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i <br />F -1 • <br />LIQUIDITY <br />Sufficient funding to accommodate at least two- week's projected cash outflow is to be <br />maintained in immediately available investments, such as the State Local Agency <br />Investment Fund, maturing certificates of deposit, or similar liquid instruments. An <br />analysis of cash flow must be conducted at least weekly to serve as the basis for <br />determining appropriate maturities for investments. At no time shall the liquid cash on <br />hand be less than 5 percent of the City's total investment portfolio. For purposes of this <br />policy, cash on hand includes all cash and investments accessible within 48 hours. <br />ACCEPTABLE INVESTMENT INSTRUMENTS <br />The following are types of investments made by the City and the guidelines for <br />investing in each. In all cases, investments shall be made in the context of the "Prudent <br />Man" rule, spelled out in the California Government Code, Section 53600.3 as follows: <br />When investing, reinvesting, purchasing, acquiring, exchanging, selling, <br />or managing public funds, a trustee shall act with care, skill, prudence, <br />and diligence under the circumstances then prevailing, including, but not • <br />limited to, the general economic conditions and the anticipated needs of <br />the agency, that a prudent person acting in a like capacity and familiarity <br />with those matters would use in the conduct of funds of a like character <br />and with like aims, to safeguard the principal and maintain the liquidity <br />needs of the agency. Within the limitations of this section and considering <br />individual investments as part of an overall investment strategy, as <br />authorized by law." <br />In this light, the City of Newport Beach does not purchase or sell securities on margin. <br />Additionally, any institution, which holds either the collateral or the investment <br />instruments themselves in safekeeping for the City, must maintain at least one billion <br />dollars ($1,000,000,000) in assets. <br />A. Certificates of Deposit <br />Only fully collateralized certificates of deposit with FDIC insured institutions <br />will be utilized in investment of City funds. Government securities having a <br />market value of 110 percent of the total amount of investment are acceptable as <br />collateral. Noncollateralized CD investments may be made in amounts less than <br />100,000 so long as they are fully insured by the FDIC. <br />2 9