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CITY OF GEM LAKE, M€NNESOTA NOTES TO BASIC FINANCIAL. STATEMENTS DECEMBER 31, 2016 NOTE 2 DEPOSITS AND INVESTMENTS A. Deposits The City maintains a cash and investment pool that is available for use by all 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 accordance 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 fo< it. The City does not have a deposit policy for custodial credit risk and follows Minnesota Statutes for deposits.. Minnesota Statutes require. that all deposits be:: protected Icy. insurance, surety bond, or collateral. The market value of collateral pledged must equal 119% of the deposits not covered by insurance or corporate surety ° bonds. Authorized collateral include: US. government treasury bills, notes; or bonds; issues of.a U.S. govern m..: t agency; general obligations of a state or local government rated "A"' or better; revenue. obligations of a state or local government rated "AA" or letter; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time; deposits insured by a `federal agency. .Minnesota Statutes require securities pledgeel'as. collateral be held in safekeeping in a restricted account at the Federal, lreserve Bank 'or'in. an account at a trust department of a commercial bank or ofbier`: firiar cial institution' not owned or controlled by the. depository. At December. 31, 2016, the carrying, amount of M City's deposits were $25'1,772, the entire amount of which was insured o'rlcol€ateralized. (21.)