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Admin Order 44-22-03 -- Investment Policy Update
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Admin Order 44-22-03 -- Investment Policy Update
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7/6/2022 1:57:25 PM
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7/6/2022 1:57:15 PM
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Investment Policy – Page 1 <br />Exhibit A to Administrative Order No. 44-22-03 <br /> <br />Effective July 6, 2022 <br /> <br />City of Eugene <br />Investment Policy <br /> <br />A. Scope and Pooling of Funds <br />This policy applies to the investment of short-term operating funds and capital funds including bond <br />proceeds and bond reserve funds held by the City of Eugene. Investments of employees' retirement <br />funds, deferred compensation plans, and funds held and invested by trustees, escrow agents or fiscal <br />agents are not covered by this policy. In order to provide a comprehensive way of tracking and <br />evaluating where the City’s money is held, this policy also covers bank deposits, except for the City’s <br />checking account which maintains a minimal balance. <br /> <br />Except where legally required to hold separate funds, the City will consolidate cash balances from all <br />funds to maximize investment earnings. Investment income will be allocated to the various funds at <br />least quarterly based on their respective cash balances. <br /> <br />B. General Objectives <br />In accordance with the City’s Financial Management Goals & Policies, Policy E.3, the primary objectives <br />for the investment policy, in priority order, shall be preservation of capital; maintenance of a liquid <br />position; and maximum yield. <br /> <br />1. Safety <br />Safety of principal is the foremost objective of the investment program. Investment decisions shall <br />be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. <br />The objective will be to mitigate credit risk and interest rate risk. <br /> <br />a. Credit Risk: The City will minimize credit risk, the risk of loss due to the financial failure of <br />the security issuer or backer, by: <br />▪ Limiting exposure to poor credits and concentrating the investments in the safest types <br />of securities. <br />▪ Diversifying the investment portfolio so that potential losses on individual securities will <br />be minimized. <br />▪ Actively monitoring the investment portfolio holdings for rating changes, changing <br />economic/market conditions, etc. <br /> <br />b. Interest Rate Risk: The City will minimize the risk that the market value of securities in the <br />portfolio will fall due to changes in general interest rates, by: <br />▪ Structuring the investment portfolio so that securities mature to meet cash <br />requirements for ongoing operations, thereby avoiding the need to sell securities on the <br />open market prior to maturity. <br />▪ Investing operating funds primarily in shorter-term securities or the Local Government <br />Investment Pool. <br /> <br />2. Liquidity <br />The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may <br />be reasonably anticipated.
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