The philosophy of the College District Investment Department is to ensure that all available funds are invested to the maximum extent possible at the highest possible rates obtainable at the time of investment consistent with the legal and administrative guidelines of this Policy. The College District shall invest funds consistent with law, including, without limitation, the Public Funds Investment Act of 1987, as amended, Chapter 2256, Texas Government Code (the “Act”) and this Policy. Effective cash management is recognized as essential to good fiscal management. An aggressive cash management and investment policy will be pursued by the College District to take advantage of investment interest as a viable and material source of revenue to all restricted and unrestricted funds of the College District as hereinafter described. The investment of the College District's funds shall be designed and managed in a manner to promote the best interest of the College District and the public.
District investments shall be made with judgment and care under circumstances then prevailing that 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 and optimum liquidity required for operations in the College District. Safety shall be the first priority, adequate liquidity the second, and yield, the third priority. Individual investments shall be made in a manner consistent with this Policy.
The investment portfolio of the College District includes funds pooled together from all of the College District’s fund groups.
Maintenance funds shall have as their primary objective to support the goals of the investment policy on these funds for safety and assure the cash flows are matched with adequate liquidity while obtaining reasonable market yields. This shall be accomplished by purchasing high quality, short-to-medium term securities that will complement each other in a laddered structure or utilizing an investment pool.
Auxiliary funds shall have as their primary objective to support the goals of the investment policy on these funds for safety and assure that cash flows are matched with adequate liquidity while obtaining reasonable market yields. This shall be accomplished by purchasing high quality, short-to-medium term securities that will complement each other in a laddered structure or utilizing an investment pool.
Restricted funds shall have as their primary objective to support the goals of the investment policy on these funds for safety and assure that cash flows are matched with adequate liquidity while obtaining reasonable market yields. This shall be accomplished by purchasing high quality, short-to-medium term securities that will complement each other in a laddered structure or utilizing an investment pool.
These funds shall have as their primary objective to ensure that anticipated cash outflows are matched with adequate investment liquidity. No funds shall be invested longer than the related anticipated expenditures. These portfolios shall have liquid securities to allow for unanticipated project expenditures or accelerated project outlays due to a better than expected or changed construction schedule.
Investments shall have as the primary objective the ability to generate a dependable revenue stream to the appropriate debt service fund within the limits set forth by the bond ordinance or debt covenants specific to each individual bond issue.
These funds shall have as their primary objective to ensure that anticipated cash outflows are matched with adequate investment liquidity. No funds shall be invested longer than the related anticipated expenditures. These portfolios should have liquid securities to allow for unanticipated project expenditures or accelerated project outlays due to a better than expected or changed construction schedule.
Each individual investment shall be considered using the following priorities in order of importance:
The longer the maturity of investments, the greater their price volatility. Therefore, it is the College District's policy to concentrate its investment portfolio in shorter-term securities in order to limit principal risk caused by changes in interest rates.
The College District attempts to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the College District shall not directly invest in securities maturing more than four years from the date of purchase.
For investment pools, the average dollar-weighted maturity shall not exceed two years.
The College District anticipates receiving royalty payments from the development of mineral rights, including specifically the development and extraction of natural gas, with moneys derived from royalty payments to be dedicated, as determined by the Board of Trustees, in a designated fund to provide scholarships to students of the College District (such fund is referred to in this Policy as the "Scholarship Fund"). Moneys dedicated to the Scholarship Fund may be invested by the Tarrant County College Foundation ("Foundation") in accordance with the authority granted by the Uniform Prudent Management of Institutional Funds Act, Chapter 163, Texas Property Code ("UPMIFA"). The investment strategy governing the Scholarship Fund shall be to (1) preserve the real purchasing power of the principal in the Scholarship Fund, and (2) provide a stable source of perpetual financial support. Asset allocation will be consistent with the Guidelines for Investments as approved by the Foundation board of directors. The investment of such moneys deposited to the credit of the Scholarship Fund in property or investments undertaken in accordance with UPMIFA shall be consistent with the foregoing investment strategy and the risk and return objections set forth in the investment strategy.
All funds received by the College District shall be deposited with the College District's depository promptly upon receipt.
The Vice Chancellor for Finance shall be the Investment Officer for all available College District funds. The Vice Chancellor for Finance may delegate the day-to-day responsibility for the investment of the College District funds to the Associate Vice Chancellor for Finance and the Chief Accountant.
Should at any time the Vice Chancellor for Finance or his designee have a personal business relationship with any entity seeking to sell investments to the College District of the nature described in the Act, said person will file a Disclosing Statement with the Texas Ethics Commission, the Chancellor and the Board of Trustees.
It is understood at all times that the control and general fiduciary responsibility of the College District's funds is vested in the Board of Trustees and said right of investment or management is extended by the Board of Trustees to the Vice Chancellor for Finance in its behalf.
In the administration of the duties of Investment Officer, the Vice Chancellor for Finance shall exercise the judgment and care, under prevailing circumstances, that a prudent person would exercise in the management of the person’s own affairs.
In order to allow the maximum flexibility for the investment of the College District's funds, the Board of Trustees extends the Vice Chancellor for Finance full authority for the investment of College District funds.
In Accordance with authorizing Federal and State Laws, including, but not by way of limitation, the Act, and Section 45.209, Texas Education Code, the College District's Depository Contract, and appropriate approved collateral provisions, the College District may utilize the following methods for the investment of College District funds:
To be eligible to receive funds from and investments on behalf of the College District, an investment pool must be rated no lower than AAA or AAA-m or at an equivalent rating of at least one nationally recognized rating service.
To maintain eligibility to receive funds from and invest funds on behalf of an entity, an investment pool must furnish to the investment officer:
An entity by contract may delegate to an investment pool the authority to hold legal title as custodian of investments purchased with its local funds.
For purposes of investment in an investment pool, "yield" shall be calculated in accordance with regulations governing the registration of open-end management investment companies under the Investment Company Act of 1940, as promulgated from time to time by the federal Securities and Exchange Commission. In addition, an investment pool created to function as a money market mutual fund shall report yield in accordance with regulations of the federal Securities and Exchange Commission applicable to reporting by money market funds.
To the extent bond proceeds of the College District are invested in accordance with provisions of the instruments authorizing the issuance of such bonds, if there shall be a conflict between such authorizing instruments and this Policy (except as described in the following paragraph), the terms of such authorizing documents shall govern and control the investment of bond proceeds and any debt service or reserve funds therein created.
Anything herein to the contrary notwithstanding, the College District shall not invest its funds in collateralized mortgage obligations.
Diversification by Investment Instrument shall not exceed the following guidelines for each type of instrument:
|Percentage of Portfolio
|U.S. Treasury Obligations||100%|
|U.S. Gov. Agency Securities and Instrumentalities Of Gov.-Sponsored Corp.||80%|
|Auth. Local Gov. Investment Pools||100%|
|Certificates of Deposit (other than negotiable Certificates)||100%|
|Money Market Mutual Funds||50%|
|Cash Management Funds||20%|
|Corporate Bonds (max 3% per issuer)||20%|
|Negotiable Certificates of Deposit||20%|
A written copy of this Policy shall be presented to any Business Organization that seeks to engage in an investment transaction with the College District. The Qualified Representative (as such term is defined in the Act) of the Business Organization seeking to engage in an investment transaction with the College District shall execute a written instrument indicating that the Qualified Representative has:
The Vice Chancellor for Finance or any designee thereof may not buy any securities from a Business Organization which has not delivered to the College District a written instrument as set forth hereinabove. The receipt of the written instrument does not relieve the Vice Chancellor for Finance of the responsibility for monitoring the investments of the College District’s funds to determine that the investments are in compliance with this Policy.
A Qualified Representative shall be those persons identified as such in the Act. A Business Organization includes any investment pool.
Not less than quarterly the Vice Chancellor for Finance shall prepare and submit to the Board of Trustees a written report of the College District's investment transactions for the preceding reporting period, in addition to other information that may be required by the College District. The report shall contain:
It is the policy of TCCD that all security transactions entered into with TCCD shall be conducted on a "DELIVERY VERSUS PAYMENT" (DVP) basis through the Federal Reserve System, with the exception of investment pools and mutual funds. By doing this, TCCD funds are not released until TCCD has received, through the Federal Reserve wire, the securities purchased. TCCD shall authorize the release of funds only after the purchased security has been received in the safekeeping account of TCCD.
The College District shall have performed as a part of its Annual External Financial Audit a compliance audit of management controls on investments and adherence to the College District's established investment policies. To the extent the Act requires review of the reports by an independent auditor, the Vice Chancellor for Finance shall provide such reports to the auditor performing the Annual External Financial Audit for review thereby, and take such steps as may be reasonable to cause said auditor to report the results of its review of the investment reports to the Board of Trustees.
To the extent required by the Act, no later than 180 days after the last day of each regular session of the Texas Legislature, the Investment Officer shall prepare and deliver to the Board of Trustees a report reciting the changes, if any, made to the Act that were enacted into law by the recently concluded regular session of the Texas Legislature.
The College District is not required to liquidate investments that were authorized investments at the time of purchase, if they subsequently are downgraded by a nationally recognized rating agency below the statutorily-required rating for eligibility for investment of College District Funds. The Investment Officer, the Associate Vice Chancellor for Finance and the Chief Accountant will meet to discuss any investment of College District funds which has been placed on credit-watch or has been downgraded to evaluate and take any necessary and prudent measures to assure the safety of College District funds. It is the policy of the College District to liquidate as quickly as is prudently possible any investment that loses its required credit rating while held in the College District’s portfolio.
The Investment Officer, the Associate Vice Chancellor for Finance and the Chief Accountant shall attend an investment training session no less often than once every two fiscal years, commencing September 1, 1997. The investment training session shall be provided by an independent source approved by the Board of Trustees. For purposes of this Policy, an “independent source” from which investment training shall be obtained shall include (i) the Texas Higher Education Coordinating Board and (ii) a sponsoring entity of the investment training session that is an entity other than a Business Organization with whom the District may engage in an investment transaction.
The Act and this Policy require that a Disclosing Statement be filed with the Texas Ethics Commission when investment transactions with related parties occur. Individuals who are responsible for filling a Disclosing Statement include members of the Board of Trustees and employees who are directly or indirectly responsible for establishing and executing this Policy.
Related party transactions include, but are not limited to, transactions between responsible College District individuals and owners or employees representing entities seeking to engage in an investment transaction with the College District who have direct family relations or have common personal business interests, as well as personal business relationships of the nature described in the Act.
Date of the Board's most recent reaffirmation of Investment Policy or most recent approval of change to Investment Policy: 08/18/2014
Name: Nancy H. Chang,
Title: Associate Vice Chancellor for Finance
Phone Number: 817-515-5222
Tarrant County College District
1500 Houston Street
Fort Worth, Texas 76102
Updated September 11, 2014