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NOTE 2 — DEPOSITS AND INVESTMENTS (CONTINUED)
<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 />U.S. Agencies
<br />MunicipalBonds
<br />MunicipalBonds
<br />Negotiable Certificates ofDeposit
<br />Investment pools
<br />Minnesota ManicipalMoneyMarket N/R N/A N/A
<br />Total Investments
<br />NIANotApphcable
<br />NIRNotRated
<br />Fair Value
<br />CreditRisk Measurements Interest Risk- Maturity Duration in Years
<br />Rating Agency Using Less Than 1 lto 5
<br />N/A N/A Levell $
<br />AAA Moodys Level2
<br />AA+ S&P Level2 350,038
<br />Aal-Ba2 Moodys Level2 291,790
<br />A -AAA S&P Level2 1,504,309
<br />N/R N/A Levell 9,829,925
<br />6to10 llto15 Total
<br />- $ - $ 2,026 $ $ 2,026
<br />549,223 549,223
<br />2,417,083 1,876,715 4,643,836
<br />7,996,942 1,945,604 522,417 10,756,753
<br />11,518,334 3,321,563 16,344,206
<br />9,134,879 242,894 19,207,698
<br />10,537,518 - - - 10,537,518
<br />$ 62,041,260
<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.
<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 subsidiaries,
<br />rated of the highest quality category by at least two nationally recognized rating agencies, and maturing
<br />in 270 days or less; time deposits that are fully insured by the Federal Deposit Insurance Corporation
<br />or bankers acceptances of the United States banks and Guaranteed Investment Contracts guaranteed by
<br />a United States commercial bank or domestic branch of a foreign bank, or a United States insurance
<br />company, or their Canadian subsidiary, and with a credit quality in one of the top two highest categories
<br />by a nationally recognized rating agency. The City's investment policies do not further address credit
<br />risk.
<br />Concentration risk — This is the risk associated with investing a significant portion of the City's
<br />investment (considered 5 percent or more) in the securities of a single issuer, excluding United States
<br />guaranteed investments (such as Treasuries), investment pools and mutual funds. The City's
<br />investment policies do not limit the concentration of investments.
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