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CITY OF SANTA ANA STATEMENT OF INVESTMENT POLICY <br />JULY 2012-2013 <br />portfolio; or <br /> 3) liquidity needs of the portfolio require that the security be sold. <br /> The market-average rate of return is defined as the average return on three-month U.S. <br />Treasury Bills. <br />The City strives to maintain one hundred percent (100%) investment of idle funds after <br />consideration for a compensating balance to cover the cost of services provided by the bank. The <br />funds available for investment are determined by cash flow projections updated daily. <br />Investments are monitored so that legal limits on types of investments are not exceeded. <br />AUTHORIZED INVESTMENTS <br />: <br />The "prudent person" standard shall be applied in the context of managing the overall portfolio. <br />Investment officers acting in accordance with written procedures and this investment policy and <br />exercising due diligence shall be relieved of personal responsibility for an individual security's <br />credit risk or market price changes, provided deviations from exceptions are reported in a timely <br />fashion and the liquidity and the sale of securities are carried out in accordance with the terms of <br />this policy. Investments shall be made with judgment and care, under circumstances then <br />prevailing, which persons of prudence, discretion, and intelligence exercise in the management of <br />their own affairs, not for speculation, but for investment, considering the probable safety of their <br />capital as well as the probable income to be derived. <br />The City is governed by the California Government Code, Sections 16429.1 and Title 5, Division <br />2, Part1, Chapter 4, entitled Financial Affairs, commencing with section 53630. Santa Ana further <br />restricts the permitted investments to those listed below. Within this scope, the City diversifies its <br />investments by maturity dates and types of investments. Concentration limits are indicated for all <br />investment categories except Treasury securities, which are considered the safest investments. <br />A. United States Treasury Bills, Notes, and Bonds, for which the full faith and credit of the <br />United States are pledged for payment of principal and interest. Purchases of this category <br />shall not exceed five years to maturity. There is no percentage limit in this category. <br />B. Obligations issued by a Federal Agency or a United States Government Sponsored <br />GNMA <br />Enterprise. Federal Agency Issues include, but are not limited to (Government <br />FFCBFHLB <br />National Mortgage Association), (Federal Farm Credit Bank), (Federal Home <br />FHLMCFNMA <br />Loan Bank Board), (Federal Home Loan Mortgage Corporation), (Federal <br />SLMAFHA <br />National Mortgage Association), (Student Loan Mortgage Administration), <br />TVA <br />(Federal Housing Administration) and (Tennessee Valley Authority). Although there is <br />no percentage limitation on these issues, the "prudent <br />Resolution No. 2012-027 <br />Page 5 of 10 <br /> <br />