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<br />Investment Policy <br />JURe 2t)06Mav 2008 <br />Page 1 of 7 <br /> <br />Attachment 1 <br /> <br />6.18 <br />Page 2 <br /> <br />CITY OF REDWOOD CITY <br />INVESTMENT POLICY AND GUIDELINES <br />April 2007Mav 2008 <br /> <br />I. SCOPE <br /> <br />Scope: This policy shall cover all investments for all City and Redevelopment Agency <br />(hereinafter all references to City shall include the City, Redevelopment Agency, Port of <br />Redwood City, and any component units) funds in the custody and control of the City <br />Treasurer (and funds controlled by fiscal agents acting under the direction of the City <br />Treasurer) and which are accounted for in the City's Comprehensive Annual Financial Report <br />except for employee retirement funds (Deferred Compensation funds and P.E.R.S. funds), <br />which are 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 manaoina the portfolio. the Treasurer and staff shall <br />avoid any transaction that mioht 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 anyone issue does not unduly harm the City's capital base and cash flow. <br /> <br />Market risk - defined as market value fluctuations due to overall changes in the general level of <br />interest rates will be mitigated by structuring the investment portfolio so that securities mature <br />