Comprehensive Annual Financial Report 12/31/2008

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Immo CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Note 2 DEPOSITS AND INVESTMENTS (CONTINUED) 12 Months 13 to 24 25 to 60 More than Type Total or Less Months Months 60 Months Minnesota Municipal Money Market Trust Fund $ 36,280 $ 36,280 $ $ $ Commercial Paper 3,614,659 3,614,659 - - Government Agencies 2,776,393 - 1,869,941 906,452 Municipal Bonds 303,876 - 303,876 Mutual Fund 251,650 251,650 - Total $ 6,982,858 $ 3,902,589 $ $ 2,173,817 $ 906,452 Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. The City's policy to minimize credit risk includes limiting investing funds to those allowable under Minnesota Statute 118A, annually appointing all financial institutions where investments are held, and diversifying the investment portfolio. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The following chart summarizes year -end ratings for the City's investments as rated by Moody's Investors Service: Credit Type Quality Rating Amount Minnesota Municipal Money Market Trust Fund Aa2 $ 36,280 Commercial Paper P -1 3,614,659 Government Agencies Aaa 2,776,393 Municipal Bonds Aaa 303,876 Mutual Fund Not Rated 251,650 Total $ 6,982,858 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. 44