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<br />I <br /> <br />I <br /> <br />I <br /> <br />IV. OBJECTJVE AND STRATEGIES <br /> <br />All City funds will be pooled for investment purposes, The primary objectives, in prionty order, of <br />the City's investment activities for all funds shall be: <br /> <br />1, Safety: Safety of principal is the foremost objective of the investment program. <br />Investments of the City shall be undertaken in a manner that sceks to ensure tbe <br />preservation of capItal in the overall portfolio. <br />2. Liquidity: The City's investment portfolio will remain sufficiently liqUid to enable the <br />City to meet all operating requirements, wbich might be reasonably anticipated. <br />3 Diversification: In order to meet the Safety objective, diversitlcatlOn IS needed to <br />minimize credit and market risk and to reduce overall portfolio impact from potential <br />losses on individual securities. <br />4_ Yield: The City's investment portfolio shall be deslgned with the objective ofattaming a <br />market rate ofretum in accordance with its designated bendunark based on the City's <br />cash flow requirements throughout budgetary and economic cycles, commensurate \vith <br />the Ciry's investment risk constraints and the cash flow characteristics of the portfolio, <br /> <br />Strategy <br /> <br />The structure and management of the overall portfolio will address the varying needs, goals Hnd <br />objectives of cach fund_ Investmcnt strategies for General Fund, Special Revenue Funds, Capita] <br />Projects Funds, Enterprise Funds, and Trust and Agency Funds are designed to assure that <br />anticipated cash flows are matched with adequate liquidity in each fund. The secondary strategy <br />objective is to create a portfolio structure that will experience minimal volatility during economIc <br />cycles. This may be accompllshed by purchasing high quality, short-to.medium term securities that <br />wiIJ complement each other in a laddercd or barbell maturity structure and assure the marketability of <br />those investments should liguidtty needs arise. Investments are to be chosen m a maIIDer that <br />promotes diversity by market sector, credit and maturity. The maximum dollar weighted average <br />maturity of the portfolio will not exceed i@-270 days, dependent on market conditions, to <br />accomplish these goals, <br /> <br />Investment strategies for Deht Service Funds will primarily as.mre investment lIquidity adequate to <br />cover The debt service obligal1on for each consecutive debt service paymenL lnvestments shall <br />progresSIvely fund each succeeding debt service. <br /> <br />Effective cash management is recognized as essential to good fiscal management. Cash management <br />is defined as the process of managing monies in order to ensure maximum cash avmlability to the <br />City for investment use. The City shall mamtam a comprehenslve cash management program that <br />includes collection ofacCOUU1S receivable, prudent Investment oflts available cash, disbursement of <br />payments In accordance with invoice tenns and the management of banking services. <br /> <br />City of San Marcos Investment Policy <br /> <br />Page 2 <br />