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INFORMATION <br />City of <br />Elk -..-. <br />River <br />MEMORANDUM <br />T ~ uc~ ors <br /> <br />T: Ju~,~ <br /> <br />~T iTCTIC~N; <br />The purpose of this report is to update the City Council on the status of the various <br />investments that the City maintains, This report is as of December 31, 2009, <br />A.C IJI~; <br />The City Council adopted the original policy on Apri12S,199S with subsequent <br />modifications on February 5, 2007. The policy generally follours the Govern~a~ent Finance <br />officers Association ~GFQA} model and does comply with State Statutes, <br />The investment goals for the City of Elk River are passive in nature due to the allowable <br />investments permitted under State Statutes, The City has four objectives for investing in <br />order of importance. They are safety of principal, liquidity, return on investment, and <br />maintaining the public trust, This means we are focused on not losing on the original <br />investment, having sufficient funds on hand to meet ongoing operating cash needs, getting a <br />market rate of return, and not purchasing speculative investments, <br />State Statutes lifriit the City's ability to invest in many risky types of investments. The City <br />does not purchase stocl~s or mutual funds. The City is generally li~n.ited to federal and state <br />government obligations or agencies backed by them. The City can invest j.n short~term <br />commercial paper highly rated}, Certificates of Deposit or money market accounts with <br />collateralization if in excess of FDIC insurance amounts}, and the rated debt of local <br />governments. <br />The City intends to hold investments until maturity, which means we will get the rate of <br />return for which we invest our funds. fur goal is not to extend our maturities beyond five <br />years unless we are matching cash flow to a specific debt service payment, <br />