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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 bond,
<br />or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by federal
<br />deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills, notes, and bonds;
<br />issues of U.S. government agencies; general obligations rated "A" or better; revenue obligations rated "AA"
<br />or better; irrevocable standard letters of credit issued by the Federal Home Loan Bank; and certificates of
<br />deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted
<br />account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other
<br />financial institution that is not owned or controlled by the financial institution furnishing the collateral. The
<br />City has no additional deposit policies addressing custodial credit risk.
<br />At year end, the carrying amount of the City's deposits was $3,061,278 while the balance on the bank
<br />records was $3,598,357. At December 31, 2013, all deposits were fully covered by federal depository
<br />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 />Investment Type
<br />U.S. Treasuries
<br />U.S. Agencies
<br />MunicipalBonds
<br />MunicipalBonds
<br />Negotiable Certificates ofDeposit
<br />lnvestmentpools
<br />Minnesota MunicipalMoneyMarket
<br />To to llnve s tme nts
<br />N/ANot Applicable
<br />N/RNotRated
<br />CreditRisk JnterestRisk-MaturityDuration in Years
<br />Rating Agency Less Than 1 lto 5 6 to 10 llto 15 >15
<br />N/A N/A $ 2,951,979 $ - $ 6,167 $ - $ -
<br />AA+ S&P 1,024,650 2,812,371 7,834,210 4,000,413 21,619
<br />Aa1-Ba3 Moodys 1,344,424 5,371,935 2,046,089 1,017,209 -
<br />A -AAA S&P 2,000,667 3,981,009 1,095,229 -
<br />N/A N/A 2,479,833 4,430,000 150,000
<br />N/R N/A 6,417,862
<br />Total
<br />$ 2,958,146
<br />15,693,263
<br />9,779,657
<br />7,076,905
<br />7,059,833
<br />6,417,862
<br />$ 48,985,666
<br />72
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