Res 2025-180 adopting a revised Investment Policy for Operating and Reserve Funds

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XI. ALLOWABLE INVESTMENT MATURITY 1. Financial assets, with the exception of reserve funds, will have a maximum dollar weighted average maturity of twenty-four(24) months, dependent on market conditions, and shall be invested with a stated maturity date not to exceed three years or shorter term . 2. Reserve funds will have a maximum dollar weighted average maturity of twenty-four(24) months, dependent on market conditions, and with a stated maturity not to exceed five years . XII. COLLATERALIZATION Pledged Collateral Collateral ization is required on time and demand deposits above FDIC insurance levels. In order to anticipate market changes and provide a level of security for all funds, the collateralization margin level will be maintained at a minimum of 102% of deposits plus accrued interest. The depository counter party shall be made contractually liable for monitoring and maintaining the collateral and required margins daily. Collateral shall be priced at least monthly. The custodian shall provide the required monthly reports directly to the City. Owned Collateral Under a Repurchase Agreement Repurchase agreements shall be collateralized to a minimum of 102% of principal and accrued interest. The counter party shall be made contractually liable for monitoring and maintaining the collateral and required margins at all times. Collateral shall be priced daily. The Custodian shall provide the required periodic reports directly to the City. Authorized Collateral Collateral shall be limited to the following: - Obligations of the US Government, its agencies and instrumentalities to include mortgage-backed securities which pass the bank test. - Obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent. For repurchase agreements (Sec. 2256.011), collateral may include cash and obligations of the United States, its agencies or instrumentalities, municipal debt rated A or better and include commercial paper and corporate bonds, when applicable Pledged collateral shall be held by an independent financial institution approved by the City under a current custodial agreement. Owned collateral shall be held by an independent financial institution approved by the City. Clearly marked evidences of ownership (report or receipt) must be supplied to the City and retained. The right of collateral substitution is granted with prior City approval. XIII. SAFEKEEPING/CUSTODY OF CITY OWNED SECURITIES Safekeeping of City owned securities will be provided by the City's banking services depository or its correspondent, or a safekeep agent/custodian. Under a City contract. . In order to ensure protection for City owned securities, the City requires delivery versus payment procedures for all securities which require book entry delivery. All security transactions, including collateral for repurchase agreements shall be conducted on a delivery versus payment(DVP) basis to the City's designated safekeeping agent/custodian. City of San Marcos Investment Policy 6 Rev 05.2025