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NOTE 2 —DEPOSITS AND INVESTMENTS (CONTINUED)
<br />C. Investments
<br />The City has the following investments at year end:
<br />FairValue
<br />Credit Risk Measurements TnterestRisk- MaturityDuration in Years
<br />lnvestmentType Rating Agency Using Less Than 1 Ito 5 6 to 10 Total
<br />U.S. Agencies AA+ S&P Level2 $ 251,015 $ 1,441 $ $ 252,456
<br />MunicipalBonds A- AAA Moodys Level2 2,821,333 9,459,970 4,334,218 16,615,521
<br />MunicipalBonds A- AAA S&P Level2 3,394,438 11,822,576 6,866,492 22,083,506
<br />Negotiable Certificates ofDeposit N/A N/A Level2 4,765,044 4,548,958 9,314,002
<br />CommercialPaper Al S&P Levell 9,996,500 9,996,500
<br />'rive stmentpools
<br />Federated Hermes lnstitutionalFund AAA S&P Levell 8,895,000 8,895,000
<br />Minnesota MunicipalMoneyMarket N/R N/A Amortized Cost 10,896,526 10,896,526
<br />UBS SelectPrime InstitutionalFund AAA Moodys NetAssetValue 16,338,998 16,338,998
<br />Totallnvestments $ 94,392,509
<br />The City's investments include investment pools managed by 4M, which is an external investment pool regulated by
<br />Minnesota Statutes and is not registered with the Securities and Exchange Commission (SEC) that follows the same
<br />regulatory rules of the SEC. The City's investments in this investment pool are measured at the net asset value per
<br />share provided by the pools, which are based on amortized cost methods that approximate fair value. The 4M Fund
<br />is sponsored by the League of Minnesota Cities. For this investment pool, there are no unfunded commitments,
<br />redemption frequency is daily, and there is no redemption notice required for the liquid class; the redemption period
<br />is 14 days for the Plus Class.
<br />The UBS Select Prime Industrial Fund includes investments primarily in short-term, high -credit -quality money market
<br />instruments that invest domestically and globally in both long and short-term common stocks across all market
<br />capitalizations. The fund aims to preserve capital, maintain liquidity and produce a competitive yield. This is an
<br />external investment pool that operates in conformity with the Securities and Exchange Commission's rules. There are
<br />no withdrawal restrictions related to the fund. The City's investments in this investment pool are measured at the net
<br />asset value per share provided by the pools that approximate fair value.
<br />The Federated Hermes Institutional Fund invests in a portfolio of short-term, high -quality, fixed -income securities
<br />issued by banks, corporations and the U.S. government that mature in 397 days or less. The fund aims to preserve
<br />principal, maintain liquidity and produce a competitive yield. It invests all or substantially all of its net assets in the
<br />institutional money market fund with similar investment objectives and strategies as the fund. It may also invest in
<br />government securities that are supported by the full faith and credit of the U.S. government.
<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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