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CITY OF FOREST LAKE <br /> • <br /> INVESTMENT POLICY <br /> PURPOSE <br /> The purpose of this policy is to establish specific guidelines the City of Forest Lake will <br /> use in the investment of City funds, including: <br /> ➢ Investment objectives, <br /> ➢ Investment reporting practices, <br /> ➢ Designation of appropriate investment instruments, <br /> ➢ Criteria for selection of banks and dealers, <br /> ➢ Requirements regarding maturities and diversification, <br /> ➢ Principles of risk,prudence and ethics, <br /> ➢ Responsibilities for the investment function, <br /> ➢ Internal controls related to investments. <br /> It will be the responsibility of the Finance Director and/or City Administrator to invest <br /> City funds in order to attain a market rate of return while preserving and protecting the <br /> capital of the overall portfolio. Investments will be made, based on statutory constraints, <br /> in safe, low-risk instruments. <br /> SCOPE • <br /> The Finance Director and/or City Administrator are responsible for the investing of all <br /> funds in the custody of the City, including but not necessarily limited to, the General <br /> Fund, Special Revenue Funds, Debt Service Funds, Capital Project Funds, Enterprise <br /> Funds and Agency Funds. Unless specified by the City Council, investments of the <br /> City's monies will be pooled and invested, with the resultant investment income accruing <br /> to the benefited fund. <br /> PRUDENCE <br /> The standard of prudence to be used by investment officials shall be the "prudent <br /> investor," and shall be applied in the context of managing the overall portfolio. <br /> Investment officers acting in accordance with this policy, and with Minnesota Statutes <br /> §427.01, et. seq. and Minnesota Statutes §118A.01, et. seq., and exercising due diligence <br /> shall be relieved of personal responsibility for an individual security's credit risk or <br /> market price changes, provided that reasonable action is taken to control adverse <br /> developments and unexpected deviations are reported in a timely manner. The Finance <br /> Director is expected to display prudence in the selection of securities, as a way to <br /> minimize default risk. No individual transaction shall be undertaken which jeopardizes <br /> the total capital position of the overall portfolio. <br /> • <br /> - 1 - <br />