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CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2011
<br />Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
<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 />Credit Risk
<br />12 Months 13 to 24
<br />Total or Less Months
<br />$ 66,659
<br />300,878
<br />1,302,457
<br />1,382,033
<br />3,002,642
<br />12,077,180
<br />4,986,283
<br />271,338
<br />$ 23,389,470
<br />$ 66,659 $
<br />12,077,180
<br />385,022
<br />271,338
<br />$ 12,800,199
<br />25 to 60 More than
<br />Months 60 Months
<br />$ - $
<br />300,878
<br />1,302,457
<br />300,215 1,081,818
<br />1,550,956 1,451,686
<br />682,673 2,126,401 1,792,187
<br />$ 682,673 $ 4,278,450 $ 5,628,148
<br />Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
<br />the investment. The City's policy to minimize credit risk includes limiting investing funds to those
<br />allowable under Minnesota Statute 118A, annually appointing all financial institutions where investments
<br />are held, and diversifying the investment portfolio. This is measured by the assignment of a rating by a
<br />nationally recognized statistical rating organization. The following chart summarizes year -end ratings for
<br />the City's investments as rated by Moody's Investors Service:
<br />Type
<br />Minnesota Municipal Money 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 />Credit
<br />Quality Rating
<br />Aa2
<br />Aaa/AA+
<br />Aaa/AA+
<br />Aaa/AA+
<br />Aaa/AA+
<br />Not Rated
<br />A -Aaa
<br />Not Rated
<br />Amount
<br />$ 66,659
<br />300,878
<br />1,302,457
<br />1,382,033
<br />3,002,642
<br />12,077,180
<br />4,986,283
<br />271,338
<br />$ 23,389,470
<br />The Minnesota Municipal Money Market Fund Trust is a common law trust organized in accordance with
<br />the Minnesota Joint Powers Act, which invests only in investment instruments allowable under Minnesota
<br />statutes as described on the previous page. Its investments are valued at amortized cost, which
<br />approximates market value in accordance with Rule 2a -7 of the Investment Company Act of 1940. The
<br />amortized cost method of valuation values a security at its cost on the date of purchase and thereafter
<br />assumes a constant amortization to maturity of any discount or premium, regardless of the impact of
<br />fluctuating interest rates on the fair value of instruments.
<br />The Minnesota Municipal Money Market Trust Fund does not have its own credit rating. MBIA, Inc., who
<br />administers the Minnesota Municipal Money Market Fund Trust holds an organization credit rating of Aa2.
<br />For an investment, custodial credit risk is the risk that, in the event of failure of the counterparty, the City
<br />will not be able to recover the value of its investment or collateral securities that are in the possession of an
<br />outside party. The City's investment policy doesn't specifically address custodial credit risk.
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