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NOTE 2 — DEPOSITS AND INVESTMENTS (CONTINUED)
<br />B. Deposits
<br />In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks
<br />authorized by the City Council, including checking accounts and certificates of deposits.
<br />The following is considered the most significant risk associated with deposits:
<br />Custodial credit risk — In the case of deposits, this is the risk that in the event of a bank failure, the
<br />City's deposits may be lost.
<br />Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety
<br />bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered
<br />by federal deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills,
<br />notes, and bonds; issues of U.S. government agencies; general obligations rated "A" or better; revenue
<br />obligations rated "AA" or better; irrevocable standard letters of credit issued by the Federal Home Loan
<br />Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held
<br />in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department
<br />of a commercial bank or other financial institution that is not owned or controlled by the financial
<br />institution furnishing the collateral. The City has no additional deposit policies addressing custodial
<br />credit risk.
<br />At year -end, the carrying amount of the City's deposits was $15,357,885 while the balance on the bank
<br />records was $16,617,025. At December 31, 2010, $16,617,025 of deposits were fully covered by federal
<br />depository insurance, surety bonds, or by collateral held by the City's agent in the City's name.
<br />C. Investments
<br />The City has the following investments at year end:
<br />Credit Risk Interest Risk - Maturity Duration in Years
<br />Investment Type
<br />U.S Treasuries
<br />U.S Agencies
<br />U.S Agencies
<br />Municipal Bonds
<br />Negotiable Certificates of Deposit
<br />Investment pools
<br />Minnesota Municipal Money
<br />Market
<br />First American Treasury
<br />Obligation
<br />Total Investments
<br />N/A Not Applicable
<br />N/R Not Rated
<br />Rating
<br />N/A
<br />Aaa
<br />AAA
<br />Al -Aaa
<br />AAA
<br />Agency
<br />N/A
<br />Moodys
<br />S &P
<br />Moodys
<br />S &P
<br />N/A N/A
<br />N/R N/A 648,546
<br />Less Than 1 1 to 5
<br />$ - $
<br />130,670 10,756,764
<br />1,184,867 8,375,863
<br />300,849 1,363,143
<br />100,000 1,310,630
<br />AAA S &P 55,473
<br />11 to 15 >15
<br />$ 13,873 $ -
<br />1,605,264 690,426
<br />6 to 10
<br />$ -
<br />3,756,816
<br />1,763,219
<br />941,173
<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. Investments are purchased and regulated according to Minnesota Statutes.
<br />Total
<br />$ 13,873
<br />16,939,941
<br />1,763,219
<br />10,501,903
<br />1,663,992
<br />1,410,630
<br />648,546
<br />55.473
<br />$32,997,577
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