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2004-06-23 City Executive Session, WS & CC Meeting
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2004-06-23 City Executive Session, WS & CC Meeting
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<br />. <br /> <br />CI'IY O:F CENn:KVlliX <br />I:NVXSI':MX:N:( POlley <br /> <br />PURPOSE <br /> <br />The purpose of this policy is to establish specific guidelines the City of Centerville will <br />use in the investment of city funds. It will be the responsibility of the Finance Director <br />and/or City Administrator to invest city funds in order to attain a market rate of return <br />while preserving and protecting the capital of the overall portfolio. Investments will be <br />made, based on statutory constraints, in safe, low-risk instruments. <br /> <br />SCOPE <br /> <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. <br /> <br />PRUDENCE <br /> <br />. <br /> <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 427.01, et. seq. and <br />MN Statute 118A.0 I, et. seq., and exercising due diligence shall be relieved of personal <br />responsibility for an individual security's credit risk or market price changes, provided <br />that reasonable action is taken to control adverse developments and unexpected <br />deviations are reported in a timely manner. <br /> <br />OBJECTIVE <br /> <br />There are three main objectives of all investment activities that are prioritized as follows: <br /> <br />A. Safety <br />Safety of principal is the foremost objective of the city. Each investment <br />transaction shall seek to first insure that capital losses are avoided. The <br />objective will be to mitigate credit risk and interest rate risk. Credit risk shall <br />be defined as the risk of loss due to failure of the security issuer or backer. <br />Interest rate risk shall be defined as the risk that the market value of securities <br />in the portfolio will fall due to changes in general interest rates. <br /> <br />B. Liquiditv <br />The investment portfolio shall remain sufficiently liquid to meet all operating <br />requirements that may be reasonably anticipated. This is accomplished by <br />structuring the portfolio so that securities mature concurrent with cash needs <br />to meet anticipated demands. <br /> <br />- I - <br />
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