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City of Saint Anthony <br /> Investment Portfolio Review.Report <br /> ' 6. Is the portfolio invested in appropriate instruments? <br /> • Allowable investments M.S 118A.04 governs the investment instruments that local <br /> 1 governments are allowed to purchase. <br /> • St Anthony portfolio composition. As was stated above, the City's portfolio is <br /> 1 comprised of those investments allowable by law. It is not uncommon to find most <br /> of these types of investments in Minnesota city government's portfolios.While it <br /> appears that investments are diversified among individual brokers, 73% of the <br /> ' City's investments are held at brokerage house of Dain Rauscher. See Graph IV for <br /> distribution by individual broker and brokerage house. <br /> ' Recommendation#10: Review the current composition of investments by type <br /> and determine the appropriate diversification. Review the diversification among <br /> individual brokers and brokerage houses and determine the appropriate <br /> diversification. Competition should be documented on a quote form when bids <br /> are received. <br /> ' Investment Policy Review <br /> • We reviewed the investment policy and compared it to Governmental Finance <br /> Officer's Association's recommended practices. The main elements of the city's <br /> policy are consistent with recommended policy. All investments authorized in the <br /> policy are allowable by state law. In accordance with law, the city obtains a signed <br /> broker certificate each year. Further, the city also requires brokers to sign a <br /> statement that requires each broker to repurchase any security that does not comply <br /> with statute at the time of purchase. This additional step ensures the preservation of <br /> city assets. <br /> ' Additional Steps <br /> •Some additional steps that the City may wish to consider are generating a <br /> comprehensive cash flow forecast and financial plan.The cash flow forecast would <br /> include all daily operating cash flow needs and a projection of equipment <br /> replacement needs. Ehlers and Associates would be happy to assist the City with <br /> this. <br /> ' Prepared by Ehlers and Associates 6 <br /> February 5,2001 <br />