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LIQUIDITY The 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 TRUST All 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 meeting or exceeding the average rate of return on U.S. <br /> Treasury Bills at a maturity level comparable to the City's weighted 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 /> IV. RESPONSIBILITY AND CONTROL <br /> OVERSIGHT RESPONB_f_LITY <br /> •v r isht Res on '.' 't for the inv•stm- of the Ci of L. P. - h.1 -- ith th- <br /> Fiscal Affairs Committee and the City Manager. <br /> DELEGATION Management 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 /> SUBORDINATES All 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 /> PRUDENCE Investments shall be made with the exercise of due care, which persons of <br /> prudence, discretion and intelligence exercise in the management of their own affairs, not for <br /> speculation but for investment considering the probable safety of their own capital as well as the <br /> probable income to be derived. Investment Officers acting in accordance with written procedures <br /> 2 <br />