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11 <br />Investment Diversification and Constraints <br /> <br />1. Diversification of instruments <br />It is the policy of the City to diversify its investment portfolios. To eliminate the risk of loss <br />resulting from the overconcentration of assets in a specific maturity, issuer, or class of <br />securities, all cash and cash equivalent assets in all City funds shall be diversified by maturity, <br />issuer, and security type. No more than 5% of the overall portfolio be invested in securities of <br />a single issue, except when backed with collateral. <br /> <br />2. Diversification of maturity dates <br />At least 5 percent of the City’s portfolio shall be kept in investments, which are available on a <br />daily basis without loss of principal. This is to ensure that funds will be available for <br />unexpected expenditures. <br /> <br />3. Maximum Maturities <br />To the extent possible, the City shall attempt to match its investments with anticipated cash <br />flow requirements. Unless matched to a specific cash flow, the City will not directly invest in <br />securities maturing more than six (6) years from the date of purchase. <br /> <br />Reserve funds and other funds with longer-term investment horizons may be segregated into a <br />long-term “core” investment portfolio and invested in securities exceeding six (6) years if the <br />maturities of such investments are made to coincide with the expected use of funds. The intent <br />to invest in securities with longer maturities shall be disclosed in writing to the City Council. <br /> <br />Reporting <br /> <br />The Finance Director shall prepare an investment report at least quarterly, including a report of the <br />investments held and investment activity. <br />