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8 <br />funds, or similar investment pools. <br /> A schedule of receipts and disbursements shall be maintained so that investments can <br />be coordinated with expected cash flows. <br /> The maximum term of investments will be 6 years unless disclosed in writing to the <br />City Council. <br /> <br />2. Liquidity <br />The investment portfolio shall remain sufficiently liquid to meet all operating requirements <br />that may be reasonably anticipated. This is accomplished by structuring the portfolio so that <br />securities mature concurrently with cash needs to meet anticipated demands (static liquidity). <br />Furthermore, since all possible cash demands cannot be anticipated, the portfolio should <br />consist largely of securities with active secondary or resale markets (dynamic liquidity). <br />Alternatively, a portion of the portfolio may be placed in money market mutual funds or local <br />government investment pools (4M Fund) which offer same-day liquidity for operating and <br />short-term funds. <br /> <br />3. Yield <br />The investment portfolio shall be designed with the objective of attaining a market rate of <br />return throughout budgetary and economic cycles, taking into account the investment risk <br />constraints and liquidity needs. Return on investment is of secondary importance compared <br />to the safety and liquidity objectives described above. Securities shall generally be held until <br />maturity. <br />After the liquidity and scheduled maturity needs are satisfied, the balance of the funds <br />available for the investment will be placed with institutions that offer the greatest safety and <br />highest rate of return. Purchases of investments should be made on the basis of competitive <br />offers and bids when practical. <br /> <br />Standards of Care <br /> <br />1. Delegation of Authority <br />The Finance Director is designated as the Investment Officer of the City and is responsible for <br />investment management decisions and activities. The Finance Director and City <br />Administrator are authorized to make investments on behalf of the City. The Finance Director <br />shall develop and maintain written administrative procedures for the operation of the <br />investment monitoring, diversification of risk, as well as a system of controls to regulate the <br />activities of the investments. <br /> <br />2. Prudence <br />The standard of prudence to be used shall be the "Prudent Investor rule" and shall be applied <br />in the context of managing the overall portfolio: “investments shall be made with judgment <br />and care – under prevailing circumstances – which persons of prudence, discretion, and <br />intelligence exercise in the management of their own affairs, not for speculation, but for <br />investment, considering the probable safety of their capital as well as the probable income to <br />be derived.” <br /> <br />City employees meeting this standard will be relieved of personal responsibility for an <br />individual security’s credit risk or market price changes, provided deviations from