Page 426 - FY 2026-2027 Adopted Budget Book

X. Strategy.

The investment maturity schedule shall correspond with Bedford’s projected cash flow
needs. Remaining maturities on individual investments purchased shall be no longer than 3
years.

With tax -exempt bond or loan proceeds, Bedford shall seek to comply with the arbitrage
regulations and to optimize yield while ensuring the safety of capital and liquidity. It is
fiscally sound to earn and rebate excess earnings, if necessary.

X I. Investment Strategies .

In order to minimize risk of loss due to interest rate fluctuations, investment maturities will not
exceed the anticipated cash flow requirements of the funds. Investment guidelines by fund -
type are as follows:

1. Pooled Investment Funds

Suitability - Any investment eligible in the Investment Policy is suitable for Pooled
Investment Funds.

Safety of Principal - All investments shall be of high quality with no perceived default
risk. Market price fluctuations will occur. However, managing the weighted average
days to maturity of each fund’s portfolio to less than 270 days and restricting the
maximum allowable maturity to the shorter of the anticipated cash flow requirement
or three years will manage the price volatility of the portfolio.

Liquidity - Pooled Investment Funds require the greatest short -term liquidity of any
of the fund - types. Financial institution deposits, short -term investment pools and
money market mutual funds will provide daily liquidity and may be utilized as a
competitive yield alternative to fixed maturity investments.

Marketability - Securities with active and efficient secondary markets are necessary
in the event of an unanticipated cash flow requirement.

Diversification - Investment maturities should be staggered throughout the budget
cycle to provide cash flow based on the anticipated operating needs of Bedford.
Diversifying the appropriate maturity structure up to the three -year maximum will
reduce interest rate risk.

Yield - Attaining a competitive market yield for comparable investment -types and
portfolio restrictions is the desired objective. The yield of an equally weighted, rolling
three -month Treasury Bill portfolio will be the minimum yield objective.

2. Capital Improvement Funds

Suitability - Any investment eligible in the Investment Policy is suitable for Capital
Improvement Funds.

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