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Director Memorandum No. 17-001 Page 4 of 9

this investment policy. No person may engage in an investment transaction except as provided
under the limits of this policy. The District Investment Officer shall maintain investment
instructions for internal and external management of investments consistent with State
Government Code requirements. The District may contract for the use of investment manager
services subject to all other provisions of this Investment Policy. The District Investment Officer
shall maintain a list of authorized broker/dealers and financial institutions that are approved for
investment purposes, and it shall be the policy of the District staff to purchase securities only from
those authorized institutions or firms.

4) Investment Oversight Committee

There is hereby established an Investment Oversight Committee, which shall consist of the
Investment Officer, the District’s Controller and the members of the Board of Directors.

It shall be the responsibility of the Committee to:

A. Review changes in investment practices of the Investment Officer for compliance
with the Investment Policy and investment transaction instructions and
procedures;

B. Review the District’s monthly Unaudited Financial Report for adherence to this
Investment Policy and investment instructions and procedures in the event that
said Report is not presented at a workshop of the Board; and

C. Identify any deviations from the Investment Policy or any investment instructions
or procedures which are deemed imprudent.

To maintain full financial transparency of the District’s operations, an unaudited financial report
will be provided monthly to the Board of Directors at a workshop meeting prior to being presented
at a board meeting. The presentation of the monthly financial report shall be the preferred
mechanism to be used to provide all financial information to the entire Board and the public.

5) Ethics and Conflict of Interest

Officers and employees involved in the investment process shall refrain from personal business
activities that could conflict with proper execution of the investment program, or which could impair
their ability to make impartial decisions. Officers and employees involved in the investment
process shall abide by the District’s Conflict of Interest Code, California Government Code,
Section 1090 and the California Political Reform Act.

6) Authorized and Acceptable Investments

Government Code, Section 53601 sets forth the eligible investments for the District. All
investments purchased for the District shall be delivered, either by book entry or physical delivery,
to the District’s third party custodian. All investments of the District shall have the Yucaipa Valley
Water District as registered owner.

A. As to the District’s surplus funds generally (excluding funds from bond proceeds),
the District’s Investment Officer is authorized to invest such funds as follows:

1. Local Agency Investment Fund - The District Investment Officer may invest
in the Local Agency Investment Fund (LAIF) established by the State
Treasurer for the benefit of local agencies. There is no minimum
investment period and the minimum transaction is $5,000, in multiples of

Yucaipa Valley Water District - January 3, 2017 - Page 22 of 120