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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
<br />held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust
<br />department of a commercial bank or other financial institution that is not owned or controlled by the
<br />financial institution furnishing the collateral. The City has no additional deposit policies addressing
<br />custodial credit risk.
<br />At year end, the carrying amount of the City's deposits was $6,744,839 while the balance on the bank
<br />records was $7,588,381. At December 31, 2017, 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 />Munic ipa 1Bonds
<br />Munic ipa 1Bonds
<br />Negotiable Certificates ofDeposit
<br />Negotiable Certificates ofDeposit
<br />Investment pools
<br />Minnesota ipa1MoneyMarket
<br />Totallnvestments
<br />N/ANotApplicable
<br />N/R Not Rated
<br />Credit Risk
<br />Rating Agency
<br />N/A N/A
<br />AA+ S&P
<br />AA -AAA Iv1oodys
<br />A- AM SRP
<br />N/R N/A
<br />N/R N/A
<br />Fair Value
<br />Measurements Interest Risk -Ma airily Durati on in Years
<br />Using Less Than 1 lto5 6to10 Total
<br />Leve12 $ - $ 2,121 $ $ 2,121
<br />Leve12 1,252,552 1,034,573 1,359,194 3,646,319
<br />Leve12 2,386,953 7,311,962 2,048,787 11,747,702
<br />Leve12 2,123,258 11,350,114 2,011,802 15,485,174
<br />Levell 484,039 239,830 723,869
<br />Leve12 8,767,906 12,575,319 21,343,225
<br />N/R N/A Amortized Cost 11,351,479 11,351,479
<br />$ 64,299,889
<br />Note: The Minnesota Municipal Money Market Fund is an external investment pool not registered with the Securities
<br />Exchange Commission (SEC) that follows the same regulatory rules of the SEC under mle 2a7. The fair value of the
<br />position in the pool is the same as the value of the pool shares.
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