05-26-2021 Council Packet - Laserfiche WebLink

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CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2020 NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED) C. Investments (Continued) Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Minnesota Statutes limit the City’s investments to direct obligations or obligations guaranteed by the United States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of 13 months or less; general obligations rated “A” or better; revenue obligations rated “AA” or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less; Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of a foreign bank, or a United States insurance company, and with a credit quality in one of the top two highest categories; repurchase or reverse purchase agreements and securities lending agreements with financial institutions qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; that are a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; or certain Minnesota securities broker-dealers. A schedule of the maturities and ratings of the City’s investments as of December 31, 2020 is as follows: Investment Type Total Less Than 1 Year 1 to 5 Years 5 to 10 Years Rating U.S. Treasury Security $ 500,080 $ - $ 500,080 $ - Not Rated U.S. Agency: Fannie Mae (FNMA) 500,110 - 500,110 - Not Rated Negotiable Certificates of Deposit 9,763,221 4,715,528 5,047,693 - Not Rated Municipal Bonds 855,083 855,083 - - S&P AA Minnesota Municipal Money Market (4M Fund) 3,946,255 3,946,255 - - Not Rated Total Investments $15,564,749 $9,516,866 $6,047,883 $ - Concentration Risk – This is the risk associated with investing a significant portion of the City’s investment (considered 5% or more) in the securities of a single issuer. The City places no limit on the amount the City may invest in any one issuer. At December 31, 2020, the City had the following investments which individually comprise more than 5% of the City’s total investments: Percentage of Amount Investments Minnesota Municipal Money Market (4M Fund) $3,946,255 25.35% 61