|
<br />
<br />NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED)
<br />
<br />B. Deposits
<br />
<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 />
<br />The following is considered the most significant risk associated with deposits:
<br />
<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 />
<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 />
<br />At year end, the carrying amount of the City's deposits was $3,061,278 while the balance on the bank
<br />records was $3,598,357. At December 31, 2013, all deposits were fully covered by federal depository
<br />insurance, surety bonds, or by collateral held by the City’s agent in the City’s name.
<br />
<br />
<br />C. Investments
<br />
<br />The City has the following investments at year end:
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />Investment Type Rating Agency Less Than 1 1 to 5 6 to 10 11 to 15 >15 Total
<br />U.S. Treasuries N/A N/A 2,951,979$ -$ 6,167$ -$ -$ 2,958,146$
<br />U.S. Agencies AA+ S&P 1,024,650 2,812,371 7,834,210 4,000,413 21,619 15,693,263
<br />Municipal Bonds Aa1-Ba3 Moodys 1,344,424 5,371,935 2,046,089 1,017,209 - 9,779,657
<br />Municipal Bonds A-AAA S&P 2,000,667 3,981,009 1,095,229 - - 7,076,905
<br />Ne gotia ble Ce rtific a te s of De posit N/A N/A 2,479,833 4,430,000 - 150,000 - 7,059,833
<br />Investment pools
<br />Minnesota Municipal Money Market N/R N/A 6,417,862 - - - - 6,417,862
<br /> Total Investments 48,985,666$
<br />N/A Not Applicable
<br />N/R Not Rated
<br />Credit Risk Inte re st Risk- Ma turity Dura tion in Ye a rs
<br />72
|