Fort Walton Beach Ordinance — 1894--Investment Policy-surplus funds — reading text

return relative to the risk being assumed. Despite this, a Portfolio Manager may trade to recognize a loss from time to time to achieve a perceived relative value based on its potential to enhance the total return of the portfolio. Investments should be made subject to the cash flow needs and such cash flows are- subject- to_revisiona -as market conditions and the City' s needs change. However, when the invested funds are needed in whole or in part for the purpose originally intended or for more optimal investments, the Finance Director or Investment Advisor(s) may sell the investment at the then -prevailing market price and place the proceeds into the proper account at the City' s custodian. IV. AUTHORIZED INVESTMENTS, MATURITY & LIQUIDITY REQUIREMENTS, AND PORTFOLIO COMPOSITION It is the City' s desire for all accounts to be fully invested; however, any funds in the custodial account not otherwise invested will be " swept" each night into a fully collateralized repurchase agreement or institutional money market fund. The following matrix identifies the portfolio investment requirements and allocation limits on security types, issuers, and maturities as established by the City. The Maximum Allocation Limit and Maximum Issuer Limit apply to the City' s comprehensive portfolio (i.e. all of the City' s investments covered under this policy); they do not apply separately to each of the portfolio types. The average duration of the funds managed by any one external portfolio manager on behalf of the City as part of the portfolio(s) shall not exceed 1. 2 times the selected benchmark. The Finance Director or Investment Advisor(s) shall have the option to further restrict investment percentages from time to time based on market conditions, risk, and diversification investment strategies. The percentage allocations requirements for investment types and issuers are calculated based on the market value of each investment. The allocation limits and security types do not apply to the investment of debt proceeds, which are governed by the debt covenant included in the debt instrument. Investments not listed in this Policy are prohibited. Page 4 of 25 Ordinance 1875, Adopted January 8, 2013  City of Fort Walton Beach, FL INVESTMENT POLICY Maximum Maximum Minimum Rating Security Type Allocation Issuer Requirement Limit Limit Non -Negotiable Interest Bearing Time Certificates of Deposit N/ A 75% 25% Local Government Surplus Funds Trust Fund AAArn 25% N/ A Intergovernmental Investment Pool AAA 25% N/ A SEC Registered Money Market Mutual Funds AAAm 50% 25% United States Government Securities N/ A 100% N/ A Repurchase Agreements N/ A 50% 25% Bankers' Acceptances P -1 / A -1 35% 20% Commercial Paper P -1 / A -1 25% 15% United States Government Agencies N/ A 50% 25% full faith and credit of the United States Government) Federal Instrumentalities United States Government Sponsored Enterprises " GSE ") N/ A 75% 40% non -full faith and credit of the United States Government) Securitized Issues* full faith and credit of the United States Government) N/ A 10% Mortgage- Backed ( MBS) Securitized Issues* non -full faith and credit of the United States Government) AAA 10% Commercial Mortgage- Backed ( CMBS), Asset -Backed ( ABS) Max 25% " BBB" with the remainder Corporate Notes* 3% at least- Single " A" by any two NRSRO- Single any State or Local Government Taxable or Tax -Exempt Debt* 3% two NRSRO O TheThe combinedcombined allocationallocation limitlimit fundsfunds investedinvested inin SecuritizedSecuritized Issues,Issues, CorporateCorporate Notes,Notes, andand StateState oror LocalLocal GovermentGoverment TaxableTaxable oror TaxTax - - Exempt Exempt DebtDebt cannotcannot exceedexceed 75% 75% ToTo thethe extentextent possible,possible, anan attemptattempt willwill bebe mademade toto matchmatch investmentinvestment maturities maturities withwith knownknown cashcash needsneeds andand anticipatedanticipated cashcash flowflow requirements.requirements. InvestmentsInvestments ofof currentcurrent operatingoperating fundsfunds ( ( liquidityliquidity andand enhancedenhanced cashcash portfolios)portfolios) shallshall havehave maturitiesmaturities ofof nono longerlonger thanthan twenty-twenty- fourfour ( ( 24)24) months.months. InvestmentsInvestments ofof bondbond reserves,reserves, constructionconstruction funds,funds, andand otherother nonnon- - operating operating fundsfunds ( ( short-short- andand longlong - - termterm portfolios)portfolios) shallshall havehave aa termterm appropriateappropriate toto thethe needneed forfor fundsfunds andand inin accordanceaccordance withwith debtdebt covenants,covenants, butbut inin nono eventevent shallshall exceedexceed fivefive ( ( 5)5) years.years. ForFor thethe purposepurpose ofof thisthis Policy,Policy, thethe toptop NationallyNationally RecognizedRecognized StatisticalStatistical RatingRating OrganizationsOrgani ( zations ( NRSRO)NRSRO) forfor corporate corporate andand municipal municipal securities securities areare Moody'Moody' ss Investor Investor Service,Service, Standard Standard & & Poor'Poor' s,s, andand FitchFitch Ratings.Ratings. InIn thethe eventevent ofof aa ratingsratings downgradedowngrade ofof aa security,security, thethe InvestmentInvestment Advisor(Advisor( s)s) shallshall notifynotify thethe FinanceFinance DirectorDirector withinwithin threethree businessbusiness daysdays ofof suchsuch aa declinedecline inin thethe requiredrequired rating.rating. TheThe InvestmentInvestment Advisor(Advisor( s)s) andand thethe FinanceFinance DirectorDirector willwill reviewreview thethe individualindividual factsfacts andand circumstancescircumstances ofof thethe situationsituation andand determinedetermine anan appropriate appropriate coursecourse ofof action.action. V.V. BIDBID REQUIREMENT REQUIREMENT AfterAfter thethe FinanceFinance DirectorDirector andand InvestmentInvestment Advisor(Advisor( s)s) havehave determineddetermined thethe approximate approximate maturitymaturity datedate basedbased onon cashcash flowflow needsneeds andand marketmarket conditionsconditions andand havehave analyzedanalyzed andand selectedselected oneone oror moremore optimaloptimal typestypes ofof investments,investments, PagePage 55 ofof 2525 OrdinanceOrdinance 1875,1875, AdoptedAdopted JanuaryJanuary 8,8, 20132013