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CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2013
<br />Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
<br />B. 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 $ 944,001 $ 944,001 $ - $ - $
<br />Federal Home Loan Bank 2,434,579 - - 2,434,579
<br />Federal Home Loan Mortgage Corp. 348,593 - 348,593 -
<br />Federal National Mortgage Assn. 2,543,496 - 597,449 1,946,047
<br />Negotiable CDs 12,899,752 6,410,000 4,057,457 2,432,295 -
<br />Municipal Bonds 10,953,310 1,145,804 2,135,439 5,704,334 1,967,733
<br />Mutual Fund 1,519,591 1,519,591 - - -
<br />Total $ 31,643,322 $ 10,019,396 $ 6,192,896 $ 9,082,671 $ 6,348,359
<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 />Type
<br />Credit
<br />Quality Rating
<br />Amount
<br />Minnesota Municipal Money Market Trust Fund Aa2 $ 944,001
<br />Federal Home Loan Bank Aaa/AA+ 2,434,579
<br />Federal Home Loan Mortgage Corp. Aaa/AA+ 348,593
<br />Federal National Mortgage Assn. Aaa/AA+ 2,543,496
<br />Negotiable CDs Not Rated 12,899,752
<br />Municipal Bonds A-Aaa 10,953,310
<br />Mutual Fund Not Rated 1,519,591
<br />Total $ 31,643,322
<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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