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3. Yield <br /> The investment portfolio shall be designed with the objective of attaining a market rate of • <br /> return throughout budgetary and economic cycles, taking into account the investment risk <br /> constraints and liquidity needs. Return on investment is of secondary importance compared <br /> to the safety and liquidity objectives described above. The core of investments are limited to <br /> relatively low risk securities in anticipation of earning a fair return relative to the risk being <br /> assumed. Securities shall generally be held until maturity with the following exceptions: <br /> • A security with declining credit may be sold early to minimize loss of principal; <br /> • A security swap would improve the quality,yield,or target duration in the portfolio; <br /> or <br /> • Liquidity needs of the portfolio require that the security be sold. <br /> IV. STANDARDS OF CARE <br /> 1. Prudence <br /> The standard of prudence to be used by the Treasurer shall be the"prudent person"standard <br /> and shall be applied in the context of managing an overall portfolio. The Treasurer acting in <br /> accordance with written procedures and this investment policy and exercising due diligence <br /> shall be relieved of personal responsibility for an individual security's credit risk or market <br /> price changes,provided deviations from expectations are reported in a timely fashion and the <br /> liquidity and the sale of securities are carried out in accordance with the terms of this policy. <br /> The "prudent person" standard states that, "Investments shall be made with judgment and <br /> care, under circumstances then prevailing, which persons of prudence, discretion and <br /> intelligence exercise in the management of their own affairs, not for speculation, but for <br /> investment,considering the probable safety of their capital as well as the probable income to <br /> be derived." <br /> 2. Ethics and Conflicts of Interest <br /> The Treasurer shall refrain from personal business activity that could conflict with the proper <br /> execution and management of the investment program, or that could impair their ability to <br /> make impartial decisions. The Treasurer shall disclose any material interests in fmancial <br /> institutions with which they conduct business. They shall further disclose any personal <br /> fmancial/investment positions that could be related to the performance of the investment <br /> portfolio. The Treasurer shall refrain from undertaking personal investment transactions with <br /> the same individual with whom business is conducted on behalf of the City. <br /> 3. Delegation of Autholity <br /> Authority to manage the investment program is granted to the Treasurer and derived from the <br /> following: Annual Resolution Appointing Official Newspaper, Acting Mayor, Official <br /> Depository, and Treasurer. Responsibility for the operation of the investment program is <br /> hereby delegated to the Treasurer, who shall act in accordance with established written <br /> procedures and internal controls for the operation of the investment program consistent with <br /> this investment policy. Procedures should include references to: safekeeping, delivery vs. <br /> payment, investment accounting, repurchase agreements, wire transfer agreements, and 41111 <br /> Page 3 of 8 <br />