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Commerce amends financial policies to add commercial paper, tighten reserves and approves Texas Connect; CO issuance tabled to Aug. 4
Summary
Council adopted amendments to its financial policies to clarify fund‑balance use, add commercial paper as an authorized short‑term instrument with limits, reduce concentration limits, and approve participation in Texas Connect; the proposed Certificates of Obligation issuance was tabled to Aug. 4 pending the certified tax roll.
Commerce — The City of Commerce on Tuesday adopted changes to its financial policies that add commercial paper as an authorized short‑term investment under strict limits, tighten fund balance language, and adjust portfolio concentration and maturity constraints. At the same meeting the council approved joining the Texas Connect Investment Trust and tabled a proposed issuance of Certificates of Obligation until Aug. 4 to await certified tax values.
Staff told council the amendments to the fund balance policy make explicit that residual, unassigned funds at the end of the fiscal year may not be used for recurring departmental expenses and should be reserved for emergencies or one‑time capital expenditures. On investment policy changes, staff said commercial paper would be allowed only if it is issued with a maturity of 270 days or less and rated at least P‑1 (or equivalent). The policy also reduces the maximum allowable allocation to any one instrument type from 50% to 30%, sets a weighted average maturity limit for the portfolio of three years and a maximum maturity of five years.
“The language is commercial paper that has stayed in maturity of 270 days or less from the date of its issuance and is rated not less than a 1 or a p 1 in an equivalent rating system,” staff said while explaining controls added at auditors’ recommendation. Council adopted the resolution amending financial policies.
The council also approved participation in the Texas Connect Investment Trust as an additional liquidity and diversification option for funds not tied to capital projects or reserve balances.
On the city’s proposed Series 2026 combination tax and revenue certificates of obligation, staff recommended tabling the ordinance until Aug. 4 so the council could act with the certified tax roll and clearer tax‑rate implications; the council voted to table the item.
The financial policy amendments and Texas Connect participation passed in separate motions; the CO issuance was tabled by council motion and will return in August.
