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1NVESTMENT POLICY Revised January 2002 1.0 POLICY AND 1NVESTMENT STRATEGY It is the policy of the City of Paris to invest public funds in a manner which will provide the highest investment return with the maxinum security while meeting the daily cash flow demands of the entity and conforming to all state and local statutes governing the investment of public funds. Investment strategies for operating funds have as their primary objective to assure that anticipated flows are matched with adequate investment liquidity. The secondary objective is to create a portfolio structure which will experience minimal volatility during economic cycles. This may be accomplished by purchasing high quality, short to medium securities which will complement each other in a laddered maturity structure. The dollar weighted average maturity target will be 365 days or less. Investment strategies for debt service funds shall have as the primary objective the assurance of investment liquidity adequate to cover the debt service obligation on the required payment date. Securities purchased shall not have a stated final maturity which exceeds the debt service payment date. Investment strategies for debt service reserve funds shall have as the primary objective the ability to generate a dependable revenue stream to the appropriate debt service fund from securities with a low degree of volatility. Securities should be of high quality and consistent with bond ordinance requirements. Short to medium maturities generally meet these requirements. Investment strategies for special projects or special purpose funds will have as their primary objective to assure that anticipated cash flows are matched with adequate investment liquidity. The stated final maturity dates of securities held should not exceed the estimated project or purpose completion date. 2.0 SCOPE This investment policy applies to the funds listed below. These funds are accounted for in the City's Comprehensive Annual Financial Report. 2.1 Consolidated Cash Funds 2.1.01 General Fund 2.1.10 Water and Sewer Fund 2.1.11 Capital Projects Fund 2.1.12 WW/SS Revenue Bond 2000 Construction Fund 2.1.17 Library Construction Fund 2.1.18 Reserved 2.1.19 Reserved 2.1.20 Special Revenue 2.1.21 Child Safety Fund 2.1.22 Health Department 2.1.26 CJD Grant Fund 2.1.40 CO 1993 Construction Fund 2.1.41 Tax & Revenue CO 2000 Construction EXHIBTT A