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HomeMy WebLinkAbout1991-029 Council ResolutionRESOLUTION 29-91 A RESOLUTION ADOPTING AN INVESTMENT POLICY FOR THE CITY OF LINO LAKES. WHEREAS, WHEREAS, WHEREAS, WHEREAS, The City of Lino Lakes is dedicated to the proposition that a sound investment program is an essential element of good fiscal management; and It is important to have written policies and procedures wherever possible; and A written policy will aid in the investment process, and The attached policy conforms with all legal and Council authorized policies; NOW THEREFORE BE IT RESOLVED: That the City Council of the City of Lino Lake hereby adopts the attached Investment Policy. Adopted by the Lino Lakes City Council this 25th March , 1991 Day of Harold L. Bisel, Mayor yn(\G. Anderson, City Clerk INVESTMENT POLICY FOR THE CITY OF LINO LAKES I. SCOPE This investment policy applies to all financial assets held by the City of Lino Lakes. II. INVESTMENT OBJECTIVES A. The following objectives will be applied in the investment of the city's funds: 1. The primary objective is the preservation of capital and the protection of investment principal. 2. The City will strive to maximize the return on the investment portfolio and to preserve the purchasing power but will avoid assuming unreasonable investment risk. 3. The investment portfolio should allow the City to meet cash flow requirements for operations. 4. The City will employ mechanisms to control risks and diversify its investments in regard to the type as well as the individual financial institution. III. LEGAL ASPECTS The City of Lino Lakes will invest only in securities which are permissible under Minnesota Statute Section 475.66(see Exhibit A). IV. CRITERIA FOR SELECTION OF FINANCIAL INTERMEDIARIES A. General Guidelines The City of Lino Lakes will conduct its investment transactions with (1) financial institutions located in the State of Minnesota that are designated as depositories by the City Council and (2) security dealers who are on the Federal Reserve Bank's list of primary dealers. B. Repurchase Agreements 'Repo's) Selection of Repo Vendors The Accountant shall only purchase repurchase agreements from vendors that meet the following criteria (as defined in MSA. 475.66): a. The vendor must be a primary reporting dealer in the United States government securities to the Federal Reserve Bank of New York; or b. Any national or state bank in the U.S. that is a member of the Federal Reserve System and whose combined capital and surplus equals or exceeds $10,000.000. V. SPECIAL REQUIREMENTS FOR CERTAIN INVESTMENTS A. Certificates of Deposits 1. Certificates of deposit shall not exceed the amount of F.D.I.C. insurance covering such deposit unless collateral or a bond is furnished as additional security. Except for notes secured by first mortgages, the total amount of collateral computed at its market value shall be at least ten percent more than the amount or deposit in excess of the insured portion. 2. The total amount of collateral consisting of notes secured by first mortgages of future maturity, computed at its market value shall be at least forty percent more than the amount on deposit in excess of the insured portion. 3. The collateral so deposited shall be assigned to the City of Lino Lakes from the depository. B. Bankers Acceptances 1. Bankers Acceptances shall be restricted to those of United States banks eligible for purchase by the Federal Reserve System. C. COMMERCIAL Paper 1. Commercial paper shall be restricted to issues that have a rating of A-1 by Moody's and P1 by Standard and Poors and mature in 270 days or less. 2. Commercial paper shall be purchased only from dealers who report to the Federal Reserve Bank of New York or from qualifying banks. VII. ADMINISTRATIVE PROCESS The City of Lino Lakes investment program should have four basic ingredients: legality, safety, liquidity, and yield. Cash management is also an essential ingredient to a good investment program. The Finance Department has the responsibility to establish procedures for effective cash management. These procedures will be maintained by the Accountant and reviewed with the City Administrator, at a minimum, on an annual basis to determine applicability.