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CITY OF CENTERVILLE, MINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />DECEMBER 31, 2013 <br />Note 3:DETAILED NOTES ON ALL FUNDS - CONTINUED <br />Investments <br />As of December 31, 2013, the City had the following investments that are insured or registered, or securities held by the <br />City or its agent in the City’s name. <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$9,624 <br />Nonpooled investments <br />Brokered CD'sN/A1 to 3 yearsN/A688,745 <br />Brokered CD'sN/Amore than 3 yearsN/A244,476 <br />Total Brokered CD's933,221 <br />U.S. Government Agency SecuritiesAAAmore than 3 yearsN/A472,435 <br />Total investments$1,415,280 <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 />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 statutes limit the City’s investments to the list on page 53 of the notes. <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 />those insured and registered under the City’s name. <br />Concentration of Credit Risk. The concentration of credit risk for investments is the risk of loss attributed to the <br />magnitude of a government’s investment in a single issuer. The City has invested more than 5 percent of <br />investments in FHLB(33.4 percent), GE Capital Bank CD (17.3 percent), Comenity Bank CD (14.1 percent), <br />Discover Bank (17.3 percent) and Amex Centurion Bank (17.3 percent) at year end. <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 />The City does not currently have aformal investment policy that addresses the above mentioned risks. <br />A reconciliation of cash and temporary investments as shown on the statement of net positionfor the City follows: <br />Total <br />Carrying amount of deposits$4,712,151 <br />Investments1,415,280 <br />Petty cash200 <br />Total$6,127,631 <br /> <br />