POLICY AND PROCEDURE
Subject: City Section 115 Pension
Investment Policy
Index: Finance & Administrative
Services
Number: 202-3
Effective Date: Prepared By: Finance & Administrative
Services
Supersedes: 202-3 Approved By:
1.0 PURPOSE:
1.1 115 Trust Purpose
The purpose of the City of San Clemente’s Section 115 Pension Investment Policy is to establish: (1) a plan and a process for funding current and future costs associated with the City of San Clemente’s Section 115 Pension Plan (hereafter referred to as the Pension Trust Fund) and its contractual obligations for pension related programs; and (2) create an appropriate set of objectives and goals regarding the investment of the assets of the City of San Clemente’s Pension Trust Fund.
Funds set aside in tThe City of San Clemente is allocating assets to a Section 115 Trust (the “Pension Trust Fund”, or the “Trust”). The Pension Trust Fund assets are safe guarded from diversion to other budgetary uses and generally may be invested in a broader range of securities than would typically be permitted for public agency operating funds, potentially increasing earnings. Therefore, higher returns can improve the City’s ability to meet future pension obligations. Retaining control of the funds in the Trust provides the flexibility to meet current or accrued pension liabilities based on the financial circumstances at that time. The City also controls the timing of contributions to the Trust.
The main investment objective of the Trust is to achieve long-term growth of Trust assets by maximizing long-term rate of return on investments and minimizing risk of loss.
1.2 Policy Purpose
The purpose of this Policy Statement is to achieve the following:
• Document investment objectives, performance expectations, and investment guidelines for Fund assets.
Attachment 1
• Establish an appropriate investment strategy for managing all Trust assets, including an investment time horizon, risk tolerance ranges, and asset allocation to provide sufficient diversification and overall return over the long-term time horizon of the Trust.
• Establish investment guidelines to control overall risk and liquidity. • Establish periodic performance reporting requirements to monitor investment results and confirm that the investment policy is being followed. • Comply with fiduciary standards, prudence, due diligence, and legal requirements for Trust assets.
2.0 ORGANIZATIONS AFFECTED:
All City departments/divisions
3.0 REFERENCES:
• Investment Advisory Act of 1940
• Civil Code Section 2261, et seq.
• Government Code Section 53600, et seq.
• Code of Ethics Policy, Administrative Policy #102-1
4.0 POLICY:
4.1 Thise policy seeks to (a) establish a framework for achieving an appropriate risk adjusted rate of return for the City of the City of San Clemente’s (“the City”) Pension Trust Fund assets and (b) is to invest in a Pension Trust Fund in a manner which will provide a market rate of return while meeting the financial obligations of the fund and conforming to all applicable State and City laws governing the investment of public funds.
4.1.1 Scope: This pension investment policy applies to all financial assets of the City of San Clemente’s Pension Trust Fund. These funds are accounted for monthly in the investment report presented to the Investment Advisory Committee.
4.1.2 Statement of Responsibilities: The following parties associated with the Pension Trust Fund shall discharge their respective responsibilities in accordance with all applicable fiduciary standards as follows: (1) in the sole interest of the Pension Trust Fund participants and beneficiaries; (2) with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent individual acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and of like aims; and (3) by diversifying the investments so as to minimize the risk of large losses.
4.1.2.1 City Investment Advisory Committee: The members of the City Investment Advisory Committee will review and propose a Section
115 Pension Investment Policy for the approval of the City Council and provide direction as to the investment strategy and for the Pension Trust Fund assets.
4.1.2.2 Investment Management Manager(s): The investment manager(s) are delegated the responsibility of investing theand managing the Pension Trust Fund’s assets in accordance with this Section 115 Pension Investment Policy and all applicable laws. Investment Managers are selected by the Investment Advisory Committee Consultant while PARS is the Investment Consultant and
Administrator. Each investment manager must either be; (1) registered under the Investment Company Act of 1940; (2) registered under Investment Advisors Act of 1940; (3) a bank, as defined in that Act; (4) an insurance company qualified under the laws of more than one state to perform the services of managing, acquiring or disposing of Fund assets; or, (5) such other person or organization authorized by applicable law or regulation to function as an investment manager.
4.1.2.3 Investment Consultant/Advisor: The investment
Consultant/Advisor (“Advisor”) is charged with advising the City Investment Advisory Committee on the selection of appropriate investments asset allocation, and providing performance analysis, and monitoring services.
The investment advisor (“Advisor”) shall assist advise the Board in Investment Advisory Committee in the investment process and to maintain compliance with this Policy Statement. The Advisor may assist the Board Investment Advisory Committee in establishing investment policy objectives and guidelines. The Advisor will adjust asset allocation for the Trust subject to the guidelines and limitations set forth in this Policy Statement. The Advisor will also select investment managers (“Managers”) and strategies consistent with its role as a fiduciary for the Trust. The investment vehicles allowed may include mutual funds, commingled trusts, separate accounts, limited partnerships and other investment vehicles deemed to be appropriate by the Advisor. The Advisor is also responsible for monitoring and reviewing investment managers; measuring and evaluating performance; and other tasks as deemed appropriate in its role as Advisor for Trust assets. The Advisor may also select investments with discretion to purchase, sell, or hold specific securities, such as Exchange Traded Funds, that will be used to meet the Trust’s investment objectives. The Advisor shall never take possession of securities, cash or other assets of the Trust, all of which shall be held by the custodian. The Advisor must be registered with the Securities and Exchange Commission
4.1.2.4 Investment Custodian: The investment custodian is the company holding Pension Trust Fund assets. The custodian selected by the Trust
will maintain possession of physical securities and records of street name securities owned by the Trust, collect dividend and interest payments, redeem maturing securities, and effect receipt and delivery following purchases and sales. The custodian may also perform regular accounting of all assets owned, purchased, or sold, as well as movement of assets into and out of the Trust. The custodian will generally report on a monthly and quarterly basis the various assets and assist with the rebalancing of the asset classes.
4.1.2.5. A Trustee shall be appointed by the Trust. , such as a bank trust department, if the Trust does not have its own Trustees, to assume fiduciary responsibility for the administration of Trust assets; provided, however, that if the City shall have appointed an investment advisor, then any The trustee appointed under this paragraph shall have no authority with respect to selection of investments.
4.1.2.6 Fund Administrator. The Fund Administrator shall provide the Investment Advisory Committee with reports for the Committee to evaluate: (a) investment risk, (b) investment returns, and (c) investments returns of comparable benchmarks per investment sleeve.
4.2 Statement of Investment Philosophy & Process:
4.2.1 City Investment Advisory Committee: The City Investment Advisory Committee is committed to: (1) protecting the corpus of the Pension Trust Fund; (2) obtaining adequate investment returns in order to protect and pay the benefits promised to the participants; (3) complying with applicable law; and (4) controlling administrative costs.
4.2.2 Pension Trust Fund: The Fund shall be managed in a prudent manner recognizing risk and return trade-offs, while concerned with avoiding undue risk. Accordingly, investments shall be chosen to maximize the return on invested assets and overall safety of funds over the long term. Sufficient liquidity shall also be maintained to fund expenses and benefit payments.
4.3 Investment Objectives: The Investment Objectives for the Pension Trust Fund will be for the asset value, is growth, exclusive of contributions or withdrawals., to grow over the long run and earn, Expected growth will be achieved through a combination of investment income and capital appreciation., The a rate of return (time-weighted total return gross of fees for periods under evaluation) tracking the will be tracked against designated benchmarks at a minimal cost utilizing a passive income strategy.
The investment objectives of the Trust are as follows:
• To invest assets of the Trust in a manner consistent with the following fiduciary standards: (a) all transactions undertaken must be for the sole interest of Trust beneficiaries, and (b) assets are to be diversified in order to minimize the impact of large losses from individual investments.
• To provide for funding for (a) contributions to CalPERs and CSCERP (see section 6.2), and anticipated withdrawals on a continuing basis for payment of benefits and (b) reasonable expenses of for operationg of the Trust. • To enhance the value of Trust assets in real terms over the long-term time horizon through asset appreciation and income generation, while maintaining a reasonable investment risk profile.
• Subject to performance expectations over the long-term, to mMinimize principal fluctuations over the Time Horizon (as defined below). • To achieve a long-term level of return commensurate with contemporary economic conditions and equal to or exceeding the investment objective set forth in this Policy Statement under the section labeled “Performance Expectations”.
4.3.1 Performance Objectives:
4.3.1.1 Total Fund Objective: The objective of the Pension Trust Fund is: (a) to invest in assets and achieve returns comparable to other similarly allocated Pension Trust Funds; (b)and exceeding the returns of the Pooled City Investments; and (c) maintaining adequate liquidity needs of the fund sufficient to meet requirements.
4.3.1.2 Total Fund Relative-Return Expectation – Pension standard: The total fund rReturn goal is to meet or exceed the actuarial assumption rate or discount rate over an appropriate time horizon multiple year period.
4.3.1.3 Rate of Relative Return Expectation – Benchmark standard: The objective of the total fund is to earn a rate of return of the indices weighted in accordance with the current target asset allocation. Return goal is to meet or exceed applicable indices on individual investments and portfolio basis, while controlling risk.
4.3.1.4 Investment RiskDiversification: The objective of the investment policy is to mManage portfolio risk through a diversified pool of assets while ensuring proper liquidity. dDiversification of assets.
Diversification can be achieved by asset class, maturities, credit quality, structure, public/private, and other dimensions.
4.4 Investment GuidelinesGeneral Investing Terms: The Pension Trust assets will be invested with a variety of diversification to minimize the risk of any one asset class and improve overall long-term performance, while comparing individual returns to benchmarks or indexes. The following asset classes may be participated in through mutual fund, exchange traded funds, or other investment options to minimize costs.
Within this section of the Policy Statement, several terms will be used to articulate various investment concepts. The descriptions are meant to be general and may share investments otherwise considered to be in the same asset class. They are:
"Growth Assets" -
aA collection of investments and/or asset classes whose primary risk and return characteristics are focused on capital appreciation. Investments within the Growth Assets category can include income and risk mitigating characteristics, so long as the predominant investment risk and return characteristic is capital appreciation.
Examples of such investments or asset classes are: domestic and international equities or equity funds, private or leveraged equity, and certain real estate investments. "Income Assets" -
aA collection of investments and/or asset classes whose primary risk and return characteristics are focused on income generation. Investments within the Income Assets category can include capital appreciation and risk mitigating characteristics, so long as the primary investment risk and return characteristic is income generation.
Examples of such investments or asset classes are: fixed income securities, guaranteed investment contracts, and certain real estate investments. "Real Return Assets" -
aA collection of investments and/or asset classes whose primary risk and return characteristics are focused on real returns, net of inflation. Investments within the Real Return category may include, but are not limited to, inflation protected securities, commodities, certain real estate investments, natural resources, and liquid alternatives.
4.4.1 “Time Horizon”:
The Trust’s investment objectives are based on a long-term investment horizon (“Time Horizon”) of five years or longer. Interim fluctuations should be viewed with appropriate perspective. The City has adopted a long-term investment horizon such that the risks and duration of investment losses are carefully weighed against the longterm potential for appreciation of assets. However, this portfolio of assets is viewed by the City as the first pool of assets that would be utilized to support pension expenses. As such, the time horizon for this portfolio could be less than five years based on budget conditions, or any increase in expenses arising from CalPERS.
4.4.2 “Liquidity and Diversification”:
In general, the Trust may hold some cash, cash equivalent, and/or money market funds for near-term Trust benefits and expenses (the “Trust Distributions”).
Remaining assets will be invested in longer-term investments and shall be diversified with the intent to minimize the risk of long-term investment losses. Consequently, the total portfolio will be constructed and maintained to provide diversification with regard to the concentration of holdings in individual issues, issuers, countries,
governments or industries.
4.4.3 “Rebalancing Philosophy”:
The asset allocation range established by this Policy Statement represents a long-term perspective. As such, rapid unanticipated market shifts or changes in economic conditions may cause the asset mix to fall outside Policy Statement ranges. When allocations breach the specified ranges, the Advisor will rebalance the assets within the specified ranges. The Advisor may also rebalance based on market conditions.
4.4.4 “Risk Tolerance”:
Subject to investment objectives and performance expectations, the Trust will be managed in a style that seeks to minimize principal fluctuations over the established Time Horizon.
4.4.5 “Performance Expectations”:
The performance objective for the Trust over the long-term, five years or longer, is expected to have an annual rate of return on Trust assets that will be commensurate with the then prevailing investment environment. Measurement of this return expectation will be judged by reviewing returns in the context of industry standard benchmarks, peer universe comparisons for individual Trust investments and blended benchmark comparisons for the Trust in its entirety.
4.5 Asset Allocation: The City believes that to achieve the greatest likelihood of meeting the Trust’s investment objectives and the best balance between risk and return for optimal diversification, assets will be invested in accordance with the targets for each asset class as follows to achieve an average total annual rate of return that is equal to or greater than the Trust’s target rate of return over the long-term, as described in the section titled “Performance Expectations”.
Asset Weightings
Asset Classes Range Target
Growth Assets
Domestic Equity 25% - 65% 45.0%
International Equity 12% - 40% 22.5%
Other 0% - 20% 7.5%
Income Assets
Fixed Income
Other
10% - 30%
0% - 10%
23%
0%
Real Return Assets 0% - 10% 0%
Cash Equivalents 0% - 20% 2%
4.6 Selection of Investment Managers
The Advisor shall prudently select appropriate Managers to invest the assets of the Trust.
Managers must meet the following criteria:
• The Manager must provide historical quarterly performance data compliant with Global Investment Performance Standards (GIPS®), Securities & Exchange Commission (“SEC”), Financial Industry Regulatory Agency (“FINRA”) or industry recognized standards, as appropriate.
• The Manager must provide detailed information on the history of the firm, key personnel, support personnel, key clients, and fee schedule (including most-favorednation clauses). This information can be a copy of a recent Request for Proposal (“RFP”) completed by the Manager or regulatory disclosure. • The Manager must clearly articulate the investment strategy that will be followed and document that the strategy has been successfully adhered to over time. • The investment professionals making the investment decisions must have a minimum of three (3) years of experience managing similar strategies either at their current firm or at previous firms.
• Where other than common funds such as mutual funds or commingled trusts are utilized, the Manager must confirm receipt, understanding and adherence to this Policy Statement and any investment specific policies by signing a consent form provided to the Manager prior to investment of Trust assets.
4.7 Guidelines for Portfolio Holdings
4.7.1 Direct Investments by Advisor: Every effort shall be made, to the extent practical, prudent and appropriate, to select investments that have investment objectives and policies that are consistent with this Policy Statement (as outlined in the following sub-sections of the “Guidelines for Portfolio Holdings”). However, given the nature of the investments, it is recognized that there may be deviations between this Policy Statement and the objectives of these investments.
4.7.2 Limitations on Portfolio Holdings Guidelines:
4.7.2.1 EQUITIES
No more than 5% of the total equity portfolio valued at market may be invested in the common equity of any one corporation; ownership of the shares of one company shall not exceed 5% of those outstanding; and not more than 40% of equity valued at market may be held in any one sector, as defined by Bloomberg (BB) Sector standards.
Domestic Equities. Other than the above constraints, there are no quantitative guidelines as to issues, industry or individual security diversification.
However, prudent diversification standards should be developed and maintained by the Manager.
International Equities. The overall non-U.S. equity allocation should include a diverse global mix that is comprised of the equity of companies from multiple countries, regions and sectors.
4.7.2.2 FIXED INCOME
Fixed income securities of any one issuer shall not exceed 5% of the total bond portfolio at time of purchase. The 5% limitation does not apply to issues of the U.S. Treasury or other Federal Agencies. The overall rating of the fixed income assets as calculated by the Advisor shall be investment grade, based on the rating of one Nationally Recognized Statistical Rating Organization (“NRSRO”).
Eligible Investments
• Debt obligations of the U.S. Government, its agencies, and Government Sponsored Enterprises
• Mortgage-Backed Securities (MBS)
• Asset Backed Securities (ABS)
• Collateralized Mortgage Obligations (CMO)
• Commercial Mortgage-Backed Securities (CMBS)
• Corporate debt securities issued by U.S. or foreign entities including, but not limited to, limited partnerships, equipment trust certificates and enhanced equipment trust certificates
• Municipal Bonds
• Fixed income mutual funds.
• Eligible instruments issued pursuant to SEC Rule 144a (only if the Client is a documented Qualified Institutional Buyer; QIB) Quality
The individual securities portfolio will maintain a minimum weighted average effective quality of A- at all times. At the time of purchase, individual securities shall have a minimum effective quality rating of BBB-.
For purposes of determining an effective rating, when three agencies rate a security (S&P, Moodys, Fitch) the middle rating will be used. When only two of the three agencies rate a security the lower of the two ratings will be used.
When only one agency rates a security that rating will be used.
Duration
The manager will maintain the portfolio duration within +/- 25% of the Bloomberg US Aggregate Bond Index duration at all times for the individual securities portfolio.
Diversification
No more than 30% of the portfolio may be invested in securities issued under Rule 144A* without registration rights (no limit on Rule 144a securities with registration rights).
* Note: Rule 144A is an administrative rule under the SEC allowing, under certain circumstances, for qualified institutional investors to trade certain securities with other institutional investors without registering the trade with the SEC. Specifically, the rule allows private companies, both domestic and international, to sell unregistered securities, also known as Rule 144 securities, to qualified institution buyers (QIBs) through a broker-dealer.
4.7.2.3 OTHER ASSETS (ALTERNATIVES)
Diversifying Liquid Alternatives
Primary objective shall be to enhance the risk-return profile of the overall portfolio. This can be accomplished by using liquid alternative strategies that may enhance returns at a reasonable level of risk or reduce volatility while providing a reasonable level of return. These asset classes may differ from traditional public market asset classes due to the use of certain strategies including short-selling, leverage, and derivatives. Liquid alternatives may also invest across asset classes. For purposes of asset allocation targets and limitations, liquid alternatives funds will be categorized under the specific asset class of the fund. For example, a long/short U.S. equity fund will be categorized as “Other” in the Growth Assets category while a long/short credit fund will be categorized as “Other” in the Income Assets category. Multistrategy liquid alternatives funds that cannot be easily categorized under one asset class will be included in “Other” under either the Growth Assets or Income Assets category depending on the risk-return profile of the strategy.
Real Assets
Real assets are typically physical assets that have intrinsic worth due to their substance and properties. Real assets are primarily used for their lower correlation to traditional assets (i.e., stocks and bonds) and their inflation hedging properties. Categories of real asset investments include, but are not limited to, real estate, infrastructure, land, farmland, timberland, precious metals, and commodities. Public real assets are publicly traded and liquid. The benefit of lower correlation investments is that, when implemented correctly, these investments can potentially improve a portfolio’s expected risk-adjusted return over the long-term. The real assets category can be extended to include other forms of assets that offer similar inflation hedging properties such as pooled vehicles holding: commodities contracts, Treasury Inflation Protected Securities (“TIPS”), index-linked derivative contracts, certain forms of intellectual property, and the equity of companies in businesses thought to hedge inflation. For purposes of asset allocation targets and limitations, real assets may be categorized as “Other” under either the Growth Assets or Income Assets category or in the Real Return Assets category, depending on the nature and risk/return profile of the investment.
4.7.2.4 CASH EQUIVALENTS
Cash equivalents shall be held in funds complying with Rule 2(a)-7 of the Investment Company Act of 1940.
Prohibited Investments
Except for purchase within authorized investments, securities having the following characteristics are not authorized and shall not be purchased: letter stock and other unregistered securities, direct commodities or commodity contracts, or private placements (with the exception of Rule 144A securities).
Further, derivatives, options, or futures for the sole purpose of direct portfolio leveraging are prohibited. Direct/physical ownership of real estate, natural resource properties such as oil, gas or timber and the purchase of collectibles is also prohibited.
Safekeeping
All assets of the Trust shall be held by a custodian approved by the Board Investment Advisory Committee for safekeeping of Trust assets. The custodian shall produce statements on a monthly basis, listing the name and value of all assets held, and the dates and nature of all transactions in accordance with the terms in the Trust Agreement. Investments of the Trust not held as liquidity or investment reserves shall, at all times, be invested in interest-bearing accounts. Investments and portfolio securities may not be loaned.
4.8 Control Procedures
4.8.1 Review of Investment Objectives: The Advisor shall review annually and report to the Board the appropriateness of this Policy Statement for achieving the Trust’s stated objectives. It is not expected that this Policy Statement will change frequently. In particular, short-term changes in the financial markets should not require an adjustment in this Policy Statement.
4.8.2 Review of Investment Performance: The Advisor shall report on a quarterly basis to the Quarterly Trust performance detail will be provided to the Board Investment Advisory Committee to review the investment performance of the Trust. In addition, the Advisor will be responsible for keeping the Board Investment Advisory Committee advised of any material change in investment strategy, Managers, and other pertinent information potentially affecting performance of the Trust.
The Advisor shall compare the investment results on a quarterly basis to appropriate peer universe benchmarks, as well as market indices in both equity and fixed income markets. Examples of benchmarks and indexes that will be used include the Russell 3000 Index for broad U.S. equity strategies; S&P 500 Index for large cap U.S. equities, Russell 2000 Index for small cap U.S. equities,
MSCI ACWI ex-U.S. Index for broad based non-U.S. equity strategies, MSCI Europe, Australasia, and Far East (EAFE) Index for developed markets international equities, Bloomberg US Aggregate Bond Index for fixed income securities, and the U.S. 91 Day T-bill for cash equivalents. The Russell 3000 Index will be used to benchmark the U.S. equities portfolio; the MSCI ACWI exU.S. Index will be used to benchmark the non-U.S. equities portfolio; the Bloomberg US Aggregate Bond Index will be used to benchmark the fixed income portfolio. The categories “Other” will be benchmarked against appropriate indices depending on the specific characteristics of the strategies and funds used.
4.8.3 Voting of Proxies: The Board Investment Advisory Committee recognizes that proxies are a significant and valuable tool in corporate governance. The voting rights of individual stocks held in separate accounts or collective, common, or pooled funds will be exercised by the investment managers in accordance with their own proxy voting policies. The voting rights of funds will be exercised by the Advisor.
5.0 DEFINITIONS:
None
6.0 PROCEDURE:
6.1 Investment Performance Review, Reporting and Evaluation:
6.1.1 Investment Advisory Committee: The City Investment Advisory Committee will review the investment results of the investment managers at least semiannually quarterly. Performance comparisons will be made against a representative performance universe and the performance objectives set forth in this policy statement appropriate benchmarks.
6.1.2 Review of Strategy: The City Investment Advisory Committee, with the assistance of the Iinvestment consultant Advisor shall periodically review the qualitative developments of each Iinvestment Manager. This evaluation should include: Changes in ownership, personnel turnover, adherence to investment style and philosophy, and any other qualities the City Investment Advisory Committee deem appropriate. This review should also include an assessment as to each investment manager operated within the Investment Policy scope.
6.1.3 Reporting: The quarterly investment report will include the assets held in the Pension Trust, the allocation percentages, and the quarterly returns, cash flows, and risk metrics. Information as to the quarterly disbursements will be included in the report and whether minimum liquidity requirements are met.
6.2 Use of Pension Trust Fund: Withdrawals will be recommended by the City Manager or designee and reviewed by the Investment Advisory Committee. Once approval from the Investment Advisory Committee has been received, it will be added as a City Council Agenda Item for approval. Funds as allowed by the Trust may be used for any of the following purposes:
• City’s annual UAL payment to CalPERS
• City’s annual normal cost payment to CalPERS
• Reimbursement to the City for CalPERS pension costs
• Additional Discretionary Payments to CalPERS
• City’s annual UAL payment to City of San Clemente Employee Retirement Plan (CSCERP)
6.3 Internal Control: In conjunction with the City’s independent annual financial audit, a review of actual and documented internal controls of the City’s investment program will be coordinated by the Investment Advisory Committee annually. The review will assure that internal controls are adequate and assure compliance with policies and procedures.
Any deviations resulting from this review will be reported to the Investment Advisory Committee.
6.4 Policy Changes: The investment consultant shall advise the City Investment Advisory Committee of any restrictions within this Investment Policy which may prevent the investment manager(s)/consultant from achieving the objectives and goals set forth herein. Any violation of the investment guidelines or other sections of this Investment Policy discovered by the investment consultant in the preparation of its regular performance review shall be reported immediately to the City Investment Advisory Committee and discussed at their next regularly scheduled meeting.
6.5 Review and Revisions: The City Investment Advisory Committee has the ability to amend the Section 115 Pension Investment Policy as necessary to comply with changes in federal and/or state law as these changes affect the investment of the Fund’s assets and such changes shall be reported to the City Council. This policy will be reviewed on an annual basis by the City Investment Advisory Committee and any revisions or modifications made thereto recommended by the Committee and approved by the City Council. Invested funds in should have ample liquidity to meet any operational needs as determined by the Investment Advisory Committee.