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City of <br />Elk - <br />River <br />To <br />City Council <br />Meeting Date <br />April 15, 2024 <br />Item Description <br />Investment report - I st quarter 2024 <br />Action Requested <br />Information Only <br />Request for Action <br />Item Number <br />12.1 <br />Prepared By <br />Lori Stich, Finance Manager <br />Reviewed by: <br />Lori Stich <br />Joe Stremcha <br />Cal Portner <br />Tina Allard <br />Background/Discussion <br />Introduction <br />The purpose of this report is to update the City Council on the status of the various investments the city <br />maintains as of March 31, 2024. <br />Background <br />The investment policy complies with state statutes and generally follows the Government Finance Officers <br />Association (GFOA) model. <br />The investment goals for the City of Elk River are passive in nature due to the allowable investments <br />permitted under state statutes. The city has four objectives for investing. In order of importance, they are: 1) <br />safety of principal, 2) liquidity, 3) return on investment, and 4) maintaining public trust. This means we are <br />focused on not losing on the original investment, having sufficient funds to meet ongoing operating cash needs, <br />getting a market rate of return, and not purchasing speculative investments. <br />State statutes limit the city's ability to invest in many 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 />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 ensures the city is sufficiently liquid by continually updating our forecast on <br />the anticipated cash flow needs over the next five-year time horizon. We anticipate two large tax settlements <br />each year along with the regularly scheduled debt service payments. We also build in a reserve balance <br />maintained in money market accounts in case of unexpected expenditures. <br />The Elk River Vision <br />A avelcoming community with revolutionary and spirited resourcefulness, exceptional service, and community p p W E H E 0 B <br />engagement that encourages and inspires prospert1NMURd201i <br />