Should a municipality have an investment policy and, if so, what should such a policy include?
While a governing body could determine how and when to make each investment, this would not be practical or workable on a daily basis. Also, the municipal treasurer or finance officer probably has more expertise regarding investment matters. Therefore, it’s advisable for the municipal governing body to delegate its investment authority to the treasurer or municipal finance officer and establish an investment policy which sets forth general guidelines and allows the treasurer or other financial officer to exercise discretion within those boundaries.
At a minimum, a municipal investment policy should probably include the following:
1. A list of financial institutions within which the treasurer is authorized to deposit public funds;
2. Guidelines concerning the amount of money that may be deposited in each or all of the designated public depositories;
3. Guidelines concerning whether and to what extent collateral will be required for particular investments or whether other security precautions must be taken;
4. Guidelines concerning whether and to what extent the treasurer may invest in each of the investment options identified in Wis. Stat. § 66.0603; and
5. Guidelines concerning the maximum time public funds may be invested in time deposits.
Finally, it might be advisable for the governing body to establish a policy of periodically reviewing the treasurer’s investment practices under the local investment policy and sec. 66.0603.
For more detailed information on investment policies and what they should contain, see Investments 54. (rev. 5/19)