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INVESTMENT POLICY 2 <br /> I. Scope <br /> . This policy applies to the investment of long term and short <br /> term operating funds of the City of St . Anthony. Individual <br /> investments are purchased using the polled approach for <br /> efficiency and maximum investment opportunity. The City <br /> will consolidate cash balances from all funds to maximize <br /> investment earnings. Each individual fund' s cash balance <br /> will continue to be reported separately in the general <br /> ledger system. Investment income will be allocated to the <br /> various funds based on their respective participation and in <br /> accordance with generally accepted accounting principles . <br /> II. Objective <br /> The primary objectives, in priority order, of investment <br /> activities shall be safety, liquidity, and yield. <br /> A. Safety <br /> Safety of principal is the foremost objective of the <br /> investment program. Investments shall be undertaken in <br /> a manner that seeks to ensure the preservation of <br /> capital in the overall portfolio. The objective will <br /> be to mitigate credit risk and interest rate risk. <br /> 1 . Credit risk. The City will minimize credit <br /> risk. Credit risk is the risk of loss due to <br /> the failure of the security issuer or backer <br /> by: <br /> a. Limiting investments to those types of <br /> securities allowable by Minnesota Statute <br /> and set forth as Authorized Investments. <br /> b. Diversifying the investment portfolio so <br /> that potential losses on individual <br /> securities will be minimized. <br /> 2 . Interest rate risk. The City will minimize the <br /> risk that the market value of securities in the <br /> portfolio will fall due to changes in general <br /> interest rates by: <br /> a. Structuring the investment portfolio so <br /> that securities will mature to meet cash <br /> requirements for ongoing operations, <br /> thereby avoiding the need to sell <br /> securities prior to maturity. <br /> b. Investing funds in those securities <br /> allowable by Minnesota <br /> . Statue #118A. <br />