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<br /> .- <br /> I <br /> ,e ANNUAL REPORT OF INVESTMENT PROGRAM <br /> AND INVESTMENT ACTIVITY FOR THE <br /> CITY OF ARDEN HILLS <br /> , 1996 <br /> The City's Investment Policy requires that a comprehensive annual report be provided by <br /> I the Treasurer that summarizes the following: <br /> Investment Strategies <br /> I The investment strategy is to approximate the yield on the benchmark two year Treasury <br /> Note while meeting the daily cash needs of the City and conforming to regulatory <br /> I requirements. The objectives of safety and liquidity are balanced through the process of <br /> diversification while maintaining a market rate of return throughout budgetary and <br /> economic cycles. <br /> I Specifically, the objectives for 1996 were to maintain a position where the investment <br /> instruments were diversified by type as suggested by the policy diversification goals as <br /> I well as by maturity. 1996 strategies were further impacted by the following conditions: <br /> Ie a) Budgeted 1997 $1,000,000 City Hall facility construction funding requirements <br /> and possible Gateway Business District land acquisition costs caused the portfolio <br /> to be invested more strongly in cash equivalents than the diversification goals <br /> I suggested in the Investment Policy; and <br /> b) In anticipation of significant City cost participation in near term county projects <br /> I (i.e., Highway 96 reconstruction), the City aggressively advance - encumbered <br /> Municipal State Aid Construction monies in 1996. $1,010,077 was received from <br /> this source in 1996 and is in the equity balance of Fund No. 409 - "Non - <br /> I Assessable Road Improvements". <br /> I Description of Portfolio (as of 12/31196 and 12/31/95) <br /> Recommended <br /> I Policv Goals Actual Portfolio Mix <br /> 12/3l!95 12/31/96 <br /> Cash or Equivalents 15% 27% 34% <br /> I Fixed Rate Instruments (FRI) 65% 50% 52% <br /> Zero Coupon Instruments 20% 230/0 14% <br /> I I <br /> .. <br /> I <br />