Res 1996-214 - Laserfiche WebLink

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liP .5 being weakest), the City's Clirrent policy is to seek depositories with a PMA rating of 1 or 2. Banks with ratings of 3 shall be eligible to serve as a depository, but must be periodically and substantively reviewed. C. Procedures for the Delivery and Possession of Securities: It provides insufficient protection for the City to simply limit its cash investments to those listed in part "a" of this section. To ensure total protection, the City has established delivery and possession procedures which will be followed in every case. Specifically: 1. All ownership of securities shall be evidenced by an acceptable safekeeping receipt issued by a third-party financial institution which is acceptable to the City, or by a safekeeping receipt from the Federal Reserve Bank. 2. All investment (or divestment) transactions will be implemented on a "delivery vs. payment" (or "payment vs. delivery") basis. In the'absence of acceptable delivery, the city will refuse to enter the transaction. 3. Repurchase agreements will meet the aforementioned delivery criteria, and will be accompanied by a minimum "haircut" (i.e., excess of market value of securities over principal amount of investment) . 4. All wire transactions required to implement t<he aforementioned purchase and sale transaction shall be supported by written instructions to the City's bank, unless the timely preparation of such written instructions would hinder the orderly completion of the transaction itself. In such cases, the City will prepare follow-up letters, confirming the oral (typically telephonic) instructions, and forward such written instructions to the bank without undue delay. v. UTILIZATION OF MUNICIPAL CREDIT AUTHORITY The City of San Marcos, like other municipalities throughout the United States, is empowered to issue various forms of municipal debt. While the unrestrained use of this authority is inappropriate, there are many circumstances in which the application of specific borrowing techniques is in the financial interest of the City and its taxpayers. Such borrowing is closely regulated by federal law, Internal- Revenue Service regulations, specific provisions of the Tax Equity and Fiscal Responsibility Act (TERFA) , and various statutes of the State of Texas. Within the established regulations and guidelines, however, the City has a great deal of latitude with regard to the timing and general nature of its financing activities.' The City will utilize those financing alternatives and techniques which produce positive financial advantages for its citizens. For example: A. Immediate financing of capital construction programs, through the issuance of either "permanent" or "interim" financing instruments, can "free up" available cash balances for investment. This will 5