to be very
successful and has ensured over 319 victims receive the assistance they needed. This position has also helped
victims submit over $70,000 in crime victims' compensation claims.
In anticipation of the grant period ending I would like approval to submit for a Violence Against Women Act Grant
made possible through the Office of the Governor, Criminal Justice Division to further fund this position. The grant
would be for a 12 month period, starting 9/1/03 and ending 8/31/04. The grant request is for a total of $43,237.00
which includes salary, training and equipment for this position. There will be a required 25% match for this grant,
which will be $10,809.00 and the cm portion would be $32,428.00
Action Reauired bv Council: Request authorization for the acting City Manager to apply for and sign the
resolution to participate in the Violence Against Women's Act Grant made possible through the Office of the
Governor, Criminal Justice Division for the funding of the Victims' Assistance Liaison position.
Ir'
Date
. . . .
WHEREAS, The La Porte City Council finds it in the best interest of the citizens of La Porte to receive
assistance, support and education about the Violence Against Women Act with the acceptance of a Violence
Against Women Act Grant made possible through the Office of the Governor, Criminal Justice Division, to be
operatedfor the grant year 2004 (09/01103-8/31/04); and
WHEREAS, The La Porte City Council has authorized the Acting City Manager to apply for, accept, reject, alter
or terminate a grant from the Office of the Governor, Criminal Justice Division for the amount of $43,237.00 for
a 12 month period, and
WHEREAS, The City of La Porte will receive a maximum of $31,303.00 for salary for the said project and
$1,125.00 for training and services from the Office of the Governor, Criminal Justice Division grant application,
with a 25% required match of$1O,809.00; and
WHEREAS, The La Porte City Council has agreed that in the event of loss or misuse of the Criminal Justice
Division funds, La Porte City Council assures that the funds will be returned to the Criminal Justice Division in
full.
NOW THEREFORE, BE IT RESOLVED that the La Porte City Council approves submission of the grant
application for the Violence Against Women Act to the Office of the Governor, Criminal Justice Division.
~frA~
Ma r
Passed and Approved thiS~Y of ~ 2003.
'1!1d1t/v1 'It/ ~II
City Secretary
.
e
La Porte Police Department
Crime Victim Assistance Office
915 S. 8th Street
La Porte, Texas 77571
281/471-3811 ext 748
January 6, 2003
The Crime Victim Assistance Office has followed 319 victims since the program was implemented in May,
2002. Of those 319 victims, 246 were assault cases and of those 246 assault cases 167 were Family
Violence Assaults. Various other crimes that result in bodily injury are included such as Stalking, Robbery,
DWI Injuries, Sexual Assaults, Vehicular Homicide, and Homicide. Sixty-seven percent of these victims
were female.
Crime Victim Compensation Applications currently on file:
o Stalking ----------------- I
o Aggravated Assault------- 2
o Family Violence Assault- 3
o Kidnapping---------------- I
o Sexual Assault ----------- 7
o DWI injuries -------------- 7
o Vehicular Homicide ------ I
o Homicide ------------------- 3
o Molestation Survivor ----- I
· Total------------- 26
To date $14,818.82 has been paid on 9 of these claims. The remainder of these claims are awaiting
payment and will possibly total close to $70,000 if approved by the Office of the Attorney General. The
Gwendolyn Walker (Homicide victim) family was awarded $4,500 to help cover funeral expenses. The
Kevin Collins family was also awarded $4500.00 to assist them with funeral expenses and Melissa
Williams family was awarded $2345.00. We have another homicide victim's widow that currently has an
application on file and hopefully she will be assisted with funeral expenses as well.
In general, I make victims aware of their rights and assist with referrals to community resources and also
assist in completing the Crime Victim Compensation application. We have assisted in placing six victims in
women's shelters, helped one victim obtain a free carseat, helped locate employment for several women,
and referred several to the Neighborhood Center to obtain food for their children. We have helped several
assault survivors obtain counseling. Ten family violence assault victims received help in relocating to
remove themselves from their abuser. Several victims were assisted and received attorney services for little
or no charge. One victim, after obtaining residency at Bay Area Women's Center was awarded a $3,000
education grant to attend Lee College and further her education. I track offender court dates, bond
amounts, case disposition and assist in obtaining protective orders for victims and report back to them
Most recently I have started tracking elderly abuse and report this to DPS. In fiscal year 2002, we had 30
cases of elderly abuse (property crimes).
.
e
Grant Budget
City of La Porte
-. : Victims' Assistance Liason
~ __~ ~. 9/1/03
8/31/04
Page 1 of 1
Budget
REQiST FOR CITY COUNCIL AGffDA ITEM
Appropriation
Agenda Date Requested: January 13, 2003
IIequeJIed By: DOUg~Ppe~
Department: Planning
Source of Funds:
Account Number:
Amount Budgeted:
Report: _Resolution:.l.. Ordinance:_
AunountRequested:
Exhibits: Resolution with
Metes and Bounds Descriptions and Map
Budgeted Item: YES .
Summary and Recommendation
The City is 95% complete with plans to extend Canada Road from Spencer Highway to Fairmont
Parkway. According to the plans prepared by the City's engineering consultant, additional right-
of-way needs to be acquired to complete this project.
The attached Resolution authorizes Knox Askins, City Attorney to represent the City in the
acquisition of the property described in the attached metes and bounds descriptions. It further
provides that in the event the owners and the City cannot agree on fair market value of the
property, the City Attorney is authorized to initiate eminent domain proceedings to acquire the
properties. Council will be informed of any recommendation to initiate eminent domain
proceedings.
This Resolution and attached documentation will be filed for record at the Harris County
Courthouse. This information will be picked up by future land title searches and therefore will
alert potential buyers of these properties that the City intends to acquire these properties for this
project.
The tracts referenced in this Resolution are located along the southern portion of Canada Road
(the northern portion will be constructed within existing right-of-way). Tracts A and D, which
are not included .with this Resolution, are owned by Harris County Flood Control District and the
City respectively.
Action Required by Council:
Consider approval of a Resolution authorizing the acquisition of rights-of-way for the
construction of Canada Road.
Approved for City Council Ae;enda
I-t h~
Dat(