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CITY OF LITTLE CANADA, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2019 <br /> <br /> <br /> <br /> <br /> <br />NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED) <br />C. Investments <br />The City has the following investments at year-end: <br /> <br />Investments Measured at Fair Value Fair Value <br />Negotiable Certificates of Deposit with Maturities <br /> at Purchase of Greater than 1 Year $7,904,408 <br />Municipal Bonds $852,678 <br /> Total Investments Measured at Fair Value $8,757,086 <br /> <br />Investments Measured at Amortized Cost Amortized Cost <br />Negotiable Certificates of Deposit with Maturities <br /> at Purchase of Less than 1 Year $1,231,800 <br />Money Market Funds 455 <br />Minnesota Municipal Money Market (4M Fund) $3,012,626 <br /> Total Investments Measured at Amortized Cost $4,244,881 <br /> <br />Investments are subject to various risks, the following of which are considered the most significant: <br /> <br />Interest Rate Risk – This is the risk of potential variability in the fair value of fixed rate <br />investments resulting from changes in interest rates (the longer the period for which an interest rate <br />is fixed, the greater the risk). The City’s investment policy requires the City to diversify its <br />investment portfolio to eliminate the risk of loss resulting from over concentration of assets in a <br />specific maturity. The policy states the City’s investment portfolio will remain sufficiently liquid <br />to enable the City to meet all operating requirements. <br /> <br />Custodial Credit Risk – For investments, this is the risk that in the event of a failure of the <br />counterparty to an investment transaction (typically a broker-dealer) the City would not be able to <br />recover the value of its investments or collateral securities that are in the possession of an outside <br />party. The City’s investment policy does not address custodial credit risk. However, investments <br />in securities are held by the City’s broker-dealers of which $1,500,000 is insured through SIPC. <br />The broker-dealers have provided additional protection by providing additional insurance. This <br />insurance is subject to aggregate limits applied to all of the broker-dealer’s accounts. <br /> <br />58