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CITY OF SANTA ANA STATEMENT OF INVESTMENT POLICY <br /> <br /> JULY 2010-2011 <br /> portfolio; or <br /> 3) liquidity needs of the portfolio require that the security be sold. <br /> The market-average rate of return is defined as the average return on three-month U.S. <br /> Treasury Bills. <br /> The City strives to maintain one hundred percent (100%) investment of idle funds after <br /> consideration for a compensating balance to cover the cost of services provided by the bank. <br /> The funds available for investment are determined by cash flow projections updated daily. <br /> Investments are monitored so that legal limits on types of investments are not exceeded. <br /> <br /> AUTHORIZED INVESTMENTS: <br /> The "prudent person" standard shall be applied in the context of managing the overall portfolio. <br /> Investment officers acting in accordance with written procedures and this investment policy and <br /> exercising due diligence shall be relieved of personal responsibility for an individual security's <br /> credit risk or market price changes, provided deviations from exceptions are reported in a timely <br /> fashion and the liquidity and the sale of securities are carried out in accordance with the terms of <br /> this policy. Investments shall be made with judgement and care, under circumstances then <br /> prevailing, which persons of prudence, discretion, and intelligence exercise in the management <br /> of their own affairs, not for speculation, but for investment, considering the probable safety of <br /> their capital as well as the probable income to be derived. <br /> The City is governed by the California Government Code, Sections 53600, 16429.1 and 53684 <br /> et seq. Santa Ana further restricts the permitted investments to those listed below. Within this <br /> scope, the City diversifies its investments by maturity dates and types of investments. <br /> Concentration limits are indicated for all investment categories except Treasury securities, which <br /> are considered the safest investments. <br /> <br /> A. United States Treasury Bills, Notes, and Bonds, for which the full faith and credit of the <br /> United States are pledged for payment of principal and interest. Purchases of this <br /> category shall not exceed five years to maturity. There is no percentage limit in this <br /> category. ~ <br /> B. Obligations issued by a Federal Agency or a United States Government Sponsored <br /> Enterprise. Federal Agency Issues include, but are not limited to GNMA (Government <br /> National Mortgage Association), FFCB (Federal Farm Credit Bank), FHLB (Federal Home <br /> Loan Bank Board), FHLMC (Federal Home Loan Mortgage Corporation), FNMA (Federal <br /> National Mortgage Association), SLMA (Student Loan Mortgage Administration), FHA <br /> (Federal Housing Administration) and TVA (Tennessee Valley Authority). Although there <br /> is no percentage limitation on these issues, the "prudent <br /> 55B-7 <br /> <br />