Res 2017-092/adopting revised Investment Policies for Operating Funds and Reserve Funds

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absence of such instructions will engage broker/dealers which the Advisor/Manager reasonably believes to be reputable, qualified and financially sound. These broker/dealers may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission Rule 15C3-1 (uniform net capital rule). Authorized dealers and institutions shall provide proof of Financial Institutions Regulatory Authority(FINRA)certification, an annual audited financial statement, and a completed broker/dealer questionnaire. Additional financial institutions may be used for time or demand deposits designed for investment purposes (i.e. not as the primary depository of the City). These institutions may be approved by the Investment Officer(s) on an ongoing basis to accommodate the need for timely action. Action by the Investment Committee is not required before use of such institutions. Each financial institution will provide policy certification and execute a depository agreement. The City may utilize third-party rating agencies in order to assess the overall financial strength of potential depositories. The depository, or its brokerage subsidiary, from which the City obtains banking services including safe- keeping, will not be used for brokerage services in order to perfect ownership on delivery versus payment settlement. The bank may be used for time deposits but all time deposits will be bid competitively. X. AUTHORIZED AND SUITABLE INVESTMENTS Authorized investments shall be limited to the instruments listed below as authorized and further described by the Act. 1. Obligations of the United States, its agencies and instrumentalities, not to exceed two years to the stated final maturity, excluding mortgage-backed securities. 2. Direct obligations of the State of Texas or its agencies and instrumentalities, not to exceed two years to the stated final maturity 3. Other obligations, the principal of and interest of which are unconditionally guaranteed or insured by the full faith and credit of, the State of Texas or the United States or their respective agencies and instrumentalities, not to exceed two years to the stated final maturity; 4. 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, not to exceed two years to the stated final maturity; 5. Fully insured or collateralized certificates of deposit or share certificates, issued by state and national banks or credit unions, not to exceed two years to the stated final maturity that are: a. Guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Association, or other federal agency, or successors; or b. Collateralized to 102% in accordance with this Policy (Section XI). 6. Fully collateralized direct repurchase agreements having a defined termination date, collateralized in accordance with this Policy, safe-kept with an independent third party approved by the City, with an executed master repurchase agreement, and placed through a primary government securities dealer, as defined by the Federal Reserve,or a bank doing business in Texas, not to exceed 90 days to the stated maturity; Flexible repurchase agreements (flex repos) are authorized for investment of bond proceeds, if collateralized in accordance with this Policy, safe-kept with an independent third party approved by the City, with an executed master repurchase agreement, and placed through a primary government securities dealer, as defined by the Federal Reserve. The term of the flex City of San Marcos Investment Policy Page 4