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6.A. -Page 17 of 40 <br />CITY OF REDWOOD CITY <br />INVESTMENT POLICY <br />A. The City Treasurer will maintain sufficient liquidity in cash and short-term investments, which <br />together with projected revenue receipts will meet the cash flow requirements of the City for <br />the upcoming six months. <br />B. The City will not directly invest in securities maturing more than five years away from the <br />settlement date. In any case, where a cash flow is matched with an investment which exceeds <br />the five year limit, the investment must be approved by the City Council. <br />C. The weighted average maturity of the general portfolio shall not exceed three years. The general <br />portfolio does not include bond proceeds or deferred compensation funds. <br />D. To the extent possible, longer-term investment maturities will be spaced so that a portion of <br />such investments mature each year to cover unanticipated emergencies. <br />XVI. Performance Standards <br />A. The investment portfolio shall be designed with the objective of obtaining a rate of return <br />throughout budgetary and economic cycles, commensurate with the investment risk constraints. <br />B. The investment performance objective for the portfolio shall be to earn a total rate of return <br />over a market cycle which is approximately equal to the return on a market benchmark index <br />of similar securities, as determined bythe City Treasurer. <br />C. Market Return (Benchmark): The basis used by the Treasurer to determine whether market return <br />is being achieved shall be to identify a benchmark which reflects a portfolio structure that is <br />comparable to the City's portfolio (An example as it pertains to the long term portion of the <br />portfolio would be the Bank of America Merrill Lynch Index of 1 to 5 Year Government securities). <br />XVII. Investment Procedures <br />A. The City Treasurer shall establish internal procedures for the operation of the investment <br />program consistent with this policy. These procedures shall include, but are not limited to, the <br />following items: <br />1. Safekeeping <br />2. Master repurchase agreements <br />3. Wire transfer agreements <br />4. Collateral/Depository agreements <br />5. Broker/Dealer relationships <br />6. Cash handling, cash management, and accounting practices <br />B. Such procedures shall include explicit delegation of authority to persons responsible for <br />investment transactions. No person may engage in an investment transaction except as provided <br />under the terms of this policy and the procedures established by the City Treasurer. <br />C. Allocation of Pool Interest <br />1. All interest earnings related to the investment pool will be allocated to the General Fund unless <br />DRAFT on 1/13/20 Approved by Council 1/14/2019 13 <br />23 <br />