Background/Summary:
Effective cash management includes investment of available or idle funds. The City of Peoria invests all available funds, taking into consideration anticipated cash flow requirements and the safety and risk of investments. Investments are made in accordance with the City’s Investment Policy and Arizona Revised Statues Title 35-321 through 35-329. The primary objective of the City’s investments, in order of priority, is:
1. Safety – Investments shall be undertaken in a manner that seeks to insure the preservation of capital in the portfolio.
2. Liquidity - The investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated.
3. Yield – The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the City’s very strict risk constraints.
Public funds may only be invested in authorized and suitable investments such as US Treasury Obligations, US Agency Obligations, Certificates of Deposits, Commercial Paper rated A-1/P-1, Corporate Notes rated AA or better, Money Market Funds and the Arizona State Investment Pool.
Investment in stocks, mutual funds, hedge funds, real estate, foreign investments or other risky or alternative investments are strictly prohibited.
The Investment Policy imposes a 3 year maximum weighted average maturity on the overall investment portfolio with specific maximum maturities for each type of investment.
The City utilizes FirstSouthwest, an investment advisory firm, to provide advice and assist with managing its investments. All securities are held by a third party custodian in the City’s name.
Quarterly investment reports are provided to City Council to report the investment portfolio holdings, maturity distribution, investment performance and compliance with the Investment Policy.