R195RESOLUTION NO. 195
A RESOLUTION ADOPTING AN AMENDED CITY OF KENNEDALE
INVESTMENT POLICY.
WHEREAS, the City Council of the City of Kennedale, Texas is required to review the
City's investment policy and investment strategies annually; and
WHEREAS, this review is authorized by the Public Funds Investment Act, as amended;
and
WHEREAS, the City Council has reviewed the City's investment policy and investment
strategies; and
WHEREAS, the City Council now desires not to change current investment policy
adopted on September 9, 2004.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF KENNEDALE, TEXAS:
The City Council of the City of Kennedale, Texas hereby approves the
Investment Policy dated September 13, 2005, attached hereto as "Exhibit
A."
PASSED, ADOPTED AND APPROVED by the City Council of the City of Kennedale,
Texas, this the 13th day of September 2005.
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APPROVED:
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City Secre
CITY OF KENNEDALE, TEXAS
INVESTMENT POLICY
ADOPTED, SEPTEMBER 13, 2001
REVIEWED, APPROVED AND ADOPTED, SEPTEMBER 12, 2002
REVIEWED, APPROVED AND ADOPTED, OCTOBER 9, 2003
REVIEWED, APPROVED AND ADOPTED, SEPTEMBER 9, 2004
REVIEWED, APPROVED AND ADOPTED, SEPTEMBER 13, 2005
TABLE OF CONTENTS
Prefac e ............................................................................................................................................ . ii
I. Introduction and Objectives ............................................................................................... ..1
II. Definitions .......................................................................................................................... ..1
III. Delegation and Restriction of Investment Authority ......................................................... ..2
IV. Acceptable Investment Instruments ................................................................................... ..3
V. Unacceptable Investment Instruments ............................................................................... ..5
VI. Diversification:
A. Securities Dealers, Investment Consultants and Banks ......................................... ..5
B. Investment Type ..................................................................................................... ..6
C. Investment Strategies ............................................................................................. ..7
VII. Safekeeping ........................................................................................................................ ..9
VIII. Collateralization ................................................................................................................. 10
IX. Investment Reporting ......................................................................................................... 1 l
X. Prudence and Ethical Standards ......................................................................................... 12
XI. Arbitrage ............................................................................................................................ 12
XII. Depositories ....................................................................................................................... 13
XIII. Compliance Audits ............................................................................................................. 14
XIV. Annual Review ................................................................................................................... 14
APPENDICES
A. Securities Broker/Dealer Certification
PREFACE
State and local public laws govern the investment process for City funds. Laws cannot ensure
that public officials manage public funds in a disciplined and prudent manner. The actions of
public officials responsible for investing public funds must be guided by knowledge, skills,
systems, policies, procedures and confidence that can be described only as professional
discipline.
It is the policy of the City of Kennedale, that giving due regard to safety and risk of investments,
all available funds shall be invested in conformance with these legal and administrative
guidelines. All City funds shall be invested, to the maximum extent possible, at the highest rates
obtainable at the time of the investment.
Effective cash management is recognized as essential to good fiscal management. An aggressive
cash management and investment policy will be pursued. To that end, investment interest will be
used as a viable and material revenue source for all operating and capital funds. Earnings from
investments will be used in a manner that will best serve the interest of the City of Kennedale.
The City's portfolio shall be designed and managed in a manner responsive to the public trust and
consistent with state and local law.
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I. INTRODUCTION AND OBJECTIVES
The investment policy of the City of Kennedale shall be to have all available funds
invested, to the maximum extent possible, at the highest rates obtainable at the time of
investment. This is in conformance with the legal and administrative guidelines outlined
herein. The investments shall be consistent with state and local laws and shall be made in
accordance with the following hierarchy of objectives:
1. preservation of capital, safety of principal and security of investments and City funds
2. maintenance of sufficient liquidity to meet operating needs
3. diversification of investments to avoid unreasonable or avoidable risks
4. maximization of return of the portfolio
Cash management is the process of managing monies in order to ensure maximum cash
availability and maximum yield on short-term investments of idle cash. A cash
management program and investment policy will be pursued by the Director of Finance to
take advantage of investment interest as a viable and material revenue for all operating
and capital funds. The City's portfolio shall be designed and managed in a manner
responsive to the public trust. Earnings from investments will be used in a manner that
will best serve the interests of the City of Kennedale.
The City is required by the Public Funds Investment Act to adopt a formal written
Investment Policy. This policy sets forth the investment objectives of the City.
II. DEFINITIONS:
The following definition of terms shall apply in interpreting this investment policy, and in
the implementation of this investment policy:
• "City" means the City of Kennedale, and the Kennedale Economic Development
Corporation.
• "Bond proceeds" means the proceeds from the sale of bonds, notes, and other
obligations issued by the City and reserves and funds maintained by the City for debt
service purposes
• "Debt service funds" means those funds which by ordinance or law must be
accumulated and are restricted to the payment of debt
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• "Reserve Funds" means those funds which by ordinance or law must be accumulated
and are restricted to the payment of debt in the event debt service funds are
insufficient to meet debt service obligations
• "Book value" means the face or par value of an investment plus accrued interest or
minus amortization or plus accretion
• "Funds" means public funds in the custody of the City that the City has the authority
to invest
• "Investment pool" means an entity created under Public Funds Investment Act to
invest public funds jointly on behalf of the entities that participate in the pool and
whose investment objectives in order of priority are:
• preservation and safety of principal;
• liquidity; and
• yield
• "Market value" means the face or par value of an investment multiplied by the price
quoted on the valuation date
• "Pooled fund group" means an internally created fund of the City in which one or
more institutional accounts (accounting funds) are invested
• "Separately invested asset" means an account or fund (accounting fund) of the City
that is not invested in a pooled fund group
• "investment" means an individual security or participation in an investment pool or
qualified mutual fund
III. DELEGATION AND RESTRICTION OF INVESTMENT AUTHORITY
This investment policy and the outlining of investment practices and authorities is
compiled in accordance with the Public Funds Investment Act, which requires the
adoption of rules governing investment of funds and the designation of an investment
officer.
The Director of Finance will serve as the investment officer under the direct supervision
of the City Manager. The Director may, when necessary, designate additional investment
officers. Responsibility and authority for daily investment transactions and cash
management reside with the Director of Finance. The Director of Finance is also
responsible for considering the quality and capability of staff involved in investment
management and procedures. The Director of Finance will insure that staff involved in
the investment function comply with all training requirements established by the Public
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Funds Investment Act. Acceptable sources of training include the Governmental
Treasurer's Organization of Texas, the Municipal Treasurer's Association, the
Governmental Finance Officers Association, the Governmental Finance Officers
Association of Texas, the Texas Municipal League and Texas Society of CPA's. All
participants in the investment process shall seek to act responsibly as custodians of public
trust.
IV. ACCEPTABLE INVESTMENT INSTRUMENTS
• Obligations of the United States or its agencies and instrumentalities
• Direct obligations of the State of Texas or its agencies
• Other obligations, the principal of and interest on which are unconditionally
guaranteed or insured by, or backed by the full faith and credit of, the State of Texas
or the United States or their respective agencies and instrumentalities
• 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
• Certificates of Deposit issued by state and national banks domiciled in the State of
Texas and collateralized or fully insured by FDIC or US Government securities
• Direct repurchase agreements with primary security dealers having a defined
termination date, and secured by U.S. Government or federal agency securities,
provided that the ownership of collateral for the repurchase agreement is transferred
to the City, and deposited with the City's safekeeping agent for the duration of the
contract and a signed master repurchase agreement has been executed with the
counterparty
• SEC-registered and regulated, no-load money market mutual funds with adollar-
weighted average portfolio maturity of 90 days or less whose assets comply with the
Public Fund Investment Act and whose investment objectives include seeking to
maintain a stable net asset value of $1 per share. Investment in mutual funds shall be
limited to a maximum of eighty percent (80%) of the City's operating funds.
The Public Funds Investment Act authorizes municipalities and other political
subdivisions of the State of Texas to invest their public funds jointly through investment
pools that complies with the requirements of the Public Funds Investment Act. A
decision to participate in an investment pool requires a Participation or Interlocal
Agreement to be executed with the State or Interlocal Authority for the investment pool.
Participation in these Investment Pools is approved subject to the following conditions:
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• execution of a Participation or Interlocal Agreement;
• any investment pool that is created to function as a money market mutual fund must
maintain a stable asset value as defined in the Public Funds Investment Act;
• the investment pool maintains a AAA rating by one of the rating agencies;
• any investment pool that is created to function as a money market mutual fund must
maintain a maximum average dollar weighted maturity does not exceed 90 days;
• any investment pool that does not meet the requirements of one that is created to
function as a money market mutual fund must maintain a maximum average dollar
weighted maturity that does not exceed 365 days, or 366 days in the case of a leap
year, and must provide a fixed interest rate and fixed maturity term for each pool
position;
• and the investment pool continues compliance with the remaining provisions of the
Public Funds Investment Act.
The Investment Officers will, in general, maintain a passive investment portfolio in which
securities will be purchased with the intent to own the securities until maturity. Safety of
principal with due consideration of liquidity is the foremost objective of this investment
policy. Each investment transaction shall seek to avoid capital losses from security
defaults or erosion of market value.
The City will practice competitive bidding orally, by telephone, electronically, by rate
comparisons from financial publications, or in any combination of these methods when
purchasing an investment to help strengthen the investment process. All investments,
other than the placement of funds in Investment Pools, will, when possible, be
competitively bid and placed with vendors guaranteeing the highest rate of return. The
City reserves the right to reject the most financially favorable bid if it is potentially
disruptive to its investment strategy.
When appropriate, actual risk of default shall be minimized by adequate collateralization.
Market risk shall be minimized by diversification. Diversification shall be directed
towards investment instruments, varying maturities, and multiple investment pools and
securities dealers.
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V. UNACCEPTABLE INVESTMENT INSTRUMENTS
The following securities, although authorized by the Public Funds Investment Act, are not
eligible investments for the City of Kennedale:
• Collateralized mortgage obligations
• Commercial paper
• Banker's acceptances
• Reverse repurchase agreements
• No-load mutual funds other than no-load money market mutual funds
• Guaranteed investment contracts
• Share certificates of qualifying credit unions
VI. DIVERSIFICATION
A. Securities Dealers. Investment Consultants and Banks
Competitive bidding of all investments among securities dealers will assure that
the City receives the highest yield on its investments. The City shall seek to
conduct its investment transactions with several competing, reputable investment
securities dealers and brokers to protect principal while achieving full advantage
of the market.
It is the policy of the City to purchase securities only from those institutions on
the City's approved list of broker\dealers, investment consultants, and banks. All
securities dealers must be registered with and certified by the Texas State
Securities Commission, National Association of Security Dealers (NASD) and
Securities and Exchange Commission (SEC) and must execute the Securities
Broker/Dealer Certification (Appendix A).
The Director of Finance will submit financial institutions, broker/dealers and
consultants to the City Council for approval. Prior to submission, the Director of
Finance shall evaluate the soundness of financial institutions, broker/dealers and
consultants to the extent he/she considers necessary. Investigation may include
review of rating agency reports, review of call reports, and analysis of
management, profitability, capitalization, and asset quality. Financial institutions,
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broker/dealers, and consultants with whom the City wishes to conduct business
shall provide the financial data requested by the City.
The Director of Finance shall review the information and decide on the soundness
of a financial institution, broker/dealer, or consultant before submitting the
institution to the City Council for approval.
An institution must be approved by the City Council and added to the approved
list before any business may be transacted with the City. The Director of Finance
will submit the list for approval at least once per year. Additional institutions may
be submitted as needed. The City Council shall also be able to limit the number of
authorized securities dealers banks/consultants doing business with the City as
required.
All banks will be Federal Reserve member banks approved by the City Council.
No investments will be placed with savings and loan institutions.
Repurchase Agreements will be done only with primary dealers.
The master repurchase agreement of the Bond Market Association (BMA) shall be
executed between the City and any primary dealer with which the City transacts
repurchase agreements.
Regardless of reporting status, all securities purchased shall require same day
delivery (on settlement date) to the City's safekeeping agent on a delivery versus
payment (DVP) basis. By doing so, City funds are not released until the City has
received, through the Federal Reserve wire, the securities purchased.
B. Investment Tune
Market risk shall be minimized by diversification of investment types. The
following limits, exclusive of funds placed in Investment Pools, by instrument, are
established for the City's total portfolio and will be implemented after adoption of
this investment policy.
(1) Repurchase Agreements ......................................................................... 50%
(2) Certificates of Deposit ......................................................................... 100%
(3) U.S. Treasury NotesBondsBills .........................................................100%
(4) U.S. Agencies/Instrumentalities (U.S. Agencies) ................................ 100%
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(5) Investment Pools .................................................................................. 100%
(6) Money Market Mutual Funds ................................ 80% of Operating Funds
(7) Repurchase Agreements ............................Collateral subject to above limits
No more than 50% of the City's total investment portfolio will be invested in any
one specific investment pool.
To allow efficient and effective placement of proceeds from bond sales, the limit
on repurchase agreements may be exceeded for a maximum of five days following
the receipt of bond proceeds.
C. Investment Strategies
The City of Kennedale maintains the following portfolios which will utilize the
specific investment strategy considerations designed to address the unique
characteristics of the pooled fund groups or separately held investment assets
represented in the portfolios:
(1) Debt Service Funds
The City will maintain one separate debt service fund: Funds in the Debt
Service Fund. Additional debt service funds will be established as required
by ordinance or law. These funds will be operated as separately invested
assets, with the exception that, for administrative purposes, funds may be
commingled with the Consolidated Cash Fund (described below) on a
temporary basis. Investment strategies for debt service funds shall have as
the primary objective the assurance of investment liquidity adequate to
cover the debt service obligation on the required payment date. Eligible
securities and maximum composition of the portfolio include Certificates
of Deposit (100%), U.S. Treasury Notes/BondsBills (100%), U.S.
Agencies (100%), Investment Pools (100%), and Repurchase Agreements
(limited to above percentages on transferred collateral). Securities
purchased shall not have a stated final maturity date that exceeds the
corresponding debt service payment date.
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(2) Reserve Funds
The City has no reserve funds at this time. Reserve funds will be
established as required by ordinance or law. Investment strategies for debt
service reserve funds shall have as the primary objective the assurance of
investment liquidity adequate to cover the debt service obligations not
funded by debt service funds on the required payment date. Investment of
reserve funds are controlled by their ordinance, resolution or indenture,
and Federal and State law. Bond documents must be examined for each
issue, for potential differences with this policy concerning investment
instruments, maximum maturity or average life restrictions, call dates or
sinking fund redemptions, and applicable arbitrage yields and rebate
liability. Provisions contained in the bond documents will supersede
provisions of this policy.
Reserve funds will be invested using a more conservative approach than
the current standard investment strategy when arbitrage rebate rules
require refunding excess earnings. All excess earnings received will be
segregated to allow a proper determination of interest income to be used in
the arbitrage calculation.
Maturity limitations for single issue reserve funds shall not exceed the call
provisions of the Bond Ordinance and shall not exceed the final maturity
of that bond issue. Eligible securities and maximum composition of the
portfolio include Certificates of Deposit (100%), U.S. Treasury
NotesBonds/Bills (100%), U.S. Agencies (100%), Investment Pools
(100%), and Repurchase Agreements (limited to above percentages on
transferred collateral). The maximum stated final maturity for investments
shall be ten years.
(3) Special Project or Special Purpose Funds
Special project or special purpose funds may be maintained as separately
invested assets or, unless prohibited by controlling ordinances, be
commingled in the Consolidated Cash Fund (described below). Should
controlling ordinances require segregation of the Fund's assets for
investment purposes, the Fund's assets, for administrative purposes, may
be commingled with the Consolidated Cash Fund (described below) on a
temporary basis. Investment strategies for special projects or special
purpose fund portfolios will have as their primary objective to assure that
anticipated cash flows are matched with adequate investment liquidity.
Eligible securities for portfolios maintained as separately invested assets
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and maximum composition of the portfolio include Certificates of Deposit
(100%), U.S. Treasury NotesBondsBills (100%), U.S. Agencies (100%),
Investment Pools (100%), Money Market Mutual Funds (80%-subject to
Public Fund Investment Act limitations), and Repurchase Agreements
(limited to above percentages on transferred collateral). The stated final
maturity dates of securities held should not exceed the estimated project
completion date. Funds in excess of defined construction payments
schedules shall be limited to a weighted average days to maturity of three
years and a maximum final maturity date of five years.
(4) Consolidated Cash Fund
The Consolidated Cash Fund shall operate as a pooled fund group and
consists of all City funds not designated as another Fund. The investment
strategies for the Consolidated Cash Fund have as their primary objective
to assure that anticipated cash flows are matched with adequate investment
liquidity. The secondary objective is to create a portfolio structure that
will experience minimal volatility during economic cycles. This may be
accomplished by purchasing securities that will complement each other in
a laddered or barbell maturity structure. Eligible securities and maximum
composition of the portfolio include Certificates of Deposit (100%), U.S.
Treasury NotesBondsBills (100%), U.S. Agencies (100%) Investment
Pools (100%), Money Market Mutual Funds (80%-subject to Public Fund
Investment Act limitations) and Repurchase Agreements (limited to above
percentages on transferred collateral). The dollar weighted average
maturity of the 365 days or less will be calculated using the stated final
maturity dates of each security. The maximum maturity date using the
stated final maturity date for an individual security is three years.
VII. SAFEKEEPING
The laws of the State of Texas and prudent financial management require that all
purchased securities shall be held in safekeeping by either a City account in a third party
financial institution, or the City's safekeeping account in its designated depository bank,
or in a Federal Reserve Bank. The safekeeping requirement does not apply to Certificates
of Deposit that are FDIC insured.
Transfers of securities in safekeeping shall be processed with written confirmations. The
confirmations will be used for documentation and retention purposes. The Director of
Finance must approve release of collateral prior to its removal from the safekeeping
account.
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VIII. COLLATERALIZATION
Consistent with the requirements of State law, the City requires all bank deposits to be
federally insured or collateralized with securities approved for investment under Section
IV of this policy. Financial institutions serving as City depositories will be required to
sign a depository agreement with the City and the City's safekeeping agent or the Federal
Reserve Bank. The safekeeping portion of the agreement shall define the City's rights to
the collateral in case of default, bankruptcy, or closing and shall establish a perfected
security interest in compliance with Federal and State regulations, including:
• the agreement must be in writing;
• the agreement has to be executed by the depository and the City
contemporaneously with the acquisition of the asset;
• the agreement must be approved by the board of directors or the loan committee
of the depository and a copy of the meeting minutes must be delivered to the City,
specifically to the Director of Finance; and
• the agreement must be part of the depository's "official record" continuously since
its execution.
The City considers repurchase agreements as simultaneous sales and purchases of
securities rather than collateralized loans. However, securities underlying repurchase
agreements are referred to as "collateral" for the purpose of this policy.
Bank demand deposits and certificates of deposit plus accrued interest up to $100,000 per
bank do not need to be collateralized pursuant to this policy as long as FDIC insurance is
provided.
The Public Funds Investment Act provides that the City may invest in certificates of
deposit that are fully guaranteed by the FDIC.
Acceptable forms of collateral are limited to investments authorized in Section IV of this
policy.
Collateral is valued at current market value plus interest accrued through the date of the
valuation. Bank demand deposits, certificates of deposit (including accrued interest) and
repurchase agreements (par value plus accrued interest) shall be secured by pledged
collateral with a market value equal to or not less than 102% of deposits. Evidence of the
pledged collateral shall be maintained by the Director of Finance and held by an
independent third party financial institution.
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Collateralized investments often require substitution of collateral. Any broker or
financial institution requesting substitution of collateral must contact the Director of
Finance or, in his/her absence, the City Manager for approval and settlement. The
substituted collateral's value will be calculated and the substitution approved if its value is
equal to or greater than the original collateralization level.
The Director of Finance or the City Manager must give immediate notification of the
decision to the bank or third party holding the collateral. Substitution is allowed for all
transactions, but should be limited, if possible, to minimize potential administrative
problems and transfer expense. The Director of Finance may limit substitution and assess
appropriate fees if substitution becomes excessive or abusive.
Collateral shall be audited at least annually by the City's independent audit firm, and may
be audited by the City at any time during normal business hours of the safekeeping party.
The financial institutions with which the City invests and/or maintains other deposits
shall provide, as requested by the City, a listing of the City's certificates of deposit and
other deposits at the institution and a listing of collateral pledged to the City marked to
current market prices. The listing shall include total pledged securities with the
following:
Name
Type/Description
Par Value
Current Market Value
Maturity Date
Moody's or Standard & Poor's Rating (both if available)
Under state law, Chapter 105 of the Local Government Code, substitution and release of
collateral must be approved by the governing body. The City Council hereby delegates
this responsibility and authority to release and substitute collateral as deemed necessary
and reasonable within the guidelines of this policy to the Director of Finance.
IX. INVESTMENT REPORTING
Each quarter, the Director of Finance and investment officers designated by the Director
of Finance shall prepare and submit to the City Council a written report of all investment
transactions. The report will include the following information: 1) a detailed description
of the investment position of the City at the end of the quarter; 2) a summary statement
of each pooled fund group that states a) beginning market value for the quarter, additions
and changes to the market value during the period, and ending market value for the
period; 3) state the book value and market value of each separately invested asset at the
beginning and end of the quarter by the type of asset and fund type invested; 4) state the
maturity date of each separately invested asset that has a maturity date; 5) state the fund
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or pooled group fund for which each individual asset was acquired; 6) state fully accrued
interest for the reporting quarter; and 7) demonstrate compliance with the investment
strategy established in this policy and by the Public Funds Investment Act. Authorized
sources of market values included in the report include the Wall Street Journal, and First
Southwest Company. This report must be prepared jointly and signed by all investment
officers of the City and the City Manager.
X. PRUDENCE AND ETHICAL STANDARDS
The standard of prudence used by the City of Kennedale shall be the "prudent person
rule" and shall be applied in the context of managing the overall portfolio. The prudent
person rule is restated as follows:
Investments shall be made with judgment and care, under prevailing circumstances, that a
person of prudence, discretion, and intelligence would exercise in the management of the
person's own affairs, not for speculation, but for investment, considering the probable
safety of capital and the probable income to be derived. In determining whether an
investment officer has exercised prudence with respect to an investment decision, the
determination shall be made taking into consideration: 1) the investment of all funds, or
funds under the entity's control, over which the officer had responsibility rather than a
consideration as to the prudence of a single investment; and 2) whether the investment
decision is consistent with this investment policy.
Investment Officers shall notify the City Council of any conflicts of interest, as defined in
the Public Funds Investment Act, no later than the next regularly scheduled City Council
meeting.
It is the City's policy that the Investment Officers perform their duties in accordance with
the policies and procedures set forth in this manual. Investment Officers acting in good
faith and in accordance with these policies and procedures shall be relieved of personal
liability.
XI. ARBITRAGE
The Tax Reform Act of 1986 places limitations on the City's yield from investing certain
tax-exempt general obligation and revenue bond proceeds, debt service funds and reserve
funds. These new arbitrage rebate provisions require that the City compute earnings on
investments from certain issues of bonds on a periodic basis to determine if a rebate is
required.
To determine the City's arbitrage position, the City is required to calculate the actual yield
earned on the investment of the funds and compare it to the yield that would have been
earned if the funds had been invested at a rate equal to the yield on the applicable bonds
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sold by the City. The rebate provisions state that periodically (not less than once every
five years, and not later than sixty days after maturity of the bonds), the City is required to
pay the U.S. Treasury a rebate of any excess earnings. These restrictions require extreme
precision in the monitoring and recordkeeping of investments, particularly in computing
yields to ensure compliance. Failure to comply can dictate that the bonds become
taxable, retroactively from the date of issuance.
The City's investment position relative to the new arbitrage restrictions is to continue
pursuing the maximum yield on applicable investments while ensuring the safety of
capital and liquidity. It is a fiscally sound position to continue maximization of yield and
to rebate excess earnings, if necessary.
XII. DEPOSITORIES
Chapter 105 of the Local Government Code prescribes procedures for selection of a city
depository designating that both general-law and home-rule cities are "authorized to
receive applications (as depository) for the custody of city funds from any banking
corporation, association, or individual banker doing business within the city." This clause
indicates that cities are not required to designate one central depository.
The City of Kennedale will, through a request for applications process, designate one or
more banks as its primary depository. This centralization is designed to maximize
investment capabilities and minimize banking cost. The depository designation does not
limit investment activity to one financial institution.
The evaluation criteria the City of Kennedale will use to consummate a banking services
contract will include:
• Full service capabilities
• Submission of financial statements and availability schedules
• Collateralization of the total City funds on deposit in the bank
• Statement of staff experience and equal opportunity employment practices
• Cost of banking services
Obtaining competitive applications on the City's depository specifications will be the
responsibility of the Director of Finance. Selection of the depository shall be based on
the institution's offering the most favorable terms and conditions for the handling of City
funds (Chapter 105 of the Local Government Code) and the services available to the City.
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State law permits a contract period of five years or less. The City's contract shall not
exceed this five (5) year contract period. Annual performance reviews of the contract will
be conducted by the Director of Finance. Special banking needs may be contracted for by
the City outside this policy if approved by the Director of Finance. If a depository does
not meet the City's requirements in the banking services contract, the bank will be
required to meet the requirements within six months or lose the depository contract.
XIII. COMPLIANCE AUDITS
The City, in conjunction with its annual financial audit, will require the audit firm to
conduct a compliance audit of the management controls on investments and adherence to
investment policies.
XIV. ANNUAL REVIEW
The Director of Finance shall, at a minimum, submit proposed amendments of this policy
to the City Council annually.
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APPENDIX A
CITY OF KENNEDALE, TEXAS
TEXAS PUBLIC FUNDS INVESTMENT ACT
CERTIFICATION BY BUSINESS ORGANIZATION
This certification is executed on behalf of the City of Kennedale, Texas and
(the Business Organization) pursuant to the Public Funds
Investment Act, Chapter 2256, Texas Government Code, (the Act) in connection with investment
transactions conducted between the Investor and the Business Organization.
The undersigned Qualified Representative of the Business Organization hereby certifies on
behalf of the Business Organization that:
The undersigned is a Qualified Representative of the Business Organization offering to enter an
investment transaction with the City of Kennedale, Texas (as defined in the Act) and
The Qualified Representative of the Business Organization has received and reviewed the
Investment Policy furnished by the City of Kennedale, Texas and
The Qualified Representative of the Business Organization has implemented reasonable
procedures and controls in an effort to preclude investment transactions conducted between the
Business Organization and the City of Kennedale, Texas that are not authorized by the
investment policy of the City of Kennedale, Texas, except to the extent that this authorization is
dependent on an analysis of the makeup of the City of Kennedale, Texas entire portfolio or
requires an interpretation of subjective investment standards.
Qualified Representative of the Business Organization
Name
Title
Date
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