07 - City Investment Policy 2023

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3.1 The standard of prudence to be used by investment officials 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 and 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. The governing body of the investing entity retains the ultimate responsibility as fiduciaries of the assets of the entity. 4.0 OBJECTIVE The primary objectives, in priority order, of the City's investment activities shall be: 4.1 SAFETY: Safety of principal is the foremost objective of the investment program. Investments of the City shall be undertaken in a manner that seeks to insure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. 4.2 LIQUIDITY: The City's investment portfolio will remain sufficiently liquid to enable the City of meet all operating requirements which might be reasonably anticipated. 4.3 RETURN ON INVESTMENTS: The City's investment portfolio will be designed with the objective of attaining a rate of return throughout budgetary and economic cycles, commensurate with the City's investment risk constraints and .the cash flow characteristics of the portfolio. 5.0 DELEGATION OF AUTHORITY AND TRAINING Authority to manage the City's investment program is derived from the City's charter and reconfirmed by adoption of this policy by the City Council. Management responsibility for the investment program is hereby delegated to the Director of Finance who shall be responsible for all transactions undertaken. The Finance Director may utilize appropriate staff personnel to assist in this area when necessary. Procedures and controls to regulate the details of the investment program may be developed by the Finance Director as needed. The investment officer shall attend at least one training session relating to the officer's responsibility under the Act within 12 months of assuming duties and complete at least 10 hours :of training every two years thereafter. Such training shall be provided by any independent source outside the City such as the Texas Municipal League or the Government Finance Officers Association. 6.0 CONFLICTS 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. Employees and investment officials shall disclose to the City Manager any material financial interests in financial institutions that conduct business within this Jurisdiction, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the City, particularly with regard to the time of purchases and sales. The investment officer must file a disclosure statement with the Texas Ethics Commission and the governing body if the officer has a personal business relationship (as defined in 2256.005 (i) (1-3) with a business organization offering to engage in an investment transaction with the City. A disclosure statement must also be filed by the investment officer if the investment officer is related within the second degree by affinity or consanguinity as determined under Chapter 573 of the Texas Government Code, to an individual seeking to transact investment business with the entity.