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<br />NOTE 2 - DEPOSITS AND INVESTMENTS (CONTINUED)
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<br />B. Deposits (Continued)
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<br />At year-end, the carrying amount of the City's deposits was $18;189,924 while the balance on the bank
<br />records was $21,083,162. At December 31,2009, $21,083,162 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.
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<br />C. Investments
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<br />The City has the following investments at year end:
<br />Credit RISk Interest Risk-Maturity Duration in Years
<br />
<br />Investment Type Ratin~ A~ency Less Than lIto 5 6 to 10 II to 15
<br />
<br />>15
<br />
<br />Total
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<br />V.S Treasuries N/A N/A $ $ $ $ 15,003 $ $ 15,003
<br />V S Agencies Aaa Moodys 31,484 11,255,082 3,642,730 860,016 978,124 16,767,436
<br />V,S Agencies AAA S&P 2,278,382 2,278,382
<br />Municipal Bonds AI-Aaa Moodys 1,359,171 5,076,963 2,371,838 8,807,972
<br /> AAA S&P 1,401,328 255,025 1,656,353
<br />Negotiable Certif'lCates of Deposit N/A N/A 893,092 308,948 1,202,040
<br />Investment pools
<br />Minnesota Municipal Money Market N/R N/A 647,647 647,647
<br />First American Treasury Ob~gation AAA S&P 55,453 55,453
<br />Total Investments $31,430,286
<br />
<br />N/A Not Applicable
<br />N/R Not Rated
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<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 />The 4M Fund is sponsored by the League of Minnesota Cities. Invesnnents are purchased and regulated according to Minnesota Statutes.
<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.
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