Item 17 - Annual Statement of Investment Policy

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A. a declining credit security could be sold early to minimize loss of principal; B. a simultaneous purchase of a security and the sale of another(security swap) to enhance the quality, yield, or target duration in the portfolio; or C. a sale of a specific security prior to its maturity and a capital gain or loss recorded to improve the credit quality, liquidity, or rate of return of the portfolio in response to market conditions and/or City risk preferences; D. general liquidity needs of the investment portfolio require that a security be sold; E. prepayment of City debt or contribution servicing obligation. In the event the City is presented with an option to prepay a City debt or contribution servicing obligation, the following analysis will be conducted to compare the amortized savings that may be realized by exercising such prepayment option and: i. the current portfolio yield; ii. the trend of the debt or contribution servicing obligation; iii. whether variances in the trend are substantial; iv. the City's net cash position; and V. the market value of investment instrument(s) recommended by staff to be liquidated to fulfill a prepayment election. When selling a security before maturity, City Investment Officials and/or officers (see generally subsection 5.1 et seq. - Investment Authority and Responsibility) must be prepared to justify the reasons and explain any gains or losses. Compliance with the investment policy does not measure return but rather manages risk. Policy compliance does not provide a benchmark to meet or exceed, but serves as a model to follow. The City will benchmark its investment performance against an agreed-upon Treasury index. The City shall strive to maintain one hundred percent (100%) of idle funds invested after consideration of a City of Santa-Annual Page 5 July 1. 2026 - Statement of Investment Policy June 30,2027