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<br />CITY OF ARDEN HILLS <br /> <br />ANNUAL REPORT OF INVESTMENT PROGRAM <br />AND INVESTMENT ACTIVITY <br />1998 <br /> <br />The City's Investment Policy requires that a comprehensive annual report be provided by the <br />Treasurer that summarizes the following: <br /> <br />Investment Strategies <br /> <br />The investment strategy is to approximate the yield on the benchmark two year Treasury Note <br />while meeting the daily cash needs of the City and conforming to regulatory requirements. The <br />objectives of safety and liquidity are balanced through the process of diversification, while <br />maintaining a market rate of return throughout budgetary and economic cycles. <br /> <br />Specifically, the objectives for 1998 were to maintain a position where the investment <br />instruments were diversified by type as suggested by the policy diversification goals, as well as <br />by maturity. The portfolio maintained a much stronger position in cash and cash equivalents than <br />that required by policy goals because of the following considerations: <br /> <br />a) <br /> <br />City Hall facility reconstruction costs are currently estimated in the $2,300,000 range; and <br /> <br />b) <br /> <br />Gateway Business District (TIF District #2) bond proceeds of $3, I 00,000 for engineering <br />services, legal services, utilities, land acquisition, site improvements, and street <br />construction public improvements were expected to be largely expended in 1998. <br /> <br />Description of Portfolio (as of12/31/97 and 12131/96) <br /> <br />Cash or Equivalents <br />Fixed Rate Instruments (FRI) <br />Zero Coupon Instruments <br /> <br />Recommended <br />Policy Goals Actual Portfolio Mix <br />12/31/97 12/31/98 <br />37% 53% <br />48% 34% <br />15% 13% <br /> <br />Pro Forma <br />12/31/98* <br />29"10 <br />52% <br />19% <br /> <br />15% <br />65% <br />20% <br /> <br />*Restated mix based upon $2,300,000 reduction in cash for City Hall facility funding <br />requirements and $2,600,000 reduction in cash for remaining property acquisition and <br />Round Lake Road, Phase I, street improvements including advance funding Ramsey <br />County share (TIF District #2 Gateway Office). <br /> <br />2 <br /> <br />. <br /> <br />. <br />e <br /> <br />e <br /> <br />e <br />