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NOTE 2 — DEPOSITS AND INVESTMENTS
<br />A. Components of Cash and Investments
<br />The City had the following cash and investments at year-end:
<br />Interest Risk —
<br />Fair Value Maturity Duration in Years
<br />Credit Risk Measurements Less Than 1 to 5 6 to 10 Greater Than
<br />Investment Type Rating Agency Using 1 Year Years Years 10 Years Total
<br />U.S. government agency securities
<br />Federal Home Loan Bank
<br />Federal Farm Credit Bank
<br />Municipal bonds
<br />Municipal bonds
<br />Municipal bonds
<br />Municipal bonds
<br />Municipal bonds
<br />Negotiable certificates of deposit
<br />Investment pools/mutual funds
<br />4M Fund
<br />4M Term Series
<br />Wells Fargo Money Market Advantage
<br />Total investments
<br />Petty cash
<br />Total cash and investments
<br />N/R — Not Rated
<br />N/A — Not Applicable
<br />B. Deposits
<br />AA
<br />S&P
<br />Level
<br />$ —
<br />$ 902,432
<br />$ 1,117,183
<br />$ — $ 2,019,615
<br />AA
<br />S&P
<br />Level
<br />—
<br />285,471
<br />1,386,327
<br />— 1,671,798
<br />AAA
<br />S&P
<br />Level
<br />—
<br />606,512
<br />425,834
<br />— 1,032,346
<br />AAA
<br />Moody's
<br />Level
<br />—
<br />232,115
<br />—
<br />— 232,115
<br />AA
<br />S&P
<br />Level
<br />—
<br />1,053,227
<br />3,082,461
<br />376,796 4,512,484
<br />AA
<br />Moody's
<br />Level
<br />—
<br />616,803
<br />1,381,916
<br />— 1,998,719
<br />A
<br />Moody's
<br />Level
<br />—
<br />521,978
<br />314,468
<br />— 836,446
<br />N/R
<br />N/A
<br />Level
<br />—
<br />1,686,058
<br />240,833
<br />— 1,926,891
<br />N/R
<br />N/A
<br />N/A
<br />4,557,507
<br />—
<br />—
<br />— 4,557,507
<br />N/R
<br />N/A
<br />N/A
<br />500,000
<br />—
<br />—
<br />— 500,000
<br />AAA
<br />S&P
<br />Level
<br />10,637
<br />—
<br />—
<br />— 10,637
<br />$ 5,068,144
<br />$ 5,904,596
<br />$ 7,949,022
<br />$ 376,796 19,298,558
<br />500
<br />$19,299,058
<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 deposit.
<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 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 fair value of collateral pledged must equal 110 percent of the deposits not
<br />covered by federal deposit insurance or corporate surety bonds. Authorized collateral includes
<br />treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated "A" or
<br />better; revenue obligations rated "AA" or better; irrevocable standard letters of credit issued by the
<br />Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities
<br />pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in
<br />an account at a trust department of a commercial bank or other financial institution that is not owned
<br />or controlled by the financial institution furnishing the collateral. The City has no additional deposit
<br />policies addressing custodial credit risk.
<br />At year-end, the carrying amount of the City's deposits and the bank balance was $0, with the use of a
<br />depository sweep account. Any bank balance during the year was covered by federal deposit
<br />insurance, surety bonds, or by collateral held by the City's agent in the City's name.
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