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NOTE 2 — DEPOSITS AND INVESTMENTS (CONTINUED)
<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 $6,093,599 while the balance on the bank
<br />records was $6,307,076. At December 31, 2019, 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 />Fair Value
<br />Credit Risk j\re a sure ments interest Risk-1V fabinty Hirt bon In Year
<br />Investment Type Rating Agency Using Less Than 1 1to 5 6 to 10 II to 15 Total
<br />U S Agencies AA+ S&P Leve12 $ - $ 2,022,096 $ 1,974,947 $ 296,235 $ 4,293,278
<br />I\ tunic ipalBonds A -AAA I\loodys Leve12 3,053,269 8,918,504 1,899,053 - 13,870,826
<br />I\ tunic ipalBonds A-AAAS&P Leve12 3,338,818 9,942,108 4,742,415 - 18,023,341
<br />Negotiable Certificates of Deposit N/A N/A Leve12 11,820,386 15,772,348 245,319 - 27,838,053
<br />Investment pools
<br />I\ fume sotaI\Tunic ipall\IoneyI\larket N/R N/A Amortized Cost 11,755,808 - - - 11,755,808
<br />UBS SelectPnme lnstitutionalFund AAA I\loodys Nettlsset Value 4,506,383 - - - 4,506,383
<br />Totallnvestments $ 80,287,689
<br />N/A Not Apphcable
<br />N/R Not Rated
<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. The City's investments in this
<br />investment pool are measured at the net asset value per share provided by the pools, which are based on amortized
<br />cost methods that approximate fair value. There are no restrictions or limitations on withdrawals from 4M. 4M Teri
<br />Series Portfolios are intended to be held until maturity: a participant's withdrawal prior to maturity will require seven -
<br />days' notice of redemption and will likely carry a penalty, which could be substantial in that it would be intended to
<br />allow the Tenn Series Portfolio to recoup any associated penalties, charges, losses, or other costs associated with the
<br />early redemption of the investments therein.
<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 -tern 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.
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