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day-to-day operation of the investment process program is handled by the Budget/Treasury <br />section. <br />The investment officer is responsible for setting investment policy and guidelines subject to <br />review and adoption by the City Council and, if required, review and comment by the Oregon <br />Short-Term Fund Board. Further, the Deputy Treasurer is the portfolio manager and makes <br />investments, under the general direction of the Finance Director, and is responsible for the day- <br />to-day operations of the investment process which includes, but is not limited to, choosing what <br />to buy or sell, from whom investments will be purchased, executing the buy/sell orders, <br />producing necessary reports, and supervising staff. In addition to the active management of the <br />investment portfolio, the Deputy Treasurer is responsible for the maintenance of other written <br />administrative procedures consistent with this policy and the requisite compliance. To further <br />optimize the total return of the investment portfolio, the Deputy Treasurer will administer an <br />active cash management program, the goal of which will be to maintain historical cash flow <br />information, i.e. debt service; payroll; revenue receipts; and extraordinary expenditures. <br />In order to optimize total return through active portfolio management, resources will be allocated <br />to the Budget/Treasury's cash management program. This commitment of resources will include <br />financial and staffmg considerations. <br />PRUDENCE <br />The standard of prudence used by the investment officer and staff in the context of managing the <br />overall portfolio shall be the prudent investor rule, which states: "Investments shall be made <br />with judgment and care, under circumstances then prevailing, which persons of prudence, <br />discretion and intelligence exercise in the management of their own affairs, not for speculation, <br />but for investment, considering the probable safety of their capital as well as the probable income <br />to be derived." <br />MONITORING AND ADJUSTING THE PORTFOLIO <br />The Deputy Treasurer will routinely monitor the contents of the portfolio, the available markets <br />and the relative values of competing instruments and will adjust the portfolio accordingly. <br />If, due to unanticipated cash needs, the investment in any security type or fmancial institution <br />exceeds the limitations in this policy, or if the credit rating of a security type or fmancial <br />institution is lowered after an investment is purchased, the Deputy Treasurer is responsible for <br />bringing the investment portfolio back into compliance as soon as practicable. <br />INTERNAL CONTROLS <br />The Deputy Treasurer will maintain a system of written internal controls which will be reviewed <br />annually by the independent auditor or upon any extraordinary event, i.e. turn-over of key <br />personnel, the discovery of any inappropriate activity. The controls will be designed to prevent <br />loss of public funds due to fraud, error, misrepresentation, or imprudent actions. <br />2005 MWMC Financial Plan -Appendix IV Page 46 <br />