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I. Scope <br />The investment policy shall apply to funds under the control of the City of Casselberry, Florida ("City") <br />in excess of those required to meet current expenses. The policy applies to all financial assets of the City <br />of Casselberry under the control of the finance director except as noted below. This investment policy <br />shall not apply to pension funds, including those funds in Florida Statutes chapters 175 and 185. Nor shall <br />this investment policy apply to funds related to the issuance of debt where there are other existing policies <br />or indentures in effect for such funds. The Finance Director or duly authorized personnel will consolidate, <br />where practicable and allowable, for the purposes of investment, cash balances and investments from all <br />funds covered by this policy to maximize investment earnings and reduce risks. The investment of funds <br />shall comply with all controlling state statutes, ordinances and covenants covering the City's investments. <br />II. General Objectives <br />The primary objectives, in priority order, of investment activities shall be safety, liquidity, yield, and <br />transparency: <br />1. Safety- The primary objective shall be the preservation of capital and the protection of <br />principal. Investments shall be undertaken in a manner that seeks the preservation of capital in the <br />overall portfolio. The objective will be to limit credit risk and interest rate risk to a level <br />commensurate with the risks associated with prudent investment practices and performance <br />benchmarks, if applicable. <br />Risks — The city recognizes that investment risks can result from issuers defaults, market price <br />changes or various technical complications leading to temporary liquidity. Portfolio diversification <br />is employed as a way to control risk. Investment managers are expected to display prudence in the <br />selection of securities, as a way to minimize default risk. No individual investment transaction <br />shall be undertaken which jeopardizes the total capital position of the overall portfolio. In the event <br />of a default by a specific issuer, the investment manager shall review, and if appropriate, proceed <br />to liquidate securities having comparable credit risks. To control market price risks, volatile <br />investment instruments shall be avoided. <br />2. Liquidity — The City's investment portfolio will be operated in such a manner as to ensure <br />the City is able to meet operating requirements which might be reasonably expected. This is <br />accomplished by structuring the portfolio so that securities mature to meet anticipated demands <br />(static liquidity). Furthermore, since all possible cash demands cannot be anticipated, the portfolio <br />should consist largely of securities with active secondary or resale markets (dynamic liquidity). <br />The portfolio may be placed in local government investment pools or money market mutual funds <br />that offer same-day liquidity for short-term funds. <br />3. Investment Income - The investment portfolio shall be designed with the objective of <br />attaining a market rate of return, as measured by specified benchmarks, throughout budgetary and <br />economic cycles, taking into account the investment risk constraints and liquidity needs. Return <br />on investment is of secondary importance compared to the safety and liquidity objectives described <br />above. <br />2 <br />