HomeMy WebLinkAboutRES 13-103 RESOLUTION NO.13-103
BE IT RESOLVED BY THE CITY COUNCIL
OF THE CITY OF BEAUMONT:
THAT the City of Beaumont Investment Policy, substantially in the form attached hereto
as Exhibit'A" has been reviewed and is hereby in all things adopted. All changes to the
policy are reflected therein.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 14th day of May,
2013.
r ��I
- ayor Beck mes -
City of Beaumont
€IC7I LVI H OPPORTUNITY
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C
T • E • X • A • SS
Investment Policy
Adopted by
City Council
fuse 41—10+44M;l
EXHIBIT "A"
City of Beaumont-Investment Policy Field code changed
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Table of Contents
1. Introduction...........................................................................................................1
ILScope......................................................................................................................1
Ill. Prudence................................................................................................................i
IV. Objectives...............................................................................................................I
A. Safety of Principal......................................................................................2
B. Liquidity.....................................................................................................2
C. Public Trust................................................................................................2
D. Yield............................................................................................................2
V. Delegation of Authority.........................................................................................2
VI. Ethics and Conflicts of I nterest.............................................................................3
VII. Training................................................................................................................3
Vill. Selection of Financial Dealers,Institutions and Investments Pools ....................3
A. Broker/Dealers...........................................................................................4
B. Public Depositories.....................................................................................4
C. Investment Pools........................................................................................5
1X. Authorized and Suitable I nvestments...................................................................5
X. Competitive Environment.....................................................................................7
X1. Collateraiization....................................................................................................7
X11. Safekeeping and Custody......................................................................................S
XIII. Diversification........................................................................................................9
XIV. Investment Strategies ...........................................................................................9
A. Pooled Fund Groups .................................................................................10
B. Debt Service Funds ...................................................................................11
C. Debt Service Reserve Funds .....................................................................12
XV. Internal Control..................................................................................................12
XVI. Performance Standards .....................................................................................13
XVII. Reporting...........................................................................................................13
XVIII. Investment Policy Adoption...............................................................................13
Exhibits
Exhibit A-Approved List Broker/Dealers.......................................................................15
Exhibit B-Certification By Business Organization ........................................................16
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Investment Policy
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U is the policy of the City of Beaurnont to invest public funds in u manner that will
ensure that the investments are duly authorized, properly managed, adequately
protected and b^Uy ouUuwzoi|zed. Tho City mbu| "*uk the optimum investment return
with the maximum security while meeting daily cash needs and conforming to the City
Charter, the Public Funds Investment Au (Chapter 2256 Goromnommu Cod* as
amended) and all mhu, state and local ouuoum governing the iuv*ounxmt of public
funds.
IL Scope
This Investment Policy applies to all fiounuu|assets oy the City uu accounted for iothe
City's Comprehensive Annual Financial Report. These imdodu Gumeru|. Special
R*v,mmu, Debt Service, Capital Projects, Enterprise, Internal Service, and Permanent
1-undo. All are pooled for investment purposes oxvw[t debt service and debt service
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reserve funds. asoutil. Interest is allocated monthly to each fund
based oo its individual Cash bu|unoo.
118' Pmn6onxo
Investments shall be made with judgment and care,under prevailing circumstances,that
u person uY prudence, discretion,and intelligence would exercise in the management of
die person's own uff-airs, not for speculation, but for iope,tmcnt� considering the
probable safety vf capital and the probable income mb*derived. The"prudent person"
ommdmd obuU be uypUnd in the context of managing the /mo| portfolio rather than u
single investment providing that the decision was consistent with this Investment
Policy.
Investment Officers acting in accordance with written pmuu*dunoo and the Investment
Policy and exercising due diligence shall he n:|iumd o{responsibility for oo individual
| n -!.S_medlt risk or market price changes provided that deviations from
exceptions are reported in u timely fashion and appropriate action is taken to control
adverse developments.
UV. Objectives
The primary objmctiwuo, in priority order, uf the City's investment activities shall he
pw-w"fitmv-and-safety of principal,liquidity,public trust,and yield.
A. Safety of principal
The City has as its foremost objective to ensure the safety of principal.
Investments of the City shall be undertaken in a manner that seeks to ensure the
preservation of principal in the overall portfolio. To attain this objective,
diversification is required in order to eliminate an over-concentration of assets in
one institution,maturity or type of investment,ti�hcr,._,•e_e�aprriat�e.
B. Liquidity
The City's investment portfolio will remain sufficiently liquid to enable the City
to meet all operating requirements that might be reasonably anticipated. The
portfolio shall be constructed so that investment maturities are matched with
forecasted cash flow requirements and limited by investments with an active
secondary market or convertible to cash with little or no penalty.
C. Public Trust
Investment Officers shall seek to act responsibly as custodians of the public trust.
Investment Officers shall avoid any transaction that might impair public
confidence in the City's ability to govern effectively.
D. Yield
The City's investment portfolio shall be designed with the objective of attaining a
rate of return that is consistent with risk limitations and cash now characteristics
of the City's investments.
V. Delegation of Authority
Authority to manage the City's investment program is derived from the City Charter
(article VII, section 1-2). 'rho Charter designates the City Manager as Director of
Finance who shall have custody of all public funds,investments,bonds and notes of the
City and be responsible for their safekeeping. The City Manager shall establish written
procedures for the operation of the investment program consistent with this Investment
Policy that include explicit delegation of authority to persons responsible for
investment transactions. The City Manager shall be responsible for all transactions
undertaken and shall establish a system of controls to regulate the activities of
subordinate officials.
The City Manager,the Chief Financial Officer,and the City Controller are approved as
Investment Officers of the City. Such approval of specific persons shall remain in
effect until rescinded by the City Council or until termination of the person's
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employment by the City. Investment Officers shall not deposit, withdraw, transfer or
manage the funds of the City in a manner that is not consistent with the "prudent
person"standard as described in section III of this Policy.
The City Council maintains the right to hire Investment Advisers to assist City staff in
the investment of funds. Investment Advisers shall adhere to the spirit, philosophy
and specific terms of this Policy and shall invest within the same objectives. The City
Manager shall establish criteria to evaluate Investment Advisers,including:
I. Adherence to the City's policies and strategies;
2. Investment strategy recommendations within accepted risk constraints;
3. Responsiveness to the City's request for services and information;
4. Understanding of the inherent fiduciary responsibility of investing public
funds;and
5. Similarity in philosophy and strategy with the City's objectives.
Selected Investment Advisers must be registered under the Investment Advisers Act
of 1940 or with the State Securities Board. A contract with an Investment Adviser
may not be for a term longer than two years and any contract, renewal or extension
must be approved by the City Council.
VI. Ethics and Conflicts of Interest
Investment. Officers 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.
Investment Officers shall disclose any personal business relationships with business
organizations approved to conduct investment transactions with the City. They shall
also disclose any specific individuals who seek to sell investments to the City and are
related to the Investment Officer within the second degree by affinity or consanguinity,
as determined under Chapter 573. Disclosure shall be filed with the Texas Ethics
Commission and the City Council.
VII. Trainin¢
In order to ensure qualified and capable investment management, each Investment
Officer shall attend at least ten (I0) hours of training relating to investment
responsibilities within 12 months after assuming such duties and shall continue to
attend an investment training session consisting of at least ten(10)hours of instruction
not less than once every two years thereafter. The two-year period shall begin on the
first day of the City's fiscal year and consist of the two consecutive fiscal years after
that date.
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Training shall be in accordance with the Public Funds Investment Act and include
education in investment controls, security risks, strategy risks, market risks, and
compliance with State statutes governing the investment of public funds. All training
shall be conducted by an independent source that has been approved by City Council.
The approved "independent sources" to provide such training are: the Government
Treasurers Organization of Texas, the Government Finance Officers Association, the
Government finance Officers Association of Texas, the Texas Municipal. League, and
the University of North Texas.
VIII. Selection of Broker/Dealers,Financial Institutions and Investment Pools
Authorized investments shall only be purchased from those institutions selected and
approved in accordance with this Policy.
Any business organization which seeks to execute investment transactions with the City
shall provide a written instrument certifying that they have received and thoroughly
reviewed the City's Investment Policy and have implemented reasonable procedures
and controls in an effort to preclude investment transactions that are not authorized by
this Policy. The certification,as shown by example in Exhibit B, must be signed by a
qualified representative of the business organization. Investment Offcers shall not buy
any securities from a firm or make deposits with a fund, pool or financial institution
that has not filed this instrument or a similar statement that is acceptable to the City.
Each time City Council approves a material revision to the Investment Policy, the
certification should be sent to the approved business organizations along with fire
neiply revised Investment Policy.
A. Broker/Dealers
The City shall select broker/dealers by their ability to provide effective market
access and may include "Primary Government Securities Dealers" or regional
dealers that qualify under Securities and Exchange Commission (SEC) Rule
150-1 (uniform net capital rule). Broker/dealers selected must be members in
good standing of the Financial Industry Regulatory Authority("FINRA"),and be
licensed by the State of Texas. Each broker/dealer will be reviewed by tl]e
Investment Officers and a recommendation wjll be made for approval by the City
Council.
An "approved broker/dealer list",as shown in Exhibit A, shall be maintained by
the Investment Officers at all times and approved by the City Council on an
annual basis.
The City shall not enter into transactions with a broker/dealer until official City
Council approval.
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B. Public Depositories/Finaneial Institutions
The City Council shall select a primary depository as required by law. The
primary depository as authorized by the City Council shall meet all.requirements
of the state law concerning depositories for municipal funds (Chapter 105,
Government Code). The primary depository shall be selected through the City's
banking services procurement process,including a formal Request for Application
(RFA) issued in compliance with applicable State law, and offers the most
favorable terms and conditions for the handling of City funds.
The City may also establish agreements with other financial institutions under
separate contract for additional services that are necessary in the administration,
collection, investment, and transfer of municipal funds. Such deposits will only
be made after the financial institution has completed and returned the required
written instruments and depository pledge agreements. No deposit shall be made
except in a qualified public depository as established by State Law.
C. Investment Pools
Investment Officers may invest funds of the City through an eligible investment
pool with specific approval by resolution of City Council and execution of a
written agreement. To become eligible, investment pools must first meet all
requirements of State Law. They shall provide the City with an offering circular
that contains specific and detailed information, investment transaction
cmtf7rmations, and detailed monthly transaction and performance reports. Pools
shall have advisory boards composed of qualified members representing
participants and non-participants who do not have a business relationship with the
pool. Before selection, pools shall be thoroughly reviewed and evaluated by,thq
Investment Officers.
IX. Authorized and Suitable Investments
Authorized investments for municipal governments in the state of Texas are set forth in
the Public Funds Investment Act, as amended. Suitable investments for the City are
limited to the following:
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• Direct Obligations of the United States or its agencies and instrumentalities that
have a maximum stated maturity date of 5 years or less.
• Financial institution deposits placed with approved financial institutions as
described above(section VIII-B)which have a maximum stated maturity date of 5
years or less and are insured by the Federal Deposit Insurance Corporation, or
their successors; or secured as described in section XI Collateralization.
Additionally, the City may execute certificates of deposit, and other forms of
deposit,in any manner authorized by the Public Funds Investment Act.
• Fully collateralized direct repurchase agreements with a defined termination date
01'90 days or less which are secured by cash or obligations of the United States or
its agencies and instrumentalities and pledged with a third party other than an
agent for the pledgor. Investment Officers may invest in repurchase agreements
through an approved primary government securities dealer or an approved
depository bank as described above (section VIII-A, B). Each issuer of
repurchase agreements shall be required to sign a master repurchase agreement.
For flexible repurchase agreements executed with bond proceeds, the defined
termination date of 90 days or less may be waived to allow the term of the flexible
repurchase agreement to more closely match the expected term of the bond
project.
• No load money market mutual funds registered with and regulated by the
Securities and Exchange Commission whose investment objectives include the
maintenance of a stable net asset value of$1 per share. Money market mutual
funds must maintain a AAAm, or equivalent rating from at least one nationally
recognized rating agency; and provide the City with a prospectus and other
information required by the Securities and Exchange Act of 1934 and be
specifically approved by City Council or purchased through the City's primary
depository as an overnight investment tool. The City may not own more than
10%of the mumey market mutual fund's total assets.
• Approved investment pools as described above (section VIII-C) which are
continuously rated no lower than AAA,AAA-m or an equivalent rating by at least
one nationally recognized rating agency.
Investments Not Authorized -The following investments are not authorized under this
section:
a. Obligations whose payment represents the coupon payments on the outstanding
principal balance of the underlying mortgage-backed security collateral and pay no
principal;
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b. Obligations whose payment represents the principal stream of cash flow from the
underlying mortgage-backed security collateral and bears no interest;
c. Collateralized mortgage obligations that have a stated final maturity date of greater
than ten years;and
d. Collateralized mortgage obligations the interest rate of which is determined by an
index that adjusts opposite to the changes in a market index.
Not less than quarterly,the Investment Officers will monitor the credit rating for each
held investment that has a Public Fund Investment Act required minimum rating. Any
Authorized Investment that requires a minimum rating does not qualify during the
period the investment does not have the minimum rating. Prudent measures will be
taken to liquidate an investment that is downgraded to less than the required minimum
rating. The City is not required to liquidate investments that were authorized
investments at the time of purchase.
The purchase of stock is not an authorized investment for municipal governments.
However,stock may be accepted as a donation, provided that it is held in accordance
with the terms of the donation and sold as soon as it is advantageous to do so.
Reinvestment of proceeds must be in accordance with authorized and suitable
investments for the City as listed above.
X. Competitive Environment
It is the policy of the City to provide a competitive environment for all individual
security purchases and sales, financial institution deposits, and money market mutual
fund and local government investment pool selections. The Investment Officers shall
develop and maintain procedures for ensuring competition in the investment of the
City's funds.
XI. Collateralization
Collateral ization will be required on all financial institution deposits and repurchase
agreements. With the exception of deposits secured with irrevocable letters of credit at
100%of amount, the collateral izati on level shall be equal to at least one hundred two
percent (102%) of the aggregate market value of the deposit or investment including
accrued interest less an amount insured by the Federal Deposit Insurance Corporation.
Evidence of the pledged collateral shall be documented by a custodial or a master
repurchase agreement with the eligible collateral clearly listed in the agreement.
Collateral shall be reviewed..ai,..1caM_ monthly to assure that the market value of the
securities pledged equals or exceeds the related deposit or investment requirement.
Collateral requirements shall be in accordance with both the Public Funds Investment
Act and the Public Funds Collateral Act. Collateral underlying repurchase agreements
is limited to direct obligations of the United States or its agencies and instrumentalities.
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The City shall accept a surety bond or the following investment securities as collateral
on deposits and certificates of deposit:
• Direct obligations of the United States or its agencies and instrumentalities.
Direct obligations of this state or its agencies and instrumentalities.
• Collateralized mortgage obligations directly issued by a federal agency or
instrumentality of the United States and excluding those mortgage backed
securities considered a high-risk mortgage security as described by Section
2257.0025 of the Government Code.
• Other obligations that are guaranteed or backed by the full faith and credit of this
state or the United States or their respective agencies and instrumentalities.
• Obligations of states, agencies, counties, cities and other political subdivisions
rated not less than A or its equivalent.
• Letters of credit issued by the United States or its agencies and instrumentalities.
Financial institutions serving as depositories will be required to sign a depository
agreement with the City. The collateralized deposit 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:
1. The agreement must be in writing;
2. The agreement has to be executed by the Depository and the City
contemporaneously with the acquisition of the asset:
3. The agreement must be approved by the Board of Directors or designated
committee of the Depository and a copy of the meeting minutes must be
delivered to the City;and
4. The agreement must be part of the Depository's "Official Record"
continuously since its execution.
XIL Safekeeping and Custody
Collateral shall be placed f'or safekeeping in a custodial account at the Federal Reserve
Bank or at an institution not affiliated with a firm pledging collateral acceptable to the
City. All safekeeping arrangements shall clearly define the responsibilities of each
party and outline the steps to be taken in order for the City to gain access to the
collateral in the event of a "failure". The custodial agreement shall be executed
between the City, the firm pledging the collateral and the custodial institution, as
applicable. All safekeeping receipts shall be delivered to the City and all collateral
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(whether a pledge or substitution) shall be formally accepted and released by
Investment Officers.
All security transactions, including collateral for repurchase agreements, entered into
by the City shall be conducted on a delivery-versus-payment (DVP) basis. That is,
funds shall not be wired or paid until verification has been made that the correct
security was received by the safekeeping institution. Financial institution deposits,
pool funds,and mutual funds are excluded from this requirement. 'rhe investment shall
be held in the name of the City or on behalf of the City.
XIII. Diversification
The City will diversify its investments to eliminate an over-concentration of assets in
any one security type or institution.
• Up to ninety percent (90%) par of the portfolio may be invested in direct
obligations of the United States(U.S.Treasury Securities).
• Up to seventy percent(70%)par of the portfolio may be invested in U.S.Agency
or Instrumentalities.
• No more than thirty percent(30%)par of the portfolio may be invested with any
one U.S.Agency or Instrumentality.
• Up to one hundred percent (100 11/o) par of the portfolio may be invested in
investment pools for liquidity purposes with no more than eighty percent(80%)
par of the portfolio invested in any one pool.
• No more than fifty percent(50%)par of die portfolio may be invested in money
market mutual funds.
XIV. Investment Strategies
The City shall maintain a separate investment strategy for each of the t we-fund types
represented in the portfolio.
A. Pooled Fund Groups
Suitability—Any investment eligible in the Investment Policy is suitable for
Pooled Fund Groups.
Safety of Principal — All investments shall be of high quality with no
perceived default risk. Market price fluctuations will occur. However,
managing the weighted average days to maturity of each fund's portfolio to
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less than 365 days and restricting the maximum allowable maturity to two
years using the final stated maturity dates of each investment will minimize
the price volatility of the portfolio.
Marketability—Investments with active and efficient secondary markets are
necessary in the event of an unanticipated cash flow requirement. Historical
market "spreads" between the bid and offer prices of a particular security-
type of less than a quarter of a percentage point will define an efficient
secondary market.
Li idi —Pooled Fund Groups require the greatest short-term liquidity of
any of the fund-types. Short-term financial institution deposits, investment
pools and money market mutual funds will provide daily liquidity and may
be utilized as a competitive yield alternative to fixed maturity investments.
Diversification —Investment maturities should be staggered throughout the
budget cycle to provide cash flow based on the anticipated operating needs of
the City. Diversifying the appropriate maturity structure up to the two-year
maximum will reduce interest rate risk.
Yield — Attaining a competitive market yield for comparable investment-
types and portfolio restrictions is the desired objective. The yield of an
equally weighted, rolling three-month Treasury Bill portfolio will be the
minimum yield objective.
B. Debt Service Funds
Suitability—Any investment eligible in the Investment Policy is suitable for
Debt Service Funds.
Safety of Principal — All investments shall be of high quality with no
perceived default risk. Market price fluctuations will occur. However, by
managing Debt Service Funds to not exceed the debt service payment
schedule the market risk of the overall portfolio will be minimized. The
stated final maturity date on investments purchased shall not exceed the debt
service payment date unless excess funds are available. In that case,
maximum maturities shall not exceed two (2) years from the date of
purchase.
Marketability--Investments with active and efficient secondary markets are
not necessary as the event of an unanticipated cash flow requirement is not
probable.
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Liquidity -- Debt Service Funds have predictable payment schedules.
Therefore investment maturities should not exceed the anticipated cash flow
requirements. Financial institution deposits, investments pools, and money
market mutual funds may provide a competitive yield alternative for short-
term fixed maturity investments. A singular repurchase agreement may be
utilized if disbursements are allowed in the amount necessary to satisfy any
debt service payment.This investment structure is commonly referred to as a
flexible repurchase agreement.
Diversification — Market conditions influence the attractiveness of fully
extending maturity to the next "unfunded" payment date. Generally, if
investment rates are anticipated to decrease over time,the City is best served
by locking in most investments. If the interest rates are potentially rising,
then investing in shorter and larger amounts may provide advantage. At no
time shall the debt service schedule be exceeded in an attempt to bolster
yield.
Yield — Attaining a competitive market yield for comparable investment-
types and portfolio restrictions is the desired objective. The yield of an
equally weighted, rolling three-month Treasury Bill portfolio shall be the
minimum yield objective.
C. Debt Service Reserve Funds
Suitability—Any investment eligible in the Investment Policy is suitable for
Debt Service Reserve Funds. Bond resolution and loan documentation
constraints and insurance company restrictions may create specific
considerations in addition to the Investment Policy.
Safety of Principal — All investments shall be of high quality with no
perceived default risk. Market price fluctuations will occur. However, by
managing Debt Service Reserve Fund maturities to generally not exceed the
call provisions of the borrowing will reduce the investment's market risk if
the City's debt is redeemed and the Reserve Fund liquidated. No stated final
investment maturity shall exceed the shorter of the final maturity of the
borrowing or five years. Annual mark-to-market requirements or specific
maturity and average life limitations within the borrowing's documentation
will influence the attractiveness of market risk and influence maturity
extension.
Marketability — Investments with less active and efficient secondary
markets are acceptable for Debt Service Reserve Funds.
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Li uid t -Debt Service Reserve Funds have no anticipated expenditures.
The funds are deposited to provide annual debt service payment protection
to the City's debt holders. Tlie funds are"returned" to the City at the final
debt service payment. Market conditions and arbitrage regulation
compliance determine the advantage of investment diversification and
liquidity. Generally, if investment rates exceed the cost of borrowing, the
City is best served by locking in investment maturities and reducing liquidity.
If the borrowing cost cannot be exceeded,then concurrent market conditions
will determine the attractiveness of locking in maturities or investing shorter
and anticipating future increased yields.
Diversification -Market conditions and the arbitrage regulations influence
the attractiveness of staggering the maturity of fixed rate investments for
Debt Service Reserve Funds. At no time shall the final debt service payment
date of the bond issue be exceeded in an attempt to bolster yield.
Yield -Achieving a positive spread to the applicable borrowing cost is the
desired objective. Debt Service Reserve Fund portfolio management shall
operate within the limits of the Investment Policy's risk constraints.
1), Natural Gas Account
Suitability-Any investment cligible in the Investment Pulic% is snitabl4 for
the Natund Gas Account.
Sa fety_of Princinal - All invesiments shall I?c_of_14-th quality with no
ps;ci ivt,il J,fault risk. larl,ctyice tlt1cutaticrns_t+gill occur. _1-loweycr,
tnana into the +s�i�hf tl t+ t il<t�-s its nu luri W-10,s t11-kin i. d;tvs ;111<1
restrictina the 13_1 xinitim allowable,maturity_to Iwo years using th4 final
aatcd tp tprity dates of each investment+will minimize tile icc volati
Lhg-portuo io.
MarItetabiiity-Invesbricnis with active and etlivienl secon(hry markets are
necessar), in the event ol'san unantic;iyated cosh Ilow 1'etiluirenient. historical
market "s x�<t33 be.k\ een the hill and offier prices of a particular secunty:
LVII;L_ialhas tlarin N t tarter of a nercelllues� pint ++sill, define_all ellfficient.
secondary market.
l.Ji uidet� _� Natural.._Gas. Account. fittdurg1gii;cmoderate shaft—tenn
liquidity, Short_-,term fnancial_insttut , _pools,and
g_opncy_ market mutual liinds Will 17rovit1c m 1.1 .1 quidily aiid may hu_t�tifi �cl
orsaciniil1gidvevie]dalterniativeinIi�edtri�hiiit;_in e-1mcu1. .
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I)iver ificg ien Inve unont itiakurities shogid_hq,'t_t,t,ered thoughout the
xnyc 2i cd !ZNpeisdi re schrdulc. I)ivei'r_I '!n the a XAA11 arc matiirit;)-
an.lcrurc illl to Ilan two_4_�__l�•mtthilnuui�K�ill r•cclucc i�ucrast rpic risk
Yield — rltlainins a competitive market yield for comimwble invesduelit-
tyrn:s and Lrrtrolio reslric long is Cite deeirc-1 objective.. The yield of-all
ec,ustlh1 weighted. rolling three-month "I'roasut • Bill norlliblio will be the
mi im Im A(Al objective.
XV. Internal Control
The City, in conjunction with its annual financial audit, shall perform a
compliance audit of management controls on investments and adherence to the
City's Investment Policy.
XVI. Performance Standards
The City intends to pursue an active versus a passive portfolio management
philosophy. That is, investments may be sold or redeemed before they mature if
market conditions present an opportunity for the City to benefit from the trade.
The investment portfolio shall be designed with the objective of obtaining a rate
of return throughout budgetary and economic cycles that is consistent with risk
limitations and cash slow needs of the City. "Weighted average yield to maturity"
shall be the portfolio performance measurement standard.
XVII. Reporting
Investment Officers shall submit a monthly report to City Council summarizing
the results of the City's investment activity. This report shall include the status of
the current portfolio position,performance, trading activity, interest earnings,and
collateral.
A quarterly report shall be submitted to the City Manager, as Chief Executive
Officer, and the City Council detailing investment transactions and performance
for the reporting period in accordance with State law. The report shall be jointly
prepared and signed by all Investment Officers. It shall include a summary
statement prepared for each fund type and a detailed listing that states the
beginning market value, ending market value and fully accrued interest for the
period. In addition, Investment Officers shall report on adherence to the City's
investment strategies as expressed in this Policy.
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In conjunction with the annual audit, the quarterly reports shall be formally
reviewed by the City's independent auditor on an annual basis and the results of
the review shall be reported to City Council.
XVIII. Investment Policy Adoption
The City's Investment Policy is hereby adopted by resolution of the City Council.
The City Council shall review and approve the Policy on an annual basis. This
Policy serves to satisfy the statutory requirement to define and adopt a formal
investment policy.
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EXHIBITS
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Exhibit A
CITY OF BEAUMONT
Approved List
Broker/Dealers
Business/Orea nization
Broker/Dealers:
JP Morgan Chase Securities
Coastal Securities
Duncan-Williams,Inc.
Wells Fargo Brokerage
Services,LLC
Rice Financial Products Company
Rpyipoqd_J antex Financial
Mutual Securities,Inc.
Capital One Financial Corporation
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Exhibit B
City of Beaumont,Texas
Certification By Business Organization
This certification is executed on behalf of the City of Beaumont (the Investor) 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:
I. The undersigned is a Qualified Representative of the Business Organization offering to
enter an investment transaction with the Investor as such terms are used in the Public
Funds Investment Act,Chapter 2256,Texas Government Code and
2. The Qualified Representative of the Business Organization has received and reviewed the
Investment Policy furnished by the Investor and
3. 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 Investor that are not authorized by the
Investor's Investment Policy,except to the extent that this authorization is dependent on
an analysis of the makeup of the Investor's entire portfolio or requires and interpretation
of subjective investment standards.
(Firm)
Qualified Representative of the Business Organization
(Signature)
(Name)
(Title)
(Date)
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