06-20-07 FPAC Minutes - Laserfiche WebLink

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VII. Suitable and Authorized Investments • 1. Investment Types Consistent with the GFOA Policy Statement on State and Local Laws Concerning Investment Practices,the following investments will be permitted by this policy and are those defined by state and local law where applicable: • U.S. Treasury obligations which carry the full faith and credit guarantee of the United States government and are considered to be the most secure instruments available; • U.S. government agency and instrumentality obligations that have a liquid market with a readily determinable market value; • Certificates of deposit and other evidences of deposit at financial institutions, • Bankers'acceptances; • Commercial paper, rated in the highest tier(e.g., A-1, P-1, F-1, or D-1 or higher)by a nationally recognized rating agency; • Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of dollar-denominated securities; and • Local government investment pools either state-administered or developed through joint powers statutes and other intergovernmental agreement legislation. Investment in derivatives of the above instruments shall not be allowed. 2. Collateralization • Where allowed by state law and in accordance with the GFOA Recommended Practices on the Collateralization of Public Deposits, full collateralization will be required on all demand deposit accounts, including checking accounts and non-negotiable certificates of deposit. (See GFOA Recommended Practices.) VIII. Investment Parameters 1. Diversification The investments shall be diversified by: • limiting investments to avoid overconcentration in securities from a specific issuer or business sector(excluding U.S. Treasury securities), • limiting investment in securities that have higher credit risks, • investing in securities with varying maturities, and • continuously investing at least 10 percent of the portfolio in readily available funds such as local government investment pools (LGIPs), money market funds to ensure that appropriate liquidity is maintained in order to meet ongoing obligations. (See the GFOA Recommended Practice on "Diversification of Investments in a Portfolio") • never investing more than 20 percent of the portfolio in securities with final maturities greater than five years. . 2. Maximum Maturities To the extent possible,the City shall attempt to match its investments with anticipated