Page 67 - City of Bedford FY21 Budget

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.

VII. Reporting.

1. Methods. The Director of Finance shall prepare an investment report, at least quarterly,
including a management summary that provides an analysis of the status of the current
investment portfolio and transactions made over the last quarter. This management summary
will be prepared in a manner, which will allow BEDFORD to ascertain whether investment
activities during the reporting period have conformed to the Investment Policy. The report shall
be provided to the City Council. The report will comply with the requirements of the PFIA.

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