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(A) The city recognizes that some level of risk is inherent in any investment transaction. Losses may be incurred due to issuer default, market price changes, or closing investments prior to maturity due to unanticipated cash flow needs. Diversification of the city’s investment portfolio by institution, type of investment instrument, and term to maturity is the primary method to minimize investment risk.
(B) The city funds shall be diversified by security type and institution. With the exception of fully insured or fully collateralized investments, and except for authorized investment pools, no more than forty percent (40%) of the city’s total investment portfolio shall be invested in a single security type or with a single financial institution.
(C) To the extent possible, the city will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow need, the city’s funds should not, in general be invested in securities maturing more than three (3) years from the date of purchase. However, the city may collateralize its repurchase agreements using longer-dated investments not to exceed three (3) years to maturity. Reserve funds may be invested in securities exceeding three (3) years, if maturity of the investments are made to coincide as nearly as practicable with the expected use of the funds.
(Ord. 94-38, passed 11-8-94)