CITY COUNCIL REGULAR MEETING AGENDA PACKET

ATTACHMENT 2 5 AUTHORIZED AND SUITABLE INVESTMENTS The City’s investments are governed by California Government Code, Sections 53600 et seq. Within the investments permitted by the Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits and minimum credit quality requirements listed in this section apply at the time the security is purchased. Any investment currently held at the time the policy is adopted which does not meet the new policy guidelines can be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy. An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and institution to avoid incurring unreasonable and avoidable risks regarding specific security types or individual issuers. a. Time Deposits Fully-insured (FDIC) or fully collateralized non-negotiable certificates of deposits (CDs) in financial institutions located in California. All time deposits must be collateralized in accordance with California Government Code sections 53650 et. seq. The City, at its discretion, may waive the collateralization requirements for any portion of the deposit that is covered by federal insurance. A maximum of 30% of the City’s portfolio may be invested in this category. The maximum maturity may not exceed five (5) years. b. Negotiable Certificates of Deposit (NCDs) Negotiable C/Ds issued by a nationally or state-chartered bank, a savings association or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank. The amount of the NCD insured up to the FDIC limit does not require any credit ratings. Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one nationally recognized statistical rating organization (NRSRO); or long-term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO. The aggregate investment in Negotiable C/Ds shall not exceed 30% of the City’s total portfolio. c. Banker’s Acceptances Banker’s Acceptances shall not to exceed 180 days maturity from date of purchase. No more than 5% of the City’s total portfolio shall be invested in banker’s Page 38 of 248