Page 65 - City of Bedford FY20 Approved Budget

valuation of securities. The agreement must clearly state that the custodian bank is instructed to
release purchased and collateral securities to BEDFORD in the event BEDFORD has
determined that the financial institution has failed to pay on any matured investments, or has
determined that the funds of BEDFORD are in jeopardy for whatever reason, including
involuntary closure or change of ownership. A clearly marked evidence of the pledge and legal
ownership must be supplied to BEDFORD and retained by BEDFORD.

3. Repurchase Agreements. Repurchase agreements shall be consistent with the PFIA and
GFOA Recommended Practices on Repurchase Agreements.

VI. Investment Parameters

1. Diversification. The investments shall be diversified by:

a. Limiting investments to avoid over concentration in securities from a specific issuer
or business sector (where appropriate),

b. Limiting investment in securities that have higher credit risks,

c. Investing with varying maturities, and

d. Continuously investing a portion of the portfolio in readily available funds such as
financial institution deposits, local government investment pools, money market
funds, or overnight repurchase agreements to ensure that appropriate liquidity is
maintained in order to meet ongoing obligations.

2. Maximum Maturities. To the extent possible, BEDFORD shall attempt to match its
investments with anticipated cash flow requirements. Unless matched to a specific cash flow,
BEDFORD will not directly invest in instruments maturing more than three (3) years from the
date of purchase or in accordance with state and local statutes and ordinances. BEDFORD shall
adopt weighted average maturity limitations (which often range from 90 days to 3 years),
consistent with the investment objectives.

Reserve funds and other funds with longer-term investment horizons may be invested in
instruments exceeding three (3) years if the maturity of such investments is made to coincide as
nearly as practicable with the expected use of funds. The intent to invest in instruments
maturing greater than three (3) years shall be disclosed in writing to the City Council.

Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of
the portfolio should be continuously invested in readily available funds such as financial
institution deposits, investment pools, money market funds, or overnight repurchase agreements
to ensure that appropriate liquidity is maintained to meet ongoing obligations.

3. Competitive Environment. In order to create a competitive pricing environment for each
investment transaction, including certificates of deposit, BEDFORD shall solicit quotations
from multiple providers.

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