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<br />NOTE 2 - DEPOSITS AND INVESTMENTS (CONTINUED)
<br />
<br />B. Deposits (continued)
<br />
<br />At year-end, the carrying amount of the City's deposits was $16,588,736 while the balance on the bank
<br />records was $17,571,565. At December 31,2007, $17,571,565 of deposits were fully covered by federal
<br />depository insurance, surety bonds, or by collateral held by the City's agent in the City's name.
<br />
<br />C. Investments
<br />
<br />The City has the following investments at year end:
<br />
<br />Interest Risk-Maturity Duration in Years
<br />1105 5 to 10 10to 15 >15 Total
<br />$ $ $ - $ 24,472 $ 24,472
<br />14,487,152 5,536,8:>5 1,955,466 663,303 26,487,903
<br />500,315 500,315
<br />1,523,032 2,334,868
<br />3,531,283 97,893 6,561,419
<br /> 629,591
<br />105,223 105,223
<br /> 1,531,940 1,531,940
<br /> $38,175,731
<br />
<br />I nvestment Type
<br />
<br />Credit Risk
<br />Rating Agency Less Than I
<br />N/A N/A $
<br />Aaa Moodys 3,845,377
<br />AAA S&P
<br />A I -Aaa Moodys 811,836
<br />N/A N/A 2,932,243
<br />N/R N/A 629,591
<br />AAA S&P
<br />Aaa Moodys
<br />
<br />U.S Treasuries
<br />
<br />U.S Agencies
<br />U.S Agencies
<br />
<br />Municipal Bonds
<br />
<br />Negotiable Certificates of Deposit
<br />
<br />Investment pools
<br />MinnesotaMunicipal MoneyMarket
<br />First American Treasury Obligation
<br />Guaranteed Investment Contract
<br />
<br />Total Investments
<br />
<br />N/A Not Applicable
<br />N/R Not Rated
<br />
<br />The Minnesota Municipal Money Market Fund is an external investment pool not regisrered with the Securities Exchange Commission (SPC) that
<br />follows the same regulatory rules of the SEC under rule 2a7. The fair value of the position in the pool is the same as the value of the pool shares.
<br />
<br />Investments are subject to various risks, the following of which are considered the most significant:
<br />
<br />Custodial credit risk - For investments, this is the risk that in the event of a failure of the
<br />counterparty to an investment transaction (typically a broker-dealer) the City would not be able to
<br />recover the value of its investments or collateral securities that are in the possession of an outside
<br />party. The City does not have a formal investment policy addressing this risk, but typically limits its
<br />exposure by purchasing insured or registered investments, or by the control of who holds the
<br />securities.
<br />
<br />Credit risk - This is the risk that an issuer or other counterparty to an investment will not fulfill its
<br />obligations. Minnesota Statutes limit the City's investments to direct obligations or obligations
<br />guaranteed by the United States or its agencies; general obligations rated "A" or better; revenue
<br />obligations rated "AA" or better; general obligations of the Minnesota Housing Finance Agency rated
<br />"A" or better; commercial paper issued by the United States corporations or their Canadian
<br />subsidiaries, rated of the highest quality category by at least two nationally recognized rating
<br />agencies, and maturing in 270 days or less; time deposits that are fully insured by the Federal Deposit
<br />Insurance Corporation or bankers acceptances of the United States banks and Guaranteed Investment
<br />Contracts guaranteed by a United States commercial bank or domestic branch of a foreign bank, or a
<br />United States insurance company, or their Canadian subsidiary, and with a credit quality in one of the
<br />top two highest categories by a nationally recognized rating agency. The City's investment policies
<br />do not further address credit risk.
<br />
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