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establish a system of control. Each transaction will be approved acknowledged <br /> iby one of the following officials within 48 hours: <br /> 1) City Administrator <br /> 2) Mayor <br /> 3) Ch ' 1 Dl „Dgn A nd „aly./ s Comam ttee <br /> f t1, F <br /> 4) Council Liaison of the Financial Planning and Analysis Committee <br /> 3. Investment Objectives <br /> The City will invest idle funds based on the following objectives: <br /> A. Safety—The primary objective is the preservation of capital and the <br /> safeguarding of public funds by mitigating credit and interest rate risk. <br /> a. Credit Risk—The City will minimize credit risk, which is the risk <br /> of loss due to the failure of the security issuer or backer. <br /> b. Interest Rate Risk—The City will minimize interest rate risk, <br /> which is the risk that the market value of securities in the portfolio <br /> will fall due to changes in the market interest rates. <br /> B. Term—Investments will be scheduled to cover all expenditures. <br /> Investments will not be longer than one year for cash flow and all excess <br /> • funds may be invested for longer than one year. <br /> C. Liquidity—The portfolio shall remain liquid to meet all operating <br /> requirements that may be reasonably anticipated. This is accomplished by <br /> structuring the portfolio so that securities mature concurrent with cash <br /> needs to meet anticipated demands. Furthermore, since all possible cash <br /> demands cannot be anticipated,the portfolio should consist of securities <br /> with active secondary or resale markets. Alternatively, a portion of the <br /> portfolio may be placed in money market mutual funds or government <br /> investment pools which offer same-day liquidity for short-term funds. <br /> D. Yield—The investment portfolio shall be designed with the objective of <br /> attaining a market rate of return throughout budgetary and economic <br /> cycles,taking into account the investment risk constraints and liquidity <br /> needs. The benchmark to be used will be the 4M Plus Fund annual rate of <br /> return. Return on investment is of secondary importance compared to the <br /> safety and liquidity objectives. The core of investments are limited to <br /> relatively low risk securities in anticipation of earning a fair return relative <br /> to the risk being assumed. Securities shall generally be held until <br /> maturity. <br /> 4. Pooling of Funds <br /> 11 <br /> 2 <br />