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INVESTMENT POLICY <br /> 4/24/2005 • <br /> L Scope <br /> This policy applies to the investment of long term and short term operating funds of the <br /> City of St. Anthony. Individual investments are purchased using the polled approach for <br /> efficiency and maximum investment opportunity. The City will consolidate cash <br /> balances from all funds to maximize investment earnings. Each individual fund's cash <br /> balance will continue to be reported separately in the general ledger system. Investment <br /> income will be allocated to the various funds based on their respective participation and <br /> in accordance with generally accepted accounting principles. <br /> II. Objective <br /> The primary objectives, in priority order, of investment activities shall be safety, <br /> liquidity, and yield. <br /> A. Safety <br /> Safety of principal is the foremost objective of the investment program. <br /> Investments shall be undertaken in a manner that seeks to ensure the preservation <br /> of capital in the overall portfolio. The objective will be to mitigate credit risk and <br /> interest rate risk. <br /> • <br /> 1. Credit risk. The City will minimize credit risk. Credit risk is the risk <br /> of loss due to the failure of the security issuer or backer by: <br /> a. Limiting investments to those types of securities allowable by <br /> Minnesota Statute and set forth as Authorized Investments. <br /> b. Diversifying the investment portfolio so that potential losses on <br /> individual securities will be minimized. <br /> c. Refrain from investments/instruments or holdings that are <br /> speculative in nature. <br /> 2. Interest rate risk. The City will minimize the risk that the market <br /> value of securities in the portfolio will fall due to changes in general <br /> interest rates by: <br /> a. Structuring the investment portfolio so that securities will <br /> mature to meet cash requirements for ongoing operations, <br /> thereby avoiding the need to sell securities prior to maturity. <br /> b. . Investing funds in those securities allowable by Minnesota <br /> Statue#118A. • <br />