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<br /> <br />Attachment A <br />Investment Policy <br /> <br /> Revised March 8, 2022 <br /> <br /> <br />The market rate of return shall be to the same rate as the target portfolio. Investments shall be made based <br />on statutory and policy constraints. Funds held for future capital projects (i.e. bond proceeds) shall be <br />invested to produce enough income to offset increases in construction costs due to inflation. Where <br />possible, prepayment funds for long-term debt service shall be invested to ensure a rate of return at least <br />equal to the interest being paid on the bonds. <br /> <br />Delegation of Authority <br />The Finance Director is designated as investment officer of the City and is responsible for investment <br />decisions and activities, under the direction of the City Manager. <br /> <br />Prudence <br />The standard of prudence to be applied by the investment officer shall be the "prudent investor" rule. This <br />rule states, "Investments shall be made with judgment and care, under circumstances then prevailing, <br />which persons of prudence, discretion and intelligence exercise in the management of their own affairs, <br />not for speculation, but for investment, considering the probable safety of their capital as well as the <br />probable income to be derived." The prudent investor rule shall be applied in the context of managing the <br />overall portfolio. <br /> <br />The investment officer, acting in accordance with written procedures and exercising due diligence, shall <br />not be held personally responsible for a specific security's credit risk or market price changes, provided <br />that these deviations are reported immediately and that appropriate action is taken to control adverse <br />developments. <br /> <br />Monitoring and Adjusting the Portfolio <br />The investment officer will routinely monitor the contents of the portfolio, the available markets and the <br />relative values of competing instruments and will adjust the portfolio accordingly. <br /> <br />Internal Controls <br />The Finance Director shall establish a system of internal controls, which shall be reviewed annually by <br />an independent auditor. The controls shall be designed to prevent loss of public funds due to fraud, error, <br />misrepresentation, unanticipated market changes, or imprudent actions. Investments shall be done on a <br />pooled funds basis with interest allocated on a cash balance method. Those internal controls shall consist <br />of competitive bids on investments, and division of duties among the staff including: <br /> <br /> Investments made by the investment officer <br /> Records maintenance by a finance staff member other than the investment officer <br /> Review and reconciliation by the assistant finance director <br /> <br />Portfolio Management <br />Under the Council-adopted Fiscal Policies, it shall be the City's procedure to restrict investments to <br />Repurchase Agreements with national or state chartered banks, U.S. Treasury and U.S. Government <br />Agencies, Guaranteed Investment Contracts, Bankers Acceptances, State and Local government <br />securities and Certificates of Deposit. <br />Page 2 of 3 <br /> <br />