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INVESTMENT POLICY FOR THE CITY OF LINO LAKES <br />I. SCOPE <br />This investment policy applies to all financial assets <br />held by the City of Lino Lakes. <br />II. INVESTMENT OBJECTIVES <br />A. The following objectives will be applied in the <br />investment of the city's funds: <br />1. The primary objective is the preservation of <br />capital and the protection of investment <br />principal. <br />2. The City will strive to maximize the return on <br />the investment portfolio and to preserve the <br />purchasing power but will avoid assuming <br />unreasonable investment risk. <br />3. The investment portfolio should allow the City <br />to meet cash flow requirements for operations. <br />4. The City will employ mechanisms to control <br />risks and diversify its investments in regard <br />to the type as well as the individual <br />financial institution. <br />III. LEGAL ASPECTS <br />The City of Lino Lakes will invest only in securities <br />which are permissible under Minnesota Statute Section <br />475.66(see Exhibit A). <br />IV. CRITERIA FOR SELECTION OF FINANCIAL INTERMEDIARIES <br />A. General Guidelines <br />The City of Lino Lakes will conduct its <br />investment transactions with (1) financial <br />institutions located in the State of Minnesota <br />that are designated as depositories by the City <br />Council and (2) security dealers who are on the <br />Federal Reserve Bank's list of primary dealers. <br />B. Repurchase Agreements 'Repo's) <br />Selection of Repo Vendors <br />The Accountant shall only purchase repurchase <br />agreements from vendors that meet the following <br />criteria (as defined in MSA. 475.66): <br />a. The vendor must be a primary reporting <br />dealer in the United States government <br />securities to the Federal Reserve Bank of <br />New York; or <br />