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CITY OF REDWOOD CITY <br />INVESTMENT POLICY <br /> Last update: 6/22/2016 9 <br />8. Whether the pool is eligible for bond proceeds and/or whether it will accept such proceeds. <br /> <br />XII. Collateralization <br /> <br />A. Bank Deposits: According to best practices, California banks and savings and loan associations <br />are recommended to secure the City’s deposits by pledging government securities with a value <br />of 110% of principal and accrued interest or secure City deposits by pledging first trust deed <br />mortgage notes having a value of 150% of the City’s total deposits. <br /> <br />B. Certificates of Deposit: <br />1. The market value of securities that underlay certificates of deposit shall be valued at 110% <br />of the market value of principal and accrued interest. <br />2. The City Treasurer, at his/her discretion may waive the collateral requirement for deposits up <br />to the maximum dollar amount which are covered by the Federal Deposit Insurance <br />Corporation. <br /> <br />C. Repurchase Agreements <br /> <br />1. The market value of securities that collateralize the investment shall be valued at 102% of <br />the market value of principal and accrued interest. <br />2. The value shall be adjusted no less than weekly. Since the market value of the underlying <br />securities is subject to daily market fluctuations, the investments in repurchase agreements <br />shall be in compliance if the value of the underlying securities is brought back to 102% no <br />later than the next business day. <br /> <br />D. A clearly marked evidence of ownership, safekeeping receipt, must be supplied to the City <br />and retained. <br /> <br />E. The City chooses to limit collateral to US Treasuries. <br /> <br />F. Collateral will always be held by an independent third-party with whom the entity has a current <br />written custodial agreement. <br /> <br />G. The right of collateral substitution is granted based on the approval of the City Treasurer. <br /> <br />XIII. Safekeeping, Custody and Competitive Bids <br /> <br />A. Third-party safekeeping is required for all investments. Securities may be maintained by a <br />banking institution or a broker/dealer firm for safekeeping as long as the securities are held in the <br />City’s name. <br /> <br />B. Third-party safekeeping arrangements will be approved by the City Treasurer and will be <br />corroborated by a written custodial agreement. <br /> <br />C. All investment transactions of the City will be conducted using standard delivery vs. payment <br />(DVP) procedures. <br /> <br />D. All securities held by the safekeeping custodian on behalf of the City shall have the City of <br />6.1.I. - Page 22