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3.7 <br /> <br />3.8 <br /> <br />4.1 <br /> <br />4.2 <br /> <br />4.3 <br /> <br />4.3.1 <br /> <br />4.4 <br /> <br />(Draft January 2002) Key Financial Strategies <br /> For Elk River <br /> <br />The City Council will determine the chargeback to the Sewer Fund for <br />administration of the sanitary sewer system. <br /> <br />Any other transfer of equity from an utility fund to the General Fund <br />(other than stated in 3.6) should only be done on a one-time exception <br />basis, for example, to fund an unusual, unanticipated expense. In no <br />event shall such equity transfers be made in consecutive years. Equity <br />transfers must be approved by the City Council. <br /> <br />e <br /> <br />Investments <br /> <br />It is the policy of the City of Elk River to invest public funds in a manner <br />which will provide the highest investment return with the maximum <br />security while meeting the daily cash flow demands of the entity while <br />conforming to all state and local statutes governing the investment of <br />public funds. <br /> <br />The investment policy applies to all financial assets of the municipality. <br />These funds are accounted for in the City's Annual Financial Report and <br />include all City funds with the exception of the Water and Electric <br />Funds that fall under the investment policy adopted by the Elk River <br />Utilities Commission. <br /> <br />Investments shall be made with judgment and care under circumstances <br />then prevailing which persons of prudence, discretion, and intelligence <br />exercise in the management of their own affairs, not for speculation, but <br />for investment, considering the probable safety of their capital as well as <br />the probable income to be derived. <br /> <br />The standard of prudence to be used by investment officials shall be the <br />"prudent person" standard, as defined by Minnesota Statute ~356A.04, <br />Subd. 2, and shall be applied in the context of managing an overall <br />portfolio. Investment officers acting in accordance with written <br />procedures and the investment policy and exercising due diligence shall <br />be relieved of personal responsibility for an individual security's credit <br />risk or market price changes, provided deviations from expectations are <br />reported in a timely fashion and appropriate action is taken to control <br />adverse developments. <br /> <br />All investments shall be limited to those permitted by Minnesota Statute <br />¢118A. The primary objectives, in priority order, shall be: <br /> <br />· Safety: Investments shall be undertaken in a manner that seeks to <br /> ensure the preservation of capital in the overall portfolio. To attain <br /> this objective, diversification is required in order that losses on <br /> individual securities do not exceed the income generated from the <br /> remainder of the portfolio. <br />· Liquidity: The investment portfolio will remain sufficiently liquid to <br /> enable the City to meet all operating requirements that might be <br /> reasonably anticipated. <br />· Return on Investment: The investment portfolio shall be designed <br /> with the objective of attaining a market rate of return throughout <br /> <br />Page <br /> 14 <br /> <br /> <br />