Agenda Information Sheet
DEPARTMENT: Finance
DCM: Bryan Langley
Date: October 17, 2017
SUBJECT
Title
Receive a report, hold a discussion, and give staff direction regarding revisions to the City of Denton's Investment Policy.
Body
BACKGROUND
The City of Denton has a formal Investment Policy to guide decision making in managing and investing public funds. The City's Policy is modeled after, and in compliance with, the provisions of the Public Funds Investment Act (PFIA) of Texas, Government Code Chapter 2256. In accordance with the Code, and in order of importance, are the following prioritized objectives for managing the portfolio's fixed income investments: safety of principal, liquidity, and yield. Since it is the City's practice to hold securities until they mature, temporary market value gains and losses are unlikely to be realized. The general investment strategy, while taking into account the current interest rate environment, is to match maturities to cash flow needs.
The Audit/Finance Committee and the City Council are required by the PFIA to review and approve the Investment Policy at least annually. Aside from small revisions addressing general clarifications to the Policy and management changes within the organization, the more substantive modifications and additions are as follows:
1) Added the City Auditor as a non-voting member of the Investment Committee. (Page 5)
2) Allow for an Investment Committee member to designate a substitute participant, when necessary, in order to constitute a meeting quorum. (Page 5)
3) Authorize interest bearing savings deposits that are backed by either a network of FDIC insured banks, or pledged collateral consisting of direct U.S. government obligations including its agencies and instrumentalities, or standby letters of credit issued by those entities. (Page 9)
4) Limit investment choices of money market mutual funds to those that invest in U.S. government securities only. (Page 10)
5) Establis...
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