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<br />8.1 Speculative Investments <br />The City shall not purchase investments that, at the time of purchase, can not be held to <br />maturity. All investments shall be purchased with the intent to hold until maturity. This <br />section shall not be construed to restrict the sale of investments prior to maturity which may <br />be in the best interest of the City. <br /> <br />8.2 Further Restrictions <br />The City shall not invest in GICs or Reverse Repurchase Agreements. <br /> <br />9.0 Collateralization <br /> <br />The City of Elk River will follow Minnesota statutes regarding the use of collateral requirements. In <br /> <br />order to anticipate market changes and provide a level of security for all funds, the collateralization <br /> <br />level will be at least ten percent more than the amount on deposit plus accrued interest at the close of <br /> <br />the business day. To the extent that funds deposited are in excess of available federal deposit <br /> <br />insurance, the government entity shall require the Bnancial institution to furnish collateral security. <br /> <br />All collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank, or in an <br /> <br />account at a trust department of a commercial bank or other Bnancial institution that is not owned or <br /> <br />controlled by the Bnancial institution furnishing the collateral. The selection shall be approved by <br /> <br />the City of Elk River. <br /> <br />Assignment <br /> <br />Any collateral pledged shall be accompanied by a written assignment to the government entity from <br /> <br />the Bnancial institution. The written assignment shall recite that, upon default, the fmancial <br /> <br />institution shall release to the government entity on demand, free of exchange or any other charges, <br /> <br />the collateral pledged. Interest earned on assigned collateral will be remitted to the fmancial <br /> <br />institution so long as it is not in default. The government entity may sell the collateral to recover the <br /> <br />amount due. Any surplus from the sale of collateral shall be payable to the fmancial institution, its <br /> <br />assigns, or both. <br /> <br />10.0 Safekeeping and Custody <br />Investments may be held in safekeeping with: <br />1.) Any Federal Reserve Bank; <br />2.) Any bank authorized under the laws of the United States or any state to exercise corporate <br />trust powers, including, but not limited to, the bank from which the investment is purchased;e <br />C: \Documents and Settings \ tallard\Local Settings \ Temporary Internet Files \ OLKF\Investment Policy Update.doc <br />