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San Leandro Investment Policy Statement Page 8 of 18 <br /> <br /> <br /> <br />• Any actions taken related to the downgrade by the investment manager will <br />be communicated to the City in a timely manner (within two business days). <br />• If a decision is made to retain the security, the credit situation will be <br />monitored and reported to the City. <br /> <br /> <br />X. Socially Responsible Investing <br /> <br />The investment policy prohibits investing in an entity that receives a significant portion of <br />their revenues from the gun manufacturing, fossil fuel production, private prisons and <br />tobacco producers. <br /> <br />XI. Competitive Transactions <br />All investment transactions shall be conducted on a competitive basis with quotes from a <br />minimum of three brokers or financial institutions when possible. <br /> <br />XII. Safekeeping <br />Purchased securities are held in third party safekeeping by the trust department of the City's <br />bank or other designated third party in the City's name and control. All security transactions <br />entered into by the City will be conducted on a delivery-versus-payment (DVP) basis and <br />evidenced by a receipt issued by the safekeeping agent. <br /> <br />XIII. Collateralization <br />An independent third party with whom the City of San Leandro has a current custodial <br />agreement will always hold collateral. A clearly marked evidence of ownership must be <br />supplied to the City. <br /> <br />XIV. Internal Control and Review <br />The Finance Director will establish an annual review process to ensure compliance with <br />the established Investment Policy and routine reporting requirements. <br /> <br />XV. Performance Standards <br />The investment portfolio shall be designed with the overall objective of obtaining a total <br />rate of return throughout economic cycles, commensurate with investment risk <br />constraints and cash flow needs. <br /> <br />The investment performance objective for the portfolio shall be to earn a total rate of <br />return over a market cycle which is approximately equal to the return on a Market <br />Benchmark Index of similar risk characteristics as that of the City’s investment portfolio. <br /> <br />Other market investments that may be used as yield comparisons include: <br /> <br />• The State of California Local Agency Investment Fund (LAIF) <br />• The two-year U.S. Treasury Bill <br />• The five-year U.S. Treasury Note <br /> <br />XVI. Reporting