ALP 6

COLORADO WATER RESOURCES AND POWER DEVELOPMENT AUTHORITY
INVESTMENT POLICY
1. Governing Authority
I. Legality
The Colorado Water Resources and Power Development Authority ( "Authority ")
investment program shall be operated in conformance with federal, state, and other legal
requirements, including Colorado Revised Statutes ( "C.R.S. ") Sections 24 -75 -601
through 605, and these guidelines.
H. Scope
This policy applies to the investment of all funds, excluding the investment of employees'
retirement funds. The Authority contributes to the Combined State and School Division Trust
Fund, a cost - sharing multiple - employer defined benefit pension plan administered by the Public
Employees' Retirement Association of Colorado ( "PERA "). The investment of retirement plan
funds is the responsibility of the Board of Directors of the PERA.
III. General Objectives
The primary objectives, in priority order, of investment activities shall be safety, liquidity, and
yield:
I . Safety
Safety of principal is the foremost objective of the investment program. Investments
shall be undertaken in a manner that seeks to ensure the preservation of capital in the
overall portfolio. The objective will be to mitigate credit risk and interest rate risk.
a. Credit Risk
Credit risk is the risk that an issuer or other counterparty to an investment will not
fulfill its obligations. The Authority will minimize credit risk by:
0 Limiting investments to the types of securities listed in Section VI of this
Investment Policy.
• Diversifying the investment portfolio so that the impact of potential losses
from any one type of security or from any one individual issuer will be
minimized. Direct obligations of, or guaranteed by, the U.S. Government are
not subject to credit risk. All other investments are limited to five percent
(5 %) of total investments, except for those investments described in
Subparagraph (d) below.
b. Interest Rate Risk
Interest rate risk is the risk that the fair value of investments may be adversely
affected by changes in interest rates. The Authority will minimize interest rate
risk by:
Approved and Adopted December I; 2006