2003-056 - Considering the City's Statement of Investment Policy

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CITY OF S;~gTA ANA STATEMENT OF INVESTMP2gT POLICY ~JL¥ 2003-2004 limited to relatively ].ow risk securities in anticipation of earning a fair return relative to the risk being assumed~ Securities shall not be sold prior to maturity with the following exceptions: 1) a declining credit security could be sold early to minimize loss of principal; 2) a security swap would improve the ~ality, yield, cr target duration in the portfolio; or 3) liquidity needs of ~he portfolio {e~ire that the security be sold. The ~rket-average rate of return is defined as the average return on thres-monch U.S. Treasury Bills. The city strives to maintain 100% investment of idle funds after consideration for a compensating balas~ce to cover the cost of services provided by the bar~. The f~nds available for investment are determined by cask flow projections updated daily. Investments are monitored so that legal limits on ty~e~ of investments are r. ot exceeded. The "prudent person" standard shall be applied in the context of m~naging the overall portfelio, Investment officers acting in accordance with written procedures and this investment policy arid exercising due diligence shall be 'relieved of personal responsibility for aa indiv/dl~al secLhrity's credit risk or market price changes, provided deviations from exceptions are reported in a timely fashion and the liquidity and the sale of securities are carried out in accordance with the terms of this policy. Investments shall be made with judgement and care, under circumstances then prevailing, which persons of p~udence, discre=ion, a~ intelligence exercise in the management of their ow~. affairs, not for speculation, but for investn%ent, considering the probable safety Of their capital as wall as the probable incom~ to be derived. The City is governed by the California Government Code, Sections 53600, 16429.1 and 5~684 et seq. Santa Aaa further restricts the permitted investments to those listed below. Within this scope, the City diversifies its investments by ~aturity dates and types of investments. Concentration limits are indicated for all investment categories except Treasury securities, which are considered the safest investments. A. United States Treasury Bills, Notes, and Bonds, for which the full faith and credit of the United States are pledged for payment of principal a~ interest. Purchases of this category shall not exceed five years to maturity. There is no percentag~ ]~m~t ~n th~s category. B. Obligatior~s issued by a Federal Agency or a United State% Resolution No. 2003-056 Page 6 of 11