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<br /> . IOZA r I
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<br /> Budgetary Procedures. . . The City Charter establishes the fiscal year as the twelve-month period beginning each October 1.
<br /> Each year between May and July, the City Manager, analyzes and then after review, submits a budget of estimated 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 ",ith their direction of the City. Various public hearings may be held to comply with state and local statutes. 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 balances. 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.
<br /> INVESTMENTS
<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 /> guanmteed or insured .by the State of Texas or the United States or its instrumentalities, (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) certificates 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 tennination date, are fully secured by
<br /> obligations described in clause (1), and are placed through primary government securities dealer or a bank domiciled in the
<br /> State of Texas, (8) a bankers' acceptances with the remaining tenn of 270 days or less, if the short-tenn obligations of the
<br /> accepting 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 Exchange
<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 $I for each share, and (11) bonds issued, assumed, or guaranteed by the State of
<br /> Israel. The City may invest in such obligations directly or through government investment pools that invest solely in such
<br /> obligations.
<br /> Investment Policies. Under Texas law, the City is required to invest its funds under .....Titten investment policies that primarily
<br /> emphasize safety of principal and liquidity and that address investment diversification, yield, maturity, and the quality and
<br /> capability of investment management, and all City funds must be invested in investments that protect principal, are consistent
<br /> with the operating requirements of the City, and yield the highest possible rate of return. Under Texas law, City investments
<br /> must be made '",ith judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence
<br /> would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable
<br /> safety of capital and the probable income to be derived.' No person may invest City funds without express written authority
<br /> fi:om the City Council or chief executi ve officer of the City.
<br /> The City's primary investment objective is to preserve principal. The City utilized cash flow needs to diversüy portfolio
<br /> maturities and maintain 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 ofFirumce has been delegated responsibility for the management of
<br /> the City's funds.
<br /> Current Investments. As of April 30, 1995, the following percentages of the City's investible funds were invested in the
<br /> foIlo"'ing categories of investments:
<br /> TyPe ofTnvestment
<br /> Description Purchase Price Market Value
<br /> Repurchase Agreements 2.2% $ 1,000,000 $ 1,001,532
<br /> Treasury Bills and Notes 13.4% 5,995,000 5,973,836
<br /> Federal Agencies and Instrumentalities 78.1% 35,080,000 35,119,150
<br /> CMOS 6.3% 2.822.780 2.783.497
<br /> Totals 100.0% $ 44,897,780 $ 44,878,015
<br /> As of such date, approximately 23.5% of the City's investment portfolio .....ill mature within the current fiscal year and 66.2%
<br /> will mature .....ithin the next twelve months. The market value of the investment portfolio was approximately 99.9% of its
<br /> purchase price.
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