COUNCIL MEMBERS MARIO GONZALES City offacinto City CARMELA GARCIA ALLEN LEE 1301 MERCURY DRIVE . PHONE (713) 674-8424 . FAX (713) 820-9264 JIMMY JJ" RIVAS JACINTO CITY, TEXAS 77029 GREGG ROBINSON wwwjacintocity-tx. gov CITY MANAGER May 5, 2025 LON D. SQUYRES MAYOR ANA DIAZ The Mayor and City Council will meet in a regular session CITY SECRETARY on Thursday, May 8, 2025 at 6:00 p.m. in the CHRISTAL RODRIGUEZ Council Chamber at 10301 Market Street. With the following items on the agenda: CITY ATTORNEY JIM DEFOYD 1. Call to Order: a. Invocation and Pledge of Allegiance b. Roll Call 2. Mayor & Council Comments: 3. Public Comments: Please Limit to three (3) minutes per individual on topics listed on the agenda or on a Municipal Government topic, in which the City of Jacinto City has authority; However Notice. is hereby given that in accordance with the Texas Open Meetings Act, Texas Government Code, Chapter. 551, prohibits the City Council from discussing, deliberating, or considering, subjects for which public notice has not been given on the agenda; Such issues may be referred to city administration. 4. Approval of the Minutes of Previous Meeting(s): 5. Reports/Announcements of City Departments: With respect to items not listed elsewhere on this agenda, members may report on items of community interest, including announcing community events, announcing employees or community recognitions. 6. Unfinished Business: a. Second and Final Reading of Ordinance 2025-2 Amending the Code of Ordinances of the Section 1C(2) Water Service Rates inside City Limits: Repealing all Ordinances in Conflict Herewith: Establishing Effective Date. 7. New Business: a. Harris County Judge Lozano to Administer Oaths of Office to Unopposed Candidates Elected by Ordinance 2025-1 on March 13, 2025. b. Mayor & Council to Appoint Mayor Pro Tem. C. First Reading of Ordinance 2025-3 Setting Salary for Mayor & Council. d. Mayor & Council to consider Resolution 2025-8R approving the submission of an application for "FY 26 SB 224 Catalytic Converter Grant Program" for the Police Department of Jacinto City, Texas. e. Mayor & Council to consider amending Capital Outlay Budget Code 25-6977 by an increase of $27,000.00 for Emergency Repairs to the City's Water Well. f. Mayor & Council to consider approving Investment Reports 10-1-2023 to 9-30-2024. g. Mayor & Council to consider approving Investment Policy. City Secretary, certifyt thatac copy oft thel May 8,2 2025 agenda was posted int theg glass case outside City Council Chambers &i int the City Halll Lobby, convenient. & accessiblet tot theg general public at alli times & tot the City's website aty www.acintortin-goy in compliancey with Chapter 551, Texas Government Code. Christal Rodriguez City Secretary This facility is wheelchair accessible and accessible parking spaces are available. Request for accommodations or interpretive service must be made 72 hours prior to Meeting. ORDINANCE NO. 2025-2 AN ORDINANCE AMENDING THE CODE OF ORDINANCES OF THE CITY OF JACINTO CITY, TEXAS AT CHAPTER 10 ENTITLED UTILITIES, AT SECTION 1C(2) "WATER SERVICE RATES" INSIDE CITY LIMITS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH, ESTABLISHING AN EFFECTIVE DATE WHEREAS, the City Council of the City of Jacinto City, Texas, since the last adjustments of its Water Rates received notice of price increase for the purchase of surface water from the City of Houston resulting in charges which the City of Jacinto City is forced to pay to the City of Houston for such surface water; and WHEREAS, the City Council has determined that to continue to make improvements to our water and to provide the citizens with water it is necessary to adjust the present Water Rates, NOW THEREFORE: BE. IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF JACINTO CITY, TEXAS: SECTION 1. That the Code of Ordinances of the City of Jacinto City, Texas, be and the same is hereby amended at Chapter 10, Sections 1C(2) as follows: Section 1C Water Service Rates: (1) Minimum Monthly Rates. The minimum monthly service rates charged by the City shall be as follows: (a) One (1) unit (whether house, business or trailer, on one (1) Meter: (i) One (1) unit up to 2,000 gallons shall be charged Twenty-Three and 26/100 ($23.26) Dollars per month; and (ii). All additional gallons used above 2000 gallons, referred to as the "net" amount, shall be charged at the rate of Six and 26/100 ($6.26) Dollars per 1,000 gallons. (b) Second (2nd) or more units on the same meter under one (1) rooff for a residence or al business: (i) One (1) unit up to 2,000 gallons for each unit, the charge shall be Twenty- Three and 26/100 ($23.26) Dollars minimum and each unit shall be charged as if each are single units under separate roofs on separate meters; and (ii) All additional gallons used above 2,000 gallons, referred to as the "net" amount shall be charged at the rate of Six and 26/100 ($6.26) Dollars per 1,000 gallons. 1C(2) Water Rate Charge Table The minimum monthly water service rates charged by the City shall be as follows: First 2,000 gallons. $23.26 (minimum) All over 2,000 gallons $ 6.26 per 1,000 gallons. Ordinance2 2025-2 Pagei 1ofz SECTION 2. All ordinances or parts of ordinances in conflict herewith are hereby repealed and this ordinance shall become effective on the second and final reading of the same as provided by the City Charter of the City of Jacinto City, Texas. SECTION 3. This ordinance shall take effect upon the final passage, and it is sO ordained. PASSED AND ADOPTED ON THE FIRST READING THIS THE 24th DAY OF APRIL, 2025. Ana Diaz, Mayor ATTEST: APPROVED: Codsiquez Christal Rodriguez, CitfSecrelay Jim Defoyd, City. Attomey PASSED AND ADOPTED ON THE SECOND AND FINAL READING THIS 8th DAY OF MAY 2025. Nho dia M Ana Diaz, Mayor ATTEST: APPROVED: Christal Rodriguez, City Secretary Jim Defoyd, City. Attomey Ordinance2 2025-2 Page2of2 ORDINANCE 2025-3 AN ORDINANCE SETTING SALARIES TO BE PAID TO THE MAYOR AND CITY COUNCIL BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF JACINTO CITY, TEXAS SECTION 1. SALARIES OF ELECTED OFFICIALS: A. MAYOR: The Mayor shall receive a salary for his or her duties rendered to the City in the amount of $ per month, plus $ auto allowance per month, which amount shall be paid to the Mayor on the 4th Thursday of each month. B. COUNCIL MEMBERS: Each Council Member shall receive a salary for his or her services rendered to the City in the amount of $ per month plus $ auto allowance per month, which shall be paid to each Council Member on the 4th Thursday of each month. SECTION 2: EXPENSES In addition to the salaries to be paid to the Mayor and Council Member set forth hereinabove each shall be entitled to reimbursement of such reasonable and necessary expenses expended by such officials in the discharge of his or her duties. All applications for reimbursement shall be in writing and accompanied with paid receipts or other evidence of such expenditures made by such officials before any reimbursement is paid, the application shall be approved by the signature of (3) Council Members. PASSED AND ADOPTED ON THE FIRST READING THIS 8th DAY OF MAY, 2025. Mayor ATTEST: Christal Rodriguez, City Secretary 2025-3 Pageiof2 5/8/20258 &5/22/2025 PASSED AND ADOPTED ON THE SECOND AND FINAL READING THIS 22nd DAY OF MAY, 2025. Mayor APPROVED: Jim DeFoyd, City Attorney Christal Rodriguez, City Secretary Voting For: Voting Against. 2025-3 Page2of2 5/8/20258 & 5/22/2025 RESOLUTION 2025-8R Resolution Approving the Submission of an Application for "FY 26 SB 224 Catalytic Converter Grant Program" A Resolution of the City of Jacinto City Approving the Submission of an Application for "FY26 SB 224 Catalytic Converter Grant Program: for the Police Department of. Jacinto City, Texas. WHEREAS, under the provisions of the Texas Transportation Code Chapter 1006 and Texas Administrative Code Title 43; Part 3; Chapter 57, entities are eligible to receive grants from the Motor Vehicle Crime Prevention Authority to provide financial support to law enforcement task forces and agencies for economic motor vehicle theft, including catalytic converter theft; and WHEREAS, this grant program will assist this jurisdiction to combat catalytic converter theft; and WHEREAS, the City of Jacinto City has agreed that in the event of loss or misuse of the grant funds, the City ofJacinto City agrees and assures that the grant funds will be returned in full to the Motor Vehicle Prevention Authority. NOW THEREFORE, BE IT RESOLVED AND ORDERED BY THE COUNCIL OF THE CITY OF JACINTO CITY: that Lon Squyres, City Manager, is designated as the Authorized Official to apply for, accept, decline, modify or cancel the grant application for the Motor Vehicle Crime Prevention Authority Grant Program and all other necessary documents to accept said grant; and BE IT FURTHER RESOLVED that Mark Longrigg, Police Captain, is designated as the Program Director; and Kathy Greiner, Finance Director, is designated as the Financial Officer for this grant. DULY PASSED BY THE COUNCIL OF THE CITY OF JACINTO CITY, ON THIS 8TH DAY OF MAY 2025 Ana Diaz, Mayor ATTEST: Lon Squyres, City Manager APPROVED: Christal Rodriguez, City Secretary Jim Defoyd, Attorney 2025-8R Page 1 of1 Budget Amendments FY 2024-2025 Budget Code: Budget Code 25-6977 Amount: $ 27,000.00 Date of Amendment: 5/8/2025 Purpose of Amendment: for Emergency Repairs to Water Well Motion: Made by Councilmember to approve / deny amendment. Second: Made by Councilmember Vote: appreus. 7/*4/30! JACINTO CITY INVESTMENT POLICY INTRODUCTION The purpose oft this dooument is to set forth specifio investment policy and strategy guidelines for the City in order to achleve the goals of safety, liquidity, yield, andj publig trust for all investment sotivity. The City Council ofthe City shall review and adopt, by resolution, fts investment strategies end policy not less than annually. The resolution shall inplude a record of ohanges made to either the investment policy or strategy. This policy seryes to satisfy the statutory requirement (specifically the Publig Funds Investment Aot, Article 342a-2 V.T.C,S, (the "Ao") to define, adopt and reviow a formal investment strategy and policy. INVESTMENT STRATEGY The City maintains portfolios, which utilize: four spegifio investment strategy considerations, designed to address the unique charactoristics ofthe fand groups represented in the portfolios: A, Investment strategies for operating funds and comingled pools containing operating funds have as their primary okjective to assure that anticipated cash flows are matched with adequate investment liquidity. The seçondary objective is to dreate a partiblio strgoture, which will experlence minimal volatility during eçonomic cyeles. This may be sccomplished by purchasing high quality, shorl- to medium-term soouritios which will complement each other in a laddered or barbell maturity strugturg. The dollar walghted average maturity of 365 days Ol less will be calculated using the stated: final maturity date of each security. B. Investment strategies for debt service funds shall have as the primary abjective the assurange of invesiment liquidity adequate to cover the debt service obligation on the required payment date, Seçurities purchased shall not have a stated final maturity date which exceeds the debt service payment date. C. Investment sfrategies for debt servios roserve funds shall have as the primary objective the to gencrate # dependable revenue straam to the appropriate debt servica fund from securities mbility with a low degree ofvolatility. Securities should be ofhigh quality and, except as may be required by the bond ordinance speciflc to an individual issue, of short to intermefiate-term maturities, Volatility sbail be further controlled fhrough the purchase of securities partying the highest coupon available, within the desired maturity and quality range, without paying aj premium, if at all possible. D. Investment strategies for special projegts or special purpose fiynd portfollos will have as their primary objective to assure that anticipated oash flows are matched with adequate investment liquidity. These portfollos should inglude at least 10% in highly liquid securities to allow for flexibility and unantiolpated project outlays. The stated final maturity dates of securities held shouldi not exceod the astimated project completion date. INVESTMENT POLICY I, SCOPE This iavestment policy applies to all: financial assets of the City, These funds ate accounted for in the City's Comprehengive Annual Finanolal Report (CAFR) and include: Generel Fund Special Rovenue Funds Dobt Servioe Funds Capital Prajects Funds Proprietary Funds $ All Other Funds IL. OBJECTIVES The City shall mannge and invest its cash with four objectives, listed in grder of! priority: Safety, Liquidity, Yield, and) Public Trust, The safety ofthe principal invested always remains the primary objective. All investments shall be designed and managed in ai imanner responsive to the publio trust and consistent with State and Local law. Tha City shall maintain & comprehenslyg gash management program that lacludes colleption ofaccounts regeivable, vendor payment in acpordance with Invoice terms, and prudent investment of: available cash. Cash management is defined as the progess of managing monies in order to Insure maximum pash availability and maximum yield on shortterin investment af pooled idle cash, Safety Thej primary objective of the City'si investment activity is the preservation of capital in the overall portfolio. Bach investment transaction shall be conducted in a manner to avoid capital losses, whether they are from securities defaults or erosion ofmarket value, Liquidity The City's investment portfolio shall be structured such that the City is able to meet all obligations ia a timely manner. This shall be achieved by matphing investment maturities with forecasted cash: flow requirements and by investing In securities with active seçondary markets, Yield The City's cash management; portfolio shall be designed to regularly exceed the average rate of return on U.S. Troasury Bille at a mgturlty level comparable to the City's weighted average matyrity in days. The investment program shall seek to apgment returns above this threshold consistent with risk limitations identified. herein and prudent investment pollcies. Public Trust Participants in the City's investment process shall aci responsibly as public trust custodians, Investment officials shall avoid transactions which might impair public confidence in the City's ability to govern effectively. m. RESPONSIBILITY AND CONTROL Investment Committes An Investment Committee, consisting of the Clty Manager, and the Finance Diroctor sha!l mpet at least quarterly to determine operational strategies Bad to monitor results, The Investment Committee shall include in ita dellberation such topics as: performance reports, eçonomis outlopk, portfolio diversification, maturity structure, potential risk to the City's funds, authorized brokers and dealers, and the target rate of relurn on the investment partfolig. Delegation of Authority and Training Authority to manage the City's investment program is derived from a City Coungil resolution. The City Manager is designated as the Clty's investment officer and is responsible for investment decisions and activities. The City Manager shall establish writton prooedures for the operation of the investment program, consistent with the investment polioy. Within 12 months after assuming duties, the investment officer shall attend at least one training session at least ance every two years and receive 10 hours of training that relates to the officer's regponsibility under the Act, Training from an independent sourcp shall be approved or endorsed by either the Government Finance Officers Assoolation ofTexas, the Government Treasurers Organization of Texas, the Texas Municipal League, or the Houston Galveston Area Council ofGoyernments. Internal Controls Thel Finance Direotori is responsible for establishing and maintaining an intetnal control structure designed to ensure that the assets ofthe entity are protepted from loss, theft, or misyse. Thei internal pontrol structure shall be designed to provide reasonable assurance that thesu objectives aro met. The concept of reasonable assurange recognizes that (1) the cost of & pontrol should: not exceed the benefits likely tol be derived; and (2) the valuation of costs and benefits requires estimates andj judgnents by management. Accordingly, the Finance Director shall establish a) prooess for annual independent review by an external auditor to assure compliance with policies and procedures. The results ofthis review shall be reported (o the City Council, Thei internal controls shall address the following points: A. Control of çollusign. B. Transagtion authority separated from accounting and record keeplng, C. Custodial safokeeping. D, Avoidance of physical dellvery segurities. E. Clear delegation ofs authority to subordinate staff members, F, Written confirmation for telephone (vaice) transactions for investments and wire transfers. G. Development of a wire transfer agreement with the depository bank or third party custodian, Prudence The standard of prudence to be applied by the investment officer shall be the' "prudent investor" rule, which states: "Investments shall be made withj judgment and cate, under oiroumstances then prevailing, whiph persons of prudence, discretion and intelligonce exeroise in the management of their own affairs, not for speoulation, but for investment, considering the probable safety oft their capital ES well as the probable income to be derived." In determining whether an investmment officer has exercised prudence with respect to an investment decision, the determination sball be madet taking into consideration: A. The investment of all funds, or funds under the City's pontrol, aver which the offiçer had responsibility rather than a consideration as to the pradence ofas single investment. B. Whether the investment decision Was consistent with the written Investment polioy ofthe City. The investment officer, aoting in accordange with weltten procedures and exercising due diligence, shall not be held personally responsible for a gpeclfie security's credit risk pr market price changes, provided that these deviations are reported immediately and that appropriate action is taken to control adverse developments. Ethics and Conflicts of Interest City staffi involved: in the investment provess shall refirain from persongl business activity that çould conflict with proper execution oft the: investmant program, or which could impair the ability to make impartial investment decisions, City staff shall disclose to the Ciiy Manager any material financial interests in financial institutions that condyot business with the Cly and they shall further disclose positions that gould be related to the performance ofthe City's portfolio, Cily staffs shall subordinate their personal fipancial transactions to those oft the City, particularly.wih: regard to timing of purchases and sales. A Clty investment officer who has a pergonal businoss relationship with an organization seeking to sell investment to the City shall flie a statement disclosing that personal business interest, An iavestment officer who is related within the second degres by affinity or consanguinity to an ipdividual geeking to sell an investment to the City shall file a statement disclosing that relationship. A statement required under this subseotion must be filed with the Texas Ethics Commission and the goverbing body ofthee entity. IV. REPORTING Quarterly Reporting The Investment Otficer shall submit a signed quarterly investment report that describe the portfolio and shall explain the total investment return for the quarter, Annual Report Within 60 days of the end ofthe fiscal year, the Finance Director shall present an annual report on the investment program and investment activity. This report may be presented as a component of the fourth quarter report to the City Manager and City Council. Methods The quarterly investment report shall Include a succinct nanagement summary that provides a clear picture of the curvent investment portfolio statys and transactions made over the last quarter. This management summary will be prepared in & manner that will allow the City to ascertain whether investment activities during the reporting period have conformed to the investment policy. The report will be prepared in compliance with generally accepted accounting principles. The report will be provided to the Mayor and City Counçil. The report will include the following: A. A listing ofindividual securities held at the end of the reporting period. This list will include the name of the fiund or pooled graup fund for which each individual inyestment was acquired, B, Unrealized gains or losses resulting from appreciation ar depreciation by listing the beginning and ending book and merket value of securities for the period. Market values shall be obtained from financial ingtitutions or portfolio reporting services independent from the broker/dealer from whigh1 the security was purchased. C. Additions and changes to the market value during the period. D. Fully accrued interest for the reporting period. E. Investment listings by maturity date. F. Thej percentage of the total portfolio which each type of investment represents. V. INVESTMENT PORTFOLIO Active Portfolio Management The City shall pursue an active versus a passive porifolio management phjlosophy. Securitigs may be: sold before they mature If market epnditions) present un opportuntty for the City to benefit from the trade. The investment offiçer will routinely monitor the porifollo contents, the available markets, and the relative value of competing instruments, and will adjust the portfolio accordingly. Investments Assets ofthe City may be invested in the: following instruments; providod, however, that at no time shall assets ofthe City be invested in any instrument or security not authorized: for investment ander the. Agt, as the Actmay: from time to time bo amended. The City is not required to liquidate investments that were authorized investments at the time of purchase. I. Authorized A, Obligations of the United States of America, jts agencies and Instrumentalities, which have a liquid market with a readily determinable market Valye. B. Direct obligations of the State ofTexas and agencies thereof. C, Other obligations, the principal of and interest on which are unconditionally guatanteed by the State ofTexas or United States of America, D. Obligations of the States, agoncies thereof, Counties, Cities, and other political subdivisions of any state having been rated as investment quality by a nationally recoguized iavestment rating firm, and having received a rating of not less than "A" or its equivalent, E, Certifiontes of Deposit of state and national banks domiciled in Texas, guarnnteed or insured by the Federal Deposit Insyrance or its suigcessor or seoured by obligations described in A through D above, whioh are intended to include all diract agenoy or instrumentality issued mortgage backed securities rated AAA by a nationally recognized rating agency, or by Article 2529b-1, V.T.C.S. and that have a market value of not less than the prinoipal amount of the certificates. F. Fully collateralized direct repurphase agreements with a defined termination date secured by obligations of the United States or its agencles and Instrumentalities pledged with a third party, solected by the Finance Director, other than anl agenoy for the pledgor, Repurchase agreements must be purchased through a primary government securities dealer, as defined by the Federal Reserve, ot a bank domiciled in Texas. A Master Repurohase Agreement must be signed by the bankldealer prior to investment in a repurchase agreement. G. Joint poois of political subdivisions in the State ofTexas which invest in instruments and follow practices allowed by curront law. Inyestment in such pools. shall be limited to 15% oft the City's entire portfplio. A pool must be continuoysly rated no. lower then AAA or AAA-m or at an equivalents sating by at least one nationally redognized rating service, U. Not Authorized The City's authorized investments options ae mjord restrictive thaut those allowed by State law. State law specifically prohibits Investment in the following Investment securities, A. Obligations whose payment represents the çoupon payments on the outstanding principal balanoe oft the underlying mortgago-baoked security collateral and pays no principal, B. Obligations whose payment represents the prinalpal stream of cash flow from the underlying moitgagebaçked security collateral and beats no interest. C. Collateralized: mortgage obligations that have a stated final maturity date of greater than 10: years. D. Coilateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in ai market index, Holding Period The City intends to match the holding periods ofiavestment funds with liquidity needs of the City. In no case will the average maturity ofinvestments ofthe City's operating funds exceed one year, The maximum final stated. maturity ofany invegtment shall not exceed fivey years. Investments in all: funds shall be managed in such a way that the markot price losses resulting firom interest rate volatility would be offset by coupon income and current ingome recelved: from the volume ofthe portfolio during a twelve month period. Risk and Diversification The City reçognizes that lnvestment risks can result from issuer defaults, market price changes or various technical complications leading to temporary lliquidity. Risk is controlled through portfolio diversification thats shall be achieved by the following general guilelines: A. Risk of issuer default is controlled by limiting investments to those instruments allowed by the Act, whioh are described herein, B. Risk. of market price changes shall be controlled by avoiding over-concentration of assets in a specific maturity seotor, Ilmitation of average maturity of operating funds investments to one year, and avoidance of overçoncentration of assets in speciflc instruments other than U.S. Treasury Securities andi Insured or Collateralized Certificates of Deposits, C. Risk ofilliquidity due to teohnical somplications shall be controlled by the seleetion of securities dealers as described herein. VI, SELECTION OF BANKS AND DEALERS Depository Atleast every three years a Depository shall be selected through the City's banking services procuroment process, which shall include a formal request for proposal (RFP). In selecting a depository, the credit worthiness ofi institutions shall be considered, and thel Direotor ofFinance shall conduct a comprehensive review of! prospective depositories credit characteristios and financial history. Certificates of Deposit Banks seeking to establish eligibility fort the City's çompetitive certificate of deposit purchase program shall submit: for review annual financial statements, evidence ofi federal insurance and other information as required by the Finange Director, Securities Dealers For govemnment securities brokers and doalers, the Cily shall select only dealers reporting to the Market Reports Division ofthel Federal Reserve Board ofNew York, aiso known as the "Primary Government Security Dealers", 3 unless a comprshensive credit and papitalization analysis reveals that other firms are adequately financed to conduct publio business, Only brokers and dealers with an office in the City shall be selected, Investment offiolals shall not knpwingly conduct business with a firm with whom public entitios have sustained losses on investments. All securitles deslers shall provide the City with refetences from publiq entities that they are currontly serving. The Investment Committee shall adopt and annually review a list of qualified brokers autharized to engage in investment transactions with the entity. - A1l financial institutions and broker/dealers who desire to become qualified bidders far investment transactions must supply the following 8s appropriate: A. audited financial statements B. proof ofNational Assogiation of Securities Dealers (NASD) cgrlification C, proofof state registration D. completed broker/dealer questionnaire E. pertification ofhaving read the Clty's Investment policy signed by a qualified representative ofthe organization F, acknowledgment thatt the organization has implemented reasonable procedures and controls in an efforti to preclude imprudent investment aotivities arising out of investment transactions conducted between the Cily and the organization Qualified representative means aj person who holds a position with a business organization, who. is authorized to act on behalf oft the business organization, and who is one oft the following: A. For E business organization doing business that is reguated by or registered with a securities commission, a porson who is registered uader the rules of the National Association of Securities Dealers; B. For a state or fedora. bank, a savings bank, or a statu ar federal gredit union, a member of the loan committoe for the bank o! branch of the bank or a person authorized by corporate resolution tg act on behalf of and bind the banking institution; or C. For an investment poul, the person authorized by the elected official or board with authority to administer the activities of the investment pool to sign the certification on bohalf oft the investment pool. Investment Pools A thorough nvestigation ofthe popl is required prior to investing, and on a continual basis. All investment pools must supply the following information in order to be eligible to receive funds: A. thei types ofinyestments in which money is allowed to be invested B, the naximum average dollar-weightod. maturity allowed, based on the stated maturity date, ofthe pool C. the maximum stated maturity date any investment securlty within the portfolio has D. the objectives ofthe pool E. the size ofthej pool F. tho names ofthe members of the advisory board ofthe pool and the dates their terms expire G. the custodian bank that will safekeep the pool's assets H. whether the intent ofthe pool is to maintain a net asset value of one dollar and the risk of market price fluctuation I whether the only source of payment is the assets ofthe pool at market value or whether there is a secondary source of payment, such as Insurance or guarantees, and a description ofthe secondary source of payment J. the name and address ofthei independent auditor ofthe pool K. the requirements to bo satisfled: for an entity to deposit funds in and withdraw funds from the pool and any deadlines ar other operating policies required for tho entity to invest funds in and withdraw funds from the pool L, the performance history oft the pool, including yield, average dollar-woighted maturities, and expense fatios M. a descriptipn ofinterest calculations and how interest is distributed, and how gains and losses are treated An annual review of the financial condition and registration of qualified bidders will be conducted by the Finance Director, VII. SAFEKEEPING AND CUSTODY Insurance or Collateral All deposits and investments of City funds pther than direct purchases ofU.S. Treasuries or, Agenoies shall be secured by pledged collateral. In order to anticipate. market changes and provide a level of security for all: funds, the collateralization level will be 102% oft market value of princippl and accrued interest on the deposits or investments less an amount: insured by the FDIC or FSLJC. Evidence oft the pledged collateral shall be maintained by thel Finance Director or a third party financial institution, Repurchase agreements shall be documented! by a specific agreement noting the collateral pledge in each agreement, Collateral shall be reviewed weekly to assure that the market value oft the pledged seourities is adequate. Safekeeping Agreement Collateral pledged to secure deposits ofthe City shall be held by a safekeeping institution in accordance with a Safekeeping Agreement which cearly defines the procedural steps for gaining access to the collateral should the City determine that the City's funds are inj jsopardy. The safekeeping institution, or Trystee, shall bei the Federal Reserve Bank or an institution nat affillated with the firm pledging the collateral. The safekeeping agreement shall include the signatures of authorized reprosentatives ofthe City, ths firm pledging the collateral, and the Trustes. Collateral Defined The City shall accept only the foligwing seourities as collateral: A, FDIC and FSLIC insurasce coyerage. B. A bond, certifioate of indebtedness, or Treasury Note of the United States, or other evidence of indebtedness of the United States that is guaranteed as to principal and interest by the United States. C. Obligations, the principal and interest qu which, are unconditionally guaranteed or insured by the State ofTexas. D. A bond of the State of Texas or of a county, city or other political subdivision of the State of Texas having been rated as investment grade (investment rating no less than "A" or its equivalent) by a nationally recognized rating agency with a remaining maturity oft ten (10); years or less, Subject to Andit All collateral shall be subject to Inspection and audit by the Director ofFinance or the City's independent auditors. Delivery VB. Payment Treasury Bilis, Notes, Bonds, Repurchase Agreements and Goverment Agencies' securities shall be purchased using the delivery ys, payment method, That is, funds shall not be wired or paid until verification has becn made that the correct security was received by the' Trustee, The seourity shall be held in the nams ofthe City or held on behalf ofthe City. The Trustee's rocords shal! assure the notation ofthe City's ownership of or explicit claint on the securities. The ariginal copy of all safekeeping recsipts shall be delivered to the City, VIL. INVESTMENT POLICY ADOPTION The City of Jacinto City's investment polioy shall be adopted by resolution ofthe City Council, The policy shall be reviewed for effectiveness on an annual basis byt the Investment Committee and any modifipations will be recommended for approval to the City Council, The City Council shall review these investment pollcies and stratogies not less than annually. GLOSSARY of COMMON TREASURY TERMS Agencies: Federal agenoy securities. Asked: The price at which secarities are offered. Bid; The price offered for securities. Bankers' Acceptançe (BA): A draft of bill or exchange accepted by a bank or trust çompany, The acoepting institution guarantees payment oft the bil, as well as the issuer. Broker: A broker brings buyers and sellers together for a çommission paid by the initlator of the transaotion or by bpth sides; he does not position. In the money market, brokers are aotive in markets in which banks buy and sell money and in Interdealer markets, Certificate of Deposit (CD): A time deposit with a specific maturity evidenced by a certificate, Large- denomination CD's are typically nogotiable, Collateral: Securitles, evidence of deposit or other property that a borrower pledges to secure repayment ofal loan, Also refers to securities pledged by & bank to secure deposits of! public monies. Comprehensive Annual Financial Report (CAFR): The official annual report for the City inoludes five combined statements and basic financial statements for each individual fund and account group prepared in conformity with GAAP. It also includes supporting schedules recessary to demonstrate compliance with financo-rolated legal and contraçtual provisions, extensive introductory material, and a detailed statistical section. Coupon: (a) The ammual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value, (b) A certificate attached to a bond evidencing interest due on a payment date. Dealer; A dealer, as opposed to a broker, açts as a principal in all transactions, buying and selling for his own açcoutt, Debenture: A bond secured only by the general credit of the issuer. Delivery versus Payment (DVP): Thare are two methods of delivery of securities: delivery versus payment and delivery versys receipt (DVR) (also called: free). Delivery versus payment means dellyary of securities with an exchange of money for the securities. Delivery versus receipt meuns delivery of securities with an exchange ofa signed receipt for the securities. Discount: The difference between the cost price of a security and its value at maturity when quoted at lower than face value, A seçurity selling below original offecing price shortly after sale also is considered to be at a discount, Discount Securifies: Non-interest bearing money market instruments that are issued at a disconnt and redeemed at maturity for full face value, for example, u.s. Treasury bills. Diversification: Dividing investment funds among a varlety ofsecurities offering independent returns, Foderal Credit Agencies: Agencios of the Federai government set up ta supply credit to various classes of Institutions and individuals, for example, S&L's, small business firms, studeuts, farmers, farm cooperatives, and exporters. Federal Deposit Insurance Corporation (FDIC): A federal agoncy that insures bank deposits, currently up to $100,000 per deposit. Federal Funds Rate (the "Fed Rate"): The rate of! interest at which. Federal funds are traded, This rate is currently pegged by the Federal Reserve through open-market operations, Federal Home Loan Banks (FHLB): The institutions that regulate and Iend to savings and loan associations. The Federal Home Loan Banks play a role analogous to that played by the Federal Resetve Banks in relation to member commercial banks, Federal National Mortgage Association (FNMA or. Fannie Mae): FNMA, like GNMA, was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal carporation wocking under the auspices ofthe Department ofHousing and Urban Development, H.U.D, It is tho largest single provider of residential mortgage funds in the United States. Fannie Mae ls a private stockholdgn-owned corporation. The corporation's purchases include a variety of adjustable mortgages and secondary loans in addition to fixed-rate mortgages, FNMA's securities ape highly liquid and widely accepted. FNMA assumes and guarantees that all gecurity holders will recelve timely payment ofprincipal and interest. Federal Open Macket Committee (FOMC): Consists of seyen members ofthe Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents, The president of thel New York. Federal Reserve Bank is a permanent member whlle the other presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purcheses and sales of government seourlties in the open-macket as ai means ofinfluencing the volume ofbank credit and money, Federal Reserve Systern: The çentral bank oft the United States created by Congress and consisting ofa seven member Board of Governors in Washington, D.C., twelve (12) regional banks, and about 5,700 commorcial banks that are members ofthe system. Government National Mortgage Assoclation (GNMA or Ginnie Mae): Securities guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and Joan assoclations, and other institutions. The security holder is protected by the full fhith and credit of the U.S. Government. Ginnie Mac securities are bapked by FHA, VA, or FMHM mortgages. The term pass-throughs is often used to describe Gipnie Maes, Liquidity: A liquid asset is one that gan be oonverted easlly and rapidly into cash without a substantial Ioss of value. In the money market, a securily is said to be liquid if the sprend between bid and asked prices is natrow and reasonable quantities catl be purchased at those quotes. Local Government Investment Pool (LGP): The aggregate of all funds from political subdivisions that are placed in the çustody ofthe State Treasurer fori imvestment and reinvestment. Market Value: Thej price at which a security is trading and cpuld presumably be purchased or sold, Master Repurchase Agreement: To protect investors, many public investors will request that repurchase agreements be pregeded by a master repurchase agreement between the investor and the fingnoial insticution or dealer. The master agreement should define the nature of the trausaction, identify tho relationship between the parties, establish notmal praptices regarding ownership and custody of the collateral securitles during the torm of the investment, provide remedies in the case of default by either parly, and clarify issues of ownership, The mmaster repurchase agreement protects the investor by eliminating the uncertainty of ownership and hence, allows investors to liquidate collateral if a bank or dealer defaults during the term ofthe agreement, Maturity: The date on which thej prinoipal or stated value ofan investment becomes due and payable. Money Market: The market in which short-term debt instruments (bills, commercial paper, bankers' acceptances, etc.) are issued and traded, Offer: The price asked by a seller of securities, (When you are buying securities, you ask for an offer.) See Asked and Bid. Open Market Operations: Purchases and sales of government and certain other secupitles in the open market by thel Now York Federal Reserve Banks as directed by thel FOMC in order to inflyence the volume of money and credit in the economy, Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open merket operations are the Federal Reserve's most important and most flexible monetary policy tool, Portfollo: Collection of securities held by an investor. Primary Dealer: A primary dealer is made up of a group of govemment securities doalers that submits dally reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and is subject to its informal oversight. Primary dealers include Securities and Exohange Commission (SEC) registered gecurities brokerdealers, banks and a few unregulated firms. Prudent Person Rule: An investment standard, Inyestments shal! be made with judgment and care, under circumstançes then prevalling, which persons of prudenge, discietion andi intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety oftheir capital as well as the probable income to be derived. Qualified Ppblic Depositorles: A fingscial institution that does not claim exemption from the payment of any sales Qr compensating use or ad valprem laxes under the laws of this state, and that has segregated for the benefit oft the Publio Deposit Proteption Commission eligible collateral having a Valus of not less than its maximum liability and which has been approved by the commission to hold publig deposits. Rate of Return: The yleld obtainable on a seourity based on its purchase price or Its current market price. This may be the amortized yield to maturity on a bond ori the aurrent income return, Reparchase. Agreement (RP or REPO): A holder of securities sells these securities to an Uvestor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" In effect lends the "seller" money for the period of the agrsement, aud the terms of the agreement args structured to componsate him fort this. Desiers usa RP extensively to finance their positions. Exception: When tha Fed is said to be doing RP, Itis lending money, that is, increasing bank resarves. Safekeeping; A service to customers rendered by banks for a fee whereby seçurities and valuables of all types and desoriptions are heldi in thel bank's Vauits for protection. SEC Rule 15C3-1: Seei uniform Net Capital Rule, Secondary Market: A market made for the purchase and sale of outstanding issues following the initiai distribution. Securities & Exchange Commission (SEC): Agency created by Congress to protect investors in securities transactions by administering seourities legislation. Structured Notes: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, SLMA, eto.) and Corporations which have imbedded options (e.g., call features, step-up çoupons, floating rate coupons, derivative-based returns) Into their debt structure, Their market performance isi impacted by the fluotuation ofinterest rates, the volatility of the. imbedded options and shifts in the shape of the yleld curve, Treasury Bills (T Bills): A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt, Most bills aro issued to mature in three months, six months or one year, Treasury Bond: Long-tarm U,S. Treasury securities having initial maturities oft more than ten years, Treasury Notes: Intermediate-term, coupon-bearing U.S. Treasury securities having Initial maturities from onet to ten years. Uniform Net Capital Rule: Securities and Exchange Commission requrement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio ofindebledness to liquid capital of15 to 1; also called net capital rule and net capital ratio, Indebtedness covers all money owed to a firm, including margin loans and commitments to purghase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily çonverted into cash. Yield: The tate of annual incotne return on an investment, expressed as a percentage. (a) Income Yleld is obtained by dividing the current dollar income by the current market price of the security. (b) Net Yleld or Yield to Maturity ist the current Income yield mimus any premium above par,