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} Information <br /> City of Memorandum <br /> Elk <br /> River <br /> TO: Mayor and City Council <br /> From: Lori Ziemer,Finance Director <br /> Date: July 16, 2018 <br /> Subject: Quarterly Investment Report (April—June, 2018) <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 is as of June 30, 2018. <br /> Background <br /> The investment policy was originally adopted in April, 1998,with subsequent modifications <br /> in 2007 and 2014. The policy complies with state statutes and generally follows the <br /> Government Finance Officers Association (GFOA) model. <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; 1) safety of principal,2) liquidity, 3) return on investment,and <br /> 4) 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 is <br /> generally limited to federal and state government obligations or agencies backed by them. <br /> The city can also invest in short-term commercial paper (highly rated), certificates of deposit <br /> or money market accounts (with collateralization if in excess of FDIC insurance amounts), <br /> and the rated debt of local 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. <br /> The finance staff makes sure the city is sufficiently liquid by continually updating our <br /> forecast on the anticipated cash flow needs over the next five-year time horizon. We also <br /> build in a reserve balance in case of unexpected expenditures; these funds are maintained in <br /> p 0 W I R I 1 e r <br /> A UR <br />