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REQUEST FOR COUNCIL ACTION <br /> Date:April 25, 2022 <br /> Item No.:7.b <br />Department Approval City Manager Approval <br /> <br />Item Description: Consider Adopting a Revised Investment Policy <br /> <br />1 B ACKGROUND <br />2 On February 14, 2022 the City Council and Finance Commission had a joint meeting where the <br />3 Commission advised the Council of what they had been working on and also requesting reconsideration <br />4 of a revision to the investment policy which would allow for adding equities investment option as allowed <br />5 under State Statute 118A.09, Attachment C. The Council was receptive to allowing the Finance <br />6 commission to work on this revision. <br />7 <br />8 The City of Woodbury is currently the only city utilizing this investment option. For 2021, they earned <br />9 a 10.9% return on their investment. In the three years they have held this investment, they have averaged <br />10 a return of 8%. This type of investment is for long term capital projects or capital reserves. <br />11 <br />12 An investment policy should include those investment options that are allowable by statute and those that <br />13 the City Council is comfortable with utilizing. Not all options in the investment policy are utilized at any <br />14 one time or at all. The Finance Director makes the final decision on an investment based on cash flow <br />15 needs, safety and return on investment. Based on the 2021 Capital Improvement Plan, the unassigned <br />16 reserves are $10 million, so the maximum amount that could be invested in the equity investment would <br />17 be $1.5 million. Before the City would actually start this investment, a specific resolution would need to <br />18 be adopted whereby, the Council would be asked to consider and understand the possible risk. <br />19 <br />20 The Finance Commission approved forwarding the draft revised investment policy in Attachment A, at <br />21 its March 15 meeting, to the City Council for adoption. Attachment D is a copy of pages related to <br />22 Qualified Government Investments from the MN State Board of Investments report from June 30, 2021, <br />23 which was also provided to the Finance Commission for discussion. Attachment E is the minutes from <br />24 the March 15 Finance Commission meeting. <br />25 <br />26 P OLICY O BJECTIVE <br />27 Not applicable. <br />28 F INANCIAL I MPACTS <br />29 Not applicable. <br />30 S TAFF R ECOMMENDATION <br />31 Staff recommends approval of the proposed revised investment policy as submitted. <br />Page 1 of 2 <br /> <br />