Laserfiche WebLink
Information <br /> City of <br /> ElkMemorandum <br /> T <br /> River <br /> To: Mayor and City Council <br /> From: Tim Simon, Finance Director <br /> Date: October 20,2014 <br /> Subject: Quarterly Investment Report Uune—September, 2014) <br /> Introduction <br /> The purpose of this report is to update the City Council on the status of the various <br /> investments the city maintains. This report reflects investments as of September 30, 2014. <br /> Background <br /> The City Council adopted the original investment policy on April 28, 1998,with subsequent <br /> modifications on February 5,2007, and April 7,2014. The policy generally follows the <br /> Government Finance Officers Association (GFOA) model and does comply with state <br /> statutes. <br /> The investment goals for the City of Elk River are passive in nature due to the allowable <br /> investments permitted under state statutes. The city has four objectives for investing,in <br /> order of importance they are safety of principal, liquidity,return on investment, and <br /> maintaining the public trust. This means we are focused on not losing on the original <br /> investment,having sufficient funds on hand to meet ongoing operating cash needs,getting a <br /> market rate of return, and not purchasing speculative investments. <br /> State statutes limit the city's ability to invest in many risky types of investments. The city <br /> does not purchase stocks or mutual funds. The city is generally limited to federal and state <br /> government obligations or agencies backed by them. The city can invest in short-term <br /> commercial paper (highly rated), certificates of deposit or money market accounts (with <br /> collateralization if in excess of FDIC insurance amounts),and the rated debt of local <br /> governments. <br /> The city intends to hold investments until maturity,which means we will get the rate of <br /> return for which we invest our funds. Our goal is not to extend our maturities beyond 10 <br /> years unless we are matching cash flow to a specific debt service payment. While the intent <br /> is to hold to maturity the bonds are subject to interest rate risk as yields change in opposite <br /> direction of the bond price. While we record at year-end unrealized gains and losses we hold <br /> P0WEn10 0Y <br /> N:\Public Bodies\Agenda Packets\10-20-2014\Final\xlnform2 sr QuarterlhInvestmentReport.docx 1 11 41 AURE <br />