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CITY OF LITTLE CANADA, MINNESOTA
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />DECEMBER 31, 2017
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<br />(53)
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<br />NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED)
<br />C. Investments (Continued)
<br />Credit Risk – This is the risk that an issuer or other counterparty to an investment will
<br />not fulfill its obligations. Minnesota Statutes limit the City’s investments to direct
<br />obligations or obligations guaranteed by the United States or its agencies; shares of
<br />investment companies registered under the Federal Investment Company Act of 1940
<br />that receive the highest credit rating, are rated in one of the two highest rating categories
<br />by a statistical rating agency, and all of the investments have a final maturity of 13
<br />months or less; general obligations rated “A” or better; revenue obligations rated “AA” or
<br />better; general obligations of the Minnesota Housing Finance Agency rated “A” or better;
<br />bankers’ acceptances of United States banks eligible for purchase by the Federal
<br />Reserve System; commercial paper issued by United States corporations or their
<br />Canadian subsidiaries, rated of the highest quality category by at least two nationally
<br />recognized rating agencies, and maturing in 270 days or less; Guaranteed Investment
<br />Contracts guaranteed by a United States commercial bank, domestic branch of a foreign
<br />bank, or a United States insurance company, and with a credit quality in one of the top
<br />two highest categories; repurchase or reverse purchase agreements and securities
<br />lending agreements with financial institutions qualified as a “depository” by the
<br />government entity, with banks that are members of the Federal Reserve System with
<br />capitalization exceeding $10,000,000; that are a primary reporting dealer in U.S.
<br />government securities to the Federal Reserve Bank of New York; or certain Minnesota
<br />securities broker-dealers.
<br />
<br />A schedule of the maturities and ratings of the City’s investments as of December 31,
<br />2017 is as follows:
<br />
<br />Investment Type Total Less Than 1 1 to 5 5 to 10 Rating
<br />Negotiable Certificates of Deposit 4,312,668$ 245,000$ 3,448,222$ 619,446$ Not Rated
<br />Federal Home Loan Mortgage Corporation 2,225,936 - 2,225,936 - AA+
<br />Municipal Bonds 2,034,313 - 869,313 1,165,000 AA-/A1
<br />Money Market Funds 2,629,805 2,629,805 - - Not Rated
<br />Minnesota Municipal Money Market (4M Fund) 3,610,240 3,610,240 - - Not Rated
<br />Total Investments 14,812,962$ 6,485,045$ 6,543,471$ 1,784,446$
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<br />Concentration Risk – This is the risk associated with investing a significant portion of
<br />the City’s investment (considered 5% or more) in the securities of a single issuer. The
<br />City places no limit on the amount the City may invest in any one issuer.
<br />
<br />At December 31, 2017, the City had the following investments which individually
<br />comprise more than 5% of the City’s total investments:
<br />
<br />Percentage of
<br />Amount Investments
<br />Minnesota Municipal Money Market (4M Fund) 3,610,240$ 24.37%
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