TEXARKANA COLLEGE

General Investment Policy

Texarkana College is authorized to invest in obligations and instruments as defined in the Public Funds Investment Act (Sec. 2256.001 Texas Government Code). Such investments include (1) obligations of the United States or its agencies, (2) direct obligations of the State of Texas or its agencies, (3) obligations of political subdivisions rated not less than A by a national investing rating firm, (4) certificates of deposit, and (5) other instruments and obligations authorized by statue.

The College does not place a limit on the amount that may be invested in any one issuer. In accordance with state law and this policy, the College does not purchase any investments with maturities greater than 10 years.

The general goals and objectives of the investment policy are:

Safety: Safety of principal is the foremost objective of the District’s investment program. Investments of the District shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.

Liquidity: The District’s investment portfolio will remain sufficiently liquid to enable the District to meet all operating requirements which might be reasonably anticipated.

Return on Investments: The District’s investment portfolio shall be designed with the objective of attaining a rate of return throughout budgetary and economic cycles, commensurate with the District’s investment risk constraints and the cash flow characteristics of the portfolio.

The Board of Trustees solicit, reviews and approves depository bids every two years. The depository bid includes bids for certificates of deposit rates. The rates to be paid on time deposits are for a specified period of time, i.e., less than 90 days, 91 to 182 days, and 183 to 365 days. The rate is established using the prime interest rate as a benchmark.

The President of Texarkana College is expressly authorized by the Board of Trustees to cause the investment of all available District funds consistent with this policy and is therefore designated as the Investment Officer. Because of the various duties and responsibilities related to managing the investment portfolio, the President may delegate specific duties and responsibilities to a designee.

The only exception of this investment strategy is the reserve employee health benefit funds. These funds are held by a Trust Department at a local bank and are bid every two years at the same time as the depository bid. The management and investment of this fund is at the discretion of the trustees, with limitation established by the Public Funds Investment Act, effective 09-01-95, as described in Sections 2256.009 and 2256.010. In addition, funds on deposit must be fully insured by FDIC. The Board of Trustees evaluates the fund every two years and the annual financial report includes the fund it its review.

Review: November 22, 2005