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Collateralization • <br /> Collateralization will be required on two types of investments - Certificates of Deposit and <br /> Repurchase Agreements. In order to anticipate market changes and provide a level of security <br /> for all funds, the collateralization level will be 110 percent of the market value of principal and <br /> accrued interest. When the pledged collateral consists of notes secured by first mortgages, the <br /> collateral level will be 140%of the market value of principal and accrued interest. Deposits in <br /> excess of deposit insurance shall require an authorizing resolution by the financial institution's <br /> Board of Directors perfecting the City's collateral. Collateral shall be deposited in the name of <br /> the City of Sauk Rapids, subject to release by the City's Finance Director. <br /> Safekeeping and Custody <br /> When investments purchased by the City are held in safekeeping by a broker/dealer, they must <br /> provide asset protection of$500,000 through the Securities Investor Protection Corporation <br /> (SIPC), at least another$2,000,000 supplemental insurance protection (an industry standard), <br /> and additional supplemental insurance to cover the account balance. <br /> Diversification <br /> The City will attempt to diversify its investments according to type and maturity. The portfolio, <br /> as much as possible, will contain both short-term and long-term investments. The City will <br /> attempt to match its investments with anticipated cash flow requirements. Extended maturities <br /> may be utilized to take advantage of higher yields; however, no more than 30%of the total <br /> investments should extend beyond 5 years and in no circumstances should any extend beyond 10 <br /> years. <br /> Investment Reporting <br /> The Finance Director shall prepare an investment report quarterly, including any management <br /> summaries that provide a clear picture of the status of the current investment portfolio and <br /> transactions made over the last quarter. <br /> Conclusion <br /> The intent of this policy is to ensure the safety of all City funds. The main goal of the City will <br /> be to achieve a market rate of return while maintaining the safety of its principal. <br /> Approved by City Council 2000. <br /> filename:INVESTMENT POLICY <br />