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ATTACHMENT 2 <br />13 <br />•The City will maintain a minimum of six (6) months of budgeted operating <br />expenditures in short term investments to provide sufficient liquidity for <br />expected disbursements. <br />•The maximum stated final maturity of individual securities in the portfolio will be <br />five (5) years, except as otherwise stated in this policy. <br />TRUST AGREEMENTS <br />The City shall direct the investment activities of trustees. Such direction shall be in <br />keeping with the terms and conditions of its bond agreements, applicable law and policies <br />set forth in this document. <br />REVIEW OF THE INVESTMENT PORTFOLIO <br />The Director of Finance shall periodically, but no less than quarterly, review the portfolio <br />to identify investments that do not comply with this investment policy and establish <br />protocols for reporting major and critical incidences of noncompliance to the City Council. <br />MAXIMUM MATURITIES <br />To the extent possible, the City will attempt to match its investments with anticipated cash <br />flow requirements. Because of inherent difficulties in accurately forecasting cash flow <br />requirements, a portion of the portfolio should be continuously invested in readily <br />available funds. Where this policy does not specify a maximum remaining maturity at the <br />time of the investment, no investment shall be made in any security that at the time of the <br />investment has a term remaining to maturity in excess of five (5) years from the date of <br />trade settlement. <br />The City will not invest in securities maturing more than five (5) years from the date of <br />trade settlement, unless the City Council has by resolution granted authority to make such <br />an investment either specifically or as a part of an investment program approved by the <br />City Council no less than three months prior to the investment. <br />The City may invest proceeds of bond issuances or certificates of participation for a term <br />exceeding five years, provided the City Council authorizes such investments as part of <br />the legal documents. <br />INTERNAL CONTROLS <br />The Director of Finance shall establish an annual process of independent review by an <br />external auditor to prevent loss of funds arising from fraud, theft, staff errors and <br />irregularities, misrepresentations by third parties, misuse, or imprudent actions by staff. <br />This review will provide internal control by assuring compliance with policies and <br />procedures. <br />Page 46 of 248