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CITY Ol= GEM LAKE, MINNESOTA NOTES -TO BASIC FINANCIAL STATEMENTS DE.CEMBER 31., 20*10 NOTE 2 DEPOSITS AND INVESTMENTS F A. Deposits The City .maintains a. cash and investment. pobl that is available for use by WI funds. .Each fund type's portion of this pool is displayed on the statement of net position and the balance sheet as -".Cash and Investments." In ac pordance with Minnesota. Statutes, the City maintains deposits at financial institutions which are authorized by the City Council.. Custodial Credit Risk — Custodial credit risk for deposits is the risk that in the event of a bank failure, the City's deposits may not be *returned to it. The City does h6t have --a deposit policy for custodial credit risk and follows Minnesota-Stafr96. for deposits, Minnesota Statutes require that all deposits. be protected. by insurance, surety, bond, or collateral. The market value.*of collateral pledged must equal 110% of the deposits not covered by insurance ot- borporate surety bonds. Authorized collateral include: U.S. government treasury bills, notes, or bonds; issues of a U.S. government.agency; general obli,gallons. of a state or local government rated 'W or better; revenue obligations of a state or local government rated "AA or better; irrevocable standby letter of credit issued by a Federal . Home Loan Bank; and time deposits insured. by a federal agency. Minnesota Statutes require securities pledged as. collateral be. held to safekeeping in- a restricted. account at the Federal Reserve Bank or in an account at a trust department of a commercial heirik .ot other financial institution not owned or controlled by the depository. At December 31, 2016, the carrying amount of the City's deposits was $251,772, the entire amount of which was insured or collateralized. (21)