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<br />I <br /> <br />I <br /> <br />I <br /> <br />Sec. 2256.017 Existing Investments. <br />An entity is not required to liquidate investments that were authorized investment at the time <br />of purchase. <br /> <br />Sec. 2256.019 Ratings of Certain Investment Pools. <br />A public funds investment pool must be continuously rated no lower than AAA or AAA-m <br />or at an equivalent rating by at least one nationally recognized rating service or no lower than <br />investment grade by at least one nationally recognized rating service with a weighted average <br />maturity no greater than 90 days. <br /> <br />Sec. 2256.020 Authorized Investments: Institutions of Higher Education. <br />In addition to the authorized investments permitted by this subchapter, an institution of <br />higher education may purchase, sell, and invest its funds and funds under its control in the <br />following: <br /> <br />(1) cash management and fixed income funds sponsored by organizations exempt <br />from federal income taxation under Section 501(f), Internal Revenue Code of 1986 <br />(26 U.S.C. Section 501(f)); <br />(2) negotiable certificates of deposit issued by a bank that has a certificate of deposit <br />rating of at least 1 or the equivalent by a nationally recognized credit rating agency or <br />that is associated with a holding company having a commercial paper rating of at <br />least A-I, P-l, or the equivalent by a nationally recognized credit rating agency; and <br />(3) corporate bonds, debentures, or similar debt obligations rated by a nationally <br />recognized investment rating firm in one of the two highest long-term rating <br />categories, without regard to gradations within those categories. <br /> <br />Sec. 2256.0201 Authorized Investment; Municipal Utility <br />(a) A municipality that owns a municipal electric utility that is engaged in the distribution <br />and sale of electric energy or natural gas to the public may enter into a hedging contract <br />and related security and insurance agreements in relation to fuel oil, natural gas, and <br />electric energy to protect against loss due to price fluctuations. A hedging transaction <br />must comply with the regulations of the Commodity Futures Trading Commission and <br />the Securities and Exchange Commission. If there is a conflict between the municipal <br />charter of the municipality and this chapter, this chapter prevails. <br />(b) A payment by the municipally owned electric or gas utility under a hedging contract or <br />related agreement in relation to fuel supplies or fuel reserves is a fuel expense, and the <br />utility may credit any amounts it receives under the contract or agreement against fuel <br />expenses. <br />(c) The governing body of a municipally owned electric or gas utility or the body vested with <br />power to manage and operate the municipally owned electric or gas utility may set policy <br />regarding hedging transactions. <br />(d) In this section, "hedging" means the buying and selling of fuel oil, natural gas, and <br />electric energy futures or options or similar contracts on those commodity futures as a <br />protection against loss due to price fluctuations. <br /> <br />City of San Marcos Investment Policy <br /> <br />Page 31 <br />