(A) The standard of prudence used by the town, shall be the “prudent person rule” and shall be applied in the context of managing the overall portfolio. The prudent person rule is restated below.
(B) Investments shall be made with judgment and care, under prevailing circumstances, that a person of prudence, discretion and intelligence would exercise in the management of the person’s own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived. In determining whether an investment officer has exercised prudence with respect to an investment decision, the determination shall be made taking into consideration: the investment of all funds, or funds under the town’s control, over which the officer had responsibility rather than a consideration as to the prudence of a single investment; and whether the investment decision is consistent with this investment policy.
(C) Investment officers shall notify the Town Council of any conflicts of interest, as defined in the Public Funds Investment Act (Tex. Gov’t Code, Chapter 2256), no later than the next regularly scheduled Town Council meeting.
(D) It is the town’s policy that the Investment Officers perform their duties in accordance with the policies and procedures set forth in this manual. Investment Officers acting in good faith and in accordance with these policies and procedures shall be relieved of personal liability.
(Res. 2009-01, passed 3-7-2009)