HomeMy WebLinkAbout1998-16 Authorizing Investment Policy-Repealed by 2009-33
_. ....
RESOLUTION 98-l.te-
A RESOLUTION AUTHORIZING THE INVESTMENT POLICY
OF THE CITY OF ASHLAND AND REPEALING
RESOLUTION NO. 89-26.
Recital: ORS 294.035 prohibits local governments from investing money unless the governing
body of the local government has authorized the investments.
The Mayor and City Council resolve: The investment of City monies in accordance with the
attached policy is authorized.
This resolution supersedes Resolution No. 89-26 authorizing the investment of City monies and
the purchase of Bancroft Bonds.
The foregoing resolution was READ and DULY ADOPTED at the regular meeting of the
Ashl City Council on the 4th day of August, 1998.
SIGNED and APPROVED this 5th day of August, 1998.
Carole wheeidon; Council.Chairperson
Reviewed as to form:
~ I
I
fg~~
Paul Nolte, Attorney
,
CITY OF ASHLAND
INVESTMENT POLICY
Effective August, 1998
..
CITY OF ASHLAND
INVESTMENT POLICY
TABLE OF CONTENTS
PAGE
POLiCy.............................................................................................................1
SCOPE...............................................................................................................1
PRUDENCE.......................................................................................................1
OBJECTIVE......................................................................................................1
SAFETy.............................................................................................................1
LIQUIDITY.. ................... ..... ................ ........... ..... ... ..... ................. ........ ..... ..... ..1
RETURN ON INVESTMENTS........................................................................2
DELEGATION OF AUTHORITY....................................................................2
ETHICS AND CONFLICTS OF INTEREST...................................................2
AUTHORIZED FINANCIAL DEALERS AND INSTITUTlONS...................2
AUTHORIZED & SUITABLE INVESTMENTS.............................................3
INVESTMENT POOLS.....................................................................................3
SAFEKEEPING AND COLLA TERALIZA TION............................................3
ACCOUNTING METHOD...............................................................................3
DIVERSIFICA T10N.........................................................................................4
MAXIMUM MA TURITIES..............................................................................4
INTERNAL CONTROL....................................................................................4
PERFORMANCE ST ANDARDS.....................................................................4
REPORTING.......................................................... ....................................... .4-5
INVESTMENT POLICY ADOPTION.............................................................5
DEFINITIONS..................................................... ............. ........................... ...5-8
City of Ashland Investment Policy Revised August 1998
CITY OF ASHLAND, OREGON
INVESTMENT POLICY (Revised August 1998)
1.0 POLICY. It is the policy of the City of Ashland to invest public funds in a manner which will provide the
highest investment return with the maximum 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.
2.0 SCOPE. This investment policy applies to activities ofthe City of Ashland and Ashland Parks &
Recreation in regard to investing the financial assets of all funds except for funds held in trust for deferred
compensation funds for the Employees of the City of Ashland. In addition, funds held by trustees or fiscal agents
are excluded from these rules; however, all funds are subject to regulations established by the State of Oregon.
Other than bond proceeds or other unusual situations, the estimated portfolio size ranges from $15,000,000 to
$24,000,000.
These funds are accounted for in the City of Ashland's Comprehensive Annual Financial Report and include:
General Fund
Special Revenue Funds
Capital Projects Funds
Debt Service Funds
Enterprise Funds
Internal Service Funds
Trust & Agency Funds
Funds of the City will be invested in compliance with the provisions of, but not necessarily limited to, ORS
294.035 through 294.048; ORS 294.125 through 294.155; ORS 294.810 and other applicable statutes. Investments
of any tax-exempt borrowing proceeds and any related debt service funds will comply with the arbitrage restrictions
in all applicable Internal Revenue Codes.
3.0 PRUDENCE. Investments shall be made with judgement and care, under circumstances then prevailing,
which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for
speculation, but for investment, considering the probable safety of their capital as well as the probable income to be
derived.
3.1 The standard of prudence to be used by investment officials shall be the "prudent person" standard and
shall be aPl'lied in the context of managing an overall portfolio. Investment officers acting in accordance with
written procedures and the investment policy and exercising due diligence shall be relieved of personal
responsibility for an individual security's credit risk or market price changes, provided deviations from expectations
are reported in a timely fashion and appropriate action is taken to control adverse developments.
4.0 OBJECTIVE. The primary objectives, in priority order, of the City of Ashland's investment activities
shall be:
4.1 SAFETY. Safety of principal is the foremost objective of the investment program. Investments of the
City of Ashland shall be undertaken in a manner that seeks to ensure the preservation of capital and the protection of
principal in the overall portfolio. To attain this objective, diversification is required in order that potential losses on
individual securities do not exceed the income generated from the remainder of the portfolio.
4.2 LIQUIDITY. The City of Ashland's investment portfolio will remain sufficiently liquid to enable the
City of Ashland to meet all operating requirements which might be reasonably anticipated.
City of Ashland Investment Policy August 1998
Page I
4.3 RETURN ON INVESTMENTS. The City of Ashland's investment portfolio shall be designed with the
objective of attaining a rate of return throughout budgetary and economic cycles, commensurate with the City of
Ashland's investment risk constraints and the cash flow characteristics of the portfolio. The city may self-finance
the Bancroft Debt in order to reduce the overall debt financing costs.
5.0 DE LEG A TION OF AUTHORITY. Authority to manage the City of Ashland's investment program are
the City Recorder/Treasurer and Director of Finance who are designated as the investment officers of the city and
are responsible for investment decisions and activities, under the review of Ashland City Council. The day to day
administration of the cash management program is handled by the City Recorder/Treasurer or by, the Director of
Finance and the Accounting Supervisor in the absence ofthe Treasurer.
Management responsibility for the investment program is hereby delegated to the City Recorder/Treasurer and
Director of Finance, who shall establish written procedures for the operation of the investment program consistent
with this investment policy and subject to review and adoption by City Council. Procedures should include
reference to; safekeeping, PSA repurchase agreements, wire transfer agreements, banking service contracts and
collateral/depository agreements. Such procedures shall include explicit delegation of authority to persons
responsible for investment transactions. No person may engage in an investment transaction except as provided
under the tenns of this policy and the procedures established by the City Recorder/Treasurer and Finance Director.
The City Recorder/Treasurer and Finance Director shall be responsible for all transactions undertaken and shall
establish a system of controls to regulate the activities of subordinate officials.
6.0 ETHICS AND CONFLICTS OF INTEREST. Investment Officers involved in the investment process
shall refrain from personal business activity that could conflict with proper execution of the investment program, or
which could impair their ability to make impartial investment decisions. Investment Officers shall disclose to the
City Council any material financial interests in financial institutions that conduct business within this jurisdiction,
and they shall further disclose any large personal financial/investment positions that could be related to the
perfonnance of the City of Ashland, particularly with regard to the time of purchases and sales.
7.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS. The investment officers shall
maintain a list of financial institutions authorized to provide investment services. In addition, a list will also be
maintained of approved security broker/dealers selected by credit worthiness who are authorized to provide
investment services in the State of Oregon. Further, there should be in place, proof as to all the necessary
credentials and licenses held by employees of the broker/dealers who will have contact with the City of Ashland as
specified by but not necessarily limited to the National Association of Securities Dealers (NASD), Securities and
Exchange Commission (SEe), etc. Additions Dr deletions to the list will be made at the discretion of the
investment officers.
Securities broker/dealers not affiliated with a bank shall be required to have an office located in Oregon and be
classified as reporting dealers affiliated with the Federal Reserve as primary dealers. These may include "primary"
dealers or regional dealers that qualify under Securities & Exchange Commission rule 15C3-1 (unifonn net capital
rule). No public deposit shall be madeexcept in a qualified public depository as established by state laws.
All financial institutions and broker/dealers who desire to become qualified bidders for investment transactions must
supply the investment officers with the finns most recent financial statements or Consolidated Report of condition
("call report") for review.
An annual reyiew of the financial condition and registrations of qualified bidders will be conducted by the
inyestment officers. A current audited financial statement is required to be on file for each financial institution and
broker/dealer in which the city invests.
8.0 AUTHORIZED & SUITABLE INVESTMENTS. The City of Ashland is empowered by statute to
City of Ashland Investment Policy August 1998
Page 2
invest in the following types of securities.
I. U.S. Treasury Obligations (Bills, notes and bonds)
2. U.S. Government Agency Securities and Instrumentalities of Government Sponsored
Corporations.
3. Bankers' Acceptances (BA's)
4. Certificates of Deposit (CD)
a. Commercial Banks which have a branch in Oregon
b. Savings & Loan Associations which have a branch in Oregon.
5. State & Local Government Securities
6. Commercial Paper (AI, AA,PI)
7. State of Oregon Investment Pool
8. Repurchase Transactions
In selecting authorized investments consideration will be given to credit ratings on commercial paper, bankers
acceptances, and collateralization of applicable instruments. If repurchase agreements are authorized, a Master
Repurchase Agreement must be signed with the bank or dealer.
Before the investment officers invests funds or sells securities prior to their maturity, competitive offers or bids will
be sought from two institutions. The most favorable offer or bid will be awarded the transaction.
9.0 INVESTMENT POOLS. A thorough investigation of the pooVfund is required prior to investing, and on
. a continual basis. There shall be an annual reyiew which will answer the following general questions:
I. A description of eligible investment securities, and a written statement of investment policy and
objectives.
2. A description of interest calculations and how it is distributed, and how gains and losses are
treated.
3. A description of how the securities are safeguarded (including the settlement processes), and how
often are the securities priced and the program audited.
4. A description of who may invest in the program, how often, what size deposit and withdrawal.
5. A schedule for receiving statements and portfolio listings.
6. Are reserves, retained earnings, etc. utilized by the pooVfund?
7. A Fee schedule, and when and how is it assessed.
8. Is the pooVfund eligible for bond proceeds and/or will it accept such proceeds?
10.0 SAFEKEEPING AND COLLATERALIZATION. Purchased investment securities will be delivered by
either Fed book entry, DTC, or physical delivery, and held in third party safekeeping with a designated custodian.
The trust department of a bank may be designated as custodian for safekeeping securities purchased from that bank.
The purchase and sale of securities will be on a delivery versus payment basis. The custodian shall issue a
safekeeping receipt to the City of Ashland listing the specific instrument, selling broker/dealer, issuer, coupon,
maturity, CUSIP number, purchase or sale price, transaction date, and other pertinent information. Delivery versus
payment will also be required for all repurchase transactions and with the collateral priced and limited in maturity in
compliance with ORS 294.035 (II). Demand and time deposits shall be collateralized through the State collateral
pool as required by statute for any excess over the amount insured by an agency of the U.S. government Repurchase
agreement collateral will be limited in maturity to three years and priced according to percentages prescribed by
written policy of the Oregon Investment Councilor the Oregon Short-Term Fund Board.
11.0 ACCOUNTING METHOD. The City of Ashland shall comply with all required legal provisions and
Generally Accepted Accounting Principles (GAAP). The accounting principles are those contained in the
pronouncements of authoritative bodies including, but not necessarily limited to, the American Institute of Certified
Public Accountants (AICPA); the Financial Accounting Standards Board (FASB); and the Government Accounting
City of Ashland Investment Policy August 1998
Page 3
Standards Board (GASB).
12.0 DlVERSIFICA TION. The City will diyersify its investments by security type and institution. With the
exception of U.S. Treasury, Government Agency Securities and authorized pools, no more than 50% of the cities
total investment portfolio will be invested in a single security type or with a single financial institution.
Diversification bv instrument % of oortfolio
U.S. Treasury Obligations 100%
U.S. Government Agency Securities and
Instrumentalities of Government Sponsored Corp.
100%
Bankers' Acceptances (BA's)
50%
Certificates of Deposit (CD)
35%
State & Local Government Securities
35%
Repurchase Transactions
25%
Commercial Paper (AA,A I ,P I)
10%
State of Oregon Investment Pool Securities
100%
The investment officers will routinely monitor the contents of the portfolio comparing the holdings to the markets,
relative values of competing instruments, changes in credit quality, and benchmarks. If there are advantageous
transactions, the portfolio may be adjusted accordingly, but not to exceed % as stated.
13.0 MAXIMUM MATURITIES. To the extent possible, the city will attempt to match its investments with
anticipated cash flow requirements. Unless matched to a specific cash flow, the city will not directly invest in
securities maturing more than 18 months from the date of purchase. All investments with maturities in excess of
one year shall pay interest at least annually.
1. Under 30 days
2. Under 90 days
3. Under 270 days
4. Under I year
5. Under 18 months
6. Under 3 years
10% minimum
25% minimum
50% minimum
75% minimum
80% minimum
100% minimum
14.0 INTERNAL CONTROL. The investment officers shall maintain a system of written internal controls
which shall be reviewed and tested by the independent auditor at least annually or upon any extraordinary event,
i.e., turnover of key personnel, the discovery of any inappropriate activity to assure compliance with policies and
procedures.
15.0 PERFORMANCE STANDARDS. The investment portfolio shall be designed with the ohjective of
obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk
constraints and the cash flow needs.
The city's investment strategy is active. Given this strategy, the basis used by the investment officers to determine
whether market yields are being achieved shall be the six-month U.S. Treasury Bill and the Oregon Local
Government Investment Pool using the monthly net yield of both portfolio's as the yardstick..
16.0 REPORTING. The investment officers shall provide to City Council quarterly investment reports which
City of Ashland Investment Policy August 1998
Page 4
provide a clear picture of the status of the current investment portfolio. The report should include data on
investment instruments being held, as well as any narrative necessary for clarification.
In addition, monthly reports shall be prepared with the following infonnation:
I. A listing of individual securities held at the end of the reporting period by authorized investment
category.
2. Average life and final maturity of all investments listed.
3. Coupon, discount or earnings rate.
4. Par value of each investment.
5. Percentage of the Portfolio represented by each investment category.
17.0 INVESTMENT POLICY ADOPTION. The City of Ashland's investment policy shall be fonnally
adopted by resolution by the City Council. If investments exceeding a maturity of eighteen months are
contemplated, further review and comment by the Oregon Short- Tenn Fund Board will be sought; and thereafter,
this policy will be re-adopted annually even if there are no changes. '
18.0 DEFINITIONS. It is the policy of the City of Ashland to invest public funds in a manner which will
provide the highest investment return with the maximum security while meeting the daily cash flow demands of the
entity and confonning to all state and local statutes governing the investment of public funds.
AGENCIES. Federal agency securities.
ASKED. The price at which securities are offered.
BANKERS' ACCEPTANCE (BA). A draft or bill or exchange accepted by a bank or trust company. The
accepting institution guarantees payment of the bill, as well as the issuer.
BID. The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.) See Offer.
BROKER. A broker brings buyers and sellers together for a commission.
CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate. large-
denomination CD's are typically negotiable.
COLLATERAL. Securities, evidence of deposit or other property which a borrower pledges to secure repayment
ofa loan. Also refers to securities pledged by a bank to secure deposits of public monies.
COMMERCIAL PAPER. Short-term unsecured promissory note issued for a specified dollar amount with a
maturity that can be tailored to meet an investor's needs. Notes have maximum maturities of270 days, but the
majority of CP is issued in the 30-50 day maturity range.
COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR). The official annual report for the City of
Ashland. It includes five combined statement of each individual fund and account group prepared in confonnity
with GAAP. It also includes supporting schedules necessary to demonstrate compliance with finance related legal
and contractual proyisions, extensive introductory material, and a detailed Statistical Section.
COUPON.
(aJ
The annual rate of interest that a bond's issuer promises to pay the bondholder on the
bond's face value.
A certificate attached to a bond evidencing interest due on a payment date.
(b)
DEALER. A dealer, as opposed to a broker, acts as principal in all transactions, buying and selling for his/her own
City of Ashland Investment Policy August 1998
Page 5
account.
DEBENTURE. A bond secured only by the general credit ofthe issuer.
DELIVERY VERSUS PAYMENT. There are two methods of delivery of securities: delivery versus payment and
delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the
securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.
DERIVATIVES. (I) Financial instruments whose return profile is linked to, or derived from, the movement of
one or more underlying index or security, and may include index or security, and may include a leveraging factor,
or (2) Financial contracts based upon nominal amounts whose value is derived from an underlying index or security
(interest rates, foreign exchange rate, equities or commodities).
DISCOUNT. The difference between the cost price of a security and its maturity when quoted at lower than face
value. A security selling below original offering price shortly after sale also is considered to be at a discount.
DISCOUNT SECURITIES. Non-interest bearing money market instruments that are issued at a discount and
redeemed at maturity for full face value, e.g. U.S. Treasury Bills.
DIVERSIFICATION. Dividing investment funds among a variety of securities offering independent returns.
FEDERAL CREDIT AGENCIES. Agencies of the Federal Goyemment set up to supply credit to various classes
of institutions and individuals, e.g. S&L's, small business finns, students, fanners, fann cooperatives, and exporters.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC). A federal agency that insures bank deposits,
currently up to $100,000 per deposit.
FEDERAL FUNDS RATE. The rate of interest at which Fed funds are traded. This rate is currently pegged by the
Federal Reserve through open-market operations.
FEDERAL HOME LOAN BANKS (FHLB). Government sponsored wholesale banks (currently 12 regional
banks) which lend funds and provide correspondent banking services to member commercial banks, thrift
institutions, credit unions and insurance companies. The mission of the FHLBs is to liquefy the housing related
assets of its members who must purchase stock in their district bank.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA). FNMA, like GNMA was chartered under the
Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of
the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage
funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder.owned corporation. the
corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate
mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that
all security holders will receive timely payment of principal and interest.
FEDERAL OPEN MARKET COMMITTEE (FOMC). Consists of seven members of the Federal Reserve Board
and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a
pennanent member, while the other Presidents serve on a rotating basis. The committee periodically meets to set
Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means
of influencing the volume of bank credit and money.
FEDERAL RESERVE SYSTEM. The central bank of the United States created by Congress and consisting ofa
seven member Board of Governors in Washington D.C., 12 regional banks and about 5,700 commercial banks that
City of Ashland Investment Policy August 1998
Page 6
, .
are members ofthe system.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae). Securities influencing
the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and
loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S.
Government. Ginnie Mae securities are backed by the FHA, V A or FMHM mortgages. The tenn "pass throughs" is
often used to describe Ginnie Maes.
LIQUIDITY. A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of
value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and
reasonable size can be done at those quotes.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP). The aggregate of all funds from political subdivisions
that are placed in the custody of the State Treasurer for investment and reinvestment.
MARKET VALUE. The price at which a security is trading and could presumably be purchased or sold.
MASTER REPURCHASE AGREEMENT. A written contract covering all future transactions between the parties
to repurchase--reverse repurchase agreements that establishes each party's rights in the transactions. A master
agreement will often specifY, among other things, the right of the buyer-lender to liquidate the underlying securities
in the event of default by the seller-borrower.
MATURITY. The date upon which the principal or stated yalue of an inyestment becomes due and payable.
MONEY MARKET. The market in which short-tenn debt instruments (bills, commercial paper, bankers'
acceptances, etc.) are issued and traded.
OFFER. The price asked by a seller of securities. (When you are buying securities, you ask for an offer.) See Asked
and Bid.
OPEN MARKET OPERATIONS. Purchases and sales of government and certain other securities in the open
market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money
and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and
credit; sales have the opposite effect. Open market operations are the Federal Reserve's most important and most
flexible monetary policy tool.
PORTFOLIO, Collection of securities held by an investor.
PRIMARY DEALER. A group of government securities dealers who submit daily reports of market activity and
positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its infonnal
oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker-dealers,
banks and a few unregulated finns.
PRUDENT PERSON RULE, An investment standard. In Oregon the law requires that a fiduciary, such as a
trustee, may invest money only in a list of securities selected by the custody state--the so-called legal list. In other
states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and
intelligence who is seeking a reasonable income and preservation of capital.
QUALIFIED PUBLIC DEPOSITORIES, A financial institution which does not claim exemption from the
payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for
the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has
City of Ashland Investment Policy August 1998
Page 7
~ .
been approved by the Public Deposit Protection Commission to hold public deposits.
RATE OF RETURN. The yield obtainable on a security based on its purchase price or its current market price.
This may be the amortized yield to maturity on a bond the current income return.
REPURCHASE AGREEMENT (RP or REPO). A holder of securities sells these securities to an investor with an
agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller"
money for the period of the agreement, and the terms of the agreement are structured to compensate him/her for
this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is
lending money, that is, increasing bank reserves,
SAFEKEEPING. A service to customers rendered by banks for a fee whereby securities and valuable of all types
and descriptions are held in the bank's vaults for protection.
SECONDARY MARKET. A market made for the purchase and sale of outstanding issues following the initial
distribution.
SECURITIES & EXCHANGE COMMISSION. Agency created by Congress to protect inyestors in securities
transactions by administering securities legislation.
SEC RULE I5C3-I. See Uniform Net Capital Rule.
STRUCTURED NOTES. Notes issued by Government Sponsored Enterprises (FHLB, FNMA, SLMA, etc.) and
Corporations which have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivatiye-
based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates,
the volatility ofthe imbedded options and shifts in the shape of the yield curve.
TREASURY BILLS. A non-interest bearing discount security issued by the U.S. Treasury to finance the national
debt. Most bills are issued to mature in three months, six months, or one year.
TREASURY BONDS. Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S.
Government and having initial maturities of more than 10 years.
TREASURY NOTES. Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the
U.S. Government and having initial maturities from_two to 10 years.
UNIFORM NET CAPITAL RULE. Securities and Exchange Commission requirement that.memberfirms as well
as nonmember broker-dealers in securities maintain a ratio of indebtedness to liquid capital of 15 to I; also called
net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and
commitments to purchase securities, one reason new public issues are spread among members of underwriting
syndicates. Liquid capital includes cash and assets easily converted into cash.
YIELD. The rate of annual income return on an investment, expressed as a percentage.
(a) INCOME YIELD is obtained by dividing the current dollar income by the current market price
for the security.
(b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above
par or plus any discount from par in purchase price, with the adjustment spread over the period
from the date of purchase to the date of maturity of the bond.
City of Ashland Investment Policy August 1998
Page 8