Page 4 - City of Moreno Valley Invstment and Cash Management Program
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Why Does The City
        HAVE INVESTMENTS?






                In general the city uses revenues received during the current year to fund the operations of
                the city during that year. The City records these revenues into funds; such as, the general
                fund, capital project funds, or reserve funds. Certain funds are used to hold and accumulate
                resources that will be spent in the future to complete a capital project or purchase equipment
                or other long-term type asset. These funds are waiting to be disbursed at a future date and can
                be described as “Idle”. Instead of letting these funds sit idle, the City invests into a diversified
                portfolio  in a manner  that preserves  capital  and generates  additional  revenues  that can be
                utilized to support City services.

        CITY PORTFOLIO OBJECTIVES


        The City manages its portfolio with the focus on three objectives:




                     1                                     2                                      3









                    Safety                              Liquidity                                Yield
              Preserve capital in              Provide  adequate  liquidity              Achieve a reasonable
              the overall portfolio              to  meet cash flow needs                     rate of return






           Safety

           Safety is always the primary objective followed closely by Liquidity. All investments carry some degree
           of risk; and in general, more risk is required the higher the desired return on investment. The California
           Government Code and the City’s Investment Policy deal specifically with the Safety concept in their
           sections that limit the types of allowable investments, which will be discussed in the next section.


           Liquidity

           Liquidity measures the ease of which a particular asset can be converted into cash. A certain amount
           of liquidity is important in an investment portfolio as it allows the City to quickly meet changing financial
           obligations. The City maintains a Liquidity or Core Portfolio that has been specifically designed to meet
           our day-to-day obligations.







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