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<br /> I <br /> I. CITY OF ARDEN HILLS <br /> MEMORANDUM <br /> I <br /> DATE: August 16, 1995 <br /> I TO: Brian Fritsinger, City Administrator <br /> I FROM:@:Jrerrance Post, City Accountant <br /> SUBJECT: Revisions to City Investment Policy <br /> I <br /> I Backl!round <br /> The City of Arden Hills adopted a formal Investment Policy on April 8, 1991 by Resolution 91- <br /> 29. This policy resulted from collaborative efforts of the City Treasurer, the Citizen Finance <br /> I Committee, and the City Administrator. <br /> A major thrust of this new policy was to allow for diversification of investment types as <br /> I permitted by Minnesota Statute. In theory, this diversification would allow for maximization of <br /> yield within the safety parameters of Minnesota Statute permitted investments. <br /> .. Subsequent Experience <br /> Treasury investment decisions have complied with the Investment Policy. However, one <br /> permitted investment category (non-money market mutual funds) has raised questions as to <br /> I appropriateness. This was the one element of the portfolio that was difficult to ladder because of <br /> the lack of a maximum maturity. In addition, the City's recent experience with the Piper <br /> Government Income Portfolio has demonstrated the higher risk/rewards associated with this type <br /> I of investment. <br /> Finance Committee Inl;)ut <br /> I During 1995, the Finance Committee has had discussions regarding reexamining the City's <br /> existing Investment Policy. The discussion themes were to simplify the existing policy, limit <br /> investment alternatives, and generally emphasize safety over yield considerations. <br /> I Draft Revised Policy <br /> A copy of a revised Investment Policy is enclosed for your review. The revision incorporates <br /> I many of the suggestions of the Finance Committee. Specifically, the following changes should <br /> be noted: <br /> I I. Limiting investment options to government and agency issues. This makes the <br /> Investment Policy more restrictive than the scope permitted investments allowed <br /> by Minnesota Statute. <br /> I 2. Eliminating non-money market mutual funds as an investment option. <br /> ~ , Specifically excluding mortgage backed securities from the portfolio. <br /> J. <br /> I <br />