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The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community <br />engagement that encourages and inspires prosperity <br /> <br /> <br />Request for Action <br /> <br />To <br />City Council <br />Item Number <br />13.2 <br /> <br />Meeting Date <br />October 21, 2024 <br />Prepared By <br />Lori Stich, Finance Manager <br /> <br />Item Description <br />Investment Report - 3rd Quarter <br />Reviewed by <br />Cal Portner <br />Tina Allard <br /> <br />Action Requested <br />Information only. <br /> <br />Background/Discussion <br />The purpose of this report is to update the City Council on the status of city financial investments as of <br />September 30, 2024. <br /> <br />The investment policy complies with state statutes and generally follows the Government Finance Officers <br />Association (GFOA) model. <br /> <br />The investment goals for the City of Elk River are passive due to the allowable investments permitted under <br />state statutes. The city has four objectives for investing. In order of importance, they are: 1) safety of <br />principal, 2) liquidity, 3) return on investment, and 4) maintaining public trust. This means we are focused on <br />not losing on the original investment, having sufficient funds on hand to meet ongoing operating cash needs, <br />getting a market rate of return, and not purchasing speculative investments. <br /> <br />State statutes limit the city’s ability to invest in risky types of investments. The city is generally limited to <br />federal and state government obligations or agencies backed by them, rated debt of local governments, short- <br />term highly rated commercial paper, certificates of deposit, and money market accounts (with collateralization <br />if in excess of FDIC insurance amounts). <br /> <br />The city intends to hold investments until maturity, which means we will get the rate of return on which we <br />invest our funds. The finance staff makes sure the city is sufficiently liquid by continually updating our forecast <br />on the anticipated cash flow needs over the next five-year time horizon. We anticipate two large tax <br />settlements each year along with the regularly scheduled debt service payments. We also build a reserve <br />balance maintained in money market accounts in case of unexpected expenditures. <br />Page 292 of 294