The primary objectives of the city's investment activities in priority order shall be:
(A) Safety of principal is the foremost objective of the investment program. Investments of the city shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The city shall seek to safeguard principal by a careful examination of credit risk and market risk of individual investments.
(1) Credit risk. The risk of loss due to failure of an issuer of a security. Credit risk shall be mitigated by investing in safe institutions and by diversifying the fund so that the failure of any one issuer would not unduly harm the city's principal.
(2) Market risk. The risk of market value fluctuations due to overall changes in the general level of interest rates. Market risk shall be mitigated by limiting the weighted average maturity of the city's fund to less than five years.
(B) Liquidity. The city investment portfolio will remain sufficiently liquid to enable the city to meet all operating expenditure requirements which might be reasonably anticipated.
(C) Return on investment. The city investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles taking into consideration the city investment risk constraints and the cash flow characteristics of the portfolio. Whenever possible, consistent with risk limitations and prudent investment principles, the city shall make an effort to achieve returns at the market average rate of return for the investment type.
(Ord. 16-21, passed 6-8-21)