RES 1169 02/10/1998 RESOLUTION #1169
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CIBOLO OUTLINING ITS
POLICY FOR THE INVESTMENT OF PUBLIC FUNDS,AND REVOKING ALL PRIOR
AND CONFLICTING RESOLUTIONS AND/OR POLICIES.
WHEREAS,a municipal governing body must adopt a written policy for the investment of
public funds in accordance with Chapter 2256 of the Texas Government Code,as amended,and
WHEREAS,the policy for public funds investment must include a written investment strategy,
THEN BE IT RESOLVED BY THE CITY COUNCIL OF CIBOLO TEXAS:
1. It is the policy of the City of Cibolo,Texas,to maintain a fund balance equal to six months
expenditures in the General Fund. All available public funds shall be invested in securities
that provide for the protection of the principal,provide liquidity as needed, and provide
reasonable yield to the City.
2. All investments will be in compliance with applicable State and Federal law. Investment
funds in excess of Federal Deposit Insurance Corporation coverage and/or invested in other
than Certificates of Indebtedness of the federal government will be protected by bonding
and/or pledged securities in accordance with applicable State statues.
3. The City Administrator/City Secretary,and City Treasurer are designated as the officers
responsible for the investment of City funds(Investment Officers),and are authorized to give
written and oral instructions to the depository bank and to place orders for the purchase of
securities. No other person may deposit,withdraw,invest,transfer, or otherwise manage
City funds eligible for investment without the express written authority of the Mayor or the
City Administrator/City Secretary.
4. Investments should be made with judgment and care,under the prevailing circumstances,
which persons of prudence, discretion,and intelligence exercise in the management of their
own affairs,not for speculation,but for investment,considering the probable safety of their
capital as well as the probable interest to be derived. The standard of prudence to be used by
Investment Officers shall be the"prudent person" standard and shall be applied in the
context of managing an overall portfolio. Investment Officers acting in accordance with
written procedures of the investment policy and exercising due diligence shall be relieved of
personal responsibility for an individual security's credit risk or market price changes,
provided deviations from expectations are reported in a timely fashion and appropriate action
is taken to control adverse developments.
5. The Investment Officer is authorized to invest eligible funds in Certificates of Deposit of
federally insured agencies,certificates and strips from the Federal Reserve,United States
Treasury Bonds,Notes,and bills,and in authorized Investment Pools(as defined in Section
2256.016-19,Texas Government Code)as long as funds may be withdrawn within 72 hours
without penalty. No more than ninety percent(90%)of invested funds shall be in pool
investments.At least five percent(5%)of the Total General Fund Expenditures in the
adopted annual budget shall be kept on deposit in a financial institution in a ready asset
(checking, saving, other demand deposit)account at all times to prevent cash shortages.
6. The investment strategy for City operating funds is to invest in a manner which will first
emphasize preservation of principal and liquidity,then diversification, and finally generation
of income,and assure that investment maturities match anticipated cash flows. Investments
with operating funds shall have maturities that do not exceed two years.
7. The investment strategy for City debt service reserve funds is to invest in a manner in
compliance with bond orders which will generate revenue income for the debt service fund.
Investments with debt service reserve funds will not have a maturity date that exceeds five
years and will not exceed the final debt service payment date.
8. The City shall retain and consult with a bond advisor before taking any action that could
require the City to issue debt.
9. The City may not set a property tax rate for debt service above$1.50 per$100 valuation.
The City shall not set the debt service portion of the property tax at a rate higher than
required for debt service.
10. When the current return rate on secured investments is less than the rate being paid as an
interest expense item for debt service,the City Administrator/Secretary shall determine if the
debt is callable, and instruct the calling of the bonds if sufficient funds are available to repay
the debt.
11. The City Treasurer will prepare and submit to the City Council a quarterly report on the
investment of City funds.
12. The Investment Officers shall receive formal investment training as defined in Section
2256.008 Texas Government Code
13. A report of all city investments will be included in the annual financial report/audit prepared
by the auditor as of 30 September of each year.
Passed and adopted this the 10th day of February, 1998.
Hon. Sam Bauder,Mayor
ATTEST:
Thomas A. Newman,City Secretary
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