A. Short-Term Investments (STIs). STIs shall be managed in such a way as to ensure that realized losses do not occur. Risk that the maturity of an investment will lengthen or extend is not acceptable.

B. Long-Term Reserve Investments (LTRIs). Higher level of risk is acceptable with LTRIs than with STIs, as LTRIs are to be made with longer maturities in order to achieve a higher rate of return. LTRIs must be made in such a way as to minimize chance of loss of investment principal. It is acknowledged that the nature of such investments may cause substantial unrealized book losses to occur if interest rates rise sharply and, in the case of mortgage-backed securities, maturity extensions to occur. (Ord. 07-08-164 § 4)