Annual Financial Report 12/31/1990

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Page 6 of 23 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1990 NOTE 2 DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS (Continued) CASH AND INVESTMENTS (continued) INVESTMENTS The City is authorized by Minnesota Statutes to invest in the following: (a) Direct obligations or obligations guaranteed by the United States or its agencies. (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) General obligations of the State of Minnesota or any of its municipalities. (d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System. (e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. (f) Repurchase or reverse 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. (g) Futures contracts sold under authority of Minnesota Statutes 471.56, subd. 5. The City's investments are categorized to give an indication of the risk assumed by the entity 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 or 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 and 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. Credit Risk Category Carrying Market Investment Type 1 2 3 Amount Value Commercial Paper $1,251,759 $1,251,759 $1,280,014 Investment Company Shares 201,830 201,830 Totals $1,453,589 $1,481,844 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 expenditure. MUNICIPAL STATE AID Municipal State Aid (MSA) is recognized as revenue in the period the funds are designated for specific construction projects.