(A) An investment policy, as adopted by the City Council, provides guidelines for the prudent investment of the temporary idle cash and outlines the policies for maximizing the efficiency of the cash management system. The ultimate goal is to enhance the economic status of the city while protecting its pooled cash.
(B) The cash management system is designed to accurately monitor and forecast expenditures and revenues, thus enabling the city to invest funds to the fullest extent possible. The city attempts to match funds to projected disbursements.
(C) In order to maximize interest earnings, the city commingles the cash of all funds. Interest and revenue derived from commingled cash is allocated to the participating funds monthly based on the relative cash balance of each fund.
(D) Criteria for selecting investments and the order of priority are:
(1) Safety. The safety and risk associated with an investment refers to the potential loss of principal, interest or a combination of these amounts. The city only invests in those investments that are considered safe.
(2) Liquidity. This refers to the ability to “cash in” at any moment in time with a minimal chance of losing some portion of principal and interest. Liquidity is an important investment quality especially when the need for unexpected funds occur occasionally.
(3) Yield. Yield is the potential dollar earnings an investment can provide, and sometimes is described as the rate of return.
(Ord. 1000, passed 1-15-18)