06-20-07 FPAC Minutes - Laserfiche WebLink

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• II. CONTEXT The Portfolio provides funding for current and future operating expenses, a reserve to cover unplanned shortfalls and investment income to support the activities of the City. The Portfolio is managed in three components ("Component Portfolios")as follows: A. Daily Portfolio: The"daily"component("Daily Portfolio")represents current operating funds on which draws are made frequently, requiring daily liquidity and preservation of principal. The Daily Portfolio is managed internally by the Cash Manager. B. Short Term Portfolio:A short-term component(Short Term Portfolio") serves as a cushion to provide liquidity for possible shortfalls in the Daily Portfolio. Draws against the short-term portfolio are expected to be infrequent. The Short Term Portfolio is managed internally by the Cash Manager. C. Intermediate Term Portfolio: The balance of the Portfolio represents the intermediate • term component("Intermediate Term Portfolio")which serves as a reserve for unplanned shortfalls. In general,the Intermediate Term Portfolio is not expected to experience withdrawals. A portion of the Intermediate Term Portfolio is managed internally by the Treasury Manager and the balance is managed by external managers. III. STANDARDS OF CARE A. Prudence The standard of prudence to be used by investment officials shall be the"prudent investor rule"and shall be applied in the context of managing the overall portfolio. Investment officers acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and the purchase and sale of securities are carried out in accordance with the terms of this policy. • 3