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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: p.. Page 2 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. Page 3 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. �n Page 4 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.