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Investment Policy <br />July 2013 <br />Page 1 of 6 <br /> <br /> <br />CITY OF REDWOOD CITY <br />INVESTMENT POLICY AND GUIDELINES <br /> July 2013 <br /> <br /> <br />I. SCOPE <br /> <br />Scope: This policy shall cover all investments for all City and the Successor Agency to the <br />Redwood City Redevelopment Agency (hereinafter all references to City shall include the City, <br />Successor Agency, Port of Redwood City, and any component units) funds in the custody and <br />control of the City Treasurer (and funds controlled by fiscal agents acting under the direction of <br />the City Treasurer) and which are accounted for in the City’s Comprehensive Annual Financial <br />Report except for employee retirement funds (Deferred Compensation funds, California Public <br />Employee Retirement funds and funds held for other post employment benefits), which are <br />administered separately. <br /> <br />II. STANDARD OF CARE <br /> <br />Prudence: All investments shall be made within the policy framework of liquidity and safety <br />with judgment and care which a person of prudence and intelligence would, under <br />circumstances when prevailing, exercise in the management of his/her affairs. <br /> <br />Ethics: Officers and employees involved in the investment process shall refrain from personal <br />business activity that could conflict with proper execution of the investment program or which <br />could impair their ability to make impartial investment decisions. All investment personnel shall <br />comply with reporting requirements of applicable state laws including annual filing of <br />Statements of Economic Interests. While managing the portfolio, the Treasurer and staff shall <br />avoid any transaction that might impair public confidence in the City. <br /> <br />III. OBJECTIVE <br /> <br />The primary investment objectives of this policy in order of priorities are: <br /> <br />Safety: Safety of the principal shall be the top priority in consideration of any investment <br />undertaken by the City Treasurer. The portfolio shall be so diversified that the losses, if any, <br />on particular securities or from an institute shall be offset by the revenue generated from other <br />investments. The intention is to hold investments until maturity unless the City will realize a <br />profit by liquidating the investment prior to maturity. The City shall seek to preserve principal <br />by mitigating credit risk and interest rate risk. <br /> <br />Credit risk - defined as the loss due to failure of the issuer of a security, shall be mitigated by <br />investing in investment grade securities and by diversifying the investment portfolio so that <br />failure of any one issue does not unduly harm the City’s capital base and cash flow. <br /> <br />Interest rate risk - defined as market value fluctuations due to overall changes in the general <br />level of interest rates will be mitigated by structuring the investment portfolio so that securities <br />6.1.I. - Page 7