(A) It is the policy of the city that all funds shall be managed and invested with four primary objectives, listed in order of their priority: safety, liquidity, diversification and yield. Investments are to be chosen in a manner which promotes diversity by market sector, credit and maturity. The choice of high-grade government investments is designed to assure the marketability of those investments should liquidity needs arise. To match anticipated cash flow requirements, the maximum weighted average maturity of the overall portfolio may not exceed six months.
(1) Safety of principal. Safety of principal is the foremost objective of the city. Investments of the city shall be undertaken in a manner that seeks to insure the preservation of capital in the overall portfolio.
(2) Liquidity. The city's investment portfolio will be based on a cash flow analysis of needs and will remain sufficiently liquid to enable it to meet all operating requirements which might be reasonably anticipated.
(3) Diversification. Diversification of the portfolio will include diversification by maturity and market sector and will include the use of a number of broker/dealers for diversification and market coverage. Competitive bidding will be used in these transactions.
(4) Yield.
(a) The city's investment portfolio shall be designed with the objective of attaining a market rate of return, taking into account the city's risk constraints and the cash flow needs of the portfolio.
(b) MARKET RATE OF RETURN may be defined as the average yield of the current six- month U.S. Treasury Bill.
(B) Effective cash management is recognized as essential to good fiscal management. Cash management is defined as the process of managing monies in order to ensure maximum cash availability. The city shall maintain a comprehensive cash management program which includes collection of accounts receivable, prudent investment of its available cash, disbursement of payments in accordance with invoice terms and the management of banking services.
(Ord. 1303, passed 9-21-2006; Ord. 19-1236, passed 11-7-2019)