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CITY OF LITTLE CANADA, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2022 <br /> <br /> <br /> <br />(48) <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 />U.S. Treasury Security with Maturity at Purchase <br />of Greater than 1 Year 1,043,907$ <br />Negotiable Certificates of Deposit with Maturities at <br />Purchase of Greater Than 1 Year 8,947,857 <br />Federal Home Loan Bank 980,470 <br />Federal Home Loan Mortgage Corporation 781,481 <br />Federal Farm Credit Bank Bond 495,205 <br />Municipal Bonds 218,734 <br />Total Investments Measured at Fair Value 12,467,654$ <br />Investments Measured at Amortized Cost Amortized Cost <br />Negotiable Certificates of Deposit with Maturities at <br />Purchase of Less Than 1 Year 490,413$ <br />Money Market Funds 397,250 <br />Minnesota Municipal Money Market (4M Fund) 5,065,077 <br />Total Investments Measured at Amortized Cost 5,952,740$ <br /> <br />Investments are subject to various risks, the following of which are considered the most <br />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 <br />interest rate is fixed, the greater the risk). The City’s investment policy requires the City <br />to diversify its investment portfolio to eliminate the risk of loss resulting from over <br />concentration of assets in a specific maturity. The policy states the City’s investment <br />portfolio will remain sufficiently liquid to enable the City to meet all operating <br />requirements. <br /> <br />Custodial Credit Risk – For investments, this is the risk that in the event of a failure of <br />the counterparty to an investment transaction (typically a broker-dealer) the City would <br />not be able to recover the value of its investments or collateral securities that are in the <br />possession of an outside party. The City’s investment policy does not address custodial <br />credit risk. However, investments in securities are held by the City’s broker-dealers of <br />which $1,500,000 is insured through SIPC. The broker-dealers have provided additional <br />protection by providing additional insurance. This insurance is subject to aggregate limits <br />applied to all of the broker-dealer’s accounts.