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NOTE 2 — DEPOSITS AND INVESTMENTS (CONTINUED)
<br />B. Deposits (continued)
<br />At year -end, the carrying amount of the City's deposits was $22,066,866 while the balance on the bank
<br />records was $22,815,979. At December 31, 2008, $22,447,012 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. The
<br />remaining amount was not covered.
<br />C. Investments
<br />The City has the following investments at year end:
<br />Credit Risk Interest Risk - Maturity Duration in Years
<br />Investment Type Rating Agency Less Than 1 1 to 5 6 to 10 11 to 15 >15 Total
<br />U.S Treasuries N/A N/A $ $ - $ - $ 19,696 $ - $ 19,696
<br />U.S Agencies Aaa Moodys 463,433 10,989,546 8,546,144 2,278,961 1,277,624 23,555,708
<br />U.S Agencies AAA S&P 1,661,613 493,125 - 2,154,738
<br />Municipal Bonds AI -Aaa Moodys 706,630 4,475,812 733,175 - 5,915,617
<br />Negotiable Certificates of Deposit N/A N/A 1,138,358 1,398,375 99,467
<br />Investment pools
<br />Minnesota Municipal Money Market N/R N/A
<br />First American Treasury Obligation AAA S&P
<br />Total Investments
<br />N/A Not Applicable
<br />N/R Not Rated
<br />-36-
<br />18,478
<br />2,636,200
<br />645,233 - - 645,233
<br />The Minnesota Municipal Money Market Fund is an external investment pool not registered with the Securities Exchange Commission (SEC) 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 />Investments are subject to various risks, the following of which are considered the most significant:
<br />18,478
<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 />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.
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