6. EDSR 07-15-2013 - Laserfiche WebLink

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Cash Management • It is the policy of the city to pool cash balances from all funds to maximize investment earnings. Exceptions include legal and specific practical requirements that demand segregation of funds. • Funds received are to be deposited into an interest bearing account with the city's currently designated official depository by the next business day. • Cash on hand is to be kept to the minimum required to meet daily operational needs. Investments It is the policy of the City of Elk River to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the entity while conforming to all state and local statutes governing the investment of public funds. The investment policy applies to all financial assets of the municipality. These funds are accounted for in the city's Annual Financial Report and include all city funds with the exception of the Water and Electric funds which fall under the investment policy adopted by the Elk River Utilities Commission. Investments shall be made with judgment and care under circumstances then prevailing which persons of prudence, discretion,and intelligence exercise in the management of their own affairs, not for speculation,but for investment, considering the probable safety of their capital as well as the probable income to be derived. The standard of prudence to be used by investment officials shall be the "prudent person" standard, as defined by Minnesota Statute §356A.04, Subd. 2, and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes,provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments. All investments shall be limited to those permitted by Minnesota Statute §118A. The primary objectives,in priority order, of the City of Elk River's investment activities shall be: 1. Safety Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that losses on individual securities do not exceed the income generated from the remainder of the portfolio. 2. Liquidity The investment portfolio will remain sufficiently liquid to enable the city to meet all operating requirements which might be reasonably anticipated. 3. Return on Investment The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles. The investment strategy will take into account the constraints on risk and cash flow characteristics of the investment portfolio. Financial Management Policies Page 3