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LIQUIDITYThe City's investment portfolio will remain sufficiently liquid to enable the City to <br />meet operating requirements that might be reasonably anticipated. Liquidity shall be achieved by <br />matching investment maturities with forecasted cash flow requirements and by investing in <br />securities with active secondary markets.Because all possible cash demands cannot be <br />anticipated, a portion of the portfolio will be invested in shares of money market mutual funds or <br />local government investment pools that offer same day liquidity. <br />PUBLIC TRUSTAll participants in the investment process shall seek to act responsibly as <br />custodians of the public trust. Investment Officials shall avoid any transaction that might impair <br />public confidence in the City's ability to govern effectively. The governing body recognizes that <br />in a diversified portfolio, occasional measured losses due to market volatility are inevitable, and <br />must be considered within the context of the overall portfolio's investment return, provided that <br />adequate diversification has been implemented. <br />YIELD(Optimization of Interest Earnings)The City's cash management portfolio shall be <br />designed with the objective of regularly meetingor exceeding the average rate of return on U.S. <br />Treasury Bills at a maturity level comparable to the City’sweighted average maturity in days. <br />The investment program shall seek to augment returns above this threshold consistent with risk <br />limitations identified herein and prudent investment principles. <br />RESPONSIBILITY AND CONTROL <br />IV. <br />Oversight Responsibility for the investment activity of the City of La Porte shall rest with the <br />Fiscal Affairs Committee and the City Manager. <br />DELEGATIONManagement responsibility for the investment program is hereby delegated to <br />the Director of Finance, who shall establish written procedures for the operation of the investment <br />program, consistent with this investment policy. Such procedures shall include explicit delegation <br />of authority to persons responsible for investment transactions. <br />SUBORDINATESAll persons involved in investment activities will be referred to as <br />"Investment Officers." No person shall engage in an investment transaction except as provided <br />under the terms of this policy and the procedures established by the Director of Finance. The <br />Director of Finance shall be responsible for all transactions undertaken, and shall establish a <br />system of controls to regulate the activities of Subordinate Investment Officers.All investment <br />officers,including the Director of Finance,will demonstrate competence in the execution of the <br />city’s investments. All Investment Officers will insure compliance with the investment program <br />with ongoing training and evaluation by management. <br />PRUDENCEInvestments shall be made with judgment and care, under prevailing circumstances, <br />that a the exercise of due care, which personsof prudence, discretion and intelligencewould <br />exercise in the management of theirthe person’sown affairs, not for speculation,but for <br />investment,considering the probable safety of their own capital as well as and the probable <br />income to be derived. Investment Officers acting in accordance with written procedures and this <br />investment policy and exercising due diligence shall be relieved of personal responsibility for an <br />individual security's credit risk or market price changes, provided deviations from expectations <br />are reported in a timely fashion and the liquidity and the sale of securities are carried out in <br />accordance with the terms of this policy. <br />IMDEMNIFICATIONThe Director of Finance and the Investment Officer, acting in accordance <br />with written procedures and exercising due diligence, shall not be held personally responsible for <br />2 <br /> <br />