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<br />-34- <br />NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED) <br /> <br />Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its <br />obligations. Minnesota Statutes limit the City’s investments to direct obligations or obligations <br />guaranteed by the United States or its agencies; shares of investment companies registered under the <br />Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the <br />two highest rating categories by a statistical rating agency, and all of the investments have a final <br />maturity of 13 months or less; general obligations rated “A” or better; revenue obligations rated “AA” <br />or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ <br />acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial <br />paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality <br />category by at least two nationally recognized rating agencies, and maturing in 270 days or less; <br />Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of <br />a foreign bank, or a United States insurance company, and with a credit quality in one of the top <br />two highest categories; repurchase or reverse purchase agreements and securities lending agreements <br />with financial institutions qualified as a “depository” by the government entity, with banks that are <br />members of the Federal Reserve System with capitalization exceeding $10,000,000; that are a <br />primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; or <br />certain Minnesota securities broker-dealers. The City’s investment policies do not further address <br />credit risk. <br /> <br /> <br />NOTE 3 – LEASE RECEIVABLE <br /> <br />The City has entered into lease receivable agreements for cell tower rental space on city property. The <br />leases are reported using an incremental rate of 3.25 percent with a final maturity through fiscal 2030. <br />During the current year, the City received principal and interest payments on these leases of $139,304.