S A N T A F E I N D E P E N D E N T S C H O O L D I S T R I C T

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S A N T A F E I N D E P E N D E N T S C H O O L D I S T R I C T September 7, 2015 To the Board of Trustees and Community Members of Santa Fe ISD, The quarterly investment report for the three-month

1 S A N T A F E I N D E P E N D E N T S C H O O L D I S T R I C T September 7, 2015 To the Board of Trustees and Community Members of Santa Fe ISD, The quarterly investment report for the three-month period beginning June 1, 2015 and ending August 31, 2015 is presented as required by Government Code Chapter The District is required by Government Code Chapter 2256, The Public Funds Investment Act, to adopt, implement, and publicize an investment policy. That policy must address the following areas: (1) safety of principle and liquidity, (2) portfolio diversification, (3) allowable investments, (4) acceptable risk levels, (5) expected rates of return, (6) maximum allowable stated maturity of portfolio investments, (7) maximum average dollar-weighted maturity allowed based on the stated maturity date for the portfolio, (8) investment staff quality and capabilities, and (9) bid solicitation preferences for certificates of deposit. This report and the District s portfolio comply with all aspects of the Public Funds Investment Act and Board Policy. The Public Funds Investment Act ( Act ) requires an annual audit of investment practices. Investment practices of the District are in accordance with local policies. The Act determines the types of investments which are allowable for the District. These include, with certain restrictions, 1) obligations of the U.S. Treasury, U.S. agencies, and the State of Texas, 2) certificates of deposit, 3) certain municipal securities, 4) securities lending program, 5) repurchase agreements, 6) bankers acceptance, 7) mutual funds, 8) investment pools, and 9) guaranteed investment contracts. The District s investments at August 31, 2015 are shown below. Investment Type Assets Texas First Bank 1,282,116 Gulf Coast Educators FCU (CD) 6,145,628 Texas Class 24,206 First Public Investment Pool 11,861,072 Texas Term Investment Pool 274,195 $ 19,587,219 Analysis of Specific Deposit and Investment Risks A. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The ratings of securities by nationally recognized rating agencies are designed to give an indication of credit risk. As of August 31, 2015, the District was not significantly exposed to credit risks. As of August 31, 2015, the District s investments, other than those which are obligations of or guaranteed by the U.S. Government, are rated as to credit quality as follows: Investment Rating Agency Rating Lonestar Standard & Poor s AAAm Texas Term Standard & Poor s AAAm

2 B. Custodial Credit Risk Deposits are exposed to custodial credit risk if they are not covered by depository insurance and the deposits are uncollateralized, collateralized with securities held by the pledging financial institution, or collateralized with securities held by the pledging financial institution s trust department or agent but not in the District s name. Investment securities are exposed to custodial credit risk if the securities are uninsured, are not registered in the name of the government, and are held by either the counterparty or the counterparty s trust department or agent but not in the District s name. As of August 31, 2015 the District was not exposed to custodial credit risk. C. Concentration of Credit Risk This risk is the risk of loss attributed to the magnitude of a government s investment in a single issuer. Diversification by investment type shall be maintained by ensuring an active and efficient secondary market in portfolio investments and by controlling the market and opportunity risks associated with specific types of investments. As of August 31, 2015, the District owned investments of the following types: Investment Type % of Portfolio Texas First Bank cash 7% Gulf Coast Educators FCU - CDs 31% Texas Class.1% First Public Investment Pool 61% Texas Term Investment Pool 1% D. Interest Rate Risk This is the risk that changes in interest rates will adversely affect the fair value of an investment. In order to minimize the risk of loss due to interest rate fluctuations, investment maturities will not exceed the anticipated cash flow requirements of the funds. Maturity guidelines by fund are as follows: 1. General Fund: Investment strategies for operating funds (including any commingled pools containing operating funds) shall have as their primary objectives safety, investment liquidity, and maturity sufficient to meet anticipated cash flow requirements. 2. Capital Projects Fund: Investment strategies for capital project funds shall have as their objective sufficient investment liquidity to timely meet capital project obligations. Maturities longer than one year are authorized provided legal limits are not exceeded. 3. Debt Service Fund: Investment strategies for debt service funds shall have as their objective sufficient investment liquidity to timely meet debt service payment obligations in accordance with provisions in the bond documents. Maturities longer than one year are authorized provided legal limits are not exceeded. Investment Accounting Policy The District s general policy is to report money market investments and short-term participating interestearning investment contracts at amortized cost and to report nonparticipating interest-earning investment

3 contracts using a cost-based measure. However, if the fair value of an investment is significantly affected by the impairment of the credit standing of the issuer or by other factors, it is reported at fair value. All other investments are reported at fair value unless a legal contract exists which guarantees a higher value. The term short-term refers to investments which have a remaining term of one year or less at time of purchase. The term nonparticipating means that the investment s value does not vary with market interest rate changes. Nonnegotiable certificates of deposit are examples of nonparticipating interest-earning investment contracts. Public Funds Investment Pools Public funds investment pools in Texas ( Pools ) are established under the authority of the Interlocal Cooperation Act, Chapter 79 of the Texas Government Code, and are subject to the provisions of the Public Funds Investment Act (the Act ), Chapter 2256 of the Texas Government Code. In addition to other provisions of the Act designed to promote liquidity and safety of principle, the Act requires Pools to: 1) have an advisory board composed of participants in the pool and other persons who do not have a business relationship with the pool and are qualified to advise the pool; 2) maintain a continuous rating of no lower than AAA or AAA-M or an equivalent rating by at least one nationally recognized rating service; and 3) maintain the market value of its underlying investment portfolio within one half of one percent of the value of its shares. Lindsey Foley Finance Manager

4 Santa Fe ISD Monthly Cash and Investment Balances For Fourth Quarter Ending August 31, 2015 Maturity Date Beginning Book June 1, 2015 Market June 1, 2015 Change in Account Ending Book August 31, 2015 Ending Market August 31, 2015 Rate Texas First Bank General Operating $ 502,761 $ 502,761 $ (78,460) $ 424,301 $ 424,301 - Activity Fund $ 109,537 $ 109,537 $ (109,537) $ - $ - - Worker's Compensation Fund $ 355,965 $ 355,965 $ (355,965) $ - $ - - Debt Service $ 72,522 $ 72,522 $ 11,629 $ 84,151 $ 84,151 - Tax Collections $ 203,178 $ 203,178 $ (30,099) $ 173,078 $ 173,078 - Payroll Clearing $ 402,922 $ 402,922 $ (8,920) $ 394,002 $ 394,002 - Tax Refund Account $ 8,670 $ 8,670 $ 458 $ 9,128 $ 9,128 - Texas First Bank Total Balance $ 1,655,554 $ 1,655,554 $ (570,894) $ 1,084,660 $ 1,084,661 $ - First Public: Child Nutrition Fund $ 81,333 $ 81,344 $ 198,144 $ 198,172 $ 62 General Fund 0.15% $ 7,475,593 $ 7,476,637 $ 250,192 $ 7,725,785 $ 7,726,863 $ 2,630 Debt Service 0.15% $ 5,197,578 $ 5,198,304 $ (1,260,434) $ 3,937,144 $ 3,937,694 $ 1,974 First Public Total Balance $ 14,022,060 $ 14,022,060 $ (1,010,242) $ 11,861,072 $ 11,862,729 $ 4,666 Texas Term: General Fund 0.09% $ 274,125 $ 274,125 $ 70 $ 274,195 $ 274,195 $ 70 Texas Term Total Balance $ 274,125 $ 274,125 $ 70 $ 274,195 $ 274,195 $ 70 Texas Class: Child Nutrition Fund 0.09% $ - $ - $ 24,206 $ 24,206 $ 24,206 $ 1 Texas Class Total Balance $ - $ - $ 24,206 $ 24,206 $ 24,206 $ 1 Gulf Coast Educators Federal Credit Union: Certificate of Deposit (General Fund) 08/07/ % $ 1,006,833 $ 1,006,833 $ 3,710 $ 1,010,543 $ 1,010,543 $ 4,589 Certificate of Deposit (General Fund) 09/02/ % $ 1,006,081 $ 1,006,081 $ 4,462 $ 1,010,543 $ 1,010,543 $ 4,462 Certificate of Deposit (Debt Service ) 09/14/ % $ 2,011,584 $ 2,011,584 $ 5,266 $ 2,016,850 $ 2,016,850 $ 7,022 Certificate of Deposit (General Fund) 11/14/ % $ 2,102,189 $ 2,102,189 $ 5,504 $ 2,107,693 $ 2,107,693 $ 7,338 Gulf Coast Total Balance $ 6,126,687.0 $ 6,126,687 $ 18,941 $ 6,145,628 $ 6,145,628 $ 23,410 Interest Earned GRAND TOTAL $ 22,078,426 $ 22,078,426 $ (1,537,918) $ 19,389,763 $ 19,391,419 $ 28,146

Santa Fe ISD Monthly Cash and Investment Balances For Fourth Quarter Ending August 31, 2015 0 Balance by Investment Institution Fourth Quarter Ending August 31, 2015 Texas First Bank

12% Texas First Bank $1,084,660.45, 6% Gulf Coast Total Balance $ 6,145,628.43 31.70% Gulf Coast Educators Federal CU - CDs 19,389,762.71 $6,145,628.

5 Santa Fe ISD Monthly Cash and Investment Balances For Fourth Quarter Ending August 31, Balance by Investment Institution Fourth Quarter Ending August 31, 2015 Texas First Bank Total Balance $ 1,084, % First Public Total Balance $ 11,861, % Texas Term Total Balance $ 274, % Texas Class Total Balance $ 24, % Texas First Bank $1,084,660.45, 6% Gulf Coast Total Balance $ 6,145, % Gulf Coast Educators Federal CU - CDs 19,389, $6,145,628.43, 32% Texas Term $274,195 1% Texas Class $24, % First Public - Lone Star $11,861,072.40, 61% Texas First Bank Total Balance First Public Total Balance Texas Term Total Balance Texas Class Total Balance Gulf Coast Total Balance

San Antonio Water System San Antonio, Texas. INVESTMENT POLICY December 2010

San Antonio Water System San Antonio, Texas INVESTMENT POLICY December 2010 1-0. PURPOSE: The purpose of the Investment Policy of the San Antonio Water System Board of Trustees (the Board ) is to establish