The investment objectives of the city, in priority order, include:
(A) Safety of principal. Safety of principal is the foremost objective of the investment program. The investment of city funds shall be conducted in a manner that seeks to ensure the preservation of capital within the context of the following criteria:
(1) Market risk (interest rate risk). The market value of securities in the city's portfolio will increase or decrease based upon changes in the general level of interest rates. The effects of market value fluctuations will be minimized by maintaining adequate liquidity so that current obligations can be met without a sale of securities; diversification of maturities; diversification of assets.
(2) Credit risk. Credit risk is the risk of loss due to the failure of a security issuer to pay principal or interest, or the failure of the issuer to make timely payments of principal or interest. Credit risk will be minimized by diversifying assets by issuer; ensuring that required, minimum credit quality ratings exist and maintaining adequate collateralization of certificates of deposit.
(B) Liquidity. The portfolio shall remain sufficiently liquid to meet all current obligations of the city. Minimum liquidity levels [as a percentage of average investable funds] may be established to meet all current obligations. The portfolio may also be structured so that securities mature concurrently with cash needs.
(C) Yield return. The portfolio shall be managed to consistently attain a market rate of return throughout budgetary and economic cycles. Whenever possible, and consistent with risk limitations and prudent investment management, the city will seek to augment returns above the market average rate of return through the implementation of active portfolio management strategies.
(Ord. 85-94, passed 10-3-94; Am. Ord. 89-96, passed 10-7-96; Am. Ord. 10-99, passed 2-16-99; Am. Ord. 63-22, passed 11-14-22)