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. sec. 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
For more detailed information on investment policies and what they should contain, see Investments 54.