2008 10-21 CCP - Laserfiche WebLink

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MEMORANDUM Date: October 21, 2008 To: City Council. From: Jessie Hart, Treasurer Re: Adopt Investment Policy Attached for your consideration is an Investment Policy for the City of Gern Lake. The purpose of the policy is to invest public funds in a manner which maximizes return and provides maximum security in preserving and protecting funds while meeting the daily cash flow demands and conforming to all applicable federal, state, and/or local statutes governing the investment of public funds. This is a standard investment policy that follows the guidelines for the investment of public funds included in Minnesota Statute § 475.66. It is similar to the policy that the Township operates under. While the policy gives some latitude to investing it also restricts investment in high risk environments. There are two things that are different from what the City is currently doing with its funds. Currently the City buys certificates of deposit and designates each one or a portion of each to a specific fund such as the CD for the park acquisitions fund. Proposed as part of this policy is the implementation of an Investment Trust Fund that would allow for the pooling of investments to allow for the purchase of larger investment interests with higher rates of return rather than smaller instruments with lower rates. The City already allocates it interest from the pooled checking account on a monthly basis to all funds. The policy as presented would allow for the General Fund to take 3.5c/0 of the interest up front for administration of the investments for all funds. This amount would be included as a revenue source in the General Fund and would be reflected in other funds as a reduction in the interest allocated to each fund. While the City's investments have been invested under Minnesota Statute § 475.66 implementation of a formal policy provides more protection as it requires brokers and bankers to ensure that what they propose complies with not only statutes but also with the City's investment policies. Action requested is to adopt the City of Gem Lake Investment Policy and authorize the Treasurer to implement the Investment Trust Fund for pooled investments.