CITY OF FATE, TEXAS. Investment Policy. Effective December 3, 2018

Transcription

1 CITY OF FATE, TEXAS Investment Policy Effective December 3, 2018

2 City of Fate, Texas Investment Policy Table of Contents I. Policy... 1 II. Purpose... 1 III. Scope... 1 IV. Investment Objectives... 2 Safety... 2 Liquidity... 3 Yield... 3 V. Responsibility and Control... 3 Delegation of Authority... 3 Quality and Capability of Investment Management... 3 Training Requirement... 4 Internal Controls... 4 Prudence... 5 Ethics and Conflicts of Interest... 5 VI. Suitable and Authorized Investments... 5 Portfolio Management... 5 Investments Authorized Not Authorized... 7 VII. Investment Parameters... 8 Maximum Maturities... 8 Diversification... 8 VIII. Selection of Financial Institutions... 9 Depository... 9 Certificates of Deposit... 9 Securities Dealers... 9 Competitive Bidding... 10

3 IX. Safekeeping of Securities and Collateral Safekeeping Agreement Collateral Policy Collateral Defined Subject to Audit Delivery v. Payment X. Performance Performance Standards Performance Benchmark XI. Reporting Quarterly Reporting Monitoring Market Value XII. Investment Policy Adoption XIII. Investments Strategy Suitability Safety Liquidity Marketability Diversification Yield Exhibits A- Authorized Investment Officials B- Statement of Ethics and Conflicts of Interest C- Approved Brokers/Dealers, Financial Institutions, and Investment Pools D- Certification of Business Organizations... 19

4 I. Policy It is the Policy of the City of Fate, Texas (hereinafter referred to as the City ) that, after allowing for the anticipated cash flow requirements of the City and giving due consideration to the safety and risk of investment, all available funds shall be invested in conformance with these legal and administrative guidelines, seeking to optimize interest earnings to the maximum extent possible. Effective cash management is recognized as essential to good fiscal management. Investment income is a source of revenue to the City s funds. The City s investment portfolio shall be designed and managed in a manner designed to maximize this revenue source, to be responsive to public trust, and to be in compliance with legal requirements and limitations. Investments shall be made with the primary objectives of (a) safety and preservation of principal, (b) maintenance of sufficient liquidity to meet operating needs, and (c) optimization of interest earnings on the portfolio. II. Purpose The purpose of this document is to set forth specific Investment Policy guidelines for the City in order to achieve the goals of safety, liquidity and yield for all investment activity. The City Council of the City shall review its Investment Policy not less than annually. This Policy serves to satisfy the statutory requirement (specifically the Public Funds Investment Act, Chapter 2256, Texas Government Code (the Act )) to define, adopt and review a formal Investment Policy. III. Scope PFIA (9) This Investment Policy shall govern the investment of all financial assets of the City. These funds are accounted for in the City's Comprehensive Annual Financial Report (CAFR) and include: General Fund Special Revenue Funds Debt Service Funds Capital Projects Funds Enterprise Fund Page 1 of 19

5 This Investment Policy shall apply to all transactions involving the financial assets and related activity for all the foregoing funds. City funds are pooled for investment purpose. IV. Investment Objectives The City shall manage and invest its cash with three primary objectives, listed in order of priority: safety, liquidity, and yield. The safety of the principal invested always remains the primary objective. All investments shall be designed and managed in a manner consistent with state and local law. The City shall maintain a comprehensive cash management program which includes collection of accounts receivable, vendor payment in accordance with invoice terms, and prudent investment of available cash. Cash management is defined as the process of managing monies in order to insure maximum cash availability and maximum earnings on short-term investment of idle cash. Safety PFIA (b) (2) The primary objective of the investment program is the safety of principal. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. Each investment transaction shall seek first to ensure that principal losses are avoided, whether they are from securities default or erosion of market value. However, it must be understood that an element of risk is inherent with all types of investments. Recognition of and minimization of risk is the responsibility of the Investment Officer. The objective will be to mitigate credit and interest rate risk. Credit Risk: The City will minimize credit risk, the risk of loss due to the failure of the issuer or backer of the investment, by: - Limiting investments to the safest types of investments, - Pre-qualifying the financial institutions, broker/dealers and advisors with whom the City will do business, and - Diversifying the investment portfolio so that potential losses from any type of security or from any one individual issuer will be minimized. Interest Rate Risk: The City will minimize the interest rate risk, which is the risk that the market value of investments in the portfolio will fall due to changes in general interest rates by: - Structuring the investments portfolio so that investments mature to meet cash requirements for ongoing operations, thereby avoiding the need to liquidate investments prior to maturity, Page 2 of 19

6 - Investing operating funds primarily in short-term securities, certificates of deposit or local government investment pools, and - Diversifying maturities and staggering purchase dates to minimize the impact of market movements over time. Liquidity PFIA (b) (2) The City s investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that the investments mature concurrently with cash needs to meet anticipated demands. All or a portion of the portfolio will be invested in local government investment pools which offer same-day liquidity. Yield PFIA (b) (3) The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance to the safety, liquidity, and yield objectives described above. Delegation of Authority PFIA (f) V. Responsibility and Control City employees authorized to engage in investment transactions and authorized as Investment Officer is the Director of Finance. Management responsibility for the investment program is delegated from the City Manager to the Director of Finance who shall establish written procedures for the operation of the investment program consistent with this Investment Policy. Investment procedures should include reference to the following: safekeeping agreements, repurchase agreements, wire transfer agreements, collateral agreements, depository service contracts and agreements, broker/dealer selection criteria, and security bidding and purchase processes. The Investment Officer is authorized to execute investment transactions on behalf of the City. No person may engage in an investment transaction or the management of City funds except as provided under the terms of this Investment Policy as approved by the City Council. The investment authority granted to the Investment Officer is effective until rescinded by the City Council. Page 3 of 19

7 Quality and Capability of Investment Management PFIA (b) (3) The City shall provide periodic training in investments for Director of Finance through courses and seminars provided by professional organizations, associations, and other independent sources in order to ensure the quality and capability of investment management in compliance with the Public Funds Investment Act. Training Requirement PFIA The Director of Finance shall attend at least one training session relative to the responsibilities under the PFIA within twelve months after taking office or assuming duties; and attend an investment training session 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, and receive not less than 10 hours of instruction relating to investment responsibilities from and independent source approved by the City Council. In addition to initial training requirement, the Director of Finance of the City shall attend an investment training session 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, and receive not less than eight hours of instruction relating to investment responsibilities from an independent source approved by the City Council. For purposes of this Policy, an independent source from which investment training shall be obtained shall include a professional organization, an institution of higher education, or any other sponsor other than a business organization with whom the City may engage in an investment transaction. Internal Controls PFIA (m) The Director of Finance is responsible for establishing and maintaining appropriate internal controls. The Investment Officer is responsible for executing investment transactions and the Accounting division is responsible for preparation of general ledger journal entries based on documentation prepared by the Investment Officer. The Director of Finance shall establish a process for annual independent review by an external auditor for compliance of management controls on investments and adherence to the City s established Investment Policies. Page 4 of 19

8 Prudence PFIA (a-b) Investment shall be made with judgment 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. The standard of prudence to be used by Investment Officer shall be the prudent person standard and shall be applied in the context of managing an overall portfolio. The Investment Officer, 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 immediately upon knowledge of the deviation and appropriate action is taken to control adverse developments. Investment Officer shall seek to act responsibly as custodians of the public trust. Investment Officer shall avoid any transaction that might impair public confidence in the City s ability to govern effectively. Ethics and Conflicts of Interest PFIA (i) An Investment Officer of the City who has a personal business relationship, as described in Texas Government Code (i), with any qualified representative offering to engage in an investment transaction with the City, shall file a statement disclosing that personal business interest with the Texas Ethics Commission and the City Council. An Investment Officer of the City who is related within the second degree by affinity or consanguinity, as determined under Chapter 573 of the Texas Government Code, to an individual seeking to engage in an investment transaction with the City shall file a statement disclosing that relationship with the Texas Ethics Commission and the City Council. Portfolio Management VI. Suitable and Authorized Investments The City shall pursue an active versus a passive portfolio management philosophy. Maturity dates are matched with cash flow requirements and investments are purchased with the intent to be held until maturity, however securities may be liquidated prior to maturity for the following reasons: Page 5 of 19

9 An investment with declining credit may be liquidated early to minimize loss of principal. Cash flow needs of the City require that the investments be liquidated. The Investment Officer will routinely monitor the contents of the portfolio, the available markets, and the relative value of competing instruments, and will adjust the portfolio accordingly. Investments PFIA (b) (4) (A-B), PFIA , PFIA , PFIA (b) (1-4), and PFIA Assets of the City governed by this Policy may be invested in the instruments described below, all of which are authorized by Chapter 2256 of the Government Code (Public Funds Investment Act). Investments of City funds in any instrument or security not authorized for investment under the Act is prohibited. The City will not be required to liquidate an investment that becomes unauthorized subsequent to its purchase. Authorized: a) Obligations of the United States or its agencies and instrumentalities; b) Direct obligations of the State of Texas or its agencies and instrumentalities; c) Other obligations, the principal of and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of the State of Texas or the United States or their respective agencies and instrumentalities, including obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States; d) Obligations of the states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent; e) Collateralized or insured certificates of deposit and other evidences of deposit at federally insured bank, fully guaranteed or insured by the FDIC (Federal Deposit Insurance Corporation) in the State of Texas. f) Fully collateralized direct repurchase agreements provided the City has on file a signed Master Repurchase Agreement, approved by the City Council, which details eligible collateral, collateralization ratios, standards, for collateral custody and control, collateral valuation, and conditions for agreement termination and provided the repurchase agreement: 1. Has a defined termination date; 2. Is secured by obligation of the United States or its agencies and instrumentalities; 3. Requires the securities being purchase by the City to be assigned to the City held in the City s name, and deposited at the time the investment is made with the City or with a third party Page 6 of 19

10 selected and approved by the City ; and 4. Is placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in this state. Public Funds Investment Pool as defined by section of the Public Funds Investment Act and approved by the City Council. 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. To be eligible to receive funds from and invest funds on behalf of the City, an investment pool must furnish to the City an offering circular and other information required by the Public Funds Investment Act. g) A public funds investment pool created to function as a money market mutual fund must mark its portfolio to market daily and, to the extent reasonably possible, stabilized at a $1 net asset value. And must maintain a maximum average dollar weighted maturity that does not exceed 90 days; and Any investment pool that does not meet the requirements of one that is created to function as a money market mutual fund, must maintain a maximum average dollar weighted maturity that does not exceed 365 days (or 366 days in the case of a leap year) and must provide a fixed interest rate and fixed maturity term for each pool position. h) Commercial Paper having a stated maturity of 270 days or fewer from the date of issuance and is rated not less than A-1 or P-1 or an equivalent rating by at least two nationally recognized credit rating agencies or one nationally recognized credit rating agency and is fully secured by an irrevocable letter of credit issued by a bank organized and existing under the laws of the United States or any state. All prudent measures will be taken to liquidate an investment that is downgraded to less than the required minimum rating. Not Authorized: The Investment Officer shall not knowingly permit City funds to be invested with any of the following investment instruments that are strictly prohibited: A. Obligations whose payment represents the coupon payments of the outstanding principal balance of the underlying mortgage-backed security collateral and pay no principal; B. Obligations whose payment represents the principal stream of cash flow from underlying mortgage-backed security collateral and bears no interest; C. Collateralized mortgage obligations that have a stated final maturity date of greater than 10 years; and Page 7 of 19

11 D. Collaterized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index. Maximum Maturities VII. Investment Parameters The longer the maturity of investments, the greater the price volatility is. Therefore, it is the City s Policy to concentrate its investment portfolio in shorter-term securities in order to limit principal risk caused by changes in interest rates. The City attempts to match its investments with anticipated cash flow requirements. The City will not directly invest in securities maturing more than three (3) years from the date of purchase; except the Restricted Reserves required by bond covenants may be invested for maximum maturity of five years at the time of purchase. An average remaining maturity of 365 days or less shall be maintained on bond proceeds subject to arbitrage rebate restriction, and the total portfolio average remaining maturity shall not exceed one year Diversification PFIA (b) (3) The City recognizes that investment risks can result from issuer defaults, market price changes, or various technical complications leading to temporary illiquidity. Risk is controlled through portfolio diversification which shall be achieved by the following general guidelines: A. Limiting investments to avoid over-concentration in investments from a specific issuer or business sector (excluding certificates of deposit that are fully insured and collateralized in accordance with state and federal law), and B. Continuously investing a portion of the portfolio in readily available funds such as local government pools (LGIPs) to ensure that appropriate liquidity is maintained in order to meet ongoing obligations. The following maximum limits, by instrument, are established for the City s total portfolio: U. S. Treasury Securities. 100% U. S. Agencies and Instrumentalities..75% Certificates of Deposit...50% Repurchase Agreements...50% Municipal & County Securities...75% Authorized Pools.100% State of Texas Securities 50% Page 8 of 19

12 VIII. Selection of Financial Institutions Depository At least every five (5) years a depository shall be selected through the City s banking services procurement process, which shall include a formal request for proposal (RFP). The selection of a depository will be determined by a competitive bid, and evaluation of bids will be based on the following selection criteria: The ability to qualify as a depository for public funds in accordance with state law, The ability to provide requested information for financial statements for the periods specified, The ability to meet all requirements in the banking RFP, Complete response to all required items on the bid form, and Lowest net banking service cost, consistent with the ability to provide an appropriate level of service. Certificates of Deposit Banks seeking to establish eligibility for the City s competitive certificate of deposit purchase program shall submit for review annual financial statements, evidence of federal insurance and other information as required by the Investment Officer. Securities Dealers PFIA (k-l) and PFIA For brokers and dealers of government securities, the City shall select only those dealers reporting to the Market Reports Division of the Federal Reserve of New York, also known as the Primary Government Security Dealers, unless a comprehensive credit and capitalization analysis reveals that other firms are adequately financed to conduct public business. Investment Officer shall not knowingly conduct business with any firm with whom public entities have sustained losses on investment. All securities dealers shall provide the City with references from public entities which they are currently serving. All financial institutions and broker/dealers who desire to become qualified bidders for investment transactions must supply the following as appropriate: Audited financial statements, Proof of National Association of Securities Dealers (NASD) certification, Proof of state registration, Completed broker/dealer questionnaire, Certification of having read the City s Investment Policy signed by a registered principal of the organization, and Acknowledgement that the organization has implemented reasonable procedures and controls in an effort to preclude imprudent investment transactions Page 9 of 19

13 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. An annual review of the financial condition and registration of qualified bidders will be conducted by the Investment Officer. Competitive Bidding All individual security purchases and sales (excluding transactions with money market mutual funds, local government investment pools) require that at least three competitive offers or bids must be received. Safekeeping Agreement IX. Safekeeping of Securities and Collateral Investments in U. S. Treasury agency and instrumentality obligations and municipal securities purchased by the City and securities pledged as collateral for certificates of deposit or other evidence of deposit and for repurchase agreements shall be retained in safekeeping in a third party safekeeping bank or in the Federal Reserve Bank in the City s name. The City, financial institution, and the safekeeping bank(s) shall operate in accordance with a master safekeeping agreement signed by all three parties. The City s designated Investment Officer must approve release of collateral in writing prior to its release from the safekeeping account. Securities owned by the City and collateral securities pledged to the City which must be maintained in safekeeping at a bank other than the bank through which the specific owned security is purchased or from which the specific collateral security is pledged. Collateral Policy Consistent with the requirements of the Public Funds Collateral Act, it is the Policy of the City to require full collateralization of all City funds on deposit with a depository bank, other than investments. In order to anticipate market changes and provide a level of security for all funds, the collateralization level will be 102% of market value of principal and accrued interest on the deposits or investments less than an amount insured by the FDIC. Collateralization is required on the time and demand deposits over the FDIC insurance coverage of $250,000 and repurchase agreements. At its discretion, the City may require a higher level of collateralization for certain investment securities. Securities pledged as collateral shall be held by an independent third party with whom the City has a current custodial agreement. The City Manager or his/her designee is responsible for Page 10 of 19

14 entering into collateralization agreements with third party custodians in compliance with this Policy. The agreements are to specify the acceptable investment securities for collateral, including provision relating to possession of the collateral, the substitution or release of investment securities, ownership of securities, and the method of valuation of securities. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the City and retained. Collateral shall be reviewed at least monthly to assure that the market value of the pledged securities is adequate. Collateral Defined The City shall accept only the following types of collateral: Federal Deposit Insurance Corporation coverage, Obligations of the United States or its agencies and instrumentalities, Direct obligations of the State of Texas or its agencies and instrumentalities, Obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as investment quality by a nationally recognized rating firm not less than A or its equivalent with a remaining maturity of ten (10) years or less, Subject to Audit PFIA (d) All collateral shall be subject to inspection and audit by the Investment Officer or the City s independent auditors. Delivery v. Payment PFIA (b) (4) (E) All investments purchased by the City and held in safekeeping in a third-party safekeeping institution shall be purchased delivery versus payment. That is, the City shall authorize the release of its funds only after it has received notification from the safekeeping bank that a purchased security has been received in the City s safekeeping account. This notification may be oral, but will be followed up in writing with the original safekeeping receipt. Performance Standards X. Performance The City s investment portfolio will be managed in accordance with the parameters specified within this Policy. The portfolio shall be designed with the objective of obtaining a rate of return through budgetary and economic cycles, commensurate with Page 11 of 19

15 the investment risk constraints and the cash flow requirement of the City. Weighted average yield to maturity shall be the portfolio s performance standard. Performance Benchmark PFIA (b) (4) (C) It is the Policy of the City to purchase investments with maturity dates coinciding with cash flow needs. Through this strategy, the City shall seek to optimize interest earnings utilizing allowable investments available on the market at that time. Market value will be calculated on a quarterly basis on all securities owned and compared to current book value. The City s portfolio shall be designed with the objective of regularly meeting or exceeding the average rate of return on U.S. Treasury Bills at a maturity level comparable to the City s weighted average maturity in days. Quarterly Reporting PFIA XI. Reporting The Investment Officer shall prepare an investment report on a quarterly basis that summarizes investment strategies employed by the most recent quarter and describes the portfolio in terms of investment securities, maturities, and shall explain the total investment return for the quarter. The quarterly investment report is reviewed by the independent auditor. The quarterly investment report shall include a summary of investment activity prepared in compliance with generally accepted accounting principles. This summary will be prepared in a manner that will allow the City to ascertain whether investment activities during the reporting period have conformed to the Investment Policy. The report will be provided to the City Council, and will include the following: A listing of individual securities held at the end of the reporting period, Unrealized gains or losses resulting from appreciation or depreciation by listing the beginning and ending book and market value of securities for the period, Additions and changes to the market value during the period, Average weighted yield to maturity or portfolio on entity investments as compared to applicable benchmark, Listing of investments by maturity date, The percentage of the total portfolio which each type of investment represents, and Page 12 of 19

16 A statement of compliance of the City s investment portfolio with State Law and the investment strategy and Policy approved by the City Council. Monitoring Market Value PFIA (b) (4) (D) Market value of all securities in the portfolio will be determined on a quarterly basis. These values will be obtained from a reputable and independent source and disclosed to the governing body quarterly in a written report. Any Authorized Investment that requires a minimum rating does not qualify during the period the investment does not have the minimum rating. The City shall monitor the rating of each investment, as applicable, at least quarterly, and take all prudent measures that are consistent with this Policy to liquidate an investment that does not have the minimum rating XII. Investment Policy Adoption PFIA (e) The City s Investment Policy shall be adopted by resolution of the City Council. It is the City s intent to comply with state laws and regulations. The City s Investment Policy shall be subject to revisions consistent with changing laws, regulations, and needs of the City. The City Council shall adopt a resolution stating that it has reviewed the Policy and investment strategies annually, approving any changes or modifications. XIII. Investments Strategy PFIA (d) The City shall manage and invest with primary objectives listed in order of importance; suitability, safety, liquidity, marketability, diversification, and yield. Suitability - Any investment eligible in the Investment Policy is suitable for Operating Funds (including debt service and other pooled funds). Safety of Principal - All investments shall be high quality with no perceived default risk. Market price fluctuations will occur. However, managing the weighted average days to Page 13 of 19

17 maturity for the Operating Fund s portfolio to less than 300 days and restricting the maximum allowable maturity to two years will minimize the price volatility of the overall portfolio Liquidity - The Operating Fund requires the greatest short-term liquidity of any of the Fund types. Short-term deposits, investment pools, and money market mutual funds will provide daily liquidity and may be utilized as a competitive yield alternative to fixed maturity investments. Marketability - Securities with active and efficient secondary markets are necessary in the event of an unanticipated cash flow requirement. Historical market spreads between the bid and offer prices of a particular security-type of less than a quarter of a percentage point will define an efficient secondary market Diversification - Investment maturities should be staggered throughout the budget cycle to provide cash flow based on the anticipated operating needs of the City. Diversifying the appropriate maturity structure out through two years will reduce market cycle risk Yield - Attaining a competitive market yield for comparable investment-types and portfolio restrictions is the desired objective. The yield of an equally weighted, rolling six-month Treasury bill portfolio will be the minimum yield objective The City shall maintain an investment portfolio that utilizes specific investment strategy considerations designed to address the unique characteristics of its various fund groups. In order to minimize risk of loss due to interest rate fluctuations, investment maturities will not exceed the anticipated cash flow requirements of the funds. Authorized securities will be of the highest credit quality, and when not matched to liabilities, they will be short-term and liquid. The portfolio will be diversified to avoid market and credit risks. Diversification and full liquidity requirements will be met through the use of investment pools and certificates of deposit. Investment guidelines by fund type are as follows: A. Investment strategies for operating funds and commingled cash pools containing operating funds have their primary objective to assure that anticipated cash flows are matched with adequate investment liquidity. The secondary objective is to create a portfolio structure which will experience minimal volatility during economic cycles. B. Investment strategies for debt service funds shall have as the primary objective the assurance of investment liquidity adequate to cover the debt service obligation on Page 14 of 19

18 the required payment date. Securities purchased shall not have a stated final maturity date which exceeds the debt service payment date. C. Investment strategies for debt service reserve funds shall have as the primary objective the ability to generate a dependable revenue stream to the appropriate debt service fund from securities with a low degree of volatility. Securities should be of high quality and, except as may be required by the bond ordinance specific to an individual issue, of short to intermediate-term maturities. The stated final maturity dates of securities held should not exceed five years. D. Investment strategies for special projects or special purposed fund portfolios will have as their primary objective to assure that anticipated cash flows are matched with adequate investment liquidity. The stated final maturity dates for securities held should not exceed the estimated project completion date. Page 15 of 19

19 Raju Anthony, Director of Finance Michael Kovacs, City Manager Justin Weiss, Assistant City Manager Exhibit A City of Fate, Texas Authorized Investment Officials Page 16 of 19

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21 EXHIBIT C City of Fate, Texas Approved Broker/Dealers, Financial Institutions and Investment Pools Broker/Dealers Cantor Fitzgerald & Company Duncan Williams, Inc. FTN Financial Hilltop Securities Public Depositories Independent Bank Custodian Bank BOK Financial Paying Agents Amegy Bank Bank of America Merrill Lynch Bank of New York Mellon BOK Financial Independent Bank Union Bank Wilmington Trust Investment Pools Texas Class TexPool TexStar Page 18 of 19

22 EXHIBIT D City of Fate, Texas Certification by Business Organization - EXAMPLE (date) City of Fate, Texas (Attn: Designated Investment official) 1900 CD Boran Parkway, Fate, TX Dear Mr./s. (investment official): This certification is executed on behalf of the City of Fate, Texas (the Investor) and (the Business Organization), pursuant to the Public Funds Investment Act, Chapter 2256, Texas Government Code, (the Act) in connection with investment transactions conducted between the Investor and the Business Organization. The undersigned Qualified Representative of the Business Organization hereby certifies on behalf of the Business Organization that: 1. The undersigned is a Qualified Representative of the Business Organization Offering to enter an investment transaction with the Investor (Note: as such terms are used in the Public Funds Investment Act, chapter 2256, Texas Local Government Code) and; 2. The Qualified Representative of the Business Organization has received and reviewed the Investment Policy furnished by the Investor and; 3. The Qualified Representative of the Business Organization has implemented reasonable procedures and controls in an effort to preclude investment transactions conducted between the Business Organization and the Investor that are not authorized by the Investor's Investment Policy, except to the extent that this authorization is dependent on an analysis of the makeup of the investor's entire portfolio or requires and interpretation of the subjective investment standards, or has implemented reasonable procedures and controls in an effort to preclude investment transactions conducted between the entity and the organization that are not authorized by the Investor's Investment Policy. Qualified Representative Signed by: Printed Name: Title: Date: Page 19 of 19