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NOTE 2 — DEPOSITS AND INVESTMENTS (CONTINUED)
<br />B. Deposits (Continued)
<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 $0 while the balance on the bank records
<br />was $5,114. At December 31, 2025, all deposits were fully covered by federal depository insurance,
<br />surety bonds, or by collateral held by the City's agent in the City's name.
<br />C. Investments
<br />The City has the following investments at year end:
<br />Investment Type
<br />Muncipal bonds
<br />Muncipal bonds
<br />Negotiable certificates of deposit
<br />Investment pools
<br />Minnesota Municipal Money Market
<br />4MPlus Fund
<br />Term Series
<br />Invesco Money Market Fund
<br />UBS SelectPrime Insitutional Fund
<br />Total investments
<br />N/A — Not Applicable
<br />N/R— Not Rated
<br />NAV— Net Asset Value
<br />Credit Risk
<br />Rating Agency
<br />A -AAA Moody's
<br />A -AAA S&P
<br />N/A N/A
<br />AAA S&P
<br />N/R N/A
<br />AAA S&P
<br />AAA Moody's
<br />Fair Value
<br />M eas urements
<br />Using
<br />Leve12
<br />Lev el 2
<br />Leve12
<br />Amortized Cost
<br />Amortized Cost
<br />NAV
<br />NAV
<br />Interest Risk —
<br />Maturity Duration in Years
<br />Less Than 1 1 to 5
<br />$ 2,235,610 $ 6,899,603
<br />5,744,020 24,014,434
<br />244,062 1,217,919
<br />3,758,103 —
<br />22,000,000 4,000,000
<br />2,268,217
<br />7,928,993
<br />Total
<br />$ 9,135,213
<br />29,758,454
<br />1,461,981
<br />3,758,103
<br />26,000,000
<br />2,268,217
<br />7,928,993
<br />$ 44,179,005 $ 36,131,956 $ 80,310,961
<br />71
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