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July 1, 2025 - <br />June 30, 2026 <br /> City of Santa - Annual <br />Statement of Investment Policy Page 5 <br /> <br />E. Pre-payment of City debt or contribution servicing obligation. In the <br />event the City is presented with an option for prepayment of a City debt <br />or contribution servicing obligation, the following analysis will be <br />conducted by with regards to a comparison between the amortized <br />savings, which may be realized by exercising such prepayment option <br />and: <br />i. the current portfolio yield; <br />ii. the trend of the debt or contribution servicing obligation; <br />iii. whether variances in the trend are substantial; <br />iv. the City’s net cash position; and <br />v. the market value of investment instrument(s) recommended by <br />staff to be liquidated to fulfill a prepayment election. <br /> <br /> <br />When selling a security prior to maturity, City Investment Officials and/or <br />officers (see generally subsection 5.1 et seq. - Investment Authority and <br />Responsibility) must be prepared to justify the reasons and explain any gains <br />or losses. <br /> <br />Compliance with the investment policy does not measure return, but rather <br />manages risk. Policy compliance does not provide a benchmark to meet or <br />exceed, but is a model to follow. The City will benchmark its investment to <br />an agreed upon treasury index. <br /> <br />The City shall strive to maintain one hundred percent (100%) investment of <br />idle funds after consideration for a compensating balance to cover the cost of <br />services provided by the City’s depository bank. The funds available for <br />investment are determined by cash flow projections updated daily. <br />Investments are monitored so that legal limits on types of investments are not <br />exceeded.