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VII. INVESTMENT MATURITY AND LIQUIDITY <br />A. To the extent possible, an attempt will be made to match investment maturities <br />with known cash needs and anticipated cash flow requirements. Investments <br />of current operation funds shall have maturities of no longer than twelve (12) <br />months. Investments of bond reserves, construction funds, and other non- <br />operating funds shall have a term appropriate to the need for funds and in <br />accordance with debt covenants, but in no even shall exceed three (3) years. <br />The maturities of the underlying securities of a repurchase agreement will <br />follow the requirements of the Master Repurchase Agreement. <br />B. Investments do not necessarily have to be made for the same length of time <br />that the funds are available. The basic criteria for consideration of <br />investments are listed below: <br />1. Keep maturities short in a period of constantly rising interest rates <br />based on treasury bill auctions or the daily Federal Funds rate. <br />2. Keep maturities short in a period of inverted treasury yield curve <br />(short-term rates are higher than the long-term rates). <br />3. Maturities should be lengthened when the treasury yield curve is <br />normal and is expected to remain whole. <br />4. Maturities should be lengthened when interest rates are expected to <br />fall based on economic reports taken as a whole. <br />5. The yield curves of the market should be analyzed for significant <br />breaks in yields over various maturity dates. The points at which <br />the yield curve breaks are the points at which there are significant <br />marginal declines in yields for incremental changes in maturity <br />dates. Investments should be made at these breaks in the yield <br />curve so that yields will be maximized. <br />VIII. BID POLICY <br />After the Finance Director or staff has determined the approximate maturity date <br />based on cash flow needs and market conditions and has analyzed and selected <br />one or more optimal types of investment, a minimum of three (3) banks and/or <br />dealers must be contacted and asked to provide bids on the securities in <br />question. To the extent permitted by law, bids will be held in confidence until <br />the highest bid is determined and awarded. If the maturing investment is a <br />certificate of deposit, then one of the contacts shall be the present holder of the <br />funds subject to the portfolio diversification requirements in this policy. Due to <br />the cost of safekeeping, one business day repurchase agreements and overnight <br />sweep repurchase agreements will not be bid, but may be placed with the <br />depository bank relating to the demand account for which the repurchase <br />agreement was purchased. This bid policy shall not apply to investments <br />authorized in Section A. <br />IX.. RISK AND DIVERSIFICATION <br />Assets held shall be diversified to control the risk of loss resulting from <br />overconcentration of assets in a specific maturity, issuer, instrument, dealer or <br />bank through which these instruments are bought and sold. The appropriate <br />management staff shall review and revise periodically as necessary the <br />diversification strategies within the established guidelines. <br />X. AUTHORIZED INVESTMENT INSITUTIONS AND DEALERS <br />The Finance Director shall only purchase securities from financial institutions <br />that are qualified as public depositories by the Treasurer of the State of Florida <br />