Annual Financial Report 12/31/1986

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CITY OF LINO LAKES, MINNESOTA Page 5 of 19 NOTES TO FINANCIAL STATEMENTS December 31, 1986 Note 2 - DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS (Continued) CASH AND INVESTMENTS (Continued) Investments are stated at cost (plus interest added, if any) which approximates market. Material purchase discounts and premiums are amortized over the term of the investment. Interest earnings are accrued at the balance sheet date and recognized as revenue when earned. Cash and investment balances were as follows at December 31, 1986 and 1985: December 31, Description 1986 1985 Cash - checking $ (55,091) $ 5,792 Investments 1,470,937 2,599,201 Petty cash and change 150 150 Totals $ 1,415,996 $ 2,605,143 Deposits In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council all of which are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage notes pledged). Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and certain other state or local government obligations. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral. Balances at December 31, 1986: Insured or collateralized by securities held by the City or its agent in the City's name Investments Bank Carrying Balance Amount $1,022,906 $ 946,156 The City also invests idle funds as authorized by Minnesota Statute, as follows: (a) Direct obligations or obligations guaranteed by the United States or its agencies.