2009 CAFR - Laserfiche WebLink

Home

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) W. Change in Accounting Principle (continued) the termination of employment. Governmental entities have traditionally accounted for OPEB on a pay- as-you-go basis. The guidance in this statement rests on the assumption that OPEB should be accrued as service is provided by employees. The City implemented this standard prospectively, meaning there is no OPEB liability accrued for past service at the date of transition. More information on these liabilities is included later in these notes. NOTE 2 - DEPOSITS AND INVESTMENTS A. Components of Cash and Investments Cash and investments at year-end consist of the following: Depos its $ 18,189,924 Investments 31,430,286 Cash on hand 600 Total $ 49,620,810 Cash and investments are presented in the financial statements as follows: Cash and temporary investments - Statement of Net Assets Restricted cash and investments for debt service - Statement of Net Assets Cash and Investments held by trustee - Statement of Fiduciary Net Assets Total $ 47,293,225 1,609,215 718,370 $ 49,620,810 B. Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council, including checking accounts and certificates of deposits. The following is considered the most significant risk associated with deposits: Custodial credit risk - In the case of deposits, this is the risk that in the event of a bank failure, the City's deposits may be lost. Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by federal deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated "A" or better; revenue obligations rated "AA" or better; irrevocable standard letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The City has no additional deposit policies addressing custodial credit risk. -37-