Centerville 2010 Financial Report

Home Browse Search

CITY OF CENTERVILLE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 Note 3:DETAILED NOTES ON ALL FUNDS - CONTINUED At year end, the City’s carrying amount of deposits was $5,993,555 and the bank balance was $6,103,388. Of the bank balance, $250,000 was covered by federal depository insurance and $5,853,388 was covered by collateral held by the City’s agent in the City’s name. Carrying amount of deposits$ 5,993,555 Investments 249,273 Petty cash 349 Total$ 6,243,177 A reconciliation of cash and temporary investments as shown on the statement of net assets for the City follows. Investments As of December 31, 2010, the City had the following investments that are insured or registered, or securities held by the City or its agent in the City’s name. Fair Value CreditSegmentedConcentrationand Quality/TimeofCarrying Investment Type Ratings (1)Distribution (2)Credit RiskAmount Pooled investments Broker money marketN/AN/AN/A$ 1,273 Nonpooled investments Brokered CDsN/A1 - 3 years99% 248,000 Total investments$ 249,273 1. Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. 2. Interest rate risk is disclosed using the segmented time distribution method. N/A Indicates not applicable or available. The investments of the City are subject to the following risks: Credit Risk . The credit risk for investments is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota Statutes limit the City’s investments to the list on pages 24 - 25 of the notes. Custodial Credit Risk . The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. Generally, the City limits its securities purchases to those insured and registered under the City’s name. Concentration of Credit Risk. The concentration of credit risk for investments is the risk of loss attributed to the magnitude of a government’s investment in a single issuer. The City has 99 percent of its portfolio invested in brokered CD’s at year end. Interest rate risk. The interest rate risk for investments is the risk that changes in interest rates will adversely affect the fair value of an investment. The City does not currently have a formal investment policy that addresses the above mentioned risks. -57-