The City of Houston invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of public funds. Public funds are invested through programs such as General Funds, Special Revenue Funds, General Debt Service Funds, Capital Project Funds, Enterprise Funds, and Trust and Agency Funds. The City’s investment portfolio is $4.8 billion as of June 30, 2020. As of June 30, 2020, this investment portfolio's dollar-weighted average maturity was 1.33 years. Modified duration was 1.23 years. The following describes the investment positions of the City's operating funds as of June 30, 2020. The City held $4.8 billion in high grade, fixed income investments in three separate investment pools, each serving a specific purpose as described below. All investments are governed by state law and the City's Investment Policy, which dictates the following objectives, in order of priority:
- Safety
- Liquidity
- Return on Investment
- Legal Requirements
The Treasury Division is responsible for managing the City’s investment portfolio in accordance with state law and the City’s investment policy. Fitch Ratings as awarded the City’s general investment portfolio its highest rating, AAA. The Treasury Division is also responsible for overseeing a debt program of approximately $15 billion. The City has multiple general obligation commercial paper programs with total authorization of $925 million (all of GO credit programs). The current issuance capacity of the commercial paper program is $550 million which is supported by credit facilities or line credit, while $375 million is appropriated. The City of Houston also has $700 million of authorized CP for combined utilities and $800 million authorized CP (commercial paper) of $800 million for Houston Airport System.
Additionally, the City has an appropriation facility supported by a forward bond purchase agreement in the amount of $200 million. The City has seven auction-rate security issues, six series of variable rate demand obligation bonds, two SFIMA indexed notes, and three interest rate swaps with a total notional amount of $902 million and credit agreements totaling $2.1 billion. The City’s general obligation debt is rated Aa3 by Moody’s; AA by Standard and Poor’s; and AA by Fitch Rating.
For more information please visit link: (https://www.houstontx.gov/controller/treasury/credit-ratings.html)