06/04/2007 Council Packet (2) - Laserfiche WebLink

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2006 Note 2 DEPOSITS AND INVESTMENTS (CONTINUED) The Minnesota Municipal Money Market Fund Trust .is a common law trust organized in accordance with the Minnesota Joint Powers Act, which invests only in investment instruments allowable under Minnesota statutes as described on the previous page. Its investments are valued at amortized cost, which approximates fair value in accordance with Rule 2a -7 of the Investment Company Act of 1940. The amortized cost method of valuation values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of instruments. Credit Risk — The Minnesota Municipal Money Market Trust Fund does not have its own credit rating. MBIA, Inc., who administers the Minnesota Municipal Money Market Fund Trust holds an organization credit rating of Aa2. Custodial Credit Risk For an investment, custodial credit risk is the risk that, in the event of failure of the counterparty, the City will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. The City's investment policy doesn't specifically address custodial credit risk. Concentration of Credit Risk The City places no limit on the amount that it may invest in any one issuer. The following is a list of investments which individually comprise more than 5 percent of the City's total investments: Type Amount Percentage Federal Home Loan Bank $ 5,880,499 25.31% Federal Home Loan Mortgage Corporation 2,877,466 12.39% Mitsubishi Commercial Paper 2,561,206 11.03% Panterra Commercial Paper 1,699,120 7.31% General Electric Capital Services Commercial Paper 1,499,916 6.46% 44