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

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3. Public Trust: All participants in the City's investment process shall seek to act responsibly as custodians of the public trust. Investment Officers and employees involved in the investment process shall avoid any transaction that might impair public confidence in the City's ability to govern effectively. 4. Yield: The City's investment portfolio shall be designed with the objective of attaining a market rate of return in accordance with its designated benchmark which is based on the City's cash flow requirements throughout budgetary and economic cycles, commensurate with the City's investment risk constraints and the cash flow characteristics of the portfolio. V. STRATEGY The structure and management of the pooled City portfolio will address the varying needs, goals and objectives of each fund. Investment strategies for General Fund, Special Revenue Funds, Capital Projects Funds, Enterprise Funds, and Trust and Agency Funds are designed to assure that anticipated cash flows are matched with adequate liquidity in each fund. A secondary strategy is to create a portfolio structure that will experience minimal volatility during economic cycles. Both may be accomplished by purchasing high quality, short-to-medium term securities that will complement each other in a laddered structure and assure the marketability of those investments should liquidity needs arise. The Reserve Funds portfolio will address the longer-term nature and needs of the funds. The primary investment strategy will be to utilize financial markets to maximize yield to build the reserves. A secondary objective is to create a portfolio structure that will experience minimal volatility during economic cycles. These objectives may be accomplished by purchasing high credit quality, medium term securities while assuring the marketability of those investments. Investments for both portfolios are to be chosen in a manner that promotes diversity by market sector,credit and maturity. The maximum dollar weighted average maturity of the portfolios to accomplish investment goals vary based on fund strategy.The maximum allowable maturity for each portfolio also varies to ensure that investment parameters are directly suited to the unique nature of the portfolio. Investment strategies will address the unique needs for Debt Service Funds to primarily assure investment liquidity adequate to cover the debt service obligation for each consecutive debt service payment. Investments shall progressively fund each succeeding debt service. Effective cash management is recognized as essential to good fiscal management. Cash management is defined as the process of managing monies in order to ensure maximum cash availability to the City for investment use. The City shall maintain a comprehensive cash management program that includes collection of accounts receivable, prudent investment of its available cash, disbursement of payments in accordance with invoice terms and the management of banking services. VI. DELEGATION OF AUTHORITY Investment Officers Management responsibility for the investment program is hereby delegated to the Director of Finance, the Assistant Director of Finance, the Accounting Manager, and Cash Management Accountant or staff accountant as designated by Director of Finance and they are therefore designated as the Investment Officers under the Act and by resolution of the City Council. The Investment Officer(s) shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. City of San Marcos Investment Policy 2 Rev 05.2025