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i 1 1 1 1 1 1 1 1 r 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 2 DEPOSITS AND INVESTMENTS Components of Cash and Investments Cash and investments at year -end consists of the following: Deposits $ 5,217,160 Investments 22,228,742 Cash with Fiscal Agent 4,271,142 Cash on Hand 820 Total $ 31,717,864 Cash and investments are presented in the financial statements as follows: Cash and Investments - Statement of Net Assets $ 26,693,215 Cash and Investments with Escrow Agent - Statement of Net Assets 4,271,142 Cash and Investments - Statement of Net Assets - Fiduciary Funds 753,507 Total $ 31,717,864 A. Deposits The City maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the statement of net assets and the balance sheet as "Cash and Investments." In accordance with Minnesota Statutes the City maintains deposits at financial institutions which are authorized by the City Council. Custodial Credit Risk — Custodial credit risk for deposits is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City does not have a specific deposit policy for custodial credit risk but rather follows Minnesota Statutes for deposits. Minnesota Statutes require that all 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 corporate surety bonds. Authorized collateral include: U.S. government treasury bills, notes, or bonds; issues of a U.S. government agency; general obligations of a state or local government rated "A" or better; revenue obligations of a state or local government rated "AA" or better; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time deposits insured by a federal agency. Minnesota statutes require securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust department of a commercial bank or other financial institution not owned or controlled by the depository. The carrying value and bank balance of the City's deposits in banks at December 31, 2010 is $5,217,160 and $5,260,793, respectively, and were entirely covered by federal depository insurance or by surety bonds and collateral in accordance with Minnesota statutes. Cash with Fiscal Agent — Unspent proceeds from the Note Payable to Anoka County of $4,271,142 are presented as cash with fiscal agent and held by Anoka County. See Note 4. 42