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CITY OF CENTERVILLE, MINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />DECEMBER 31, 2012 <br />Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED <br />Investments <br /> <br />As of December 31, 2012, the City had the following investments that are insured or registered, or securities held by the <br /> <br />Fair Value <br />CreditSegmentedConcentrationand <br />Quality/TimeofCarrying <br />Investment Type <br />Ratings (1)Distribution (2)Credit RiskAmount <br />Pooled investments <br />Broker money marketN/AN/AN/A$ 2,124 <br />Nonpooled investments <br />U.S. Government Agency SecuritiesAAA1 - 3 yearsN/A 500,745 <br />Total investments$ 502,869 <br />(1)Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. <br />(2)Interest rate risk is disclosed using the segmented time distribution method. <br />N/AIndicates not applicable or available. <br />The investments of the City are subject to the following risks: <br /> <br />Credit Risk. The credit risk for investments is the risk that an issuer or other counterparty to an investment will <br />not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate <br />associated credit risk. Minnesota s 54 of the notes. <br /> <br />Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the <br />counterparty to a transaction, a government will not be able to recover the value of investment or collateral <br />securities that are in the possession of an outside party. Generally, the City limits its securities purchases to <br /> <br /> <br />Concentration of Credit Risk. The concentration of credit risk for investments is the risk of loss attributed to the <br />e City has 99 percent of its portfolio invested in <br />FHLB at year end. <br /> <br />Interest Rate Risk. The interest rate risk for investments is the risk that changes in interest rates will adversely <br />affect the fair value of an investment. <br /> <br />The City does not currently have a formal investment policy that addresses the above mentioned risks. <br /> <br />A reconciliation of cash and temporary investments as shown on the statement of net position for the City follows: <br /> <br />Total <br />Carrying amount of deposits$ 5,149,888 <br />Investments 502,869 <br />Cash with fiscal agent 509,210 <br />Petty cash 199 <br />Total$ 6,162,166 <br />-60- <br /> <br />