R263RESOLUTION NO. 263
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 the current investment policy
adopted on September 13, 2007.
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 November 13, 2008, attached hereto as "Exhibit A."
PASSED, ADOPTED AND APPROVED by the City Council of the City of Kennedale,
Texas, this the 13th day of November 2008.
APPROVED:
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Mayor, Bryan Lankhorst
ATTEST:
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Kathy Turd ;r, City Secretary
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CITY OF KENNEDALE
KENNE0,4LE
INVESTMENT POLICY
ADOPTED BY CITY COUNCIL: SEPTEMBER 13, 2001
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 City
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.
SUBSEQUENT REVIEW 8 ADOPTION
SEPTEMBER 12, 2002
OCTOBER 9, 2003
SEPTEMBER 9, 2004
SEPTEMBER 13, 2005
SEPTEMBER 14, 2006
SEPTEMBER 13, 2007
NOVEMBER 13, 2008
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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 compliance with legal and administrative
guidelines, including Chapter 2256 of the Government Code ("Public Funds
Investment Act"). The investments shall be consistent with state and local laws
and shall be made in accordance with the following hierarchy of objectives:
A. Safety of principal and security of investments and City funds and
preservation of capital;
B. Maintenance of sufficient liquidity to meet operating needs;
C. Diversification of investments to avoid unreasonable risks, thus earning
public trust from prudent investment activities;
D. Maximization of interest earnings on 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:
A. "City" means the City of Kennedale, and the Kennedale Economic
Development Corporation.
B. "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.
C. "Debt Service Funds" means those funds which by ordinance or law must
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be accumulated and are restricted to the payment of debt.
D. "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.
E. "Book Value" means the face or par value of an investment plus accrued
interest or minus amortization or plus accretion.
F. "Funds" means public funds in the custody of the City that the City has the
authority to invest.
G. "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:
1) Preservation and safety of principal;
2) Liquidity; and
3) Yield.
H. "Market Value" means the face or par value of an investment multiplied
by the price quoted on the valuation date.
I. "Pooled Fund Group" means an internally created fund of the City in
which one or more institutional accounts (accounting funds) are invested.
J. "Separately Invested Asset" means an account or fund (accounting fund)
of the City that is not invested in a pooled fund group.
K. "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
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Finance will insure that staff, which is involved in the investment function,
complies with all training requirements established by the Public 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 Certified
Public Accountants (CPA). All participants in the investment process shall seek to
act responsibly as custodians of public trust.
IV. ACCEPTABLE INVESTMENT INSTRUMENTS
A. Obligations of the United States or its agencies and instrumentalities;
B. Direct obligations of the State of Texas or its agencies;
C. 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;
D. 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;
E. Commercial Paper that has a stated maturity of 270 days or fewer from
the date of issuance and is rated not less than A-1 or P-1 or an equivalent
rating by at least two nationally recognized credit rating agencies;
F. 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;
G. 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;
H. SEC-registered and regulated, no-load money market mutual funds with a
dollar-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
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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:
Execution of a Participation or Interlocal Agreement;
J. 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;
K. The investment pool maintains a AAA rating by one of the rating
agencies;
L. 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;
M. 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;
N. 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
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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.
V. UNACCEPTABLE INVESTMENT INSTRUMENTS
The following securities, although authorized by the Public Funds Investment Act,
are not eligible investments for the City of Kennedale:
A. Collateralized mortgage obligations directly issued by a federal agency;
B. Banker's acceptances;
C. Reverse repurchase agreements;
D. No-load mutual funds other than no-load money market mutual funds;
E. Guaranteed investment contracts;
F. Share certificates of qualifying credit unions.
The following securities, are not authorized by the Public Funds Investment Act:
G. Interest-only or principal-only strips of obligations with underlying
mortgage-backed security collateral;
H. Collateralized mortgage obligations with an inverse floating interest rate.
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
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Texas State Securities Commission, National Association of Security Dealers
(NASD) and Securities and Exchange Commission (SEC) and must execute
the Certification By Business Organization Form (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, 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 Type
Market risk shall be minimized by diversification of investment types. The
following limits, exclusive of funds placed in Investment Pools, by
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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 Notes/Bonds/Bills ................................................100%
4) U.S. Agencies/Instrumentalities (U.S. Agencies) ...................100%
5) Investment Pools .......................................................................100%
6) Money Market Mutual Funds ....................................80% of
Operating Funds
7) Repurchase Agreements..... Collateral Subject To Above Limits
8) Commercial Paper
........................................................................................30~
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. 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
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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/Bonds/Bills (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.
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 Notes/Bonds/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
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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 and maximum composition of the portfolio include
Certificates of Deposit (100%), U.S. Treasury Notes/Bonds/Bills (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 Notes/Bonds/Bills (1 OO~o), U.S. Agencies
(1000) Investment Pools (1000), 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.
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:
A. The agreement must be in writing;
B. The agreement has to be executed by the depository and the City
contemporaneously with the acquisition of the asset;
C. 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;
D. 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.
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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.
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)
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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 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.
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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 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
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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:
A. Full service capabilities;
B. Submission of financial statements and availability schedules;
C. Collateralization of the total City funds on deposit in the bank;
D. Statement of staff experience and equal opportunity employment
practices;
E. 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.
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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