The City invests only in those instruments that are considered very safe. A portion of the portfolio should be maintained in liquid short-term securities which can be converted to cash if necessary to meet disbursement requirements. Investments must not have a term remaining to maturity in excess of three years without prior approval from the City Council at least three months prior to making the investment not withstanding that the California Government Code Section 53601 allows for maturities of up to five years without City Council approval. The City attempts to obtain the highest yield possible, provided that the basic criteria of safety and liquidity have been met. Percentage limitations on the purchase of securities apply at the time of purchase.
Maximum investment is subject to State regulation.
The Individual Portfolios are not part of the assets of the Trust. Cash in the Pool and the Individual Portfolios will be invested by the California Asset Management Trust investment advisor in accordance with the prudent investor standard of the California Government Code. To the extent prohibited by the California Government Code, the Pool, and Individual Portfolios will not invest in a any inverse floaters, range notes, or interest-only strips that are derived from a pool of mortgages, or in any security that could result in zero interest accrual if held to maturity. A purchase of securities by the City pursuant to an agreement by which the seller will repurchase such securities on or before a specified date, or on demand of either party, and for a specified amount. Investments in repos will be used solely as short term investments not to exceed 90 days and the market value of the securities used as collateral that underlay a repurchase agreement shall be valued at 102 percent or greater of the funds borrowed against those securities, and the value shall be marked to market daily.