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been difficult to meet the latter two provisions. This is due to a variety of factors, <br />including the need to continually reinvest bonds that are called and not held to maturity, <br />the growth in the size of the portfolio and the policy limit on the amount of funds that can <br />be invested in the County Pool, which has historically been used to achieve both <br />liquidity and moderate yield. Staff proposes that the above proportions be replaced with <br />a requirement that the weighted average maturity not exceed three years. As noted <br />above, cash flow needs will be taken into account in decisions about investment <br />maturity. <br /> <br />Authorized Investments <br />State law restricts the types and quality of investment instruments local agencies can <br />invest in. Both the City’s current policy and the changes that are proposed below are <br />more restrictive than what is allowed by State law. <br /> <br />The table below summarizes the current and proposed types of investments and limits: <br /> <br />Type of Investment Legal Limit Current Policy Limits Proposed Policy Limits <br />Certificates of Deposit none 7.5% of portfolio <br />$3M per institution <br />10% of portfolio <br />2% per issuer <br />Bankers’ Acceptances 40% <br />30% per <br />issuer <br />$3M per institution 10% of portfolio <br />2% per issuer <br />Treasury Bills, Notes, and <br />Bonds <br />none none none <br />Federal Agency of <br />Government Sponsored <br />Enterprises (GSEs) <br />none none 70% of portfolio <br />35% per agency <br />Commercial Paper 25% <br />10% per <br />issuer <br />$1M per institution 10% of portfolio <br />2% per issuer <br />LAIF (Local Agency <br />Investment Fund) <br />$65M per <br />account <br />$50M per account $65M per account <br />Passbook savings <br /> <br />none 0.1M Not allowed under new <br />policy <br />San Mateo County Pool <br /> <br />none $40M $50M <br />Money Market and Mutual <br />Funds <br />20% <br />10% per <br />mutual fund <br />10% of portfolio 20% of portfolio <br />5% per fund <br />6.1.I. - Page 3