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CITY OF ARDEN HILLS,MINNESOTA <br /> NOTES TO FINANCIAL STATEMENTS <br /> DECEMBER 31,2000 <br /> Note 3: DETAILED NOTES ON ACCOUNTS-CONTINUED <br /> Minnesota Statutes require that all City deposits be protected by insurance,surety bond or collateral. The market <br /> value of collateral pledged must equal 110%of the deposits not covered by insurance or bonds(140%in the case <br /> of mortgage notes pledged). <br /> Authorized collateral includes the legal investments described below,as well as certain fust mortgage notes,and <br /> certain other State or local government obligations. Minnesota Statutes require that securities pledged as <br /> collateral be held in safekeeping by the City or in a financial institution other than that furnishing the collateral. <br /> Investments ' <br /> Investments are categorized into these three categories of credit risk: <br /> 1. Insured or registered,or securities held by the City or its agent in the City's name. <br /> 2. Uninsured and unregistered,with securities held by the counterparty's trust department or agent in the <br /> City's name. , <br /> 3. Uninsured and unregistered,with securities held by the counterparty,or by its trust department or agent but <br /> not in the City's name. <br /> At year end,the City's investment balances were as follows: <br /> Category Carrying and <br /> 1 2 3 Fair Value <br /> U.S.Government Securities $ 7,904,896 $ - $ - $ 7,904,896 <br /> Certificates of Deposit 878,000 - - 878.000 <br /> $ 8.782.896 $ - $ - 8,782,896 <br /> Investments not subjected to categorization: <br /> Broker money market funds 98,175 <br /> 4M Fund 6,580,174 <br /> Total investments $ 15.461.245 <br /> The City's investment in Broker Money Market Funds and the 4M Fund were equal to the value of the pool <br /> shares. <br /> A reconciliation of cash and temporary investments as shown on the Combined Balance Sheet for the City <br /> follows: <br /> Investments $ 15,461,245 ' <br /> Petty cash 325 <br /> Total cash and temporary investments $ 15.461.570 <br /> B. Loans Receivable <br /> In 1998,the City entered into an agreement with Cardiac Pacemakers,Inc.and the Minnesota Department of <br /> Trade and Economic Development(MNDTED). This agreement provides a$300,000 loan to Cardiac <br /> Pacemaker,Inc.that has a$200,000 forgivable component and a$100,000 loan component at 3%payable over <br /> 60 months. The forgivable component remains forgivable if Cardiac Pacemakers,Inc.meets certain employment <br /> criteria over a five-year period beginning September 1998 through August 2003. The outstanding balance at year <br /> end for the forgivable component is$150,000 and for the loan component is$55,194. <br /> -16- <br />