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City of Colleyville Page 1
CITY OF COLLEYVILLE
AUDIT COMMITTEE AGENDA
100 Main Street, Colleyville, Texas, 76034
City Manager's Conference Room - Third Floor
TUESDAY, JUNE 18, 2024 - 3:30 PM
1. CALL TO ORDER
2. APPROVAL OF MINUTES
2a February 20, 2024
3. REGULAR AGENDA ITEMS
3a Approval of the City of Colleyville Investment Policy annual review
and recommended changes
3b Presentation of the second quarter FY24 investment report
4. ADJOURNMENT
I hereby certify this agenda was posted on City Hall bulletin boards Friday, June 14, 2024,
by 5:00 p.m.
Christine Loven, TRMC
City Secretary
A quorum of any Colleyville board, commission, or committee may be present at this
meeting. Any matter on this agenda may be opened for public comment and discussion at
the discretion of the governing body.
If you plan to attend this public meeting and have a disability that requires special
accommodations, please advise the City Secretary at least 48 hours in advance at
817.503.1130, and reasonable accommodations will be made to assist you.
City of Colleyville Page 1
CITY OF COLLEYVILLE
AUDIT COMMITTEE MINUTES
100 Main Street, Colleyville, Texas, 76034
City Manager's Conference Room - Third Floor
TUESDAY, FEBRUARY 20, 2024 - 5:00 PM
1. CALL TO ORDER
City Secretary Christine Loven called the meeting to order at 5:03 p.m. and called
the roll.
PRESENT: Committee members Brandi Elder and Scotty Richardson.
ABSENT: Chuck Kelley.
ALSO PRESENT: Accounting Manager Karen Hines, City Manager Jerry Ducay,
Assistant City Manager Mark Wood, and City Secretary Christine Loven.
2. APPROVAL OF MINUTES
November 21, 2023
The November 21, 2023 minutes were approved.
3. REGULAR AGENDA ITEMS
3a Discussion of the draft FY23 Audit and SAS 114 Letter
Accounting Manager Karen Hines introduced Jennifer Ripka, partner, Weaver
Tidwell, the City’s auditor. Ms. Ripka gave an overview and explained the audit
process. She stated the City received an unmodified report, which is the highest
report which can be given. She noted there were no material weaknesses, no
significant deficiencies, and no noted noncompliance material to the financial
statements.
Ms. Ripka thanked Karen and the finance staff for their assistance and advised the
Committee they are appreciative of staff and the City Council. With there being no
questions regarding the audit, Ms. Ripka advised it will be become final and be
presented at the March 19, 2024 City Council meeting for approval.
4. REPORTS
Quarterly investment report
Accounting Manager Karen Hines stated this has been a quiet quarter with more
focus on the audit. She noted one CD has renewed during this quarter.
Audit Committee Minutes February 20, 2024
There was general discussion regarding CD renewal and rate structures.
4. ADJOURNMENT
The meeting adjourned at 5:28 p.m.
PASSED BY A VOTE OF 2 AYES, 0 NAYS, THIS 18TH DAY OF JUNE 2024.
Minutes taken and prepared by:
Christine Loven, TRMC
City Secretary
City of Colleyville Page 1
CITY OF COLLEYVILLE
AUDIT COMMITTEE BRIEFING
Agenda Number 3a Agenda Date 6/18/2024 Number
Type Regular Agenda Items
Department Finance
Title
Approval of the City of Colleyville Investment Policy annual review and recommended
changes
Explanation
The Public Funds Investment Act requires that the governing body of a public entity
review the investment strategy and adopt a written instrument by resolution stating
that it has reviewed the investment policy and investment strategies.
Staff has reviewed and updated the attached Investment Policy and Strategy document
to be a more thorough, user-friendly, and transparent document. Matt Poston, Finance
Director, will provide a high-level review of the recommended changes, and answer
questions.
Attachments
1. City of Colleyville 2024 Investment Policy - Draft
2. Investment Policy Update Presentation
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY
JUNE XX, 2024
1
FORMAL ADOPTION
This Investment Policy is authorized by the City Council of the City of Colleyville (the “City”) in accordance
with Chapter 2256, Texas Government Code (the Public Funds Investment Act or “PFIA”), as amended.
SCOPE
This Policy applies to all of the investment activities of the City, excluding the deferred compensation
plan, the City’s participation in the Texas Municipal Retirement System, or investments donated to the
City for a particular purpose or donated according to terms specified by the donor. Except for cash in
certain restricted and special funds, the City will combine cash balances from all funds to maximize
investment earnings. This Policy establishes guidelines for those who can invest City funds, for how City
funds will be invested, and for when and how a periodic review of investments will be made. The
Investment Policy is divided into two sections: General Investment Policy and Investment Strategy.
GENERAL INVESTMENT POLICY
The following are general requirements of the City Investment Policy. The general requirements address
issues and requirements common to all funds separately invested by the City. Following the general
requirements are specific requirements that relate to either specific fund types or funds managed by the
City.
INVESTMENT OBJECTIVES
The City investment objectives are as follows:
1) To preserve capital; the most important investment objective.
2) To provide liquidity.
3) To optimize earnings within the constraints of Numbers 1 and 2 above.
TO PRESERVE CAPITAL
1) To preserve capital, the City will only invest in the following:
a. Time Deposits, Certificates of Deposit, and other interest bearing accounts at an
authorized depository of the City. Investments are limited by the amount of the
combination of federal depository insurance, pledged collateral and any surety bond or
letter of credit of the depository.
Deposits issued:
i. by a depository institution that has its main office or a branch office in this state
that are:
1. Guaranteed or insured by the Federal Deposit Insurance Corporation, or
its successor; or
2. Secured in compliance with COLLATERAL; or
3. Secured in any other manner and amount provided by law for deposits of
the investing entity.
ii. In addition to the authority to invest funds in deposits under Section 1 a., an
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JUNE XX, 2024
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investment in deposits made in accordance with the following conditions is an
authorized investment:
1. The funds are invested through a depository institution or broker that has
its main office or a branch office in the state of Texas. Additionally, a
broker is required to be selected from a list of approved broker dealers
adopted by the City;
2. The depository institution or broker arranges for the deposit of the funds
in certificates of deposit in one or more federally insured depository
institutions, wherever located, for the account of the City;
3. The full amount of the principal and accrued interest of each of the
certificates of deposit is insured by the United States or an
instrumentality of the United States; and
4. If appointed by the City, the depository institution or broker may act as
custodian for the City with respect to the deposits issued for the account
of the City.
The investment in Certificates of Deposit is limited to seventy-five percent (75%) of the
Portfolio
b. Direct obligations of the United States including Treasury Bills, Treasury Notes, Treasury
Bonds, Treasury Strips, and instruments guaranteed by the Full Faith and Credit of the
United States; for reporting purposes, these securities will be defined as Government
Securities.
c. Obligations of agencies and instrumentalities of the United States. For reporting
purposes, the investment in agency and instrumentality securities will be categorized as
Agency Securities. The investment in agencies and instrumentalities is limited to
seventy-five percent (75%) of the Portfolio. Investments in agencies or instrumentalities
will be diversified among the agencies and instrumentalities.
d. A Texas local government investment pool, as authorized by PFIA, which is continuously
rated AAA. Participation in any pool must be authorized by resolution of the City Council.
Pools investing in commercial paper are permissible up to five percent (5%) of total pool
investments. The investment in pools is limited to seventy-five percent (75%) of the
Portfolio. Investments in pools will be diversified among the City’s authorized pools.
e. A no-load money market mutual fund that is continuously rated AAA or AAAm by at least
one nationally recognized rating agency; is regulated by the Securities and Exchange
Commission; complies with the requirements of a money market mutual fund; and
includes in its investment objectives the maintenance of a stable net asset value of
$1.0000 per share. The investment in money market mutual funds is limited to ten
percent (10%) of the Portfolio.
f. Obligations of states, agencies, counties, cities, and other political subdivisions of any
state rated AA- or above or its equivalent by a nationally recognized rating agency. Total
investment in these securities would be limited to ten percent (10%) of the portfolio.
g. Bond proceeds may be invested in fully collateralized flexible repurchase agreements
(“flex repos”), or similar structured investment, with a defined maturity date not to exceed
the final scheduled construction expenditure date. Flexible repurchase agreements must
only be entered into with a primary government securities dealer as defined by the
Federal Reserve or a financial institution doing business in the State of Texas. They
must be secured by a combination of cash and obligations of the United States or its
agencies and instrumentalities, which are pledged to the City and deposited with a third
party custodian approved by the City. The collateralization percentage shall be
maintained at or above one hundred two percent (102%) of the outstanding flex repo
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY (CONTINUED)
JUNE XX, 2024
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balance along with any interest accrued but not yet paid. All repurchase agreement
transactions shall be governed by a signed repurchase agreement, which requires that
the securities being purchased by the City or cash held by the City to be pledged to the
City, held in an account in the City’s name and deposited at the time the investment is
made with the City or with a third party selected and approved by the City
2) To preserve capital, the City will not employ any investment strategy that is inherently risky.
a. The City will not borrow funds using investment securities as collateral and reinvest the
proceeds in other investment securities. Approved no-load money market mutual funds
in 1(g) above are allowed to use Reverse Repurchase Agreements.
b. The City will not take a position in a security for speculation or only for anticipated capital
appreciation.
c. While a designated Investment Officer will be empowered to buy and sell securities on
behalf of the City, the City will use a buy and hold strategy for most investments.
d. The City will diversify investments.
3) To preserve capital, the City will not invest in any securities that are inherently risky:
a. Obligations whose payment represents the coupon payments on the outstanding
principal balance of the underlying mortgage-backed security collateral and pays no
principal.
b. Obligations whose payment represents the principal stream of cash flow from underlying
mortgage-backed security collateral and bears no interest.
c. Obligations the interest rate of which is determined by an index that adjusts opposite to
the changes in a market index.
d. Collateralized mortgage obligations that have a stated final maturity date of greater than
10 years.
e. Any other obligations similar to items 3(a) through 3(d) above where small changes in
market interest rates can produce potentially large changes in the value of a security or
substantially extend the life of the security.
TO PROVIDE LIQUIDITY
1) The Investment Portfolio will remain sufficiently liquid to meet the cash flow requirements that
might be reasonably anticipated. Liquidity shall be achieved by matching investment maturities
with forecasted cash flow requirements; investing in securities with active secondary markets;
maintaining appropriate Portfolio diversification; and investing with overnight liquidity. Since
projected cash flows are estimates, it is the stated goal to invest in a manner that provides excess
funds for reinvestment and additional liquidity each month.
2) In conjunction with (1) above, the City will ladder investment maturities. That is, the Portfolio will
be structured so that investments mature all along the yield curve and generally target anticipated
outflows. However, it will not be necessary to completely cover all outflows for a month before
investing further out on the yield curve. By not fully investing every month, the City will be better
able to utilize all investment options (especially more short-term securities) available in the
Investment Policy. With the laddered Portfolio structure, there would be a steady stream of funds
to the Portfolio and high quality short-term securities available if securities needed to be sold
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY (CONTINUED)
JUNE XX, 2024
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before maturity. In conjunction with the above ladder approach, maturities beyond ninety (90)
days will be diversified along the yield curve to avoid a concentration of maturities in one or more
months.
3) Additional liquidity will be provided through attractive cash equivalent investment options. The
combined cash equivalent investment should be a minimum of fifteen percent (15%) of the overall
Portfolio.
TO OPTIMIZE EARNINGS
1) Within the constraints of preservation, safety, and liquidity, it is the City’s goal to optimize
earnings.
2) City funds will be deposited daily to optimize funds available for investment.
3) Idle cash will be invested until needed to pay obligations.
4) The Portfolio will be structured to provide excess funds for reinvestment so that in periods of
rising interest rates, funds are available for reinvestment. In periods of falling rates maturities
have been laddered to lock in higher returns.
PORTFOLIO COMPOSITION
All investments purchased on behalf of the City will have a maturity date that does not exceed five (5)
years. At all times at least 80% of the Portfolio must be in investments with maturities of two years or
less. No more than 20% of the Portfolio can be held in maturities ranging from two to five years. The
maximum dollar weighted average maturity of the Portfolio cannot exceed one year. Individual fund-types
may have more restrictive parameters.
DESIGNATED INVESTMENT OFFICER
The Finance Director and the Accounting Manager are the designated Investment Officers. After the
investment transaction is completed, an authorization of investment form will be executed for all City
investments. The Finance Director or the Accounting Manager must sign the form approving
investments. Also, the City Manager or an Assistant City Manager must co-sign the form acknowledging
the investments.
INVESTMENT COMMITTEE
The Investment Officers of the City along with one other member of the management team will be
members of the Investment Committee. The role of the committee will be to review and monitor quarterly
reports, make recommendations on changes in the Investment Policy, approve training sources, and
approve brokers/dealers.
AUDIT COMMITTEE
The quarterly investment report and any changes in the Investment Policy will be taken through the Audit
Committee before being taken, sent, or presented to the City Council.
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY (CONTINUED)
JUNE XX, 2024
5
PERCENTAGE TESTS
This Policy contains several percentage tests. Because of daily changes in cash, the Portfolio can be in
compliance one day and not in compliance the next day. The Portfolio limits should be adhered to as
investments are purchased; however, investments would not have to be sold to comply with Portfolio
limits.
MARKET PRICE VALUATION
Investment reports will include market price valuations of the Portfolio from a third-party pricing agency or
through a source independent of the transaction.
PERFORMANCE STANDARD
The performance standard of the Portfolio will be calculated based on the weighted average yield to
maturity.
MONITORING
Not less than quarterly, the Investment Officers or designee will monitor the credit rating for each held
investment that has a Public Fund Investment Act required minimum rating. Prudent measures will be
taken to liquidate an investment that is downgraded to less than the required minimum rating.
Except as stated above, the City is not required to liquidate investments that were authorized investments
at the time of purchase.
SETTLEMENT OF SECURITIES
All settlements of security transactions will be by “delivery versus payment.”
INTERFUND TRANSFERS
From time to time some City funds (for example: General Fund, Drainage Fund, and Utilities Fund) will
become over/under invested while the overall Portfolio is compliant with the City’s Investment Policy.
Investment transfers can be made to correct funds being over/under invested; however, any transfer
would have to be suitable for the fund. Investment transfers will be made between funds at book value
plus accrued interest. However, transfers involving tax-exempt bond proceeds shall comply with
applicable IRS regulations.
COLLATERAL
1) All bank deposits not insured by federal depository insurance will be collateralized in compliance
with the Public Funds Collateral Act and this Policy. Any pledged securities held by an
independent third party under a custody arrangement must give the City unconditional rights and
claims to the collateral. In lieu of the above collateral requirement the depository may provide a
surety bond or letter of credit issued by an agency or instrumentality in compliance with the Public
Funds Investment Act. Deposits secured with pledged marketable securities shall have a market
value equal to or greater than 102% of the principal plus accrued interest of the deposit, less any
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY (CONTINUED)
JUNE XX, 2024
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amount insured by the FDIC. Deposits secured with letters of credit shall have 100% of principal
plus anticipated interest of the deposit, less any amount insured by the FDIC.
2) The City will accept as collateral any securities eligible under the Public Funds Collateral Act
reserving the right to accept or reject any individual securities.
3) The City will routinely compare deposit collateral to deposit levels.
4) Authorized depositories will be required to sign a depository agreement with the City. The
collateralized deposit portion of the agreement shall define the City’s rights to the collateral in
case of default, bankruptcy or closing and shall establish a perfected security interest in
compliance with Federal and State regulations, including:
a. The agreement must be in writing;
b. The agreement must be executed by the depository and the City contemporaneously with
the acquisition of the asset;
c. The agreement must be approved by the Board of Directors or designated committee of
the depository and a copy of the meeting minutes must be delivered to the City; and
d. The agreement must be part of the depository’s “Official Record” continuously since its
execution.
SAFEKEEPING
Securities owned by the City should be held in a manner that the safekeeping method will be categorized
as “Least Risk” for Governmental Accounting Standards Board (GASB) purposes:
1) All securities will be held by the City’s third-party safekeeping agent in an account in the City’s
name as evidenced by safekeeping receipts of the institution with which the securities are
deposited.
2) All non-physical securities will be safekept at the Federal Reserve or at the City’s third-party
safekeeping agent.
COMPETITIVE BIDDING
The City will practice competitive bidding orally, by telephone, electronically, or in any combination of
these methods when purchasing an investment to help strengthen the investment process. All
investments, other than the placement of funds in local government investment pools, money market
accounts, and securities which are deemed to be made at prevailing market rates, will be competitively
bid, with at least three bids, and placed with providers offering the best value to the City. The City
reserves the right to reject the most financially favorable bid if it is potentially disruptive to its investment
strategy.
INTERNAL CONTROLS
The Finance Director is responsible for establishing and maintaining an internal control structure
designed to ensure that the assets of the City are protected from loss, theft or misuse. The internal
control structure shall be designed to provide reasonable assurance that these objectives are met. The
concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits
likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY (CONTINUED)
JUNE XX, 2024
7
management.
The internal controls shall address the following points:
1) Avoidance of collusion,
2) Separation of transactions authority from accounting and record keeping,
3) Third-party safekeeping and custody,
4) Clear delegation of authority of subordinate staff members, and
5) Written confirmation for transactions for investments and wire transfers.
STANDARD OF CARE
The standard of care used by the City shall be the “prudent person rule” and shall be applied in the
context of managing the overall Portfolio within the applicable legal constraints. The Public Funds
Investment Act states:
“Investments shall be made with judgment and care, under prevailing circumstances, that a person of
prudence, discretion, and intelligence would exercise in the management of the person’s own affairs, not
for speculation, but for investment, considering the probable safety of capital and the probably income to
be derived.”
STANDARDS OF ETHICS
All Investment Officers shall file with the Texas Ethics Commission and the City Council a statement
disclosing any personal business relationship with an entity seeking to sell investments to the City or any
relationship within the second degree by affinity or consanguinity to an individual seeking to sell
investments to the City.
REPORTING
Investment performance will be monitored and evaluated by the Investment Officers. The Investment
Committee will provide a quarterly comprehensive report signed by all Investment Officers to the Audit
Committee and then forward it on to the City Council. This investment report shall be in compliance with
the Public Funds Investment Act.
AUDITS
The City, in conjunction with its annual financial audit, shall perform a compliance audit of management
controls on investments and adherence to the City’s Investment Policy and strategies. The quarterly
investment reports must also be reviewed annually by the independent auditor, as part of the City’s
annual audit, and the result of the review shall be reported to the City Council by that auditor.
REVIEW AND AMENDMENT
The City Council shall review and adopt this Policy at least annually. Amendments must be approved by
the Investment Committee and adopted by the City Council. Investment Officers will review the Policy for
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY (CONTINUED)
JUNE XX, 2024
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any necessary changes as a result of each Texas Legislative session and include such changes in the
annual review and update to the Policy for City Council approval. The timing of amendments and
approval of legislative changes to the Policy must align with the required effective dates assigned by the
Legislation.
TRAINING
In order to have qualified and capable Investment Officers, officers will attend investment training and
receive not less than ten (10) hours of instruction relating to investment responsibilities and that is in
compliance with the Public Funds Investment Act within 12 months of taking office or assuming
investment duties. After the initial training, Investment Officers are required to take eight (8) hours of
training every two years aligned with the City’s fiscal year. The Investment Committee will approve all
investment training sources.
PRUDENT INVESTMENT MANAGEMENT
The designated Investment Officers shall perform their duties in accordance with the adopted Investment
Policy and internal procedures. Investment Officers acting in good faith and in accordance with these
policies and procedures shall be relieved of personal liability.
PRIMARY DEPOSITORY
In Compliance with Local Government Code, Chapter 105 – Depositories for Municipal Funds, a Primary
Depository shall be selected through the City’s banking services procurement process, which shall
include a formal request for application (RFA). The selection of a primary depository will be determined
by evaluation of the “most advantageous” criteria during the RFA process, and may include the following
selection criteria:
1) The ability to qualify as a depository for public funds in accordance with state law,
2) The ability to provide requested information or financial statements for the periods specified,
3) The ability to meet the minimum required items in the banking RFA,
4) Complete response to all required items on the RFA form, and
5) Competitive net banking service cost, consistent with the ability to provide an appropriate level of
service.
BROKER/DEALERS
Investment Broker/Dealers shall adhere to the spirit, philosophy and specific term of the Policy and shall
avoid recommending or suggesting transactions outside the “Standard of Care.”
The Investment Committee will perform selection of Broker/Dealers at least annually. The Investment
Committee will establish criteria to evaluate Broker/Dealers, including:
1) Adherence to the City’s policies and strategies.
2) Transaction pricing.
3) Responsiveness to request for services, information and open communication.
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY (CONTINUED)
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4) Understanding of the inherent fiduciary responsibility of investing public funds.
5) Similarity in philosophy and strategy with the City’s investment objectives.
Selected Broker/Dealers shall provide timely transaction confirmations.
The approved Broker/Dealers are authorized to engage in investment transactions with the City and can
be revised periodically by the Investment Committee. It may become necessary to revise Broker/Dealers
during the year to ensure competition and quality service to the City. Therefore, the Investment
Committee can add or subtract Broker/Dealers during the year.
INVESTMENT POLICY CERTIFICATION
All business organizations (local government investment pools and discretionary investment management
firms) must sign a certification acknowledging that the organization has received and reviewed the City’s
Investment Policy and that reasonable procedures and controls have been implemented to preclude
investment transactions that are not authorized by the City’s Policy and in accordance with the PFIA.
The City shall not transact with a business organization prior to receiving the certification above.
WIRE/ACH PROCEDURES
The City is allowed to initiate wires/ACH through a City authorized depository. The individuals authorized
to perform wires/ACH transactions include the Finance Director, the Accounting Manager, the accountant,
and the accounting specialist. Transactions may be done as repetitive or non-repetitive transactions.
Repetitive wires/ACH can be set up at a City depository bank with approval of two of the authorized
individuals. Thereafter, repetitive wires may be completed with approval of one of the authorized
individuals. Non-repetitive wires/ACH will require approval from two of the authorized individuals.
INVESTMENT STRATEGY
OPERATING FUND
The operating funds include the General Fund and other Special Revenue Funds of the City. The primary
objective in investing available funds is the preservation and safety of principal. All of the allowable
investments mentioned in the Investment Policy would be suitable for the operating funds. The
investments should be structured so that investments mature to meet cash needs and have excess funds
for additional liquidity. In the investment of funds decision, the security with the best return within a three
to six month range will be selected with the intention of investing in the other maturities at a later date.
This strategy allows the City to take full advantage of the yield curve and all investments securities
allowed in the Investment Policy. Short-term securities such as discount notes can be used for shorter
maturities, while treasury notes and other agency securities can be used for longer-term maturities. At
least some of the purchases will be in U.S. Treasuries or Agency securities, which are both liquid and
marketable. Investments in Agency securities should be diversified among different Government
Agencies. Investments will be laddered along the yield curve to optimize earnings.
DEBT SERVICE AND DEBT SERVICE RESERVE FUNDS
All Debt Service Reserve funds will be kept in local government investment pools, money market mutual
funds/accounts, or certificates of deposits in the unlikely event the funds would be needed for a shortfall
in making debt service payments. Debt Service funds will be accumulated in local government
investment pools or money market funds/accounts until needed for scheduled debt service payments.
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY (CONTINUED)
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The primary objective in investing available funds is the preservation and safety of principal. Yield will be
dictated by short-term rates.
PROPRIETARY FUNDS
Proprietary funds include both Enterprise Funds and Internal Service Funds. These funds provide for the
operations, capital replacement, and future claims of each functional area. Specifically, the City
maintains only two proprietary funds, the Utilities Fund and the Drainage Fund. All of the allowable
investment securities would be suitable for the proprietary funds. The primary objective in investing
available funds is the preservation and safety of principal. The investments should be structured so that
maturities are scheduled to meet cash needs and have excess funds for additional liquidity. In the
investment of funds decision, the security with the best return within a three to six month range will be
selected with the intention of investing in the other maturities at a later date. This strategy allows the City
to take full advantage of the yield curve and all investments securities allowed in the Investment Policy.
Short-term securities such as discount notes can be used for shorter maturities, while treasury notes and
other agency securities can be used for longer-term maturities. Most of the purchases will be in U.S.
Treasuries or Agency securities, which are both liquid and marketable. Investments in Agency securities
should be diversified among different Government Agencies. Investments will be laddered along the yield
curve to optimize earnings.
CAPITAL PROJECT FUNDS
Capital Project funds are used to account for the construction of various City improvements including
General Construction and other capital improvement funds. All allowable City investments would be
suitable for the capital projects funds. The cash should be invested to correspond to the estimated
aggregate cash draws on the various projects. At least some of the purchases will be in U.S. Treasuries
and Agency securities, which provide both liquidity and marketability. Investments in Agency securities
should be diversified among the various Government Agencies.
TRUST FUNDS
Trust funds will be invested in accordance with provisions of the applicable trust agreement. If there are
not specific investment requirements, trust funds will be invested in a similar manner as operating funds.
In the investment of funds decision, the security with the best return within a three to six month range will
be selected with the intention of investing in the other maturities at a later date. This strategy allows the
City to take full advantage of the yield curve and all investments securities allowed in the Investment
Policy. Short-term securities such as discount notes can be used for shorter maturities, while treasury
notes and other agency securities can be used for longer-term maturities. The primary objective in
investing available funds is the preservation and safety of principal.
BOND PROCEEDS
The investment of bond proceeds (excluding reserve and debt service funds) shall generally be limited to
the anticipated cash flow requirement or the “temporary period,” as defined by Federal tax law. During the
temporary period bond proceeds may be invested at an unrestricted yield. After the expiration of the
temporary period, bond proceeds subject to yield restriction shall be invested considering the anticipated
cash flow requirements of the funds and market conditions to achieve compliance with the applicable
regulations. Bond proceeds may be invested in a single flexible repurchase agreement if the Investment
Officers determine that such an investment has advantage to comply with Federal arbitrage restrictions or
to facilitate arbitrage record keeping and calculation.
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A flexible repurchase agreement provides that disbursements are allowed in the amount necessary to
satisfy reasonable expenditure requests and the defined termination date of the investment does not
exceed the estimated expenditure date of the bond proceeds.
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY
APPENDIX 2 – APPROVED TRAINING PROVIDERS
i
AGENCIES – Federal agency securities and/or Government-sponsored entities.
BENCHMARK – A comparative base for measuring the performance or risk tolerance of the investment
portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of
the portfolio’s investments.
BROKER – A broker brings buyers and sellers together for a commission.
CERTIFICATE OF DEPOSIT – A time deposit with a specific maturity evidenced by a certificate.
CDAR – A time deposit (certificate of deposit) that breaks up large deposits over the FDIC limit and places
them across a network of over 3,000 banks and savings associations across the US.
COLLATERAL – Securities, evidence of deposit, or other property which a borrower pledges to secure
repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies.
DEALER – A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his
own account.
DELIVERY VERSUS PAYMENT – Delivery verses payment is the delivery of a security and there is an
exchange of money after the delivery of the security.
DISCOUNT SECURITIES – Non-interest bearing money market instruments that are being issued at a
discount and redeemed at maturity for full face value, e.g. Treasury Bills.
DIVERSIFICATION – Dividing instruments among securities offering independent returns.
FEDERAL CREDIT AGENCIES – Agencies of the Federal government set up to supply credit to various
classes of institutions and individuals e.g. savings and loans, small business firms, students, farmers, farm
cooperatives, and exporters.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) – A federal agency that insures bank
deposits, currently up to $250,000 per deposit.
FEDERAL HOME LOAN BANKS (FHLB) – Government sponsored regional wholesale banks which lend
funds and provide correspondent banking services to member commercial banks, thrift institutions, credit
unions and insurance companies. The mission of the FHLB is to liquefy the housing related assets of its
members who must purchase stock in their district bank.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) – FNMA, like GNMA was chartered under
the Federal National Mortgage Association Act in 1938. It is a federal corporation and the largest single
provider of residential mortgage funds in the United States. FNMA’s securities are highly liquid and widely
accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal
and interest.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) – Securities influencing the volume of
bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan
associations. Security holder is backed by the full faith and credit of the US Government.
LIQUIDITY – An asset that can be converted quickly and easily to cash.
LOCAL GOVERNMENT INVESTMENT POOL – An investment by local governments in which their money
is pooled as a method for managing local funds.
MARKET VALUE – The price at which a security is trading and could presumably be purchased or sold.
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY
APPENDIX 2 – APPROVED TRAINING PROVIDERS
ii
MASTER REPURCHASE AGREEMENT – A written contract that establishes each party’s rights in the
transactions. A master agreement will specify, among other things, the right of the buyer-lender to
liquidate the underlying securities in the event of default by the seller-borrower.
MATURITY – The date upon which the principal or stated value of an investment becomes due and payable.
MUTUAL FUND – An investment company that pools money and can invest in a variety of securities,
including fixed-income securities and money market instruments. Mutual funds are regulated by the
Investment Company Act of 1940 and must abide by Securities and Exchange disclosure guidelines.
PORTFOLIO – Collection of securities held by an investor.
PRIMARY DEALER – A group of government securities dealers who submit daily reports of market activity
and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject
to informal oversight.
PRUDENT PERSON RULE – An investment standard outlining fiduciary responsibilities of public funds
investors relating to investment practices.
RATE OF RETURN – The yield obtainable on a security based on its purchase price or its current market
price.
REPURCHASE AGREEMENT – An agreement of one party to sell securities at a specified price to
a second party and a simultaneous agreement of the first party to repurchase the securities at a
specified price or at a specified later date.
REVERSE REPURCHASE AGREEMENT – An agreement of one party to sell securities at a specified
price to a second party and a simultaneous agreement by the first party to resell the securities at a
specified price to the second party on demand or at a specified date.
SAFEKEEPING – Holding of assets (e.g. securities) by a financial institution.
TREASURY BILLS – A non-interest bearing discount security issued by the US Treasury to finance the
national debt. Most bills are issued to mature in three months, six months, or one year. The yields on
these bills are monitored closely for interest rate trends.
TREASURY BONDS – Long term US government debt securities with maturities of ten to thirty years.
TREASURY NOTES – Intermediate term US government debt securities with maturities of one to ten
years.
YIELD – The current rate of return on an investment security generally expressed as a percentage of the
securities current price.
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY
APPENDIX 2 – APPROVED TRAINING PROVIDERS
iii
Current Approved Broker Dealers
1) Duncan-Williams, Inc.
2) Raymond James
3) Multi-Bank Securities, Inc. (MBS)
4) Wells Fargo
CITY OF COLLEYVILLE INVESTMENT POLICY AND STRATEGY
APPENDIX 2 – APPROVED TRAINING PROVIDERS
iv
Current Approved Training Providers
1) North Central Texas Council of Governments (NCTCOG)
2) Government Treasurers’ Organization of Texas (GTOT)
3) Government Finance Officers Association of Texas (GFOAT)
4) Texas Municipal League (TML)
5) University of North Texas Center for Professional Development (UNT)
Investment Policy
Update
Audit Committee
June 18, 2024
1
•Purpose: To present the new Investment Policy and its key
components. The old policy was adequate, but this update
modernizes and refines it. This policy must be approved
annually by the City Council.
•Scope: Applies to all investment activities of the City, with
specific exceptions (deferred compensation plan, Texas
Municipal Retirement System, etc.)
•Authorized by: City Council of Colleyville
•In accordance with: Chapter 2256 Texas Government
Code – Public Funds Investment Act (PFIA)
2
Introduction & Authorization
1)Preserve capital
–Only invest in secure and approved instruments
2)Provide liquidity
–Maintain sufficient liquidity to meet cash flow needs
3)Optimize earnings
–Optimize earnings within constraints of capital
preservation and liquidity
3
Investment Policy - Objectives
•Time Deposits, Certificates of Deposit
•Direct obligations of the United States
•Obligations of U.S. agencies and instrumentalities
•Texas local government investment pools
•No-load money market mutual funds
•Obligations of state and local governments
•Fully collateralized flexible repurchase agreements
4
Authorized Investments
•Designated Investment Officers
–Finance Director, Accounting Manager, and Assistant City
Manager
–Make up investment committee
–Required to complete initial and ongoing training
–Must disclose any personal business relationships with
investment entities
•Audit Committee
–Review quarterly investment reports
–Evaluate any changes to the investment policy
•City Council
–Receive quarterly investment report
–Approve any changes to the investment policy
5
Roles & Responsibilities
Monitoring:
•Quarterly monitoring of credit ratings
•Prudent measures to liquidate downgraded investments
Reporting:
•Quarterly reports to the Audit Committee and City Council
•Compliance audits as part of the annual financial audit
6
Monitoring and Reporting
Scope Adjustments:
•Old Policy: Applies to all financial assets of the City
accounted for in the Comprehensive Annual Financial
Report.
•New Policy: Specifies exclusions such as deferred
compensation plan, Texas Municipal Retirement System, or
investments donated with specific terms.
Investment Objectives:
•Old Policy: Emphasis on safety, liquidity, and yield.
•New Policy: Similar emphasis but with detailed strategies
for preservation of capital, liquidity, and optimization of
earnings.
7
Changes from Old to New Policy (Part 1)
Authorized Investments:
•Old Policy: Includes U.S. obligations, Texas obligations, certificates of
deposit, local government investment pools, repurchase agreements, SEC-
registered no-load money market mutual funds.
•New Policy: More specific limitations and percentages for investment
types, addition of obligations of states and political subdivisions, and
stricter diversification requirements.
Prohibited Investments:
•Old Policy: Lists several prohibited investments including collateralized
mortgage obligations and commercial paper.
•New Policy: New approach of listing only allowed investments and adding
detail on inherently risky securities.
Monitoring and Reporting:
•Old Policy: Quarterly written report to Audit Committee and City Council.
•New Policy: Quarterly monitoring of credit ratings, detailed quarterly
reports, and compliance audits as part of the annual financial audit.
Additionally added information on internal controls in place.
8
Changes from Old to New Policy (Part 2)
•Next Steps:
–With your approval, we will take to City Council for approval at July
2nd meeting
–After Council review and approval, the policy will be submitted to
the Government Treasurers’ Organization of Texas (GTOT) for
review for their Certificate of Distinction award.
•Colleyville last received this award for the two-year period ended January 31,
2022
•Questions & Discussion
9
Conclusion
City of Colleyville Page 1
CITY OF COLLEYVILLE
AUDIT COMMITTEE BRIEFING
Agenda Number 3b Agenda Date 6/18/2024 Number
Type Regular Agenda Items
Department Finance
Title
Presentation of the second quarter FY24 investment report
Explanation
Finance Director Matt Poston will present the Quarterly Investment Report.
Attachments
1. Quarterly Investment Report - March 2024 (final)
2. 2024-03 Quarterly Investment Report Presentation
MEMO
TO: City Council
THRU: Audit Committee
FROM: Investment Committee:
Mark Wood, Assistant City Manager
Matthew Poston, Director of Finance
Karen Hines, Accounting Manager
DATE: May 23, 2024
RE: March 31, 2024 Quarterly Investment Report
On March 31, 2024, the City of Colleyville was in compliance with its investment policy
and the Public Funds Investment Act. Specifically, the City only purchases securities from
brokers who have reviewed the investment policy and signed a statement agreeing to
comply with it. The weighted average maturity of the portfolio is approximately 1.26
months, which is well below the 12-month maximum weighted average maturity stipulated
in our investment policy. The maturity dates of the City’s investments will meet the
anticipated cash flow needs of the City.
The overall weighted average portfolio yield is 5.20%, which is competitive in the current
market. The chart below shows a comparison to the previous four quarters along with an
analysis of the portfolio yield versus the rolling 13-week Treasury note.
Treasury yields can fluctuate at a much higher rate than the portfolio. Our portfolio is
designed to hold value. Our laddered strategy will always lag the market. In periods of
declining rates, our returns will be greater than the market. Conversely, in periods of
4.00%
4.50%
5.00%
5.50%
6.00%
March‐23 June‐23 September‐23 December‐23 March‐24Yield (%)Quarterly Portfolio Yield Analysis
Portfolio Yield 13‐week Treasury Bill Yield
Quarterly Investment Report – March 2024
2
increasing rates, our return will lag relative to the market. In a rising interest rate
environment, the market value of the portfolio should decrease.
Our stated objective in the investment policy is to optimize earnings within the constraints
of preserving capital and maintaining liquidity. The portfolio investments are typically held
until maturity. The laddered structure of the portfolio reduces volatility while providing
liquidity. The portfolio market value remains extremely consistent at 99.97%.
The City invests in:
- Certificates of deposit (CDs)
- Governmental agencies
- Local government investment pools
- Cash at the City’s authorized depositories
A summary of the portfolio is attached, reflecting a total portfolio, including cash and
investments, of $79,944,194.
Certificates of deposit are currently a good option to lock in interest rates while they are
high. The City utilizes various brokers to place new investments, including brokered CDs
that allow us to use multiple banks and keep under the $250,000 FDIC insurance limit.
Currently, the City is receiving approximately 5.15% on a new 52-week CD, 5.20% on a
new 39-week CD, and 5.00% on a 26-week CD investment. On March 31, 2024, the City
had $7.2 million in CD investments. Governmental Agency securities are also a good
option and offer comparable interest rates to CDs. The portfolio currently holds $10.0
million in agencies, with holdings in Federal Home Loan Bank securities making up $7.7
million and Federal Home Loan Mortgage Corporation securities the remaining $2.3
million.
The City has cash invested at the City depository, Frost, totaling $20.5 million. The City
earns an earnings service credit with Frost of 5.39%.
The City has investments in local government investment pools (LGIP) totaling $42.3
million. The City uses only AAA-rated Texas LGIPs as authorized by the PFIA. The City
participates in four different pools. On March 31, 2024, the City held $19.8 million in
TexPool, $12.9 million in Lone Star, $6.8 million in Texas Class, and $2.8 million in Logic.
The investment policy allows investment in LGIPs that invest in commercial paper up to a
limit of 5% of total pool investments. Currently, the only pool with commercial paper is
Logic, which made up 6.5% of pool investments on March 31, 2024, exceeding the 5%
limit. The City’s position in Logic will be decreased to comply with the investment policy.
The portfolio is well balanced between cash and investment securities and diversified
between certificates of deposits and agencies. Local government investment pools
comprise 52.9% of the total portfolio, below the 75% limit. Agency securities represent
12.5% of the total portfolio, and certificates of deposit represent 9.0%, both below the 75%
limit.
Quarterly Investment Report – March 2024
3
No securities have a maturity date longer than five years, in accordance with our investment
policy. Cash balances, including LGIP, make up approximately 78.6% of the portfolio.
Other short-term instruments are funds invested in certificates of deposit, comprising
approximately 9.0% of the portfolio, ranging in maturity from 6 to 24 months upon
issuance.
The portfolio is well-positioned, with a heavier weighting in the zero to three-month
maturity area. In an increasing rate environment, many of these funds will be available to
reinvest at higher rates. Below is a graph of the investment maturities by quarter.
CD, $7.15
FHLB , $7.72
FHLMC, $2.25
Cash, $20.54
LGIP, $42.29
Portfolio Composition as of March 31, 2024 (in millions)
$7.00
$2.46
$3.16 $3.00
$0.50
$1.00
$‐$‐$‐$‐$‐
$‐
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
0‐33‐66‐99‐12 12‐15 15‐18 18‐24 24‐36 36‐48 48‐60 >=60ValueMillions
Maturity Period (months)
Investment Maturities by Quarter as of March 31, 2024
City of Colleyville
Investment Holding Report
For the Quarter Ended March 31, 2024
Security Description
Coupon
Rate
Maturity
Date
Purchase
Date Ending Market Value Ending Amort Value
Cash ‐ Frost 5.39% 3/31/2024 3/31/2024 20,530,038.00$ 20,530,038.00$
Cash ‐ MBS 1.00% 3/31/2024 3/31/2024 6,835.50 6,835.50
TexPool LGIP 5.33% 3/31/2024 3/31/2024 19,837,306.05 19,837,306.05
Lone Star LGIP 5.34% 3/31/2024 3/31/2024 12,925,353.63 12,925,353.63
Texas Class LGIP 5.26% 3/31/2024 3/31/2024 6,763,987.20 6,763,987.20
LOGIC LGIP1 5.47% 3/31/2024 3/31/2024 2,760,975.46 2,760,975.46
Total Cash and Cash Equivalents 62,824,495.84 62,824,495.84
CD 0.40 03/29/24 0.40% 3/29/2024 9/29/2021 248,970.12 249,000.00
CD 4.40 10/11/24 4.40% 10/11/2024 10/14/2022 247,807.29 249,000.00
CD 4.40 10/21/24 4.40% 10/21/2024 10/21/2022 247,764.96 249,000.00
CD 5.00 02/10/25 5.00% 2/10/2025 2/9/2024 247,640.40 248,000.00
CD 5.00 09/16/24 5.00% 9/16/2024 3/15/2024 247,637.92 248,000.00
CD 5.00 11/12/24 5.00% 11/12/2024 2/12/2024 237,595.40 238,000.00
CD 5.00 11/18/24 5.00% 11/18/2024 2/16/2024 239,596.80 240,000.00
CD 5.15 03/07/25 5.15% 3/7/2025 3/8/2024 248,066.96 248,000.00
CD 5.15 07/26/24 5.15% 7/26/2024 5/26/2023 247,816.48 248,000.00
CD 5.15 11/26/24 5.15% 11/26/2024 5/26/2023 247,838.80 248,000.00
CD 5.15 11/29/24 5.15% 11/29/2024 2/29/2024 239,848.80 240,000.00
CD 5.15 11/29/24 5.15% 11/29/2024 2/29/2024 239,848.80 240,000.00
CD 5.15 12/05/24 5.15% 12/5/2024 3/5/2024 236,864.91 237,000.00
CD 5.20 05/24/24 5.20% 5/24/2024 5/26/2023 236,876.76 237,000.00
CD 5.20 05/25/24 5.20% 5/25/2024 2/26/2024 1,548,072.96 1,548,072.96
CD 5.20 09/12/24 5.20% 9/12/2024 9/12/2023 718,625.16 718,625.16
CD 5.20 11/19/24 5.20% 11/19/2024 5/19/2023 242,859.06 243,000.00
CD 5.20 12/09/24 5.20% 12/9/2024 3/7/2024 239,952.00 240,000.00
CD 5.20 12/20/24 5.20% 12/20/2024 3/20/2024 239,988.00 240,000.00
CD 5.20 12/23/24 5.20% 12/23/2024 12/22/2022 249,965.00 250,000.00
CD 5.60 10/18/24 5.60% 10/18/2024 10/19/2023 248,267.84 248,000.00
CD 5.75 09/13/24 5.75% 9/13/2024 9/13/2023 248,314.96 248,000.00
FHLB 2.625 4/25/2024 2.63% 4/25/2024 4/25/2022 998,220.00 1,000,000.00
FHLB 2.700 4/29/2024 2.70% 4/29/2024 4/29/2022 449,095.50 450,000.00
FHLB 3.000 5/17/2024 3.00% 5/17/2024 5/20/2022 513,496.20 515,000.00
FHLB 3.000 5/17/2024 3.00% 5/17/2024 5/16/2022 997,090.00 1,000,000.00
FHLB 4.875 7/25/2024 4.88% 7/25/2024 10/25/2022 998,180.00 1,000,000.00
FHLB 5.000 7/29/2025 5.00% 7/29/2025 1/29/2024 997,670.00 1,000,000.00
FHLB 5.015 2/19/2025 5.02% 2/19/2025 2/15/2024 1,248,537.50 1,250,000.00
FHLB 5.340 4/26/2024 5.34% 4/26/2024 8/10/2023 1,500,015.00 1,500,000.00
FHLMC 5.125 1/27/2025 5.13% 1/27/2025 2/28/2024 1,248,012.50 1,250,000.00
FHLMC 5.150 5/23/2024 5.15% 5/23/2024 11/28/2022 499,730.00 500,000.00
FHLMC 5.350 5/16/2025 5.35% 5/16/2025 5/16/2023 498,690.00 500,000.00
Investment Total 17,098,956.08 17,119,698.12
Total Portfolio 79,923,451.92$ 79,944,193.96$
99.97%
1 ‐ LOGIC is invested in commercial paper.
City of ColleyvilleInvestment TransactionsFor the Quarter Ending March 31, 2024Approved Investment Policy 1/17/2023Market Value*BalanceChange inBalanceMarket Value* Accrued InterestFund Fund DescriptionDecember 31, 2023 December 31, 2023 Acquisitions MaturitiesCashMarch 31, 2024 March 31, 2024 March 31, 2024001 GENERAL FUND10,999,419.58$ 11,037,110.75$ 6,741,072.96$ (6,252,400.00)$ 4,040,401.98$ 15,566,185.69$ 15,550,664.90$ 86,754.39$ 002 UTILITY FUND6,448,976.20 6,450,446.98 726,000.00 ‐ 62,780.57 7,239,227.55 7,236,106.25 29,483.17 003 CAPITAL PROJECTS6,500,222.00 6,503,053.13 ‐ ‐ 2,903,379.67 9,406,432.80 9,404,005.05 900.49 005 VOLUNTARY PARK FUND1,090,400.88 1,090,400.88 ‐ ‐ 13,757.96 1,104,158.84 1,104,158.84 ‐ 006 SESQUICENTENNIAL FUND3,543.86 3,543.86 ‐ ‐ 44.72 3,588.58 3,588.58 ‐ 011 VOLUNTARY LIBRARY FUND528,028.52 528,028.52 ‐ ‐ 6,662.32 534,690.84 534,690.84 ‐ 012 PARK LAND DEDICATION FUND644,471.33 644,471.33 ‐ ‐ 8,131.52 652,602.85 652,602.85 ‐ 015 POLICE ASSET FORFEITURE FUND9,804.74 9,804.74 ‐ ‐ 123.71 9,928.45 9,928.45 ‐ 017 DRAINAGE FEE FUND714,177.89 714,177.89 ‐ ‐ 9,544.93 723,722.82 723,722.82 ‐ 018 TREE PRESERVATION FUND270,694.22 270,694.22 ‐ ‐ 3,415.43 274,109.65 274,109.65 ‐ 024 C'VILLE ECONOMIC DEVELOPMENT4,647,321.22 4,646,991.22 ‐ ‐ 42,055.69 4,689,046.91 4,689,061.91 39,382.50 026 TIF FUND1,050,076.97 1,050,076.97 ‐ ‐ 13,249.18 1,063,326.15 1,063,326.15 ‐ 027 CRIME DISTRICT FUND2,574,352.45 2,576,259.21 ‐ (1,000,000.00) 11,052.91 1,587,312.12 1,587,309.96 9,540.62 029 COURT TECHNOLOGY FEE FUND9,724.79 9,724.79 ‐ ‐ 122.70 9,847.49 9,847.49 ‐ 032 VEHICLE/EQUIP REPLACEMENT FUND1,612,212.56 1,612,212.56 ‐ ‐ 21,031.31 1,633,243.87 1,633,243.87 ‐ 033 PUBLIC ART FUND6,494.49 6,494.49 ‐ ‐ 81.94 6,576.43 6,576.43 ‐ 035 PARKS TOMORROW FUND936,095.88 936,095.88 ‐ ‐ 12,491.96 948,587.84 948,587.84 ‐ 036 STRATEGIC INCENTIVE FUND540,891.52 540,891.52 ‐ ‐ 7,218.07 548,109.59 548,109.59 ‐ 039 UTILITY‐CAPITAL PROJECTS FUND12,889,133.61 12,897,432.86 9,178.76 (1,000,000.00) 146,505.79 12,053,117.41 12,053,432.37 3,057.96 041 DRAINAGE‐CAPITAL PROJECTS FUND1,336,502.77 1,336,502.77 ‐ ‐ 17,001.94 1,353,504.71 1,353,504.71 ‐ 52,812,545.48$ 52,864,414.57$ 7,476,251.72$ (8,252,400.00)$ 7,319,054.30$ 59,407,320.59$ 59,386,578.55 169,119.13$ * Market Valule provided by an independent third-party pricing agency.
City of Colleyville Investment Listing
March 31, 2024
Security Name
CUSIP/Accou
nt Fund
Broker/Ba
nk Type Purchase Mature Rate Par Market Acc Int
American Eagle Bank 02554BEV9 001 MBS BCD 3/15/2024 9/16/2024 5.000% 248,000.00 247,637.92 543.56
Bank Hope 062683HX8 002 MBS BCD 5/26/2023 5/24/2024 5.200% 237,000.00 236,876.76 10,466.96
Bank United National Assoc 066519WX3 001 MBS BCD 3/7/2024 12/9/2024 5.200% 240,000.00 239,952.00 820.60
Blupeak CU 09644EAK8 039 MBS BCD 9/13/2023 9/13/2024 5.750% 248,000.00 248,314.96 703.23
Capital Education FCU 14008LAA4 002 RJ BCD 12/22/2022 12/23/2024 5.200% 250,000.00 249,965.00 ‐
Cornerstone Community CU 21923LAP8 001 MBS BCD 3/8/2024 3/7/2025 5.150% 248,000.00 248,066.96 804.81
Crossfirst Bank 22766APU3 001 MBS BCD 3/20/2024 12/20/2024 5.200% 240,000.00 239,988.00 376.11
Dime Community Bank 25432JDN0 002 MBS BCD 2/16/2024 11/18/2024 5.000% 240,000.00 239,596.80 1,446.58
FHLB 2.625 4/25/2024 3130ARLC3 001 MBS FHLB 4/25/2022 4/25/2024 2.625% 1,000,000.00 998,220.00 11,375.00
FHLB 2.700 4/29/2024 3130ARP54 001 MBS FHLB 4/29/2022 4/29/2024 2.700% 450,000.00 449,095.50 5,130.00
FHLB 3.000 5/17/2024 3130ARV65 001 MBS FHLB 5/20/2022 5/17/2024 3.000% 515,000.00 513,496.20 5,750.83
FHLB 3.000 5/17/2024 3130ARVT5 001 RJ FHLB 5/16/2022 5/17/2024 3.000% 1,000,000.00 997,090.00 11,083.33
FHLB 4.875 7/25/2024 3130ATK63 001 RJ FHLB 10/25/2022 7/25/2024 4.875% 1,000,000.00 998,180.00 8,802.08
FHLB 5.000 7/29/2025 3130AYPP5 001 RJ FHLB 1/29/2024 7/29/2025 5.000% 1,000,000.00 997,670.00 8,472.22
FHLB 5.015 2/19/2025 3130AYML7 001 RJ FHLB 2/15/2024 2/19/2025 5.015% 1,250,000.00 1,248,537.50 11,840.96
FHLB 5.340 4/26/2024 3130AVJN3 024 RJ FHLB 8/10/2023 4/26/2024 5.340% 1,500,000.00 1,500,015.00 39,382.50
FHLMC 5.125 1/27/2025 3134GYFG2 001 RJ FHLMC 2/28/2024 1/27/2025 5.125% 1,250,000.00 1,248,012.50 11,210.94
FHLMC 5.150 5/23/2024 3134GX7F5 027 RJ FHLMC 11/28/2022 5/23/2024 5.150% 500,000.00 499,730.00 9,084.03
FHLMC 5.350 5/16/2025 3134GYS52 002 MBS FHLMC 5/16/2023 5/16/2025 5.350% 500,000.00 498,690.00 10,031.25
Frost Bank CD Frost 001 Frost CD 2/26/2024 5/25/2024 5.200% 1,548,072.96 1,548,072.96 7,498.61
Great Southern Bank 39120VTC8 003 MBS BCD 10/21/2022 10/21/2024 4.400% 249,000.00 247,764.96 300.16
Harborstone CU 41166MAG0 002 MBS BCD 5/26/2023 7/26/2024 5.150% 248,000.00 247,816.48 174.96
Hinsdale Bank & Trust 433411DES 001 MBS BCD 2/29/2024 11/29/2024 5.150% 240,000.00 239,848.80 1,049.75
Intercity State Bank 45847PAD8 001 MBS BCD 3/5/2024 12/5/2024 5.150% 237,000.00 236,864.91 869.43
Lake Forest Bank & Trust 509685FU2 001 MBS BCD 2/29/2024 11/29/2024 5.150% 240,000.00 239,848.80 1,049.75
Morgan Stanley Bank 61773TKZ5 003 MBS BCD 10/14/2022 10/11/2024 4.400% 249,000.00 247,807.29 600.33
Pacific Western Bank 69506YZM4 002 MBS BCD 5/19/2023 11/19/2024 5.200% 243,000.00 242,859.06 4,604.35
Pentagon Federal CU 70962LAN2 001 MBS BCD 9/29/2021 3/29/2024 0.400% 249,000.00 248,970.12 76.41
Simmons Bank CD Simmons 039 Simmons CD 9/12/2023 9/12/2024 5.200% 718,625.16 718,625.16 2,354.73
Technology CU 87868YAU7 002 MBS BCD 2/9/2024 2/10/2025 5.000% 248,000.00 247,640.40 1,019.18
Truestone Finl CU 89841MAS6 027 MBS BCD 10/19/2023 10/18/2024 5.600% 248,000.00 248,267.84 456.59
Western Alliance Bank 95763PRW3 002 MBS BCD 2/12/2024 11/12/2024 5.000% 238,000.00 237,595.40 1,564.93
Workers Federal CU 98138MBW9 002 MBS BCD 5/26/2023 11/26/2024 5.150% 248,000.00 247,838.80 174.96
17,119,698.12 17,098,956.08 169,119.13
Brokered Certificate of Deposit BCD 4,888,000.00 4,883,521.26 27,102.65
Certificate of Deposit CD 2,266,698.12 2,266,698.12 9,853.34
Federal Home Loan Bank FHLB 7,715,000.00 7,702,304.20 101,836.92
Federal Home Loan Mortgage Corporation FHLMC 2,250,000.00 2,246,432.50 30,326.22
Securities 17,119,698.12 17,098,956.08 169,119.13
Cash 5.389% 20,536,873.50 20,536,873.50
LGIP 5.331% 42,287,622.34 42,287,622.34
Total Portfolio 79,944,193.96 79,923,451.92
Quarterly Investment Report
Highlights
March 31, 2024
Audit Committee
June 18, 2024
1
•Overview of the Report
–Compliance with the City’s investment policy and the Texas Public Funds
Investment Act (PFIA)
•Investment Strategies and objectives
1)Preserve capital
2)Provide Liquidity
3)Optimize earnings within constraints of 1) and 2)
2
Introduction
3
Portfolio Composition
CD, $ 7.15
FHLB , $ 7.72
FHLMC, $ 2.25
Cash, $ 20.54
LGIP, $ 42.29
Total Value:
$79.9 Million
Legend:
•LGIP – Local Government
Investment Pool
•CD – Certificate of Deposit
•FHLB – Federal Home Loan Bank
•FHLMC – Federal Home Loan
Mortgage Corporation
* - Figures are in millions and as of March 31, 2024
4
Portfolio Performance
•Weighted Average Maturity: 1.26 months
•Weighted Average Yield: 5.20%Yield (%)March-23 June-23 September-23 December-23 March-24
4.00%
4.50%
5.00%
5.50%
6.00%
Quarterly Portfolio Yield Analysis
Portfolio Yield 13-week Treasury Bill Yield
5
Investment Distribution
Maturity Period (months)ValueMillions0-3 3-6 6-9 9-12 12-15 15-18 18-24 24-36 36-48 48-60 >=60
$ -
$ 1.00
$ 2.00
$ 3.00
$ 4.00
$ 5.00
$ 6.00
$ 7.00
$ 8.00
$ 7.00
$ 2.46
$ 3.16 $ 3.00
$ 0.50
$ 1.00
$ -$ -$ -$ -$ -
Investment Maturities by Quarter as of March 31, 2024
•Compliance with Policy Limits:
–LGIPs: 52.9% (below 75% limit)
–Agency Securities: 12.5% (below 75% limit)
–CDs: 9.0% (below 75% limit)
•Investment Strategy:
–Laddered structure for reduced volatility and maintained liquidity
–Transition from brokered CDs to placement with local banks and other
programs
6
Compliance & Strategy
•Certificates of Deposit:
–Recent CD investment have been yielding us return in the low 5% range
•Governmental Agencies:
–Holdings diversified in FHLB and FHLMC yielding us return in the low 5%
range
•Cash and Cash Equivalents
–Frost Bank – City’s primary depository
•Earnings credit rate of 5.39%
–Local Government Investment Pools
•TexPool – 5.33%
•Lone Star – 5.34%
•Texas Class – 5.26%
•Logic1 – 5.47%
1- Logic is the only approved pool that invests in commercial paper, limited per policy to 5% of total LGIP investment
7
Highlights of Specific Investments
8
Local Government Investment Pools
(LGIP)
TexPool, $ 19.84, 47%
Lone Star, $ 12.93, 31%
Texas Class, $ 6.76, 16%
Logic*, $ 2.76, 6%
*- Logic is the only approved pool that invests in commercial paper, limited per policy to 5% of total LGIP investment
Note on Compliance:
Logic’s position was 6.5% of total LGIP
investments as of 3/31/2024. Logic is
limited to 5% of total LGIP holdings.
This was corrected as soon as it was
identified by partially liquidating our
holding in Logic.
•Summary
–Strong compliance and strategic investment
–Stable and optimized portfolio performance
•Next Step:
–Continued monitoring and adjustment to maintain compliance and
optimize returns
–Continue to build out our laddered investment strategy
–We will be back in a few months with the June 2024 quarterly report
9
Conclusion
10
Questions & Discussion