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San Leandro Investment Policy Statement Page 3 of 13 <br />IV. Investment Objectives <br />The City's cash management system is designed to monitor and forecast revenues and expenditures <br />in order to meet the following objectives: <br />1. Safety of Principal -Safety of principal is the primary objective of the City's investment <br />program. The City invests in a manner that ensures the preservation of the principal value of <br />the portfolio -investing only in securities having the highest quality ratings and little or no <br />risk of default. The City employs diversification to ensure that potential losses on individual <br />securities do not exceed the income generated by the remainder of the portfolio_ <br />2. Liquidity -The City's investment portfolio will be structured to provide cash from maturing <br />investments and interest income to meet City operating requirements that can be reasonably <br />anticipated. Since emergency cash needs do arise on occasion, the portfolio will consist <br />primarily of securities with established and active secondary resale markets. <br />3. Yield or Return on Investment -Yield Return becomes a consideration only after the safety <br />and liquidity objectives have been met. The City's investment portfolio shall be designed <br />with the objective of attaining a rate of return throughout budgetary and economic cycles, <br />commensurate with the City's investment risk constraints and the cash flow characteristics of <br />the portfolio. <br />V. Investment Criteria <br />The City invests its funds in accordance with the following criteria: <br />1. Insure that funds not needed for current City obligations are fully <br />invested at all times. <br />2. Actively manage the portfolio and take advantage of the changing <br />nature of the economy, the U.S. Government Securities market and <br />the national money market in order to maximize total return. <br />3. Guarantee that funds are always available when needed. <br />4. Insure that yield-restricted funds are monitored to ensure compliance <br />with federal arbitrage rebate requirements. <br />5. Insure that the specific requirements outlined in the Bond Indentures <br />of Trust are maintained. <br />VL Ethics and Conflicts of Interest <br />Officers and employees involved in the investment process will refrain from personal business <br />activity that would conflict with the proper execution of the investment program, or would <br />impair their ability to make impartial investment decisions. Employees and investment officials <br />will disclose to the Finance Director any material interests in financial institutions that conduct <br />business with the City of San Leandro. Furthermore, they will disclose any large personal <br />