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due. Any surplus from the sale of collateral shall be payable to the financial <br /> institution, its assigns, or both. <br /> 10.0 Safekeeping and Custody <br /> 10.1 Investments shall be held in safekeeping with: <br /> A. Any Federal Reserve Bank; <br /> B. Any bank authorized under the laws of the United States or any state to <br /> exercise corporate trust powers, including,but not limited to,the bank from <br /> which the investment is purchased; <br /> C. A primary reporting dealer in United States government securities to the <br /> Federal Reserve Bank of New York; or <br /> D. A securities broker/dealer having its principal executive office in Minnesota, <br /> licensed pursuant to chapter 80A, or an affiliate of it,regulated by the <br /> Securities and Exchange Commission; provided that the government entity's <br /> ownership of all securities is evidenced by written acknowledgments <br /> identifying the securities by the names of the issuers, maturity dates, interest <br /> rates, CUSIP number, or other distinguishing marks. <br /> 10.2 Custodial Credit Risk—The Utility will minimize the investment Custodial Risk by <br /> permitting brokers that obtained investment for the Utility to hold them only to the <br /> extent there is SIPC and excess SIPC coverage available. Securities purchased that <br /> exceed available SIPC coverages shall be transferred to the Utility's custodian. <br /> 11.0 Diversification/Maturities <br /> Elk River Municipal Utilities will diversify its investments by security type and institution. In <br /> establishing specific diversification strategies,the following general policies and constraints <br /> shall apply: <br /> Portfolio maturities shall be staggered to avoid undue concentration of assets at a specific <br /> maturity sector,with one broker-dealer or financial institution, or any one type of <br /> instrument. The maturities selected shall provide for stability of income and reasonable <br /> liquidity. <br /> 12.0 Internal Control <br /> The Finance Director shall establish an annual process of independent review by an external <br /> auditor. This review will provide internal control by assuring compliance with policies and <br /> procedures. <br /> 5 <br /> 109 <br />