HomeMy WebLinkAboutFY 2025 Annual Investment ReportCityof
Euless
Annual Investment Report
Fiscal Year 2024-2025
201 N. Ector Drive, Euless, TX 76039 www.eulesstx.gov
Investment Committee Meeting
1/27/2026
* Compliance Summary - Legislative Requirements
Introduction
Investment Strategy Compliance
* Annual Review, Fiscal Year 2025
I. Portfolio Summary
II. Performance Summary
III. Interest Income Summary
IV. Collateral Review
V. Broker Selection Process
VI. Summary
* Certification
* Minutes from 1/13/2026
* Appendices
Appendix A - Investment Portfolio by Fund
Appendix B - Investment Purchases
Appendix C - Investment Maturities
Appendix D - Investment Types and Institutions
* Investment Policy
* Broker / Dealers
* Economic News
INTRODUCTION
This report is written and submitted in accordance with Chapter 2256 of the Texas Government Code
entitled the "Public Funds Investment Act," which states that "at least once each year, the investment
officer of a state agency or political subdivision shall prepare a written report concerning the agency's or
subdivision's local funds investment transactions for the preceding year and describing in detail the
investment position of the agency or subdivision as of the date of the report."
The City's investment policy designates the Investment Officers as the responsible managers of the
City's investment program. The daily investment procedures are monitored by the City's Finance
department and reviewed by the Investment Officers. This report has been signed by each Investment
Officer as required by the Public Funds Investment Act and the City's investment policy.
In compliance with the City's investment policy, the Finance department fulfills four main objectives:
compliance, safety, liquidity, and yield, in that order. Compliance is maintained through regular
reporting to City management on a monthly, quarterly and annual basis. Safety is insured by 1)
investing only in securities allowed by Chapter 2256 of the Texas Government Code entitled the "Public
Funds Investment Act;" 2) using delivery vs. payment for all purchases; 3) protecting all non -
government securities (cash and bank certificates of deposit) with collateral including Federal Deposit
Insurance Corporation (FDIC) Insurance, Federal Savings and Loan Insurance Corporation (FSLIC)
Insurance and/or eligible securities as defined in Government Code Chapter 2257 Collateral for Public
Funds Section 2257.002; and 4) diversifying investment purchases into different security markets to
minimize individual market risk.
Liquidity is met by matching investment terms to future operating cash needs such as payroll, accounts
payable, debt service, and capital improvement disbursements. The City also utilizes money market
funds and local government investment pools to provide daily liquidity needs. Per the Investment
Policy, the yield or rate of return which the City receives is measured against the 90-day treasury bill
yield.
The information contained in this report will quantitatively and graphically demonstrate the achievement
of these City objectives for Fiscal Year 2024-25.
Investment Strategy Compliance
The strategy for all pooled funds is to assure that cash flows are matched with projected needs and provide
adequate liquidity and safety. This may be accomplished by purchasing high quality securities in a laddered
structure or utilizing an investment pool. Furthermore, the following purposes are also considered when investing.
-Operating Funds will be structured in such a way as to minimize volatility during economic cycles. This may be
accomplished by purchasing high quality short-term securities. The weighted average maturity on these funds will
remain within the 6 to 9 month range. These funds include:
101 General Fund
201 Hotel -Motel Tax Fund
202 Juvenile Case Fund
210 '/z¢ Sales Tax Operations Fund
220 Crime Control & Prevention District Fund
221 Police Seized Asset Fund
223 PD Financial Crimes Recovery Fund
225 PD Narcotics Task Force Fund
227 Elementary SRO Fund
230 Police Drug DEA Awards Fund
231 Police Drug State Awards Fund
232 Local Drug Seizure Fund
240 Car Rental Tax Fund
243 American Rescue Plan Fund
245 Glade Parks PID Fund
250 Glade Parks TIRZ #3 Fund
260 Cable PEG Fund
265 Glade Parks PID #2 Fund
270 Midtown PID Fund
275 Midtown TIRZ #4 Fund
501 Water & Wastewater Fund
504 Service Center Fund
510 Drainage Utility Fund
520 Recreation Classes Fund
521 Arbor Daze Fund
530 PATS Operations Fund
540 TSGC Operations Fund
601 Equipment Replacement Fund
610 Health Insurance Fund
615 Risk Management/Worker's Comp Fund
-Funds for Capital Improvement Projects (CIP) and Special Purposes may purchase securities which allow for
flexibility and unanticipated project outlays by having a portion of their investments in highly liquid securities. The
stated final maturity dates of securities held should not exceed the estimated project completion date. These funds
include:
301 Developer's Escrow Fund
305 Streets CIP Fund
310 '/z¢ Sales Tax CIP Fund
320 General CIP Fund
321 Redevelopment CIP Fund
322 Midtown Development CIP Fund
325 Police Facility CIP Fund
330 Car Rental CIP Fund
502 Water & Wastewater CIP Fund
505 Water Impact Fees Fund
508 Wastewater Impact Fees Fund
511 Drainage CIP Fund
543 TSGC CIP Fund
552 PATS CIP Fund
-Debt Service Funds should assure adequate liquidity to cover the debt service obligations on the required payment
dates. These funds include:
401 Debt Service/General Obligation Fund
402 Star Center Debt Service Fund
403 Glade Parks Debt Service Fund
404 Midtown Development Debt Service Fund
410 'h¢ Sales Tax Debt Service Fund
506 Water & Wastewater Debt Service Fund
541 TSGC Debt Service Fund
-Emergency, Contingency, Operating and Debt Service Reserve funds will have the ability to generate a dependable
revenue stream to the appropriate fund from securities with a low degree of volatility. Such securities will tend to
hold their value during economic cycles. The stated final maturity dates of securities held should not exceed five
years. These funds include:
102 General Fund Emergency
103 General Fund Contingency
211 '/z¢ Sales Tax Debt Reserve Fund
240 Car Rental Tax Fund ($4,000,000 Reserve)
323 Midtown Development Reserve Fund
503 Water & Wastewater Debt Reserve Fund
507 Water & Wastewater Emergency Fund
509 Water & WW Rate Stabilization Reserve Fund
532 PATS Reserve Fund
542 TSGC Reserve Fund
705 Star Center Escrow Fund
Based on the above strategies, the investment portfolio reported herein is in compliance with the City's adopted
investment policy.
Janina Jewell
Director of Finance
R o airJc
Ross Fairclo
Assistant Director of Finance
I. PORTFOLIO SUMMARY
The City's investment portfolio at the end of the fiscal year, September 30, 2025, is
summarized by instrument as shown below.
Distribution by Instrument
Weighted Weighted
% of Average Avg. Yield
Instrument $ Cost Portfolio Yield Prior Qtr.
Agencies & CD's $ 60,727,270 33% 1.41 % 1.43%
Gov't Pools $124,339,949 67% 2.83% 2.85%
$185,067,219 100.00%
The Distribution by Instrument table shows approximately 67% of City funds are invested in
overnight investment pools, while the remaining 33% is invested in government agencies
and CD's. As of the date of this report, the weighted average yield on the portfolio was
4.24%. When compared to prior quarter levels, the yield on the portfolio has begun to
decline due to Fed rate cuts, the early redemption of debt, reinvestment in the overnight
market and utilizing proceeds from maturities and calls for cash flow purposes. The portfolio
composition below demonstrates the diversity within the portfolio.
Portfolio Composition
as of September 30, 2025
TexPool
23%
TexStar
22%
TexasClass
22%
I. PORTFOLIO SUMMARY (CONTINUED)
The City's investment portfolio at the end of the fiscal year, September 30, 2025, is
summarized by maturity as shown below.
# of months
Overnight
< 1 mo
up to 6 mos
6 to 9 mos
9 to 12 mos
12 to 18 mos
18 to 24 mos
> 24 mos
Distribution by Maturity
$ Cost
$ 124,339,949
$ 240,000
$ 13,673,820
$ 7,918,040
$ 2,479,600
$ 17,719,000
$ 5,198,060
$ 13,498,750
$ 185,067,219
of Portfolio
67%
0%
7%
4%
2%
10%
3%
7%
100%
The Distribution by Maturity table reflects the degree of liquidity in the City's
portfolio. Currently, access to 67% of the portfolio is available within 24 hours, with
an additional 7% available within 6 months. This liquidity strategy was followed to
meet cash flow requirements for construction projects, payroll, debt service, and
other operating expenses. An additional 6% of the portfolio matures within one
year. The City has 10% of the portfolio invested from 12 - 18 months, with 3%
invested in the 18-24 month range. The remaining 7% is invested in the greater
than 24 month range. The weighted average maturity on the portfolio is currently
145.38 days.
> 24 mos
18 to 24 mos
12 to 18 mos
9 to 12 mos
6 to 9 mos
up to 6 mos
< 1 mo
Overnight
__,
Investment Maturity Distribution
as of September 30, 2025
$13.5
$5.2
$17.7
$2.5
$7.9
$13.7
$0.2
$124.3
1111111111111111111,1111111111111111111,1111111111111111111,1111111111111111111,1111111111111111111,1111111111111111111,1111111111111111111,11111111111111111111
$0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0
Shown in millions
I. PORTFOLIO SUMMARY (CONTINUED)
The City's investment portfolio at the end of the fiscal year, September 30, 2025, is
summarized by institution as shown below.
Institution
Duncan Williams
FHN Financial
Hilltop Securities
Financial Northeastern
Samco Capital
Vining Sparks KNA Stifel
TexPool
TexSta r
TexasCLASS
Distribution by Institution
$ Cost
$ 8,000,000
$ 11,000,000
$ 9,999,250
$ 8,738,000
$ 11,994,170
$ 10,995,850
$ 41,548,201
$ 41,446,655
$ 41,345,093
$185,067,219
of Portfolio
4%
7%
5%
5%
7%
6%
22%
22%
22%
100%
The City strives to not only diversify the portfolio by the type of instruments that are
purchased, but also by the institution from which they are purchased. The City uses the
following guidelines:
- No more than 10% in repurchase agreements,
- No more than 33% in investment pools with any single institution,
- No more than 33% in money market mutual funds, and
- No more than 33% by individual brokerage firms.
The chart below demonstrates the City's compliance with the above guidelines.
TexasCLASS
TexStar
TexPool
Vining/Stifel
Samco
FNS
Hilltop
FHN
Duncan
Investments by Institution
as of September 30, 2025
111.11 $41.3
$41.4
$41.5
$11.0
$12.0
$8.7
$10.0
$11.0
$8.0
$0.0 $10.0 $20.0 $30.0
Shown in millions
$40.0 $50.0
Investments at June 30, 2025
Investment Purchases/Dividends
City of Euless
Pooled Portfolio Summary
for Fiscal Year Ending
September 30, 2025
Cost Book Market
Principal Only Value Value
$ 207,357,091
$ 27,823,322
Investment Maturities $ (50,113,194)
Investments at September 30, 2025 $ 185,067,219
Janina Jewell
Director of Finance
-R ate_ a ouncJv
Ross Fairclo
Assistant Director of Finance
$ 207,336,013 $ 207,497,161
$ 185,046,623 $ 185,260,951
Summary of Investments by Fund
The following is a summary of cash and investments held by each fund at June 30, 2025 and September 30, 2025. The changes include all
investment purchases, maturities, revenues, expenses, and transfers that occurred during the fourth quarter of FY2025.
101 General Fund
102 General Fund Emergency
103 General Fund Contingency
201 Hotel -Motel Tax Fund
202 Juvenile Case Fund
210 Yz¢ Sales Tax Operations Fund $
211 Yz¢ Sales Tax Debt Reserve Fund $
220 Crime Control & Prevention District F' $
221 Police Seized Asset Fund $
223 PD Financial Crimes Recovery Fund $
225 PD Narcotics Task Force Fund $
227 Elementary SRO Fund $
230 Police Drug DEA Awards Fund $
231 Police Drug State Awards Fund $
232 Local Drug Seizure Fund $
235 Public Safety Grant Fund $
236 Police Grant Fund $
237 Texas Transportation Grant Fund $
240 Car Rental Tax Fund $
240-R Car Rental Reserve Fund $
243 American Rescue Plan Fund $
245 Glade Parks PID Fund $
250 Glade Parks TIRZ #3 Fund $
260 Cable PEG Fund $
265 Glade Parks PID #2 Fund $
270 Midtown PID Fund $
275 Midtown TIRZ #4 Fund $
301 Developer's Escrow Fund $
305 Streets CIP Fund $
310 Yz¢ Sales Tax CIP Fund $
320 General CIP Fund $
321 Redevelopment CIP Fund $
322 Midtown Development CIP $
323 Midtown Development Reserves Fun, $
325 Police Facility CIP $
330 Car Rental CIP Fund $
401 Debt Service/General Obligation Funi $
402 Star Center Debt Service Fund $
403 Glade Parks Debt Service Fund $
404 Midtown Development Debt Service F $
410 EDC Debt Service Fund $
501 Water & Wastewater Fund $
502 Water & Wastewater-CIP Fund $
503 Water & Wastewater Debt Reserve F $
504 Service Center Fund $
505 Water Impact Fees Fund $
506 Water & Wastewater -Debt Service Fi. $
507 Water & Wastewater -Emergency Fun $
508 Wastewater Impact Fees Fund $
509 W/WW Rate Stabilization Fund $
510 Drainage Utility Fund
511 Drainage CIP Fund
520 Recreation Classes Fund
521 Arbor Daze Fund
530 Parks @ Texas Star Operations Func
532 PATS Debt Reserve Fund
540 TSGC Operations Fund
541 TSGC Debt Service Fund
542 TSGC Debt Reserve Fund
543 TSGC CIP Fund
552 PATS CIP Fund
601 Equipment Replacement Fund
610 Health Insurance Fund
615 Risk Management/Worker's Comp FL
701 Payroll Clearing Fund
705 Star Center Escrow Fund
TOTAL
Cash & Investment Cash & Investment Increase/
at Market Value at Market Value (Decrease)
6/30/2025 9/30/2025 In Fund
$ 31,049,700 $ 26,775,765 $
$ 496,567 $ 499,225 $
$ 996,542 $ 1,000,000 $
$ 2,076,158 $ 2,140,706 $
$ 284,903 $ 293,788 $
3,160,568 $ 3,785,749 $
401,125 $ 401,125 $
976,554 $ 1,347,359 $
179,951 $ 179,107 $
6 $ 6 $
182,963 $ 178,873 $
(324,161) $ (93,825) $
232,053 $ 235,342 $
254,798 $ 258,384 $
127,012 $ 128,652 $
38,101 $ 74,201 $
- $ - $
(8,347) $ (10,585) $
5,597,745 $ 11,782,161 $
4,027,985 $ 4,036,873 $
5,941,274 $ 5,940,491 $
(0) $ (0) $
3,641,577 $ 1,217,778 $
628,685 $ 641,793 $ 13,108
- $
49,169 $ 6,823 $
939,198 $ 1,137,154 $
2,972,494 $ 3,020,822 $
3,498,722 $ 3,471,555 $
6,481,248 $ 7,373,234 $
14,599,145 $ 14,398,728 $
2,076,634 $ 2,076,156 $
61,136 $ 58,163 $
1,003,376 $ 1,003,194 $
19,808,865 $ 16,324,286 $
3,259,253 $ 5,900,333 $
2,315,003 $ 1,481,815 $
440,283 $ 0 $
5,741,681 $ 26,536 $
1,761,788 $ 1,254,588 $
250,176 $ 29,671 $
8,371,849 $ 9,618,151 $
4,843,101 $ 4,004,030 $
695,299 $ 695,299 $
366,975 $ 395,350 $
3,046,360 $ 3,148,638 $
1,305,488 $ 616,180 $
500,000 $ 500,000 $
747,099 $ 732,833 $
4,343,817 $ 4,422,576 $
$ 405,376 $ 516,244 $
$ 812,785 $ 824,506 $
$ 983,392 $ 995,896 $
$ 93 $ 93 $
$ 1,152,877 $ 1,155,368 $
$ 458,278 $ - $
$ 1,958,847 $ 2,036,194 $
$ 1,233,073 $ - $
$ (0) $ - $
$ 2,458,369 $ 377,264 $
$ 172,375 $ 643,432 $
$ 22,561,997 $ 26,792,696 $
$ 6,337,277 $ 8,359,458 $
$ 2,828,475 $ 3,445,969 $
$ 810,502 $ 809,420 $
$ 1,430,841 $ 1,436,017 $
$ 193,044,477 $ 189,901,641 $ (3,142,835)
(4,273,936) Operating expenses
2,658
3,458
64,547
8,885
625,180 tax revenue
370,805 tax revenue
(844)
(0)
(4,090)
230,336 pmt received
3,290
3,587
1,641
36,100
(2,238)
6,184,416 Motor vehicle tax collection
8,888
(783)
(2,423,799) Early redemption of debt
(42,346)
197,956
48,328 Capital outlay
(27,168)
891,986
(200,417) Project expense
(478)
(2,973)
(183)
(3,484,579) Project expense
2,641,080 Monthly transfers from ops
(833,188) Debt service payments
(440,283) Final debt pmt
(5,715,145) Early redemption of debt
(507,200) Debt service payments
(220,505) Debt service payments
1,246,301 Operating expenses
(839,071) Capital outlay
28,375
102,278
(689,308) Debt service payments
(14,266)
78,759
110,869
11,721
12,504
0
2,490
(458,278) Elimination of reserve
77,348
(1,233,073) Early redemption of debt
0
(2,081,105) Project expense
471,057
4,230,700 Transfer in
2,022,181 Ins receivable/stop loss credits
617,495 Receivable contractor damages
(1,082)
5,175
II. PERFORMANCE SUMMARY
Cash and Investment Balances - Full utilization of funds and minimization of idle cash is
necessary to pursue additional interest income for the City. The average percent of invested
funds is 100% for FY2025. The monthly data below shows the continued utilization of City
funds through investments.
Consolidated Invested Percentage
FY2024 Cash Balance Invested
October $ 877,082 $ 187,969,814 100%
November $ 737,755 $ 190,433,269 100%
December $ 709,748 $ 201,046,385 100%
January $ (1,985,978) $ 215,054,592 101%
February $ 371,307 $ 214,698,628 100%
March $ (363,275) $ 199,681,870 100%
April $ 670,718 $ 201,734,179 100%
May $ 356,421 $ 202,342,748 100%
June $ 290,608 $ 203,580,348 100%
July $ 1,077,864 $ 202,992,629 99%
August $ 593,590 $ 201,104,210 100%
September $ 1,301,817 $ 201,536,170 99%
Average $ 386,471 $ 201,847,904 100%
Consolidated Invested Percentage
FY2025 Cash Balance Invested
October $ 914,557 $ 199,331,580
November $ 450,921 $ 201,187,775
December $ 500,192 $ 204,734,831
January $ 148,660 $ 218,882,112
February $ (9,182) $ 221,932,140
March $ 606,590 $ 206,258,987
April $ 1,238,448 $ 209,255,848
May $ 232,831 $ 208,748,189
June $ 919,409 $ 207,357,091
July $ (2,642,685) $ 196,803,211
August $ (33,298) $ 192,877,470
September $ 6,781,702 $ 185,067,219
Average $ 759,012 $ 204,369,704
100%
100%
100%
100%
100%
100%
99%
100%
100%
101%
100%
96%
100%
This graph shows how the City's funds continue to be invested, always in pursuit of 100%.
Percent Invested
105.00%
100.00%
95.00%
90.00%
85.00%
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Fiscal Year
Cash management performance - effectiveness of the cash management program has
been measured utilizing actual figures for FY2025 as shown below:
Average City's Number Estimated
90-day Invested Days in Interest
Month T-bill Yield Balance Month Earnings
October 4.44% $ 199,331,580 31 $751,671
November 4.39% $ 201,187,775 30 $725,930
December 4.23% $ 204,734,831 31 $735,531
January 4.20% $ 218,882,112 31 $780,779
February 4.24% $ 221,932,140 28 $721,857
March 4.24% $ 206,258,987 31 $742,758
April 4.23% $ 209,255,848 30 $727,522
May 4.23% $ 208,748,189 31 $749,949
June 4.24% $ 207,357,091 30 $722,625
July 4.24% $ 196,803,211 31 $708,707
August 4.05% $ 192,877,470 31 $663,446
September 3.86% $ 185,067,219 30 $587,145
Estimated earnings at benchmark yields $8,617,920
Actual FY2025 interest income (un-audited) $9,116,841
Earnings over benchmark $498,921
Annual Average
4.22% $ 204,369,704 $8,624,402
Key rate comparisons - an objective of the investment policy is for the City's average rate
of return to consistently exceed that of the three-month U.S. Treasury Bill, as stated
before. Therefore, returns for both have been presented for comparative purposes below.
Benchmark City's Basis
90-day Wtd Avg Point
Month T-bill yield Portfolio Yld Difference
October 4.44% 4.87% 43
November 4.39% 4.73% 34
December 4.23% 4.57% 34
January 4.20% 4.44% 24
February 4.24% 4.39% 15
March 4.24% 4.36% 12
April 4.23% 4.33% 10
May 4.23% 4.29% 6
June 4.24% 4.28% 4
July 4.24% 4.30% 6
August 4.05% 4.28% 23
September 3.86% 4.24% 38
Average 4.22% 4.42% 21
The Federal Reserve cut rates three consecutive times in 2025. September, October, and
December bringing the target range to 3.5% from 3.75%. These decisions to cut rates
were influenced by ongoing economic conditions, including inflation trends and labor
market dynamics. Fed Chairman Jerome Powell stated, "Inflation has eased significantly
from its highs in mid-2022, but remains somewhat elevated relative to our 2% longer run
goal." Current expectations are for only one cut to rates in 2026.
III. INVESTMENT INTEREST INCOME SUMMARY*
FY21 Audit
FY22 Audit
FY23 Audit
FY24 Audit
FY25 Unaudited
FY25 Budgeted
* amounts exclude OPEB Trust Fund earnings
$ 165,992
$ 978,477
$ 6,277,548
$ 10,414,532
$ 9,116,841
$ 6,647,230
$12,000,000
$10,000,000
$8,000,000
ct
m $6,000,000
A $4,000,000
$2,000,000
$-
Investment Interest Income Summary'
FY21 Audit FY22 Audit FY23 Audit FY24 Audit
FY25 FY25 Budgeted
Unaudited
Investment income exceeded budget expectations for FY2025 by $2,469,611. This was due to a
combination of conservative revenue estimates, the Federal Funds Rate being reduced later than
projected, and higher investable balances than estimated. Investment income revenues were less
than FY2024 primarily due to the reinvestment of proceeds from maturities and called securities
at lower market rates as well as the fourth quarter decline in investable balances. The
benchmark 90-Day T-Bill averaged 5.15% in FY2024 and 4.22% in FY2025. The City's weighted
average portfolio yield averaged 5.16% in FY2024 and 4.42% in FY2025. Current expectations
are for one rate cut during 2026 by the Federal Reserve. The fourth quarter of the fiscal year saw
a substantial decrease in funds available for investment throughout the quarter. This is due in
large part to the early redemption of debt as well as capital project expenditures/expenses.
Investment Interest Income By Fund
For Fiscal Year Ending September 2025
# Fund FY 24 FY 24 Actual FY 25 FY 25 Actual Diff FY25
Budget (Unaudited) Budget (Unaudited) Bud. -Act.
101
General
$ 112,404
$ 1,276,816
$ 341,793
$ 1,325,687
$ 983,894
201
Hotel/Motel
$ 27,755
$ 128,229
$ 89,180
$ 99,718
$ 10,538
202
Juvenile Case Fund
$ 6,251
$ 11,309
$ 8,406
$ 11,383
$ 2,977
210
1/2 Cent Sales Tax -Operations
$ 28,432
$ 266,579
$ 83,404
$ 206,801
$ 123,397
211
1/2 Cent Sales Tax -Reserve
$ -
$ -
$ -
$ -
$ -
220
Crime Control & Prevention District
$ 21,181
$ 26,877
$ 7,588
$ 49,858
$ 42,270
221
Police Seized Asset Funds
$ 9,826
$ 10,201
$ 5,873
$ 7,902
$ 2,029
225
PD Narcotics Task Force Fund
$ -
$ 480
$ 12,692
$ -
$ (12,692)
230
Police Drug DEA Awards
$ 8,369
$ 12,499
$ 9,874
$ 10,249
$ 375
231
Police Drug State Awards
$ 7,360
$ 11,934
$ 9,040
$ 10,975
$ 1,935
232
Local Drug Seizure Fund
$ -
$ -
$ -
$ 3,652
$ 3,652
240
Car Rental Tax
$ 352,750
$ 1,302,552
$ 570,462
$ 947,391
$ 376,929
245
Glade Parks PID
$ -
$ -
$ -
$ -
$ -
250
Glade Parks TIRZ
$ 137,686
$ 277,141
$ 196,089
$ 118,399
$ (77,690)
260
Cable PEG Fund
$ 21,602
$ 31,570
$ 20,343
$ 27,848
$ 7,505
270
Midtown PID
$ 5,143
$ 2,413
$ 2,304
$ 829
$ (1,475)
301
Developer's Escrow
$ 2,454
$ 132,269
$ 99,118
$ 130,238
$ 31,120
305
Streets CIP
$ 332,754
$ 519,084
$ 491,777
$ 385,920
$ (105,857)
310
1/2 Cent Sales Tax - CIP
$ 26,919
$ 172,648
$ 107,025
$ 262,319
$ 155,294
320
General Capital Projects
$ 371,795
$ 1,001,632
$ 643,396
$ 697,915
$ 54,519
321
Redevelopment CIP Fund
$ 73,531
$ 67,264
$ 129,431
$ 92,059
$ (37,372)
322
Midtown Development CIP
$ -
$ -
$ -
$ -
$ -
323
Midtown Development Reserves
$ -
$ -
$ -
$ -
$ -
325
Police Facility CIP
$ 858,969
$ 1,351,445
$ 1,912,124
$ 990,459
$ (921,665)
330
Car Rental CIP
$ 2,759
$ 28,457
$ 22,898
$ 164,231
$ 141,333
401
GO Debt Service
$ 98,256
$ 134,369
$ 80,000
$ 139,225
$ 59,225
402
Star Center Debt
$ 14,886
$ 21,008
$ 11,913
$ 74,943
$ 63,030
403
Glade Parks Debt Service
$ 5,494
$ 9,904
$ 9,863
$ 106,800
$ 96,937
404
Midtown Development Debt Service
$ 72,019
$ 121,051
$ 94,528
$ 70,760
$ (23,768)
410
1/2 Cent Sales Tax Debt Service
$ 3,725
$ 7,178
$ 4,776
$ 5,273
$ 497
501
Water and Wastewater
$ 14,226
$ 674,782
$ 247,204
$ 559,287
$ 312,083
502
Water and Wastewater CIP
$ 5,826
$ 353,568
$ 155,041
$ 226,338
$ 71,297
503
Water and Wastewater Reserve
$ -
$ -
$ -
$ -
$ -
504
Service Center Fund
$ -
$ -
$ -
$ -
$ -
505
Water Impact Fees
$ 4,261
$ 145,132
$ 110,740
$ 133,415
$ 22,675
508
Wastewater Impact Fees
$ 1,429
$ 37,869
$ 29,467
$ 31,391
$ 1,924
509
W/WW Rate Stabilization
$ 21,000
$ 199,987
$ 75,090
$ 195,854
$ 120,764
510
Drainage
$ 7,207
$ 13,253
$ 9,858
$ 10,290
$ 432
511
Drainage CIP
$ 2,030
$ 49,372
$ 32,411
$ 39,667
$ 7,256
520
Recreation Classes
$ 6,000
$ 33,403
$ 23,970
$ 36,226
$ 12,256
521
Arbor Daze
$ -
$ 1
$ -
$ 1
$ 1
530
Parks At Texas Star
$ 1,044
$ 38,069
$ 27,759
$ 49,323
$ 21,564
531
PATS Debt Service
$ -
$ -
$ -
$ -
$ -
532
PATS Reserve
$ 2,000
$ 21,836
$ -
$ 18,184
$ 18,184
540
Texas Star Golf Course
$ 30,000
$ 78,289
$ 53,003
$ 73,884
$ 20,881
541
TSGC Debt Service
$ 28
$ 3,021
$ 500
$ 39,736
$ 39,236
542
TSGC Reserve
$ 10,000
$ 41,042
$ -
$ 3,981
$ 3,981
543
TSGC CIP Fund
$ 315
$ 6,143
$ 36,947
$ 80,347
$ 43,400
550
Parks At Texas Star
$ -
$ -
$ -
$ -
$ -
552
TSSC CIP
$ 243
$ 7,554
$ 21,524
$ 8,430
$ (13,094)
601
Equipment Replacement
$ 489,775
$ 1,163,705
$ 658,456
$ 1,179,131
$ 520,675
610
Health Insurance
$ 68,008
$ 356,099
$ 123,824
$ 363,562
$ 239,738
615
Risk Mgmt/Worker's Comp
$ 70,419
$ 138,281
$ 77,539
$ 126,961
$ 49,422
Total
$ 3,336,131
$ 10,286,315
$ 6,647,230
$ 9,116,841
$ 2,469,611
Note that investment earnings are being produced on all investable City funds and great efforts go into meeting budgeted
levels while ensuring compliance with the Public Funds Investment Act and City policy. Several funds were budgeted
conservatively or not at all due to the volatility of revenues and expenditures/expenses. However, these funds are used
for investment purposes when available.
IV. COLLATERAL REVIEW
The first and most important objective of investing public funds is safety. One way to ensure the safety of the City's assets is
to have them fully secured with "collateral." Acceptable collateral is defined in the City's investment policy as Federal
Deposit Insurance Corporation (FDIC) Insurance, Federal Savings and Loan Insurance Corporation (FSLIC) Insurance
and/or eligible securities as defined in Government Code Chapter 2257 Collateral for Public Funds Section 2257.002. Bank
balances are monitored daily to assure full coverage. The amount of collateral required by the depository bank varies with
the expected level of deposits (typically correlates with large receipts such as property taxes, franchise taxes and investment
maturities).
City of Euless
Collateral Analysis for
Bank Deposits
as of 09/30/25
Pledged
Pledging Safekeeping Securities Security Market Value Bank Difference
Institution Location Description Market Value (w/FDIC Ins.) Deposits Over/(Under)
Frost Bank
Bank of New
York Mellon
Produced By:
Director of Finance
Reviewed by:
Assistant Director of Finance
various bonds
$ 7,352,208 $ 7,602,208 $ 7,063,764
Payroll $ 34,109
$7,352,208 Operating $ 7,029,655
Insurance $ -
0vi au,c12°-
$ 538,444
This review is practiced on a regular basis assuring coverage. Another regular practice is reviewing each individual
instrument pledged. This assures compliance with the investment policy and consideration of the underlying security. This
separate but thorough practice has protected the City's portfolio against derivative products.
V. BROKER SELECTION PROCESS
This section of the report is to provide a brief explanation of the process undertaken to select
brokers with which the City invests. The broker/dealer list is reviewed annually, and
additions/deletions are made as necessary. The City currently maintains a list of six
broker/dealers. The process is outlined below:
1. Brokers express an interest in doing business with the City.
2. A questionnaire is sent to the broker which requests the necessary information for
management to review including references, capital adequacy ratios, etc.
3. The Finance Department reviews all received questionnaires, summarizes the
information and recommends the desired list of brokers with explanatory notes in
conjunction with the first quarter investment report.
4. The list is presented to the investment committee annually for their approval.
5. All brokers are notified after the selection is complete.
VI. SUMMARY
The primary objectives of compliance, safety, liquidity and yield have been achieved for the
reporting period as evidenced by this report. These objectives will continue to be pursued
for the City of Euless as provided by the investment policy. This year proved to be another
successful year for the investment program. The City of Euless, like all other local
governments, is faced with the challenge of meeting benchmark levels triggered by the Fed's
actions. The City's investment program will continue to seek new techniques, instruments,
etc. to enhance the return on the City's funds, as well as the return of all City funds.
The investment committee will meet on January 27, 2026 to discuss the Annual Investment
Report. Once the annual report is approved by the committee, it will be forwarded to the City
Council.
ti-)i.e9z4z,a
Janina Jewell Ross Fairclo
Director of Finance Assistant Director of Finance
CERTIFICATION
This report has been examined and approved by the Investment Officers of the City of Euless.
Information presented in this report to the Investment Committee and City Council exemplifies
an accurate depiction of the City's investment activity for the fiscal year ending September 30,
2025. This report meets all requirements specified by the Public Funds Investment Act and
the Investment Policy of the City of Euless.
Investment Officers
01(_A.A01,
Janina Jewell
Director of Finance
"R 0-3A_ a 0,-,,J20-
Ross Fairclo
Assistant Director of Finance
Minutes — 01/13/2026 4:00 p.m. Investment Committee Meeting
Members: Linda Martin, Mayor
Chris Barker, City Manager
Lawrence Bryant, Assistant City Manager
Janina Jewell, Director of Finance
Committee members present included Chris Barker, Lawrence Bryant, and Janina Jewell. Non -committee
present included Steven Viera, Assistant City Manager and Jeremiah Vasquez-Zavala, Budget/Treasury
Manager.
Jewell presented the Third Quarter Investment Report for Fiscal Year 2025. She stated it was in compliance
with Chapter 2256 of the Public Funds Investment Act. Jewell referred the committee to page 2 that showed
the City's investment strategy for the various funds of the City as of June 30, 2025. She noted that operating
funds were invested with a weighted average maturity (WAM) ranging from 6 to 9 months, capital
improvement projects (CIP) and special purpose funds were invested in accordance with drawdown
schedules of the projects and would not exceed the estimated project completion dates, debt service funds
were invested to assure adequate liquidity to cover the debt service obligations on the required payment
date, and finally that emergency, contingency, operating and debt service reserve funds could not exceed
five year investment timelines. She noted that there were no changes made that quarter to the strategy.
Jewell stated that the presented investment portfolio followed those strategies for the third quarter of Fiscal
Year 2025.
Jewell referred the committee to page 3 where she noted significant increases and decreases in fund
investments since March 31, 2025. She specifically noted most of the change occurred due to the outflow of
capital projects expenses. Overall there was a decrease of almost $14 million. The total market value of cash
and investments was stated to be $193,044,477.
On page 4 Jewell pointed out the portfolio shows its diversity in investment types on this page. She noted
that the weighted average yield on the portfolio was 4.28% and was down 8 basis points from the last quarter.
On page 5 she noted the diversity of the portfolio by maturity and specifically cited that 80% of the portfolio
maturity had a maturity of less than one year. The WAM on the portfolio was 168.82 days which is well
within the 365-day guideline in the investment policy. Jewell noted it was previously 175.89 days. Page 6
noted the portfolio diversity by institution and that no one institution had more than a third of the City's
portfolio invested with them. She noted that as investments matured we have chosen to keep those funds
in overnight pools. Page 7 was noted to show the market value of the portfolio as of June 30, 2025, of
$207,497,161 which, if investments had been liquidated, the City would have to show a gain of $161,148.
On page 8 Jewell noted the comparison of average 90 day T-Bills for the quarter compared to the portfolio
average maturity. The portfolio averaged about 6.7 basis points above the 90 Day T-Bill benchmark. This
page also showed that cash was on average 100% invested for the quarter. Jewell noted on page 9 that the
City was fully collateralized as of June 30, 2025.
Jewell then noted that the report was certified by City Investment Officers. Mr. Barker made a motion to
approve the quarterly investment report. Mr. Bryant seconded the motion and the vote was unanimous in
favor.
Minutes for the May 13, 2025, Investment Committee Meeting were presented. Mr. Barker motioned to
approve. Mrs. Jewell seconded the motion and the committee approved unanimously.
Mrs. Jewell commented on the economy including that the Fed Funds rates have changed now with the range
from 3.5% to 3.75%. She noted the labor market has stabilized. Feds are buying mortgage bonds and
consumer confidence is strong. Sales tax revenue is up this year 7% and car rental revenues are flat. Jewell
updated us that the CPI has risen but sits at 2.7%. Jewell noted the events in Venezuela have had negligible
effect on the markets.
Mrs. Jewell informed us of reviewing the investment policy at the next council meeting. She suggested no
recommendations to change the investment policy. Mr. Barker approved no recommended changes to the
investment policy. Mr. Bryant seconded the motion. Jewell suggested no recommendation of changes to list
of financial advisors. She commented our current list of advisors are doing a wonderful job. Mr. Bryant made
a motion to approve no recommendation of change to list of advisors. Mr. Barker seconded it.
The meeting adjournment at 4:18 p.m.
APPENDICES
APPENDIX A
City of Euless
Change in Portfolio Values by Asset and Investment Fund
For the Quarter Ending September 30, 2025
Inv.
Type
CUSIP
Number
Maturity/
Call Date
Par
Value
Market Value
09/30/2025
Market Value
06/30/2025
Change in
Market Value
Book Value
09/30/2025
Book Value
06/30/2025
Change in
Book Value
OPERATING FUNDS:
CD
61768EF57
11/17/2025
240,000
240,350
241,685
(1,335)
240,000
240,000
-
CD
130162BG4
11/21/2025
240,000
240,372
242,019
(1,647)
240,000
240,000
-
CD
05580A4M3
05/18/2026
240,000
242,028
242,940
(912)
240,000
240,000
-
CD
61690DHA9
11/16/2026
240,000
243,382
243,848
(467)
240,000
240,000
-
FHLB
3130B0TC3
10/09/2026
1,000,000
1,000,530
1,003,569
(3,039)
1,000,000
1,000,000
-
FHLB
3130BORE1
04/27/2027
1,000,000
1,000,030
1,003,516
(3,486)
1,000,000
1,000,000
-
FHLB
3130B0Q77
10/08/2027
1,000,000
1,000,350
1,003,643
(3,293)
1,000,000
1,000,000
-
CD
82869AFY6
11/14/2025
240,000
240,269
241,371
(1,102)
240,000
240,000
-
CD
06051XDQ2
05/18/2026
240,000
241,817
242,409
(593)
240,000
240,000
-
FFCB
3133ERGA3
06/04/2026
1,000,000
1,007,680
1,010,355
(2,675)
1,000,000
1,000,000
-
CD
38150VUZ0
06/11/2026
240,000
242,083
242,834
(751)
240,000
240,000
-
CD
465076UP0
06/12/2026
240,000
242,088
242,837
(749)
240,000
240,000
-
CD
32026U5X0
12/14/2026
240,000
243,485
243,842
(358)
240,000
240,000
-
CD
23204HPM4
06/11/2027
240,000
244,459
244,339
120
240,000
240,000
-
CD
34520LBD4
06/14/2027
240,000
244,478
244,354
124
240,000
240,000
-
FFCB
3133ERMK4
01/26/2026
1,000,000
1,001,950
1,003,706
(1,756)
1,000,000
1,000,000
-
FFCB
3133ERWM9
01/05/2026
1,000,000
999,160
996,960
2,200
1,000,000
1,000,000
-
FFCB
3133ERWB3
04/03/2026
1,000,000
998,600
995,235
3,365
1,000,000
1,000,000
-
FHLB
3130B34S9
10/06/2027
1,000,000
1,000,190
997,364
2,826
999,250
999,250
-
FHLB
3130B3BV4
10/15/2027
1,000,000
999,690
997,568
2,122
1,000,000
1,000,000
-
FHLB
3130B3JC8
10/22/2027
1,000,000
1,001,810
999,955
1,855
1,000,000
1,000,000
-
FHLB
3130B3N82
11/05/2026
1,000,000
999,650
1,000,342
(692)
1,000,000
1,000,000
-
FHLB
3130B3SN4
11/12/2026
1,000,000
999,510
1,001,155
(1,645)
1,000,000
1,000,000
-
FHLB
3130B3MH3
11/05/2027
1,000,000
1,000,660
1,000,799
(139)
1,000,000
1,000,000
-
FFCB
3133ERA92
11/12/2027
1,000,000
1,008,730
1,004,515
4,215
997,000
997,000
-
FHLB
3130B43H2
12/11/2025
1,000,000
1,000,050
999,553
497
997,750
997,750
-
FFCB
3133ERP96
09/24/2026
1,000,000
1,005,370
1,003,389
1,981
998,800
998,800
-
FFCB
3133ERP96-1
09/24/2026
1,000,000
1,005,370
1,003,389
1,981
1,000,000
1,000,000
-
FFCB
3133ERK42
12/26/2026
1,000,000
1,004,350
1,002,136
2,214
1,000,000
1,000,000
-
FAMCA
31424WSD5
12/17/2027
1,000,000
1,007,290
1,004,789
2,501
1,000,000
1,000,000
-
FHLB
3130B4G62
01/06/2026
1,000,000
1,000,120
999,736
384
998,200
998,200
-
FHLB
3130B4P47
01/21/2026
1,000,000
1,000,250
999,727
523
997,600
997,600
-
FFCB
3133ERS93
01/13/2027
1,000,000
1,006,540
1,004,722
1,818
997,000
997,000
-
FHLB
3130B4MH1
01/15/2027
1,000,000
1,000,910
1,001,599
(689)
1,000,000
1,000,000
-
FHLB
3130B4RL7
01/29/2027
1,000,000
1,000,510
1,000,891
(381)
1,000,000
1,000,000
-
FFCB
3133ER2H3
02/03/2026
1,000,000
1,000,610
999,885
725
1,000,000
1,000,000
-
FFCB
3133ER2H3-2
02/03/2026
1,000,000
1,000,610
999,885
725
997,420
997,420
-
FHLB
3130B55P9
02/18/2026
1,000,000
1,000,930
1,000,959
(29)
998,500
998,500
-
FAMCA
31424WUZ3
02/10/2027
1,000,000
1,006,520
1,004,950
1,570
1,000,000
1,000,000
-
FHLB
3130B53F3
02/19/2027
1,000,000
1,001,250
1,002,320
(1,070)
1,000,000
1,000,000
-
FFCB
3133ER5L1
11/28/2025
1,000,000
999,940
999,730
210
999,250
999,250
-
FHLB
3130B5F60
03/03/2026
1,000,000
1,000,780
999,987
793
998,740
998,740
-
FFCB
3133ER7H8
03/18/2026
1,000,000
1,000,400
998,832
1,568
1,000,000
1,000,000
-
CD
149159UT0
10/09/2025
240,000
240,000
240,000
-
240,000
240,000
-
CD
49306SS72
01/05/2026
240,000
240,000
240,000
-
240,000
240,000
-
CD
27004PGG2
04/09/2026
240,000
240,065
240,000
65
240,000
240,000
-
CD
669331CU2
01/14/2026
240,000
240,000
240,000
-
240,000
240,000
-
FFCB
3133ETEP8
04/24/2026
1,000,000
999,980
1,000,000
(20)
996,874
996,572
302
CD
744039CU0
05/11/2026
240,000
240,353
240,000
353
240,000
240,000
-
CD
33767GJU3
10/09/2026
240,000
240,590
240,000
590
240,000
240,000
-
FFCB
3133ETCU9
10/14/2026
1,000,000
1,001,810
1,000,000
1,810
1,000,000
1,000,000
-
CD
92512KAC7
04/05/2027
240,000
240,974
240,000
974
240,000
240,000
-
FFCB
3133ETCP0
04/14/2027
1,000,000
1,001,140
1,000,000
1,140
996,040
995,860
180
CD
29367SMD3
05/08/2026
240,000
240,422
240,000
422
240,000
240,000
-
CD
857894Z69
08/10/2026
240,000
240,586
240,000
586
240,000
240,000
-
APPENDIX A
City of Euless
Change in Portfolio Values by Asset and Investment Fund
For the Quarter Ending September 30, 2025
Inv.
CUSIP
Maturity/
Par
Market Value
Market Value
Change in
Book Value
Book Value
Change in
Type
Number
Call Date
Value
09/30/2025
06/30/2025
Market Value
09/30/2025
06/30/2025
Book Value
FFCB
3133ETHY6
11/23/2026
1,000,000
1,003,030
1,000,000
3,030
1,000,000
1,000,000
-
CD
02589AHF2
05/07/2027
240,000
241,090
240,000
1,090
240,000
240,000
-
FHLB
3130B6B70
05/07/2027
1,000,000
998,860
1,000,000
(1,140)
1,000,000
1,000,000
-
FHLB
3130B6JZ0
11/22/2027
1,000,000
1,000,490
1,000,000
490
1,000,000
1,000,000
-
FHLB
3130B6Q25
06/10/2026
1,000,000
1,002,920
1,000,000
2,920
1,000,000
1,000,000
-
FFCB
3133ETKW6-220
12/11/2026
500,000
502,325
500,000
2,325
500,000
500,000
-
FFCB
3133ETKW6-601
12/11/2026
250,000
251,163
250,000
1,163
250,000
250,000
-
FFCB
3133ETKX4-615
06/11/2026
250,000
250,360
249,813
548
249,438
249,438
-
FFCB
3133ETKX4-101
06/11/2026
250,000
250,360
249,813
548
249,438
249,438
-
Purchases
None
Maturities
CD
70212YBM3
09/17/2025
240,000
-
240,738
(240,738)
-
240,000
(240,000)
CD
87164DXA3
08/15/2025
240,000
-
240,749
(240,749)
-
240,000
(240,000)
FHLB
3130B1CV7
08/13/2026
1,000,000
-
1,002,795
(1,002,795)
-
1,000,000
(1,000,000)
FAMCA
31424WJV5
08/01/2025
1,000,000
-
1,002,541
(1,002,541)
-
1,000,000
(1,000,000)
FFCB
3133ERPC9
08/12/2026
1,000,000
-
999,937
(999,937)
-
1,000,000
(1,000,000)
FHLB
3130B2CK9
02/12/2027
1,000,000
-
999,996
(999,996)
-
1,000,000
(1,000,000)
FHLB
3130B35W9
04/08/2026
1,000,000
-
999,556
(999,556)
-
1,000,000
(1,000,000)
FAMCA
31424WSA1
12/16/2025
1,000,000
-
999,331
(999,331)
-
1,000,000
(1,000,000)
Par total does not
Total Operating:
include maturities
$ 45,290,000
$ 45,391,669
$ 51,852,908
$ (6,461,239)
$ 45,261,299
$ 51,740,817
$ (6,479,518)
CIP FUNDS
FFCB
3133ERHH7
12/14/2026
1,000,000
1,011,960
1,012,313
(353)
1,000,000
1,000,000
-
FFCB
3133ERPX3
11/19/2025
1,000,000
1,000,010
999,840
170
1,000,000
1,000,000
-
CD
78658RQK0
02/06/2026
239,000
239,263
239,091
172
239,000
239,000
-
CD
938828GA2
02/13/2026
239,000
239,096
239,112
(16)
239,000
239,000
-
FFCB
3133ER5M9
06/03/2026
1,000,000
1,001,900
1,001,220
680
1,000,000
1,000,000
-
FAMCA
31424WWB4
11/05/2026
1,000,000
1,003,290
1,000,764
2,526
1,000,000
1,000,000
-
FHLB
3130B5K64
03/10/2027
1,000,000
1,005,400
1,001,250
4,150
1,000,000
1,000,000
-
FHLB
3130B5KQ0
03/25/2027
1,000,000
1,000,120
1,000,280
(160)
1,000,000
1,000,000
-
FAMCA
31424WWM0
09/13/2027
1,000,000
1,004,900
1,000,212
4,688
998,500
998,500
-
FAMCA
31424WZK1
11/06/2026
1,000,000
1,001,700
1,000,000
1,700
1,000,000
1,000,000
-
FFCB
3133ETKW6-310
12/11/2026
250,000
251,163
250,000
1,163
250,000
250,000
-
FFCB
3133ETKX4-330
06/11/2026
500,000
500,720
499,625
1,095
498,875
498,875
-
Purchases
None
-
-
-
-
-
-
Maturities
CD
20415WBG0
09/08/2025
240,000
-
240,030
(240,030)
-
240,000
(240,000)
Par total does not
Total CIP:
include maturities
$ 9,228,000
$ 9,259,521
$ 9,483,737
$ (224,216)
$ 9,225,375
$ 9,465,375
$ (240,000)
APPENDIX A
City of Euless
Change in Portfolio Values by Asset and Investment Fund
For the Quarter Ending September 30, 2025
Inv. CUSIP
Maturity/
Par
Market Value
Market Value
Change in
Book Value
Book Value
Change in
Type Number
Call Date
Value
09/30/2025
06/30/2025
Market Value
09/30/2025
06/30/2025
Book Value
RESERVE FUNDS:
FHLB 3130B0YH6
04/19/2029
1,000,000
1,018,700
1,017,965
735
1,000,000
1,000,000
-
FHLB 3130B2PZ2
09/12/2028
500,000
499,225
496,567
2,658
500,000
500,000
-
FHLB 3130B3M67
11/13/2029
1,000,000
1,005,410
1,000,506
4,904
1,000,000
1,000,000
-
FFCB 3133ERP70
12/27/2027
1,000,000
1,011,720
1,008,090
3,630
1,000,000
1,000,000
-
FAMCA 31424WTB8
01/07/2028
1,000,000
1,010,750
1,008,776
1,974
1,000,000
1,000,000
-
CD 43711MAH4
05/19/2026
240,000
240,648
240,274
374
240,000
240,000
-
CD 10421ABK2
08/19/2026
240,000
240,900
240,612
288
240,000
240,000
-
FNMA 3136GACT4
03/06/2028
1,000,000
1,001,530
1,000,255
1,275
1,000,000
1,000,000
-
CD 68621KDH1
01/07/2028
240,000
240,929
240,000
929
240,000
240,000
-
Purchases
None
-
Maturities
FHLB 3130B2UW3
06/10/2027
500,000
-
996,542
(996,542)
-
1,000,000
(1,000,000)
CD 319735CQ7
07/18/2025
240,000
-
240,506
(240,506)
-
240,000
(240,000)
CD 9475475V3
08/13/2025
240,000
-
240,602
(240,602)
-
240,000
(240,000)
Par total does not
Total Reserve:
include maturities
$ 6,220,000
$ 6,269,812
$ 7,730,695
$ (1,460,884)
$ 6,220,000
$ 7,700,000
$ (1,480,000)
OVERNIGHT INVESTMENTS:
Beginning Bal
Ending Bal
Texpool Balance
45,184,999
41,548,201
41,548,201
45,184,999
(3,636,798)
41,548,201
45,184,999
(3,636,798)
Purchases
12,648,439
Maturities
16,285,238
Texstar Balance
45,672,991
41,446,655
41,446,655
45,672,991
(4,226,336)
41,446,655
45,672,991
(4,226,336)
Purchases
11,238,122
Maturities
15,464,457
TexasCLASSBalance
47,571,831
41,345,093
41,345,093
47,571,831
(6,226,738)
41,345,093
47,571,831
(6,226,738)
Purchases
3,936,761
Maturities
10,163,499
Total Overnight:
$ 124,339,949
$ 124,339,948
$ 138,429,821
$ (14,089,872)
$ 124,339,948
$ 138,429,821
$ (14,089,872)
Par total does not
Total Portfolio
include maturities
$ 185,077,949
$ 185,260,951
$ 207,497,161
$ (22,236,211)
$ 185,046,623
$ 207,336,013
$ (22,289,390)
APPENDIX B
City of Euless
Schedule of Purchases
FY2025 4th Quarter
Cost Accrued
Inv. CUSIP Purchase Maturity Call Term Price Par Book Value Coupon Interest Seller Total Cost
Type Number Date Date Date (in days) Per $100 Value (Prin. Only) YTM Rate Purchased Inst. Discount Premium Fund of Investment
Texpool Jul 2,641,250 2,641,250 Various 2,641,250
Texpool Aug 2,521,180 2,521,180 Various 2,521,180
Texpool Sep 7,009,385 7,009,385 Various 7,009,385
Texstar Jul 2,000,000 2,000,000 Various 2,000,000
Texstar Aug 4,707,469 4,707,469 Various 4,707,469
Texstar Sep 4,061,486 4,061,486 Various 4,061,486
TexasCLASS Jul 0 0 Various 0
TexasCLASS Aug 2,942,058 2,942,058 Various 2,942,058
TexasCLASS Sep 521,441 521,441 Various 521,441
Totals
$ 26,404,269 $ 26,404,269 $ $ $ $ 26,404,269
Texpool Dividends Reinvested
Jul 166,967 166,967 - Texpool - Various 166,967
Aug 158,581 158,581 Texpool Various 158,581
Sep 151,077 151,077 Texpool Various 151,077
Texstar Dividends Reinvested
Jul 166,455 166,455 Texstar Various 166,455
Aug 157,746 157,746 Texstar Various 157,746
Sep 144,966 144,966 Texstar Various 144,966
TexasCLASS Dividends Reinvested
Jul 166,796 166,796 - TexasCLASS - Various 166,796
Aug 156,682 156,682 - TexasCLASS Various 156,682
Sep 149,785 149,785 - TexasCLASS Various 149,785
Totals including Dividends $ 27,823,322 $ 27,823,322 $ $ $ $ 27,823,322
APPENDIX C
City of Euless
Schedule of Maturities
FY2025 4th Quarter
Term to Cost Accrued
Inv. CUSIP Purchase Maturity Call Mat'y Price Par Book Value Yield To Coupon Interest Seller Total Cost
Type Number Date Date Date (in days) Per $100 Value (Prin. Only) Maturity Rate Purchased Inst. Discount Premium Fund of Investment
Texpool Jul 4,615,348 4,615,348 - - - Various 4,615,348
Texpool Aug 2,679,930 2,679,930 Various 2,679,930
Texpool Sep 8,989,960 8,989,960 - - - Various 8,989,960
Texstar Jul 5,000,000 5,000,000 Various 5,000,000
Texstar Aug 4,507,469 4,507,469 - - - Various 4,507,469
Texstar Sep 5,956,988 5,956,988 Various 5,956,988
TexasCLASS Jul 4,600,000 4,600,000 - - - Various 4,600,000
TexasCLASS Aug 3,142,058 3,142,058 - Various 3,142,058
TexasCLASS Sep 2,421,441 2,421,441 - - - Various 2,421,441
CD 319735CQ7 02/18/25 07/18/25 N/C 150 100.0000 240,000 240,000 4.25% 4.250% 0 FNS - - 509 240,000
FHLB 3130B35W9 10/09/24 04/08/26 07/08/25 539 100.0000 1,000,000 1,000,000 4.30% 4.300% 0 Duncan - - 101 1,000,000
FAMCA 31424WJV5 06/03/24 08/01/25 N/C 418 100.0000 1,000,000 1,000,000 5.19% 5.180% 0 Hilltop - - 240 1,000,000
CD 9475475V3 02/10/25 08/13/25 N/C 184 100.0000 240,000 240,000 4.25% 4.250% 0 FNS - - 509 240,000
CD 87164DXA3 05/15/24 08/15/25 N/C 457 100.0000 240,000 240,000 5.10% 5.100% 0 FNS - - 240 240,000
FFCB 3133ERPC9 08/12/24 08/12/26 08/12/25 720 100.0000 1,000,000 1,000,000 4.52% 4.520% 0 FHN - - 501 1,000,000
FHLB 3130B2CK9 08/12/24 02/12/27 08/12/25 900 100.0000 1,000,000 1,000,000 4.42% 4.420% 0 Duncan 601 1,000,000
FHLB 3130B1CV7 05/13/24 08/13/26 08/13/25 810 100.0000 1,000,000 1,000,000 5.13% 5.125% 0 Samco - - 601 1,000,000
CD 20415WBG0 02/07/25 09/08/25 N/C 213 100.0000 240,000 240,000 4.20% 4.200% 0 FNS 320 240,000
CD 70212YBM3 03/17/23 09/17/25 N/C 915 100.0000 240,000 240,000 4.90% 4.900% 0 FNS - - 101 240,000
FAMCA 31424WSA1 12/16/24 12/16/25 09/16/25 360 100.0000 1,000,000 1,000,000 4.35% 4.350% 0 Samco 240 1,000,000
FHLB 3130B2UW3 09/24/24 06/10/27 09/10/25 976 100.0000 1,000,000 1,000,000 4.00% 4.000% 0 Duncan 103 1,000,000
TOTAL $ 50,113,194 $ 50,113,194 4.55% $ $ $ $ 50,113,194
APPENDIX D
City of Euless
Investment Portfolio General Information
Investment Types and Institutions
Investment Types
Texstar Local Gov't Pool
Texpool Local Gov't Pool
TexasCLASS Local Gov't Pool
US Bank US Bank
FNMA
FFCB
FHLB
B of T
Fed. Nat'l Mort. Assoc.
Fed. Farm Credit Bank
Fed. Home Loan Bank
Bank of Texas
Institution
FHLMC
FAMCA
CD
TBILL
Fed. Home Loan Mort. Corp
Farmer Mac
Certificates of Deposit
Treasury Bill
Texstar TexSTAR
Texpool TexPool
TexasCLASS TexasCLASS
US Bank US Bank
FHN
Samco
B of T
Vining/Stifel
First Horizon
Samco Capital
Bank of Texas
Vining Sparks KNA Stifel
Hilltop Hilltop Securities
Duncan SouthState Duncan Williams
FNS Financial Northeastern Securities
CITY OF EULESS
FINANCE POLICY
DATE: June 26, 1990 PREPARED BY:Finance Department
REV: January 28, 2025 REVIEWED BY:City Manager
RE: Investment Policy APPROVED BY:City Council
I. SCOPE
This investment policy applies to the investment activities of the Government of the City of
Euless, Texas. This policy serves to satisfy the statutory requirements of defining and adopting
a formal investment policy. The policy and strategy shall be reviewed annually by the Investment
Committee and any modifications must be approved by the Investment Committee and
forwarded to City Council for final approval. The City Council must adopt a written instrument
by rule, order, ordinance, or resolution stating that it has reviewed the investment policy and
investment strategies. Any changes made to either the policy or strategies will be recorded in
this written instrument. This Investment Policy, as approved, is in compliance with Chapter 2256
of the Texas Government Code, also known as "The Public Funds Investment Act."
A. FUNDS INCLUDED All financial assets of all funds, including the General Fund and any
other accounts of the City not specifically excluded in these policy guidelines are included.
These funds, as well as funds that may be created from time -to -time, shall be administered
in accordance with the provisions of these policies. All funds will be pooled for investment
purposes. The strategy developed for this pooled fund group will address the varying needs,
goals, and objectives of each fund.
B. FUNDS EXCLUDED None.
II. OBJECTIVES AND STRATEGY
A. COMPLIANCE The City must adopt rules, designate staff to manage local funds, and submit
related reports as outlined by Chapter 2256 of the Texas Government Code, also known as
the Public Funds Investment Act ("PFIA"). All investments made on behalf of the City must
comply with the Public Funds Investment Act and all federal, state, and local statutes, rules,
or regulations. In conjunction with the annual comprehensive financial audit and report, the
City will perform, or have performed, a compliance audit of management controls on
investments and adherence to the City's approved investment policy.
B. SAFETY OF PRINCIPAL The primary objective of the City's investment activity is the
preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and
interest rate risk.
1. Credit Risk — The City of Euless will minimize credit risk, which is the risk of loss due
to the failure of the security issuer or backer, by:
a. Limiting investments to the types of securities listed in Section V of this investment
policy.
b. Pre -qualifying the financial institutions, broker/dealers and advisors with whom the
City of Euless will do business.
c. Diversifying the investment portfolio so that the impact of potential losses from any
type of security or from any one issuer will be minimized.
2. Interest Rate Risk — The City of Euless will minimize interest rate risk, which is the risk
that the market value of securities in the portfolio will fall due to changes in market
interest rates by:
a. Structuring the portfolio so that securities mature to meet cash requirements for
ongoing operations, avoiding the need to sell securities prior to maturity.
b. Investing operating funds primarily in shorter -term securities, money market
mutual funds, or similar investment pools.
C. LIQUIDITY The City's investment portfolio will remain sufficiently liquid to enable the City to
meet operating requirements that might be reasonably anticipated. Liquidity shall be
achieved by matching investment maturities with forecasted cash flow requirements and by
investing in securities with active secondary markets. In addition, all or a portion of the
portfolio may be invested in money market mutual funds or local government investment
pools which offer same day liquidity for short-term funds.
D. YIELD The City's cash management portfolio shall be designed with the objective of regularly
exceeding the average rate of return on three-month U.S. Treasury Bills, or the average
Federal Reserve Discount whichever is higher. The investment program shall seek to
augment returns above this threshold consistent with risk limitations identified herein and
prudent investment principles.
Funds held for future capital projects shall be invested in securities that reasonably can be
expected to produce enough income to offset inflationary construction cost increases.
E. RISK OF LOSS All participants in the investment process shall seek to act responsibly as
custodians of the public trust. Investment officials shall avoid any transaction that might
impair public confidence in the City's ability to govern effectively.
F. STRATEGY The strategy for all pooled funds is to assure that cash flows are matched with
projected needs and assume adequate liquidity and safety. This may be accomplished by
purchasing high quality securities in a laddered structure or utilizing an investment pool.
Furthermore the following purposes are also considered when investing:
1. Funds for Capital Improvement Projects or special purposes should allow for flexibility
and unanticipated project outlays by having a portion of their investments in highly
liquid securities. The stated final maturity dates of securities held should not exceed
the estimated project completion date. A weighted average maturity of 365 days or
less will be maintained and calculated by using the stated final maturity of each
security.
2. Funds for Debt Service should assure liquidity adequate to cover the debt service
obligation on the required payment date. Surplus funds outside the debt service dates
will remain within the investment and fiscal policies.
3. Debt Service Reserves, Operating Reserves, Emergency and Contingency funds will
have the ability to generate a dependable revenue stream to the appropriate fund from
securities with a low degree of volatility. Such securities will tend to hold their value
during economic cycles. The stated final maturity dates of securities held should not
exceed five years.
4. Operating funds will be structured in such a way as to minimize volatility during
economic cycles. This may be accomplished by purchasing high quality short-term
securities which will complement each other in a laddered maturity schedule. The
weighted average maturity on these funds will remain within the 6 to 9 month range
and calculated by using the stated final maturity date of each security.
III. INVESTMENT COMMITTEE
A. MEMBERS There is hereby created an Investment Committee, consisting of the City
Manager and/or his designee, the Assistant City Manager, the Director of Finance, and the
Mayor or Mayor's designee. The Investment Committee shall meet at least quarterly to
determine general strategies and to monitor results and shall call a special meeting of the
Investment Committee within 24 hours of notification of any significant events related to the
City's portfolio including a downgrade in the investment rating. All prudent measures will be
taken to liquidate an investment whose rating has been downgraded to less than the required
minimum rating. The Investment Committee shall be authorized to invite advisors to the
meetings as needed including, but not limited to, the City Attorney, the City Council, or
outside advisors.
B. SCOPE The Investment Committee shall include in its deliberations such topics as:
performance reports, economic outlook, portfolio diversification, maturity structure, potential
risk to the City's funds, authorized brokers and dealers, and the target rate of return on the
investment portfolio.
C. PROCEDURES The Investment Committee shall provide for minutes of its meetings. Any
two members of the Investment Committee may request a special meeting, and three
members shall constitute a quorum. The Investment Committee shall establish its own rules
of procedures.
IV. RESPONSIBILITY AND CONTROL
A. DELEGATION Management responsibility for the Investment Program is hereby delegated
to the Director of Finance, who shall establish written procedures and internal controls for the
operation of the investment program, consistent with this Investment Policy. Such
procedures shall include, but not be limited to, account management procedures, cash flow
procedures, investment transaction procedures, authorized dealer selection process,
investment portfolio reporting requirements, and explicit delegation of authority to persons
responsible for investment transactions. No person shall engage in an investment transaction
except as provided under the terms of this policy and the procedures established by the
Director of Finance. The Director of Finance shall be responsible for all transactions
undertaken and shall establish a system of controls to regulate the activities of the Authorized
Investment Officers and subordinate officials.
B. SUBORDINATES The Director of Finance will serve as the City's chief investment officer.
The Assistant Director of Finance, Treasurer, and the accountant responsible for cash and
debt analysis are hereby designated as Authorized Investment Officers, responsible for the
investment of the City's funds, pursuant to the Public Funds Investment Act Section 2256.005
Subsection F. Authority granted to a person to invest the funds on behalf of the City shall
remain in effect until rescinded by the City or until the person resigns from or is terminated
by the City. All authorized investment officers shall receive not less than 8 hours of
investment training relating to their investment responsibilities, as described by Section
2256.008 of the Public Funds Investment Act not less than once in a two-year period that
begins on the first day of the City's fiscal year and consists of the two consecutive fiscal years
after that date. This training must be provided by an independent source which has been
approved by the investment committee. At least one training session of not less than 10
hours of investment training related to their investment responsibilities as described by
Section 2256.008 of the PFIA must be completed by the investment officer within twelve
months of assuming their duties. The training must include, but is not limited to, education
in investment controls, security risks, strategy risks, market risks, diversification, and
compliance with the Public Funds Investment Act.
C. QUARTERLY REPORTS The Director of Finance shall prepare and submit investment
reports that are compliant with Government Code Chapter 2256 Public Funds Investment
Section 2256.023.
D. ANNUAL REPORTS Within 120 days of the end of the fiscal year, the Director of Finance
shall present a comprehensive annual report on the investment program and investment
activity. The annual report shall include twelve-month and quarterly comparison returns, and
shall suggest improvements that might be made in the investment program.
E. MONITORING OF MARKET PRICE OF INVESTMENTS The investment officer shall
determine the market value of each investment at least quarterly and at a time as close as
practicable to the closing of the reporting period for investments. Such values shall be
included on the investment reports. The following methods shall be used:
1. Certificates of deposits shall be valued at their face value plus any accrued but unpaid
interest.
2. Shares in money market mutual funds and investment pools shall be valued at par plus
any accrued but unpaid interest.
3. Other investment securities may be valued in any of the following ways:
a. the lower of two bids obtained from securities broker/dealers for such security;
b. the average of the bid and asked prices for such investment security as published in
the Wall Street Journal; or
c. the bid price published by any nationally recognized security pricing service.
F. PRUDENCE The standard of prudence to be used by the investment officers shall be
"prudent person" standard and shall be applied in the context of managing an overall portfolio.
The "prudent person" standard states that, "Investments shall be made with judgement and
care, under circumstances then prevailing, which persons of prudence, discretion and
intelligence exercise in the management of their own affairs, not for speculation, but for
investment, considering the probable safety of their capital as well as the probable income
to be derived." Investment officers acting in accordance with written procedures and the
investment policy and exercising due diligence shall be relieved of personal responsibility for
an individual security's credit risk or market price changes, provided deviations from
expectations are reported in a timely fashion and appropriate action is taken to control
adverse developments.
G. ETHICS AND CONFLICTS OF INTEREST Officers and employees involved in the
investment process shall refrain from personal business activity that could conflict with proper
execution and management of the investment program, or that could impair their ability to
make impartial investment decisions. Employees and investment officers shall disclose any
material interests in financial institutions with which they conduct business. They shall further
disclose any personal financial/investment positions that could be related to the performance
of the investment portfolio. Employees and officers shall refrain from undertaking personal
investment transactions with the same individual with whom business is conducted on behalf
of the City of Euless.
An investment officer who has a personal business relationship with a business organization
offering to engage in an investment transaction with the City shall file a statement disclosing
that personal business interest. Investment officers who are related within the second degree
by affinity or consanguinity to an individual seeking to sell an investment to the City shall also
disclose such relationship. A statement required under this section must be filed with the
Texas Ethics Commission and the City Council. For the purpose of this section, an
investment officer has personal business relationship with a business organization if:
1. The investment officer owns 10 percent or more of the voting stock or shares of the
business organization or owns $5,000 or more of the fair market value of the business
organization;
2. Funds received by the investment officer from the business organization exceed 10
percent of the investment officer's gross income for the previous year; or
3. The investment officer has acquired from the business organization during the previous
year investments with a book value of $2,500 or more for the personal account of the
investment officer.
V. AUTHORIZED AND SUITABLE INVESTMENT SECURITIES
A. ACTIVE PORTFOLIO MANAGEMENT The City intends to pursue an active versus a passive
portfolio management philosophy. That is, securities may be sold before they mature if
market conditions present an opportunity for the City to benefit from the trade.
B. ELIGIBLE INVESTMENTS The following investments will be permitted by this policy as
defined by state and local law where applicable:
1. Obligation, including letters of credit, of the United States or its agencies and
instrumentalities, including the Federal Home Loan Banks (except for mortgage pass -
through securities);
2. Fully insured or collateralized certificates of deposits as authorized and described in
Texas Government Code Section 2256.010.
3. Fully collateralized repurchase agreements having a defined termination date, are in
accordance with a master repurchase agreement approved by the Investment
Committee, and as authorized by Texas Government Code Section 2256.011.
4. Investment Pools as authorized by Texas Government Code Section 2256.016. The
pool must enter into a contract approved (by resolution) by the City Council to provide
services to the City. The pool must be continuously rated no lower than AAA or AAA-m
or at an equivalent rating by at least one nationally recognized rating service.
5. No load money market mutual fund, registered with and regulated by the Securities
Exchange Commission, which complies with Federal Securities and Exchange
Commission Rule 2a-7 as defined in Texas Government Code Sec. 2256.014. Each fund
must provide the City with a prospectus and other information required by the Securities
Exchange Act of 1934 or the Investment Advisor Act of 1940.
6. Interest bearing checking accounts that are fully collateralized at 105% of ledger balance.
7. Other such securities or obligations as approved by City Council upon recommendation
of the Investment Committee. No securities will be purchased which have a potential for
price volatility that is inappropriate for the City and incompatible with its investment
strategies. This includes, but is not limited to, certain collateralized mortgage obligations,
such as principal and interest only securities, inverse floaters, capped and mismatched
floaters, and structures notes and range notes.
C. LENGTH OF INVESTMENTS Except for monies of Reserve funds, Emergency funds,
Contingency funds and construction funds, the City of Euless shall invest in instruments
whose maturities do not exceed two (2) years at the time of purchase.
1. For the General Fund, Water & Wastewater Utility Fund, and any other operating funds,
the weighted average maturity of each fund's portfolio will remain within the 6 to 9 month
range. Assets held from bond proceeds may be invested in maturities with a final stated
maturity greater than (2) years based on estimated project completion dates.
2. Assets held in the General Obligation Interest & Sinking Fund may be invested in
maturities which provide liquidity adequate to cover the debt service payment dates.
3. Assets held in the General Emergency, General Contingency, Water & Wastewater
Emergency, and the Car Rental Tax Reserve Funds may be invested in maturities not
exceeding five (5) years.
4. An average remaining maturity of 365 days or less shall be maintained on bond proceeds
subject to arbitrage rebate restrictions, and the total portfolio average remaining shall not
exceed one year.
D. DIVERSIFICATION It is the policy of the City of Euless to diversify its investment portfolios.
Assets held in the common investment portfolio shall be diversified to eliminate the risk of
loss resulting from one concentration of assets in a specific maturity, a specific issuer or a
specific class of securities. Diversification strategies shall be determined and revised
periodically by the Investment Committee. In establishing specific diversification strategies,
the following general policies and constraints shall apply:
1. Portfolio maturities shall be staggered in a way that protects interest income from the
volatility of interest rates that avoids undue concentration of assets in a specific maturity
sector.
2. Securities shall be selected which provide for stability of income and reasonable liquidity.
In addition, the City will invest a portion of the City's portfolio in readily available funds
such as local government investment pools and money market funds to ensure that
appropriate liquidity is maintained in order to meet ongoing obligations.
3. The Investment Committee shall establish strategies and guidelines for the percentage
of the total portfolio that may be invested in securities other than repurchase agreements,
treasury bills, or insured and collateralized certificates of deposit.
4. The Investment Committee shall conduct a quarterly review of these guidelines, and shall
evaluate the probability of market and default risk in various investment sectors as part
of its considerations.
5. The investment officer will obtain at least three competitive bids from approved brokers
on our broker/dealer list before making an investment transaction except for a)
transactions with money market funds and local government investment pools (which are
deemed to be made at prevailing market rates), b) treasury and agency securities
purchased at issuance through an approved broker/dealer or financial institution, and c)
fully insured certificates of deposit placed in accordance with the conditions prescribed in
Section 2256.010(b) of the Public Funds Investment Act. In the event of a tie, the choice
will be made by a cumulative and objective manner.
E. ARBITRAGE The City of Euless will follow arbitrage regulations.
The Tax Reform Act of 1986 provided limitations restricting the City's investing of tax-exempt
General Obligation Bond proceeds and debt service income. New arbitrage rebate
provisions require that the City compute earnings on investment from each issue of bonds
on an annual basis to determine if a rebate is required. To determine the City's arbitrage
position, the City is required to perform specific calculations relative to the actual yield earned
on the investment of the funds and the yield that could have been earned if the funds had
been invested at a rate equal to the yield on the bonds sold by the City. The rebate provision
states that periodically (not less than once every five years, and not later than sixty days after
maturity of the bonds), the City is required to pay the U.S. Treasury a rebate of excess
earnings based on the City being in a positive arbitrage position. The Tax Reform restrictions
require extreme precision in the monitoring and recording facets of investments as a whole,
and particularly as relates to yields and computations so as to insure compliance. Failure to
comply can dictate that the bonds become taxable, retroactively from the date of issuance.
The City's investment position relative to the new arbitrage restrictions is the continued
pursuit of maximizing yield on applicable investments while insuring the safety of capital and
liquidity. It is a fiscally sound position to continue maximization of yield and rebate excess
earnings, if necessary.
VI. SELECTION OF BANKS AND DEALERS
A. BIDDING PROCESS Periodically, a Depository shall be selected through the City's banking
services procurement process, which shall include a formal request for proposal (RFP)
issued in compliance with applicable State law. The contract can be extended as per the
RFP specifications. In selecting depositories, the credit worthiness of institutions shall be
considered, and the Director of Finance shall conduct a comprehensive review of prospective
depositories credit characteristics and financial history.
B. INSURABILITY Banks and Savings & Loan Associations seeking to establish eligibility for
the City's competitive investment program, shall submit financial statements, evidence of
federal insurance and other information as required by the Director of Finance.
C. AUTHORIZED BROKER/DEALERS A list will be maintained of "primary" dealers and
regional dealers that qualify under the Securities and Exchange Commission (SEC) Rule
15C3-1 (uniform net capital rule). All financial institutions and broker/dealers who desire to
become qualified for investment transactions must supply the audited financial statements,
proof of state registration, and a completed broker/dealer questionnaire. All brokers and
dealers must be authorized by the Investment Committee, as analyzed by this broker/dealer
questionnaire. Investment Officers shall not conduct business with any firm with whom public
entities have sustained losses on investments or whose name has been removed from an
approved list by the Investment Committee. At least annually, the investment committee will
review, revise and adopt a list of qualified brokers that are authorized to engage in investment
transactions with the City.
D. COMPLIANCE A written copy of the investment policy will be presented to any investment
pool or business organization offering to engage in an investment transaction with the City.
A qualified representative (as described by section 2256.002, subdivision 10 of the Texas
Government Code) of such business organization shall execute a written instrument, in a
form acceptable to both the City and the organization, certifying that they have received and
reviewed a written copy of the City's investment policy. The firm must acknowledge that it
has implemented reasonable internal procedures and controls in an effort to preclude
investment transactions conducted between the City and the organization that are not
authorized by the City's investment policy, except to the extent that this authorization is
dependent on an analysis of the makeup of the City's entire portfolio or requires an
interpretation of subjective investment standards or relates to investment transactions of the
entity that are not made through accounts or other contractual arrangements over which the
business organization has accepted discretionary investment authority. The investment
officer of the City may not acquire or otherwise obtain any authorized investment described
in the City's investment policy from a business organization that has not delivered such
instrument. This instrument does not, at any time, relieve the City of the responsibility of
monitoring all investment transactions to determine if they are in compliance with this policy.
VII. COLLATERALIZATION, SAFEKEEPING AND CUSTODY
A. COLLATERALIZATION OF DEPOSITS The City requires that all uninsured collected
balances plus accrued interest, if any, in depository accounts be secured in accordance with
the requirements of this Policy and Chapter 2257, Government Code ("Public Funds
Collateral Act") and the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (FIRREA). Financial institutions serving as City depositories will be required to sign a
depository agreement with the City which details securities that can serve as eligible
collateral, collateralization ratios, standards for collateral custody and control, collateral
valuation, rights of substitution and conditions for agreement termination.
Pledged securities serving as collateral will always be held in the City's name or on behalf of
the City by an independent third party with which the City has a current custodial agreement.
Depository and custodial records shall assure the notation of the City's ownership of or
explicit claim on the securities. Collateral levels will be reviewed no less than monthly to
ensure the market value of the pledged securities is at least 105% of the deposit and
investment balances less any amount insured by FDIC or FSLIC. Eligible collateral is as
follows:
B. ELIGIBLE COLLATERAL
1. FDIC and FSLIC insurance coverage.
2. Eligible securities that are compliant with Government Code Chapter 2257 Collateral for
Public Funds.
The City's Investment Officers reserve the right to accept or reject any form of collateral or
enhancement at their sole discretion.
C. SUBJECT TO AUDIT All collateral shall be subject to inspection and audit by the Director of
Finance, or designee, as well as the City's independent auditors.
D. SAFEKEEPING AND CUSTODY Safekeeping and custody of the City's investments shall
be in accordance with applicable law and accounting standards. Investment securities will
be held by a Custodian designated by the City and will be required to issue safekeeping
receipts clearly detailing that the securities are owned by the City. Monthly safekeeping
reports detailing the City's securities held by the Custodian will be provided no less than
monthly.
E. DELIVERY VS. PAYMENT Treasury Bills, Notes and Bonds and Government Agencies'
Securities, and all other investment transactions, except investment pools and mutual funds,
shall be purchased using the delivery versus payment method (DVP). That is, funds shall
not be wired or paid until verification has been made that the security was received by the
Custodian.
VIII. MANAGEMENT AND INTERNAL CONTROLS
The Director of Finance, or designee, shall establish a system of internal controls which shall be
reviewed by an independent auditor. The controls shall be designed to prevent losses of public
funds arising from fraud, employee error, misrepresentation by third parties, unanticipated
changes in financial markets, or imprudent actions by employees or Investment Officers of the
City.
Controls and managerial emphasis deemed most important that shall be employed where
practical are:
A. Control of collusion;
B. Separation of duties;
C. Separation of transaction authority from Accounting and Record -keeping;
D. Custodian safekeeping receipts records management;
E. Avoidance of physical delivery securities;
F. Clear delegation of authority;
G. Documentation of investment bidding events;
H. Written confirmation of transactions for investments and wire transfers;
I. Reconcilements and comparisons of security receipts with the investment subsidiary records;
J. Compliance with investment policies;
K. Accurate and timely reports;
L. Validation of investment maturity decisions with supporting cash flow data;
M. Adequate training and development of Investment Officials;
N. Verification of all interest income and security purchase and sell computations;
O. Review of financial conditions of all brokers, dealers, and depository institutions; and
P. Staying informed about market conditions, changes and trends that require adjustments in
investment strategies.
The City's list of six brokers currently includes FHN Financial, Hilltop Securities, Stifel,
SouthState Duncan Williams, Samco Capital, and Financial Northeastern Securities.
The Public Funds Investment Act and the City's investment policy require staff to review the
broker/dealer list annually. At this time, we recommend approval of the six brokers we
currently have as they continue to fill our portfolio needs. The recommended broker/dealer list
for 2026 includes:
FHN Financial - Buddy Saragusa
Hilltop Securities - Gilbert Ramon
Stifel - Mike Smith
SouthState Duncan Williams - Patrick Boyer/Doug Boyer
Samco Capital Markets - Robert Phillips
Financial Northeastern Securities, Inc. - Steven Azzato
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