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1 <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />CITY OF LINO LAKES <br />INVESTMENT POLICY <br /> <br />I. Scope <br /> <br />This policy applies to the investment of all municipal funds. <br /> <br /> 1. Pooling of Funds Except for cash in certain restricted and special funds, the City of <br />Lino Lakes will consolidate cash balances from all funds to maximize investment earnings. <br />Investment income will be allocated to the various funds based on their respective participation <br />and in accordance with generally accepted accounting principles. <br /> <br />II. General Objectives <br /> <br />The primary objectives, in priority order, of investment activities shall be safety, liquidity, and <br />yield: <br /> <br /> 1. Safety Safety of principal is the foremost objective of the investment program. <br />Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the <br />overall portfolio. The objective will be to mitigate credit risks and interest rate risk. <br /> <br /> a. Credit Risk The City of Lino Lakes will minimize credit risks, the risk of loss <br />due to the failure of the security issuer or backer, by: <br /> <br /> * Limiting investments to those investments specified in Minnesota Statutes <br /> 118A <br /> * Annually appointing the financial institutions, broker/dealers, <br /> intermediaries, and advisers. <br /> * Diversifying the investment portfolio so that potential losses on <br /> individual securities will be minimized. <br /> <br /> b. Interest Rate Risk The City of Lino Lakes will minimize the risk that the <br />market value of securities in the portfolio will fall due to changes in general interest rates, by: <br /> <br /> * Structuring the investment portfolio so that securities mature to meet <br /> cash requirements for ongoing operations. <br /> * Investing municipal funds primarily in shorter-term securities.