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<br />CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2012
<br />Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
<br />12 Months 13 to 24 25 to 60 More than
<br />Type Total or Less Months Months 60 Months
<br />Minnesota Municipal Money
<br />Market Trust Fund $ 1,584,962 $ 1,584,962 $ - $ $
<br />Federal Agricultural Mortgage Corp. 1,000,000 1,000,000
<br />Federal Home Loan Bank 2,348,975 - - 2,348,975
<br />Federal Home Loan Mortgage Corp. 853,992 - 353,805 500,187
<br />Federal National Mortgage Assn. 1,002,240 - 300,849 701,391
<br />Negotiable CDs 13,713,494 7,483,000 2,726,516 3,503,978 -
<br />Municipal Bonds 8,803,714 500,546 1,850,410 4,623,472 1,829,286
<br />Mutual Fund 272,261 272,261 - - -
<br />Total $ 29,579,638 $ 9,840,769 $ 5,576,926 $ 8,782,104 $ 5,379,839
<br />Credit Risk
<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 />Credit
<br />Type Quality Rating Amount
<br />Minnesota Municipal Money Market Trust Fund Aa2 $ 1,584,962
<br />Federal Agricultural Mortgage Corp. Aaa/AA+ 1,000,000
<br />Federal Home Loan Bank Aaa/AA+ 2,348,975
<br />Federal Home Loan Mortgage Corp. Aaa/AA+ 853,992
<br />Federal National Mortgage Assn. Aaa/AA+ 1,002,240
<br />Negotiable CDs Not Rated 13,713,494
<br />Municipal Bonds A -Aaa 8,803,714
<br />Mutual Fund Not Rated 272,261
<br />Total $ 29,579,638
<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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