|
CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2010
<br />Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
<br />B. Investments
<br />The City may also invest idle funds as authorized by Minnesota Statutes as follows:
<br />• Direct obligations or obligations guaranteed by the United States or its agencies
<br />• Shares of investment companies registered under the Federal Investment Company Act of 1940 and
<br />received the highest credit rating, is rated in one of the two highest rating categories by a statistical
<br />rating agency, and all of the investments have a fmal maturity of thirteen months or less
<br />• General obligations rated "A" or better; revenue obligations rated "AA" or better
<br />• General obligations of the Minnesota Housing Finance Agency rated "A" or better
<br />• Banker's acceptances of United States banks eligible for purchase by the Federal Reserve System
<br />• Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of
<br />highest quality category by a least two nationally recognized rating agencies, and maturing in 270 days
<br />or less
<br />• Guaranteed investment contracts guaranteed by United States commercial banks or domestic branches
<br />of foreign banks or United States insurance companies if similar debt obligations of the issuer or the
<br />collateral pledged by the issuer is in the top two rating categories
<br />• Repurchase or reverse purchase agreements and securities lending agreements financial institutions
<br />qualified as a "depository" by the government entity, with banks that are members of the Federal
<br />Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S.
<br />government securities to the Federal Reserve Bank of New York, or certain Minnesota securities
<br />broker - dealers
<br />Investments Held with Broker —
<br />Interest Rate Risk
<br />Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
<br />investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value
<br />to changes in market interest rates. The City's policy to minimize interest rate risk includes investing
<br />primarily in short-term securities and structuring the investment portfolio so that securities mature to meet
<br />cash requirements for ongoing operations. Information about the sensitivity of the fair values of the City's
<br />investments to market interest rate risk fluctuations is provided by the following table that shows the
<br />distribution of the City's investments by maturity:
<br />Type
<br />Minnesota Municipal Money
<br />Market Trust Fund
<br />Federal Farm Credit Banks
<br />Federal Home Loan Bank
<br />Federal Home Loan Mortgage Corp.
<br />Federal National Mortgage Assn.
<br />Negotiable CDs
<br />Municipal Bonds
<br />Mutual Fund
<br />Total
<br />12 Months 13 to 24
<br />Total or Less Months
<br />$ 2,563,407
<br />100,426
<br />3,129,816
<br />2,001,358
<br />2,600,771
<br />8,399,720
<br />3,158,829
<br />274,415
<br />$ 22,228,742
<br />43
<br />$ 2,563,407
<br />8,399,720 -
<br />25 to 60 More than
<br />Months 60 Months
<br />$ - $
<br />100,426
<br />1,498,114 1,631,702
<br />1,249,991 751,367
<br />2,152,758 448,013
<br />200,000 1,536,246 828,291 594,292
<br />274,415 - - -
<br />$ 11,437,542 $ 1,536,246 $ 5,829,580 $ 3,425,374
<br />
|