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EXHIBIT A repurchase and reverse repurchase agreements shall not exceed 20% of the City's total portfolio. I. Money Market and Mutual Funds Money market and mutual funds whose portfolios consist of government securities or diversified money market securities such as acceptable C/D's, banker's acceptances, agency discount notes, commercial paper, and other full- faith and credit obligations of the U.S. Government or its agencies. The aggregate investment in Government Security money market and mutual Funds shall not exceed 20% of the City's total portfolio. COLLATERALIZATION Collateralization will be required on active and inactive deposits in accordance with Government Code Section 53651, 53651.2, and 53652, which set forth the eligible securities and the required value of the securities to collateralize these deposits. Whenever possible, the City shall request that U.S. Treasury and Government securities be used as collateral. Repurchase agreements will be collateralized 102% with securities of the U.S. Government or its Agencies, marked to market daily. SAFEKEEPING AND CUSTODY All security transactions entered into by the City shall be conducted on a delivery- versus-payment (DVP) basis. Securities purchased from brokers/dealers will be held by a third party custodian designated by the Director of Finance and evidenced by safekeeping receipts. Securities do not literally have to be held in the name of the City but ownership is evidenced through safekeeping or custodial receipts and/or statements. TRUST AGREEMENTS The City shall direct the investment activities of trustees. Such direction shall be in keeping with the terms and conditions of its bond agreements, applicable law and policies set forth in this document. DIVERSIFICATION The City will diversify its instruments by security type and institution, meeting at least the minimum requirements as outlined in Government Code Section 53601. With the exception of U.S. Treasury securities, Federal Agency securities and authorized pools, no more than 30% of the total portfolio, and less where stated, will be invested in a single security type with no more than 5 percent invested with a single issuer. 6