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I <br /> CITY OF PEQUOT LAKES <br /> INVESTMENT POLICY <br /> Adopted 12/03/2007 <br /> SECTION 1. PURPOSE <br /> The purpose of this policy is to establish investment objectives and specific guidelines that the City of <br /> Pequot Lakes will use in the investment of City funds. It will be the responsibility of the City Clerk to <br /> invest city funds in order to attain a market rate of return while preserving and protecting the capital of <br /> the overall portfolio. Investments will be made,based on statutory constraints,in safe, low risk <br /> instruments. <br /> SECTION 2. SCOPE <br /> These investment and portfolio procedures apply to the activities of the City with regard to investing the <br /> financial assets of all funds, including the following. <br /> • General Fund <br /> • Special Revenue Funds <br /> • Capital Project Funds <br /> • Enterprise Funds <br /> • Debt Service Funds <br /> SECTION 3. INVESTMENT OBJECTIVES <br /> Funds of the City will be invested in accordance with Minnesota Statute I I 8 and this investment policy. <br /> Investments shall be made based on statutory and policy constraints including the following. <br /> A. Safety of principal. Safety of the principal is the foremost objective of the City. Each <br /> investment transaction shall insure that capital losses are avoided. <br /> B. Liquidity. The investment portfolio must remain sufficiently liquid to meet all operating costs <br /> that may be reasonably anticipated. Cash needs will be determined based on cash flow forecasts <br /> prepared during the budget process. <br /> C. Yield. The investment portfolio shall be designed to manage the funds to maximize returns. <br /> SECTION 4. DELEGATION OF AUTHORITY <br /> The City Clerk is designated as investment officer of the City and is responsible for investment decisions <br /> and activities. <br /> SECTION 5. PRUDENCE <br /> The standard of prudence to be applied by the investment officer shall be the"prudent investor"rule,and <br /> shall be applied in the context of managing the overall portfolio. This rule states, "Investments shall be <br /> made with judgment and care,under the circumstances then prevailing, that persons of prudence, <br /> discretion and intelligence would exercise in the management of their own affairs,not for speculation, <br /> Page 1 <br />