Annual Financial Report 12/31/1986

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CITY OF LINO LAKES, MINNESOTA Page 6 of 19 NOTES TO FINANCIAL STATEMENTS December 31, 1986 Note 2 - DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS (Continued) CASH AND INVESTMENTS (Continued) (b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above. (c) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System. (d) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. (e) Repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker - dealers. Credit Risk Category Carrying Market Securities Type 1 2 3 Amount Value U.S. Government or its agencies $ -0- $71,576 $ -0- $ 71,576 $ 71,576 Investment Company Shares 398,114 389,996 $469,690 $461,572 The City's investments are categorized above to give an indication of the level of risk assumed at year -end. Category 1 includes investments that are insured or registered or for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the broker's or dealer's trust department or agent in the City's name. Category 3 includes uninsured or unregistered investments for which the securities are held by the broker or dealer, or by its trust department or agent but not in the City's name. GRANT REVENUE RECOGNITION The City receives various Federal, State and other grants, the purpose of which is to fund specific City expenditures. These revenues are recognized at the time of the specific expenditures. The City also receives Federal Revenue Sharing and other general purpose grants. These grants are recognized as revenues in the period to which the grant applies. MUNICIPAL STATE AID ALLOTMENTS FOR STREET CONSTRUCTION Municipal State Aid (MSA) is recognized as revenue in the period the funds are designated for specific construction projects.