Page 26 - Yucaipa Valley Water District

Director Memorandum No. 17-001 Page 8 of 9

7) Nondiscrimination

Investments shall not knowingly be made in any institution that practices or supports directly or
indirectly through its actions discrimination on the basis of race, religion, color, creed, national or
ethnic origin, age, gender, or physical disability.

8) Maximum Maturity

Investment maturities shall be based on a review of cash flow forecasts. Maturities will be
scheduled so as to permit the District to meet all projected obligations. No investment shall be
made in any security, other than a security underlying a repurchase or reverse repurchase
agreement that at the time of the investment has a term remaining to maturity in excess of five
years.

9) Ineligible Investments

Any security type or structure not specifically approved by this policy and investment instructions
is specifically prohibited. Security types that are thereby prohibited to be purchased include, but
are not limited to:

A. Complex derivative structures such as range notes, inverse floaters, or any other
complex variable rate or structure note.

B. Interest-only strips that are derived from a pool of mortgages, or any security that
could result in zero interest accrual if held to maturity.

10) Sales Prior to Maturity

Sales prior to maturity are permitted. It is also recognized that in a changing interest rate
environment, it may be financially advantageous to sell investments at a book value loss in order
to reinvest in a more profitable security.

11) Reporting

The District Investment Officer shall render to the Board of Directors a monthly report which shall
include the following information for investments:

1
• Distribution of funds within all financial accounts maintained by the District;
• Summary of investments including the types of investments, maturity date, yield, costs
2
and market value;
• Detailed money market investment account activity associated with the purchase of U.S.

Treasuries; ²
• The current balance, accrued interest and historical effective yield of funds managed by
the Local Agency Investment Fund (LAIF).²

The monthly report shall also:

A. State compliance of the portfolio to this Investment Policy and State law, or state
the manner in which the portfolio is not in compliance.

1 This report component is contained within the monthly Unaudited Financial Report.
2 This report component is contained within the Investment Summary of the monthly Unaudited Financial Report.

Yucaipa Valley Water District - January 3, 2017 - Page 26 of 120