2025-019 - Statement of Investment Policy

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a bank default and filing for bankruptcy. All securities, excepting investments which are not deliverable (such as LAIF, California CLASS Prime Fund, direct time certificates of deposit, and money market mutual funds), will be received and delivered using standard "delivery versus payment". Delivery versus payment refers to delivery of securities with an exchange of money for the securities at the time of delivery, rather than delivery of securities with an exchange of a signed receipt for the securities. 13.0 DIVERSIFICATION The purpose of diversification is to reduce overall portfolio risk while attaining market rates of return and to enable the City to meet all anticipated cash requirements. The investment portfolio shall consist of various types of securities approved by state statute and this Statement of Investments Policy. Investments shall vary in issuers, asset classes, industries and maturities to meet City's financial obligations. Diversifying the investment portfolio will help mitigate the loss of funds as a result of failure of any one issuer. Investments shall further be diversified between structures and imbedded options within the security. The investments shall be diversified by: • Limiting investments to avoid over-concentration in securities of a specific issuer (excluding treasury bills). • Limiting investment in securities that have higher credit risks. • Limiting certificates of deposit to the maximum federally insured amount. • Investing in securities with varying maturities. • Investing a minimum percentage of the total portfolio as established by the FMSA Investment Advisory Committee in highly marketable short-term treasuries, checking accounts with interest, government pooled account, or a combination of all three (See Section 4.1 (A)(iv)). 14.0 INTERNAL CONTROLS The Executive Director for FMSA is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The Finance Department, with oversight and approval of the Executive Director for FMSA, has developed a system of internal investment controls and a segregation of responsibilities of investment functions in order to assure an adequate system of internal control over the investment function. No investment personnel may engage in an investment transaction except as provided for under the terms of this policy and the procedure established by the Executive Director for FMSA. Internal control procedures address: • Control of collusion City of Santa-Annual Page 16 duly 1.2025 - Statement of Investment Policy June 30,2026 Resolution No. 2025-019 Page 20 of 24