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City of Pleasanton INVESTMENT POLICYAND GUIDELINES April 17, 2007 POLICY It is the policy of the City of Pleasanton to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of public funds. SCOPE This investment policy applies to all financial assets of the City. These funds are accounted for in the City's comprehensive Annual Financial Report and include: ^ General Fund ^ Enterprise Funds ^ Internal Service Funds ^ Capital Projects Funds ^ Special Revenue Funds ^ Private-Purpose Trust Funds ^ Agency Funds ^ Debt Service Funds PRUDENCE Investments shall be made with judgment and care under circumstances then prevailing - in which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived (i.e. the "prudent person" standard as defined by Civil Code #2261). Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments. OBJECTIVE The primary objectives, in priority order, of the City's investment action shall be: a. Safety: Safety of principal is the foremost objective of the investment program. [nvestments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.