(A) Portfolio diversification.
(1) The town will diversify use of investment instruments to avoid incurring unreasonable risks inherent in overinvesting in specific instruments, and individual financial institutions.
Maximum Percent Of Portfolio |
Maximum Percent Of Portfolio | |
Diversification by instrument: | |
Money market and interest bearing checking accounts with commercial banks | 50% |
Money market funds | 50% |
U.S. treasury obligations (bills, notes and bonds) | 100% |
100% | |
25% | |
Taxable municipal securities | 20% |
Certificate of deposit commercial banks or savings banks | 100% |
Certificate of deposit savings and loan association | 25% |
Local government investment pool | 100% |
Diversification by financial institution: | |
Repurchase agreements: No more than 50% of the total investment portfolio shall be secured in repos with any 1 institution. | |
Certificates of deposit - commercial banks: No more than 20% of the total investment portfolio shall be secured in any 1 commercial bank’s CDs. | |
(2) If the amount of any of the above investments are in excess of the percentage allowed, it is not considered a violation of this policy if the amount is corrected within 30 days.
(B) Maturity scheduling. Investment maturities for operating funds shall be scheduled to coincide with projected cash flow needs, taking into account large routine expenditures (payroll, bond payments) as well as considering sizable blocks of anticipated revenue (sales tax, property tax). The period from the date of purchase of a security to its maturity date will be five years or less except for transactions initiated by an appointed independent investment manager, or if authorized by the Town Council.
(Ord. 24(2016) § 10: Ord. 3(1997) § 1)