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<br /> Use of Bond Proceeds, Grants, etc. . . The City's policy is to use bond proceeds, grants, revenue sharing or other non-recurring
<br /> revenues for capital expenditures only. Such revenues are never to be used to fund City operations.
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<br /> Budgetary Procedures. . . The City Charter establishes the fiscal year as the twelve-montb. period begÎm1Îng each October 1.
<br /> Each year between May and July, the City Manager, analyzes and then afte:r review, submits a budget of ~;m"t...-i revenues
<br /> and expenditures to the City Council. Subsequently, the City Council will hold work sessions to discuss and amend the budget
<br /> to coincide with their diredion of the City. Various public bearings may be held to COOlply with state and local sta.tutes. The
<br /> City Council will adopt a budget prior to September 15. If the Council fails to adopt a budget then the budget presented to the
<br /> Council by the City Manager becomes the adopted budget
<br /> During the fiscal year, budgetary control is maintained by the monthly review of departmental appropriation hsoJ"nc..es. Actual
<br /> operations are compared to the amounts set forth in the budget Departmental appropriations that have not been expended lapse
<br /> at the end of the fiscal year. Therefore, funds that were budgeted and not used by the departments during the fiscal year are not
<br /> : available for their use unless appropriated in the ensuing fiscal year's budget
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<br /> \ INVESTMENTS
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<br /> The City invests its funds in investments authorized by Texas law in accordance with investment policies approved by the City
<br /> Council of the City. Both state law and the City's investment policies are subject to change.
<br /> Legal Investments. . . Under current Texas law, the City is authorized to invest in (1) obligations of the United States or its
<br /> instrumentalities, (2) direct obligations of the State of Texas or its agencies, (3) collateralized mortgage obligations directly
<br /> issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency
<br /> or instrumentality of the United States, (4) other obligations, the principal of and interest on which are unconditionally
<br /> guaranteed or insured by the State of Texas or the United States or its ins1rumentalities, (5) obligations of states, agencies,
<br /> counties, cities, and other political subdivisions of any state that are rated A or higher by a nationally recognized investment
<br /> rating agency, (6) œrtificates of deposit that are guaranteed or insured by the Federal Deposit Insurance Corporation or are
<br /> secured as to principal by obligations described in the preceding clauses or in any other manner and amount provided by law
<br /> for City deposits, (7) fully collateralized repurchase agreements that have a defined termination date, are fully secured by
<br /> obligations described in clause (I), and are placed through primary government securities dealer or a bank: domiciled in the
<br /> State of Texas, (8) Ii bankers' acceptances with the r=a;n;ng term of 270 days or less, if ~ short-term obligations of the
<br /> aœepting bank or its parent are rated at least A-lor P.I or the equivalent by at least one nationally recognized credit rating
<br /> agency, (9) commercial paper that is rated at least A-lor P-l or the equivalent by either (a) two nationally recognized credit
<br /> rating agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of
<br /> credit issued by a U.S. or state bank:, (10) no-load money market mutual funds registered with the Securities and Excb.a.nge
<br /> Commission that have a dollar weighted average portfolio maturity of 90 days or less and include in their investment objectives
<br /> the maintenance of a stable net asset value of S 1 for each share, (11) bonds issued, assumed, or guaranteed by the State of
<br /> Israel, and (12) any other investments authorized by the Public Funds Investment Act as amended., Chapter 2256, Texas
<br /> Government Code. The City may invest in such obligations directly or through government investment pools that invest solely
<br /> in such obligations. It is further, provided, however, that any interest earnings on Bond proceeds which are required to be rebated to
<br /> the United States of America in order to prevent the Bonds ftom being arbitrage bonds shall be so rebated and not cooside:red as interest
<br /> earnmgs.
<br /> Investment Policies. . . Under Texas law, the City is required to invest its funds under written investment policies that
<br /> °, primarily empba.size safety of principal and liquidity and that address investment diversification., yield, maturity, and the
<br /> quality and capability of investment management, and all City funds must be invested in investments that protect principal, are
<br /> consistent with the operating requirements of the City, and yield the highest possible rate of return. Under Texas law, City
<br /> investments must be made "with judgment and care, under prevailing circumsttln=, that a person of prudence, discretion., and
<br /> intelligence would e:œrcise in the management of the person's own affairs, not for speculation., but for investment, considering
<br /> the probable safety of capital and the probable income to be derived." No person may invest City funds without express written
<br /> authority fÌOm the City Council or chief executive officer of the City.
<br /> The City's primary investment objective is to preserve principal. The City utilized cash flow needs to diversifY portfolio
<br /> maturities and maiñtain sufficient liquidity. Risk: of loss is managed by restricting maturity length to two or three years
<br /> depending upon the type of funds invested. The Director of Finance has been delegated responsibility for the management of
<br /> the City's funds.
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