4.8 SR 10-21-2024 - Laserfiche WebLink

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Financial Management Policies Page 15 6 All collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The selection shall be approved by the City of Elk River. Any collateral pledged shall be accompanied by a written assignment to the government entitycity from the financial institution. The written assignment shall recite that, upon default, the financial institution shall release to the government entity city on demand, free of exchange or any other charges, the collateral pledged. Interest earned on assigned collateral will be remitted to the financial institution so long as it is not in default. The government entity city may sell the collateral to recover the amount due. Any surplus from the sale of collateral shall be payable to the financial institution, its assigns, or both. Investments may be held in safekeeping with: 1. Any Federal Reserve Bank; 2. Any bank authorized under the laws of the United States or any state to exercise corporate trust powers, including, but not limited to, the bank from which the investment is purchased; 3. A primary reporting dealer in United States government securities to the Federal Reserve Bank of New York; or 4. A securities broker/dealer having its principal executive office in Minnesota, licensed and registered pursuant to chapter 80A, or an affiliate of it, regulated by the Securities and Exchange Commission; provided that the government entity’s ownership of all securities is evidenced by written acknowledgments identifying the securities by the names of the issuers, maturity dates, interest rates, CUSIP number, or other distinguishing marks. The city will minimize investment custodial credit risk by permitting brokers that obtained investments for the city to hold them only to the extent there is SIPC and excess SIPC coverage available. Securities purchased that exceed available SIPC coverage shall be transferred to the city’s custodian. The Ccity of Elk River will diversify its investments by security type and institution. In establishing specific diversification strategies, the following general policies and constraints shall apply: A. Portfolio maturities shall be staggered to avoid undue concentration of assets at a specific maturity sector, with one broker-dealer or financial institution, or any one type of instrument. The maturities selected shall provide for stability of income and reasonable liquidity. B. The Finance Director Manager shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures. C. The investment portfolio will be designed to obtain a market average rate of return during budgetary and economic cycles, taking into account the City of Elk River’s investment risk constraints and cash flow needs. D. The Finance Director Manager shall prepare an investment report directed to the City Council on a quarterly basis including: 1. Listing of individual securities held at the end of the reporting period. Page 86 of 294