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HomeMy WebLinkAboutres_11021 EXTRACT OF MINUTES OF MEETING OF THE CITY COUNCIL OF THE CITY OF ROSEVILLE * * * * * * * * * * * Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Roseville, County of Ramsey, Minnesota was duly held on the 22nd day of October 2012 at 6:00 p.m. The following members were present: Willmus, Johnson, Pust, McGehee, Roe and the following were absent: None. Member Johnson introduced the following resolution and moved its adoption: RESOLUTION No. 11021 RESOLUTION ADOPTING FINANCIAL AND BUDGET POLICIES FOR THE CITY OF ROSEVILLE WHEREAS,the City Council of the City of Roseville,Minnesota desires to establish budget and financial policies that provide for the sustainability of City programs, services and infrastructure; and WHEREAS, the City Council of the City of Roseville, Minnesota desires to maintain the City's strong financial condition; and WHEREAS,the City Council of the City of Roseville,Minnesota desires to provide appropriate fiscal and budgeting controls. NOW,THEREFORE,BE IT RESOLVED,by the City Council of the City of Roseville,Minnesota,that the following budget and financial policies be adopted and remain in effect until such time that a subsequent policy action is taken. Investment Policy Purpose The purpose of the Investment Policy is to ensure the most efficient use of the City's idle funds, and to ensure the best return on these funds while making only those investments allowed by law. Policy ❑ The City will make a cash flow analysis of all funds on a regular basis. Disbursement, collection, and deposit of all funds will be scheduled to ensure maximum cash availability. ❑ When permitted by law, the City will pool cash from several different funds for investment purposes. ❑ The City will invest 99 percent of its idle cash on a continual basis. ❑ The City will obtain the best possible return on all cash investments. Such investments will only be those legally permissible under Minnesota law. ❑ The accounting system will provide regular information concerning cash position and investment performance. ❑ The City will make arrangements for banking services on a contractual basis for a specified period of three years, with specified fees for each service rendered. ❑ The City includes interest earnings and investment summaries as part of the Comprehensive Annual Financial Report (CAFR). Implementation See Investment and Portfolio procedures. Investment and Portfolio Procedures Scope These investment and portfolio procedures apply to the activities of the City with regard to investing the financial assets of all funds, including the following: ❑ General Fund ❑ Special Revenue Funds ❑ Capital Project Funds ❑ Debt Service Funds ❑ Special Assessment Funds ❑ Internal Service Funds ❑ Trust and Agency Funds Objectives Funds of the City will be invested in accordance with Minnesota Statutes,Council-approved fiscal policies and these administrative procedures. The City's investment portfolio shall be managed in a manner to attain a market rate of return throughout budgetary and economic cycles while preserving and protecting capital in the overall portfolio. The market rate of return shall be to the same rate as the target portfolio. Investments shall be made based on statutory and policy constraints. Funds held for future capital projects (i.e. bond proceeds) shall be invested to produce enough income to offset increases in construction costs due to inflation. Where possible, prepayment funds for long-term debt service shall be invested to ensure a rate of return at least equal to the interest being paid on the bonds. Delegation of Authority The Finance Director is designated as investment officer of the City and is responsible for investment decisions and activities, under the direction of the City Manager. Prudence The standard of prudence to be applied by the investment officer shall be the"prudent investor"rule. This rule states,"Investments shall be made with judgment and care,under circumstances then prevailing,which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived." The prudent investor rule shall be applied in the context of managing the overall portfolio. Page 2 of 5 The investment officer,acting in accordance with written procedures and exercising due diligence,shall not be held personally responsible for a specific security's credit risk or market price changes, provided that these deviations are reported immediately and that appropriate action is taken to control adverse develop- ments. Monitoring and Adjusting the Portfolio The investment officer will routinely monitor the contents of the portfolio, the available markets and the relative values of competing instruments and will adjust the portfolio accordingly. Internal Controls The Finance Director shall establish a system of internal controls,which shall be reviewed annually by an independent auditor. The controls shall be designed to prevent loss of public funds due to fraud, error, misrepresentation, unanticipated market changes, or imprudent actions. Investments shall be done on a pooled funds basis with interest allocated on a cash balance method. Those internal controls shall consist of competitive bids on investments, and division of duties among the staff. ❑ Investments made by investment officer ❑ Records maintenance by a finance staff member other than investment officer ❑ Review and reconciliation by the assistant finance director Portfolio Management Under the Council-adopted Fiscal Policies, it shall be the City's procedure to restrict investments to only Repurchase Agreements with national or state chartered banks, U.S. Treasury and U.S. Government Agencies, Guaranteed Investment Contracts, and Bankers Acceptances. All investments shall carry a minimum credit rating of `AA'. An exception to these restrictions is permitted with regard to the investment of proceeds received from the 2011 and 2012 bonds due to extenuating economic circumstances and their effect on financial institutions. Repurchase Agreements associated with the bonds can be placed with any bank, bank holding company, savings and loan association, trust company or other financial institution including the trustee or any of its affiliates. The financial institution shall carry a credit rating of `A' or better, and is required to pledge collateral from national or state chartered banks. The procedures shall consist of yield curve analysis and implemented with the appropriate purchase of the above investments. Maturity scheduling shall be within those investments and in a manner that will maximize yield and liquidity and minimize interest rate risk. Competitive Selection of Investment Instruments Before the City invests any surplus funds, a competitive "bid" process shall be conducted. If a specific maturity date is required,either for cash flow purposes or for conformance to maturity guidelines,bids will be requested for instruments that meet the maturity requirement. If no specific maturity is required, a market trend (yield curve) analysis will be conducted to determine which maturities would be most advantageous. Bids will be requested from financial institutions for various options with regards to term and instrument. The City will accept the bid that provides the highest rate of return within the maturity required and within the parameters of these procedures. Page 3 of 5 Bids for purchases through the treasury auctions are not required. Records will be kept of the bids offered,the bids accepted and a brief explanation of the decision that was made regarding the investment. Settlement All settlements of investments shall be on a"Delivery vs.Payment" (DVP)basis. Physical delivery shall be avoided if at all possible, with book-entry being the preferred method of safekeeping. Safekeeping and Collateralization All investment securities purchased by the City shall be held in third-party safekeeping by an institution designated as primary agent. The primary agent shall issue a safekeeping receipt to the City listing the specific instrument, rate, maturity and other pertinent information. Reporting Requirements The investment officer shall generate daily and monthly reports for management purposes. The annual investment report shall be completed on a time-weighted basis and shall be included as part of the Comprehensive Annual Financial Report to the City Council. The target portfolio shall be the U.S. Government Bond Yield Index for the comparable period. The motion for the adoption of the foregoing resolution was duly seconded by member Johnson and upon a vote being taken thereon, the following voted in favor thereof: Johnson, Pust, McGehee, Roe and the following voted against the same: Willmus Page 4 of 5 WHEREUPON, said resolution was declared duly passed and adopted. State of Minnesota) ) SS County of Ramsey) I,undersigned,being the duly qualified City Manager of the City of Roseville,County of Ramsey,State of Minnesota,do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of said City Council held on the 22nd day of October 2012, with the original thereof on file in my office. WITNESS MY HAND officially as such Manager this 22nd day of October 2012. ' h m J. Malinen City Manager Seal