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The City will annually develop a cash flow budget based upon anticipated revenue • <br /> in flows and expenditure out flows to obtain projections of cash balances for <br /> investment purposes and updated quarterly. Utilizing the last in/first out cash <br /> management philosophy, the cash flow budget should establish the City's core <br /> funds (those funds not required to be utilized within a twelve month period)and the <br /> amount of reserve required (two weeks set aside for operational expenditures). <br /> Funds not classified as core funds or part of the reserve requirement should be <br /> invested to mature during periodic times when revenue receipts do not match <br /> expenditure requirements. It is anticipated that these investments would be spread <br /> out to meet long term expenditures or positioned to achieve a favorable investment <br /> rate at the time the transaction was completed. <br /> VI. PRACTICE/STRATEGY/PERFORMANCE <br /> Based upon limited portfolio management personnel, it is anticipated that the City <br /> will participate in a buy and hold investment philosophy. Once the investment is <br /> completed, the instrument will be held until maturity. <br /> It is anticipated this investment practice should provide the City with annualized <br /> earnings between 50 to 80 basis points greater than the annualized 90 day treasury <br /> bill. <br /> • <br /> With City Council approval, the City may enter into a contractual agreement with <br /> independent investment managers. An independent investment manager would <br /> invest in accordance with guidelines and objectives of the investment policy as well <br /> as state statutes. <br /> The independent manager, unlike the City, would be expected to buy and sell <br /> investments based upon market conditions rather than operating on a buy and hold <br /> philosophy. Independent investment manager's ability to buy and sell based upon <br /> changing market conditions should out-perform the City's investment practice. <br /> Independent investment managers would have to return to the City all earnings <br /> which are equal to or less than 80 basis points above the annualized 90 day <br /> treasury bill rate. Interest earnings between 80 basis points and 200 basis points <br /> would be shared equally. Earnings greater than 200 basis points above the <br /> annualized 90 day treasury bill rate would be divided 65% to the investment <br /> company and 35% to the City. <br /> VII. INVESTMENT INSTRUMENTS <br /> S <br />