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The City of Louisville <br />Investment Policy <br />It is the policy of the City of Louisville (the “City”) to invest public funds in a manner which will <br />provide the highest investment return with the maximum security while meeting the daily cash <br />flow demands of the entity and conforming to all Colorado Revised Statutes, the City of <br />Louisville Charter, and the City of Louisville Municipal Code. <br />Scope <br />The provisions of this investment policy shall apply to all funds held in the custody of the Cityof <br />Louisville (the “City”) and all of its offices. Except for cash in certain restricted and special <br />funds, the City shall consolidate, or “pool”, cash and investment balances from all funds to <br />maximize investment earnings and to increase efficiencies with regards to investment pricing, <br />safekeeping, and administrationpool all excess cash for investmentpurposes. The investment <br />income derived from the pooled cash and investment accounts shall be allocated to the <br />contributing variousfunds based upon the proportion of the respective average balances <br />relative to thetotal pooled balanceon their respective participation and in accordance with <br />generally accepted accounting principles.Interest earnings shall be distributed to the individual <br />funds on a monthly basis. <br />Objectives <br />In order of priority, the primary objectives of investment activities shall be safety, liquidity, and <br />yield: <br />Safety.Safety of principal is the foremost objective of the investment program. Investments <br />shall be undertaken in a manner that seeks to ensure the preservation of capital in the <br />overall portfolio through the mitigation of credit risk and interest rate risk. <br />Liquidity. The investment portfolio shall remain sufficiently liquid to meet all operating <br />requirements that may be reasonably anticipated. This isshall be accomplished by <br />structuring the portfolio so that securities mature concurrent with cash needs to meet <br />anticipated demands. Furthermore, since all possible cash demands cannot be anticipated, <br />the portfolio shouldshallconsist largely of securities with active secondary or resale <br />markets. AlternativelyIn addition, a portion of the portfolio maymaybe placed in money <br />market mutual funds of local government investment pools (LGIPs) which offer same-day, <br />constant dollar liquidity for short-term funds. <br />Yield. The investment portfolio shall be designed with the objective of attaining a market <br />rate of return throughout budgetary and economic cycles, taking into account the investment <br />risk constraints and liquidity needs. Return on investment is of secondary importance <br />compared to the safety and liquidity objectives described above. Securities generally shall <br />be held to maturity with the following exceptions: <br /> A security with a declining credit may be sold early to minimize loss of principal. <br />o <br /> A security swap would improve the quality, yield, or target duration of the portfolio. <br />o <br /> Liquidity needs of the portfolio require the security to be sold. <br />o <br />Delegation of Authority <br />The Finance Director shall be the designated investment officer of the City and shall be <br />responsible for all investment decisions and activities, under the direction of the City Manager. <br />11 <br />