2012-04-11 CC Packet - Laserfiche WebLink

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CITY OF CENTERVILLE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Investments As of December 31, 2011, 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. Investment Type Pooled investments Broker money market Nonpooled investments Brokered CDs U.S. Government Agency Securities Total investments $ 502,724 (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 page 52 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. A reconciliation of cash and temporary investments as shown on the statement of net assets for the City follows. Tntnl Carrying amount of deposits Investments Petty cash Total $ 4,371,761 502,724 199 $ 4,874,684 -58- Fair Value Credit Segmented Concentration and Quality/ Time of Carrying Ratings (1) Distribution (2) Credit Risk Amount N/A N/A N/A $ 4,724 N/A 1 - 3 years 49% 248,000 AAA more than 3 years N/A 250,000 $ 4,371,761 502,724 199 $ 4,874,684 -58-