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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 $4,401,415 while the balance on the bank
<br />records was $4,908,229. At December 31, 2014, all deposits were fully covered by federal depository
<br />insurance, surety bonds, or by collateral held by the City's agent in the City's name.
<br />C. Investments
<br />The City has the following investments at year end:
<br />CreditRisk InterestRisk-Maturity Duration in Years
<br />Investment Type
<br />Rating
<br />Agency
<br />Less Than 1
<br />lto 5
<br />6 to 10
<br />llto 15
<br />>15 Total
<br />U. S.Treasuries
<br />N/A
<br />N/A
<br />$
<br />$ -
<br />$ 4,087
<br />$ - $
<br />- $ 4,087
<br />U.S. Agencies
<br />AA+
<br />S&P
<br />3,700,127
<br />6,210,057
<br />4,187,496
<br />9,054 14,106,734
<br />MunicipalBonds
<br />Aal-Ba3
<br />Moodys
<br />653,719
<br />3,838,198
<br />1,916,576
<br />806,683
<br />- 7,215,176
<br />MunicipalBonds
<br />A- AAA
<br />S&P
<br />1,938,465
<br />5,044,338
<br />1,817,461
<br />-
<br />8,800,264
<br />Negotiable Certificates ofDeposit
<br />N/A
<br />N/A
<br />2,982,043
<br />7,521,530
<br />-
<br />150,000
<br />10,653,573
<br />Investmentpools
<br />Minnesota MunicipalMoneyMarket
<br />N/R
<br />N/A
<br />5,425,061
<br />-
<br />-
<br />5,425,061
<br />Totallnvestments $ 46,204,895
<br />N/A Not Applicable
<br />N/R No t Ra to d
<br />Investments are subject to various risks, the following of which are considered the most significant:
<br />Custodial credit risk — For investments, this is the risk that in the event of a failure of the counterparty
<br />to an investment transaction (typically a broker-dealer) the City would not be able to recover the value
<br />of its investments or collateral securities that are in the possession of an outside party. The City does
<br />not have a formal investment policy addressing this risk, but typically limits its exposure by purchasing
<br />insured or registered investments, or by the control of who holds the securities.
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