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<br /> If'§. <br /> - <br /> a. Guaranteed or insured by the Federal Deposit Insurance <br /> corporation, or its successor; or <br /> b. Secured by obligations that are described by Subdivision <br /> (1) - (4) of this subsection, which are intended to include <br /> all direct agency or instrumentality issued mortgage backed <br /> securities rated AAA by a nationally recognized rating <br /> agency, or by Chapter 726, Acts of the 67th Legislature, <br /> Regular Session, 1981 (Article 2529b-l, Vernon's'Texas Civil <br /> Statutes), and that have a market value of not less that the <br /> principal amount of the certifications; and <br /> 6. Fully collateralized direct repurchase agreements having a deFined <br /> termination date, secured by obligations described by Subdivision <br /> (1) of this subsection, pledged with a third party selected or <br /> approved by the City of San Marcos, and placed through a primary <br /> government securities dealer, as defined by the Federal Reserve, <br /> or a bank domiciled in this state. <br /> 7. Investment Pools as provided for in section 2256.117 through <br /> 2256.019 and 2256.021 of the Public Funds Investment þ..ct of 1993. <br /> B. Criteria for Selection of Financial Intermediaries: <br /> Although the City's policies for the purchase of investment securities <br /> are designed to ensure complete safety, accompanied by appropriate <br /> liquidity and competitive yields, the "providers" etf such securities <br /> must also meet specific financial and operational standards. <br /> The City has no desire to "test" the FDIC insurance program, nor does it <br /> wish to have to establish its legal right to securities held by <br /> financially-insolvent brokers or securities dealers. <br /> There are a sufficiently large number of financial standing. As a <br /> result, the City does not choose to do business with "marginal" or <br /> financially-week institutions. <br /> Therefore financial intermediaries shall be subject to the following <br /> types of selection criteria: <br /> 1. Commercial Banks: <br /> Deposits of City monies in commercial banks may only be made with <br /> institutions which possess the overall financial strength, <br /> capitalization, and liquidity to reasonably ensure the safety and <br /> availability of such monies. To assess the over all' financial <br /> strength of potential depositories, the City will utilize third- <br /> party rating agencies to perform periodic reviews of various <br /> commercial banks, relying upon their reports to determine the <br /> appropriateness of the depository. Currently, the City uses the <br /> services of Prudent Man Analysis, Inc. (PMA) to rate the strength <br /> of the co~~ercial banks with which the City does business. In as much <br /> as PMA utilizes overall ratings of 1 through 5(1 being strongest. <br /> 4 <br />