10.06C Policy Revisions - Investment Policy

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i SECTION 5. PRUDENCE The standazd of prudence to be applied by the investment officer shall be the"prudent investor" rule, and shall be applied in the context of managing the overall portfolio. This rule sta.tes, "Investments shall be made with judgment and care, under the circumstances then prevailing,that persons of prudence,discretion and intelligence would exercise in the management of their own afFairs,not for speculation,considering the probable safety of the plan capital as well as the probable investment return to be derived from the assets." The investrnent officer,acting in accordance with this policy and with Minnesota Staxute 118A and exercising due diligence shall be relieved of personal liability for an individual security's credit risk or market price changes,provided that reasonable action is taken to control adverse i developments and unexpected deviations are reported in a timely manner. � � SECTION 6. CONFLICT OF INTEREST i Any City official(elected or appointed) involved in the investment process shall refrain from �i personal business activity that could conflict with proper execution of the investment program or , which could impair his/her ability to make impartial investment decisions. � SECTION 7. INTERNAL CONTROLS I i Internal controls shall be designed to prevent loss of public funds due to fra.ud,error, � misrepresenta.tion,unanticipated market changes, or imprudent actions. Internal controls shall be � reviewed annually by an independent auditor. j SECTION 8. AUTHORIZED FINANCIAL INSTITUTE AND DEALER The responsibility for conducting investment transactions reside with the City Council of the City of Pequot Lakes. Investments will be held in safekeeping in accordance with Minnesota Statues 118A.06. SECTION 9. BROKER REPRESENTATIONS Before engaging in investment transactions with the City of Pequot Lakes,brokers shall submit a certification annually according to Minnesota Statutes, Section 118A.04. The document will sta.te that the officer has reviewed the investrnent policies and objectives,as well applicable state law, and agrees to disclose potential conflicts of interest or risk to public funds that might arise out of ; business transactions between the firm and the City of Pequot Lakes. All financial institutions � shall agree to undertake reasonable efforts to preclude imprudent transactions involving the City's funds. SECTION 10. SUITABLE AND AUTHORIZED INVESTMENT INSTRUMENTS The City is authorized to invest in the instruments as outlined in Minnesota Statutes, Section 118A.04. Investments shall be structured to meet the City's current and future cash flow needs. Investments shall be done on a pooled funds basis with interest allocated on a cash balance method. Interest-bearing deposits in authorized depositories must be fully insured or collateralized. -2 -