VLAWMO Annual Financial Report 2018

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VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018 NOTE 3 DETAILED NOTES ON ACCOUNTS (CONTINUED) Deposits and Investments (Continued) investments (Continued) The investments of the Organization are subject to the following risks: Credit Risk — Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota statutes limit the Organization's investments to the list on page 29 of the notes. Custodial Credit Risk — The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. Concentration of Credit Risk — Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. Interest Rate Risk — Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The Organization does not have an investment policy that addresses the risks described above. The Minnesota Municipal Money Market Fund Trust and the US Bank Money Market are money market accounts that are valued at amortized cost with maturities of investments of one year or less. The Minnesota Municipal Money Market Trust Fund does not have its own credit rating. PMA Financial Network, Inc., who administers the Minnesota Municipal Money Market Fund Trust, holds an organization credit rating of AA by Standard & Poor's. A reconciliation of cash and temporary investments as shown in the financial statements of the Organization follows: Carrying Amounts of Deposits $ 28,745 Investments 688,607 Cash on Hand 24 Total $ 717,376 Cash and Investments Unrestricted $ 687,715 Restricted 29,661 Total 717,376 (30)