1 General Investment Guidelines: Full Compliance
a) The max. stated final maturity of individual securities in the portfolio should be 10 years. b) A max. of 30 percent of the par value of the portfolio shall be invested in securities with maturities 29.3% beyond 5 years.
c) The City shall maintain a minimum of one month's cash needs in short term investments. d) At least
$50 million shall be maintained in securities maturing in less than 2 years.
Plus two managed pool accounts which provide instant liquidity:
- Local Agency Investment Fund (LAIF) - maximum investment limit is $75 million $28 million - Fidelity Investments $15.5 million
e) Should market value of the portfolio fall below 95 percent of the book value, report this fact within a 93.7% reasonable time to the City Council and evaluate if there are risk of holding securities to maturity. d) Commitments to purchase securities newly introduced on the market shall be made no more than three (3) working days before pricing.
f) Whenever possible, the City will obtain three or more quotations on the purchase or sale of comparable securities (excludes new issues, LAIF, City of Palo Alto bonds, money market accounts, and mutual funds).
2 U.S. Government Securities:
Full Compliance
a) There is no limit on purchase of these securities.
b) Securities will not exceed 10 years maturity.
3 U.S. Government Agency Securities: Full Compliance
a) There is no limit on purchase of these securities except for:
Callable and Multi-step-up securities provided that:
- The potential call dates are known at the time of purchase; - the interest rates at which they "step-up" are known at the time of purchase; and - the entire face value of the security is redeemed at the call date. - No more than 25 percent
of the par value of portfolio. 24.86%
b) Securities will not exceed 10 years maturity.
4 California State, California Local Government Agencies, and other United States State Bonds: Full Compliance a) Having at time of investment a minimum Double A (AA/Aa2) rating as provided by a nationally recognized rating service (e.g., Moody’s, Fitch, and/or Standard and Poor’s). b) May not exceed 40 percent of the par value of the portfolio. 40.00% 5 Certificates of Deposit (CD): Full Compliance
a) May not exceed 20 percent of the par value of the portfolio; None Held b) No more than 10 percent of the par value of the portfolio in collateralized CDs in any institution. c) Purchase collateralized deposits only from federally insured large banks that are rated by a nationally recognized rating agency (e.g. Moody's, Fitch, and/or Standard & Poor's). d) For non-rated banks, deposit should be limited to amounts federally insured (FDIC) e) Rollovers are not permitted without specific instruction from authorized City staff. 6 Banker's Acceptance Notes (BA):
Full Compliance
a) No more than 30 percent of the par value of the portfolio. None Held b) Not to exceed 180 days maturity.
c) No more than $5 million with any one institution.
$206.2 million
1.10%
Attachment C
Investment Policy Compliance
As of March 31, 2024
Investment Policy Requirements
Compliance
Check / Actual
Attachment C
Investment Policy Compliance
As of March 31, 2024
Investment Policy Requirements
Compliance
Check / Actual
7 Commercial Paper: Full Compliance
a) No more than 15 percent of the par value of the portfolio. None Held b) Having highest letter or numerical rating from a nationally recognized rating service. c) Not to exceed 270 days maturity.
d) No more than $3 million or 10 percent
of the outstanding commercial paper of any one institution, whichever is lesser.
8 Short-Term Repurchase Agreement (REPO): Full Compliance a) Not to exceed 1 year. None Held
b) Market value of securities that underlay a repurchase agreement shall be valued at 102 percent or greater of the funds borrowed against those securities. 9 Money Market Deposit Accounts Full Compliance
a) Liquid bank accounts which seek to maintain a net asset value of $1.00. 10 Mutual Funds: Full Compliance
a) No more than 20 percent of the par value of the portfolio. None Held b) No more than 10 percent of the par value with any one institution. 11 Negotiable Certificates of Deposit (NCD): Full Compliance a) No more than 20 percent of the par value of the portfolio. 7.95% b) No more than $5 million in any one institution. Federally Insured 12 Medium-Term Corporate Notes: Full Compliance
a) No more than 10 percent of the par value of the portfolio. 4.65% b) Not to exceed 5 years maturity.
c) Securities eligible for investment shall have a minimum rating of AA or Aa2 from a nationally recognized rating service.
d) No more than $5 million of the par value may be invested in securities of any single issuer, other than the U.S. Government, its agencies and instrumentality. e) If securities owned by the City are downgraded by either rating agencies to a level below AA it shall be the City's policy to review the credit situation and make a determination as to whether to sell or retain such securities.
13 Supranational Organizations Securities:
Full Compliance
a) Securities will not exceed 5 years maturity
b) No more than 20 percent of the par value of the portfolio. 7.88% c) No more than 10 percent in any one institution. Full Compliance d) Securities eligible for investment shall have a minimum rating of AA or Aa2 from a nationally recognized rating service.
14 Prohibited Investments:
a) Reverse Repurchase Agreements
b) Derivatives as defined in Appendix B of the Investment Policy 15 All securities shall be delivered to the City's safekeeping custodian, and held in the name of the City, with the exception of :
- Certificates of Deposit, Mutual Funds, and Local Agency Investment Fund (LAIF) Full Compliance
None Held
Full Compliance