HomeMy WebLinkAboutCity Council Resolution 1985-420CITY OF PLYMOUTH
Pursuant to due call and notice thereof, a rggular meeting of the City
Council of the Cityof Plymouth, Minnesota was held on the 3rd day
of June , 1985. The following members were present: Mayor Davenport,
Councilmembers Schneider. Neils, Crain and Va,Siliau
The following members were absent: nQ[ke^
Councilmember Neils introduced the following Resolution and moved
its adoption:
RESOLUTION NO. 85- 420
ADOPTING THE CITY OF PLYMOUTH'S INVESTMENT POLICY
WHEREAS, the City Council recognizes the need to establish written guidelines
for the efficient management of all City funds and for the purchase/sale of
investments: and,
WHEREAS, the Cite staff has nrenared an investment policy which clearly defines
the guidelines to be followed when purchasing or selling investments; and,
WHEREAS, the City Finance Director is hereby authorized to purchase, at their
original sale or after they have been issued, securities which are permissible
investments as defined by Minnesota Statutes and set forth within the Investment
Policy, from money in his/her custody which is not required for the immediate
necessities of the City and as ne/she may deem wise and expedient, and to sell
or exchange for other eligible securities and reinvest the proceeds of the
securities so purchased, subject to all other conditions as set forth in the
Investment Policy:
NOW, THEREFORE, BE IT HEREBY RESOLVED By THE CIT° COUNCIL 0' THE CiTv OF PLVMOUTH,
MINNESOTA, that it does hereby approve the Investment Policv as vresented and
attached to this resolution.
The nation for the adoption of the foregoing Resolution was duly seconded by
Counci]member Schneider , and upon vote being taken thereon, the following
voted in favor thereof: Mayor Davenport, Councilmembers Schneider. Neils.
Cry
The following voted against or abstained: none
Whereupon the Resolution was declared duly passed and adopted.
City of Plymouth
Investment Polio•
Purpose and Goals
This polio• is to establish guidelines for the efficient management of CitV funds
and for the purchase/sale of investments.
The primary financial goals of Plymouth's treasury management program are to
maximize the amount of cash available, both to meet daily cash needs as well as to
increase the amount available for investing, and to earn the maximum return on cash
invested with no risk of losing the principal investment.
Authority and Responsibility
Authority for all investment decisions is hereby granted to the City's Finance
Director. It shall be the duty of the Finance Director to manage the day-to-day
operations of the investment portfolio.
Investments shall be made with judgement and care, under circumstances then
prevailing, which persons of prudence, discretion and intelligence exercise in the
management of their own affairs, not for speculation, but for investment,
considering the primary objective of safety as well as the secondary objective of
the obtainment of market rates of return.
The standards of prudence to be used by investment officials shall be the "prudent
person", and shall be applied in the context of managing an overall portfolio.
Investment officers acting in accordance with written procedures and exercising due
intelligence shall be relieved of personal responsibility for an individual
security's credit risk or market price changes, provided that deviations from
expectation are reported in a timer• fashion, and appropriate action is taken to
control adverse developments.
Authorized Investments and Collateral Requirements
Under Minnesota Statutes, Section 471.56 there are a number of ways in which
available funds can be invested, however, it is the infant of this policy to limit
the available investment options to the following:
1. Savings or money market accounts
2. Certificates of deposits
3. Direct U.S. government obligations
4. Federal agency issues
5. Repurchase agreements
6. Bankers' acceptance
7. Highest quality commercial paper
If the city's deposit exceeds $100,000, which is the amount protected by federal
insurance, the excess must be protected by collateral furnished by the depository.
The total amount of collateral required must be at least 10 percent more than the
amount deposited with the particular financial institution. The only securities
that may be used as collateral are regulated by (M.S. 118.01, Subd. 2). They are as
follows:
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Investment Policy
1.
All bonds (except bonds secured
by
real estate), certificates o:
indebtedness, or warrants which
are
authorized investments for
savings banks under state law;
2.
Bonds of any insular possession
of
the United States;
3.
Bonds of any state or of any of
its
agencies if the principal or
interest is paid otherwise than
by
direct taxation;
4.
Notes secured by unmatured first
mortgage on real estate located
within the state if interest is
not
past due and the real estate is
not tax delinquent.
5. Loans guaranteed by the Small Business Administration under the Small
Business Act and loans or obligations secured guaranteed by the
United States or any agency of the United States; including any
corporation wholly owned directly or indirectly by the United States.
All collateral shall be assigned to the City by an assignment requiring the
depository to pay to the city treasurer all money deposited free of any charges as
well as all interest when due at the stated rate. Under the assignment, the Citv
shall have authority to sell as much of the collateral as needed to cover the
uninsured deposit in case of default.
The following types of investments which are included within the City's portfolio
are not subject to collateralization:
10
1. Direct U.S. government obligations
2. Federal agency issues
3. Bankers acceptance
4. Commercial paper
Procedures
The following procedures shall be used as a guideline for making all investments.
I. The Finance Director shall maintain adequate accounting and auditing
procedures for all cash and investments.
2. It shall be the general policy of the City to co -mingle all available
cash into a common pool for investment purposes. The only exception
to this procedure shall be in those instances where legal
requirements demand specific treatment.
3. The amount of money available for investment must be determined.
Adequate operating cash must be available and is to be invested in an
interest bearing account until needed.
4. The term of the investments must be determined so that the maturities
will coincide when future anticipated expenditures are to be made.
Recognizing there is a need to retain liquidity in investments.
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Investment Policy
5. *Sake sure that all investments to be purchased meet all legs:
requirements.
6. Request competitive bids by telephone from numerous financial
institutions (which have previously been approved by the City
Council) to assure a reasonable coverage of the market. When
evaluating the bids to determine the most competative rate it is well
that we recognize the economic and social impact which our local
financial institutions may have upon our community.
7. Before buying make sure that all necessary written agreements are in
order:
(a) The financial institution selected has been officially
approved as a depository by the City Council.
(b) The City has an executed "Depository Agreement" on file
which requires the depository to pledge appropriate
collateral to secure all funds deposited. Such an
agreement requires the depository to deliver appropriate
collateral for safekeeping to an independent third party
financial institution.
(c) The City has the necessary "Escrow Agreements" in place.
The escrow agreemQnt is an agreement with a third party who
has agreed to hold all pledged collateral in safekeeping
subject to the conditions set forth in the agreement.
6, bake sure that collateral has been pledged to cover all deposits
including the current buy.
9. Wire transfer the necessary funds to cover the financial transaction.
All wire transfers must be completed within a given time frame. Make
sure that time frame is known by all parties concerned. Follow up to
make sure the money was sent and received promptly.
10. Make sure that all necessary paper work confirming the buy is
received by the City and properly filed.
11. Place investments such that no one financial institution has a high
percentage of our total investments.
12. Maintain a proper mix of the portfolio in short-term (less than one
year) and long-term investments. Generally long-term means one to
five years and are comprised of federal securities.
13. Make sure that all accounting entries are made promptly and
accurately.
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Investment Policy
lb. Ali investments and pledged collateral are reviewed on an ongoing
basis.
15. Maintain a good working relationship with the representatives fror.
all official financial depositories.
This policy and the schedule of investments and corresponding collateral are subject
to a continuous reviewing process and audit.