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CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2014
<br />Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
<br />B. INVESTMENTS (CONTINUED)
<br />Type
<br />Minnesota Municipal Money
<br />Market Trust Fund
<br />Federal Home Loan Bank
<br />Federal Home Loan Mortgage Corp.
<br />Federal National Mortgage Assn.
<br />Negotiable CDs
<br />Municipal Bonds
<br />Mutual Fund
<br />Total
<br />Credit Risk
<br />25 to 60 More than
<br />Months 60 Months
<br />12 Months
<br />13 to 24
<br />Total
<br />or Less
<br />Months
<br />$ 252,220
<br />$ 252,220
<br />$ -
<br />1,375,394
<br />275,017
<br />1,989,713
<br />300,167
<br />-
<br />300,167
<br />1,995,937
<br />-
<br />1,995,937
<br />16,947,235
<br />10,866,000
<br />4,303,032
<br />9,123,402
<br />-
<br />1,006,501
<br />1,528,538
<br />1,528,538
<br />-
<br />$ 31,522,893
<br />$ 12,921,775
<br />$ 5,309,533
<br />25 to 60 More than
<br />Months 60 Months
<br />Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
<br />the investment. The City's policy to minimize credit risk includes limiting investing funds to those
<br />allowable under Minnesota Statute 118A, annually appointing all financial institutions where investments
<br />are held, and diversifying the investment portfolio. This is measured by the assignment of a rating by a
<br />nationally recognized statistical rating organization. The following chart summarizes year-end ratings for
<br />the City's investments as rated by Moody's Investors Service:
<br />Credit
<br />-
<br />1,100,377
<br />300,167
<br />-
<br />-
<br />1,995,937
<br />1,778,203
<br />-
<br />6,127,188
<br />1,989,713
<br />$ 8,205,558
<br />$ 5,086,027
<br />Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
<br />the investment. The City's policy to minimize credit risk includes limiting investing funds to those
<br />allowable under Minnesota Statute 118A, annually appointing all financial institutions where investments
<br />are held, and diversifying the investment portfolio. This is measured by the assignment of a rating by a
<br />nationally recognized statistical rating organization. The following chart summarizes year-end ratings for
<br />the City's investments as rated by Moody's Investors Service:
<br />The Minnesota Municipal Money Market Fund Trust is a common law trust organized in accordance with
<br />the Minnesota Joint Powers Act, which invests only in investment instruments allowable under Minnesota
<br />statutes as described on the previous page. Its investments are valued at amortized cost, which
<br />approximates market value in accordance with Rule 2a-7 of the Investment Company Act of 1940. The
<br />amortized cost method of valuation values a security at its cost on the date of purchase and thereafter
<br />assumes a constant amortization to maturity of any discount or premium, regardless of the impact of
<br />fluctuating interest rates on the fair value of instruments.
<br />The Minnesota Municipal Money Market Trust Fund does not have its own credit rating. MBIA, Inc., who
<br />administers the Minnesota Municipal Money Market Fund Trust holds an organization credit rating of Aa2.
<br />For an investment, custodial credit risk is the risk that, in the event of failure of the counterparty, the City
<br />will not be able to recover the value of its investment or collateral securities that are in the possession of an
<br />outside party. The City's investment policy doesn't specifically address custodial credit risk.
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<br />Credit
<br />Type
<br />Quality Rating
<br />Amount
<br />Minnesota Municipal Money Market Trust Fund
<br />Aa2
<br />$ 252,220
<br />Federal Home Loan Bank
<br />Aaa/AA+
<br />1,375,394
<br />Federal Home Loan Mortgage Corp.
<br />Aaa/AA+
<br />300,167
<br />Federal National Mortgage Assn.
<br />Aaa/AA+
<br />1,995,937
<br />Negotiable CDs
<br />Not Rated
<br />16,947,235
<br />Municipal Bonds
<br />A-Aaa
<br />9,123,402
<br />Mutual Fund
<br />Not Rated
<br />1,528,538
<br />Total
<br />$ 31,522,893
<br />The Minnesota Municipal Money Market Fund Trust is a common law trust organized in accordance with
<br />the Minnesota Joint Powers Act, which invests only in investment instruments allowable under Minnesota
<br />statutes as described on the previous page. Its investments are valued at amortized cost, which
<br />approximates market value in accordance with Rule 2a-7 of the Investment Company Act of 1940. The
<br />amortized cost method of valuation values a security at its cost on the date of purchase and thereafter
<br />assumes a constant amortization to maturity of any discount or premium, regardless of the impact of
<br />fluctuating interest rates on the fair value of instruments.
<br />The Minnesota Municipal Money Market Trust Fund does not have its own credit rating. MBIA, Inc., who
<br />administers the Minnesota Municipal Money Market Fund Trust holds an organization credit rating of Aa2.
<br />For an investment, custodial credit risk is the risk that, in the event of failure of the counterparty, the City
<br />will not be able to recover the value of its investment or collateral securities that are in the possession of an
<br />outside party. The City's investment policy doesn't specifically address custodial credit risk.
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