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6.A. -Page 14 of 22 <br />CITY OF REDWOOD CITY <br />INVESTMENT POLICY <br />A. Bank Deposits: Under provisions of Best Practices, California banks and savings and loan <br />associations are recommended to secure the City's deposits by pledging government securities <br />with a value of 110% of principal and accrued interest or secure City deposits by pledging first <br />trust deed mortgage notes having a value of 150% of the City's total deposits. <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 />C. Repurchase Agreements <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 />D. A clearly marked evidence of ownership, safekeeping receipt, must be supplied to the City <br />and retained. <br />E. The City chooses to limit collateral to US Treasuries. <br />F. Collateral will always be held by an independent third -party with whom the entity has a current <br />written custodial agreement. <br />G. The right of collateral substitution is granted based on the approval of the City Treasurer. <br />XIII. Safekeeping. Custody and Competitive Bids <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 />B. Third -party safekeeping arrangements will be approved by the City Treasurer and will be <br />corroborated by a written custodial agreement. <br />C. All investment transactions of the City will be conducted using standard delivery vs. payment <br />(DVP) procedures. <br />D. All securities held by the safekeeping custodian on behalf of the City shall have the City of <br />Redwood City as the registered owner, and all interest and principal payments and withdrawals <br />shall indicate the City of Redwood City as the payee. <br />Approved update: °% 11 <br />32 <br />