INFORMATION #1 07-16-2012 - Laserfiche WebLink

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INFORMATION V~r MEMORANDUM TO: Mayor and Council Members FROM: Tim Simon, Finance Director DATE: July 16, 2012 SUBJECT: Quarterly Investment Report (April-June, 2012) INTRODUCTION: The purpose of this report is to update the City Council on the st<Zt«s of the ~~Zrious in~-estments that the cit<r maintains. This report is as of June 30, 2012. BACKGROUND: The Cit< Council adopted the original in~-eshnent polio on April 28, 1998, with subsequent modifications on Febn~ai-~r ~, 2007. The polio generally tollo«-s the Go~Ternment Finance Officers association (GFO ~) model and does complywith state statl~tes. The ii~~estinent goals for the Cit<- of Elk Rimier are passi~-e in nat«re due to the aIlowable investments permitted under State Statl~tes. The cit< has tour objecti~-es for ii~~-esting. hi order of importance, they are safefi of principal, liquidity, ret«in on in~-estment, and maintaining the public tn~st. This means we are focused on not losing on the original in~Testment, ha~Ting sufficient funds on hand to meet ongoing operating cash needs, getting a market rate of return, and not purchasing speculati~Te in~Testments. State statutes limit the cit~-'s abilit<- to in~-est in mangy- risk- tt-pes of in~-estments. The cit<- does not purchase stocks or mutual funds. The cifi is generall~r limited to federal and state go~Ternment obligations or agencies backed b~~ them. The city can in~-est in short-term commercial paper (highhr rated), Certificates of Deposit or moneir market accounts (with collateralization if in ezcess of FDIC insurance amounts), and the rated debt of local goVetnments. The cit<r intends to hold in~-estments until mat«rit~, which means we will get the rate of return for which we ingest our funds. Our goal is not to extend our matl~rities beyond fire years unless we are matching cash flow to a specific debt service payment. ~owEeEO er Au~~