|
CITY OF LAKE ELMO, MINNESOTA
<br />NOTES TO THE BASIC FINANCIAL STATEMENTS
<br />DECEMBER 31, 2023
<br />
<br />
<br />48
<br />NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
<br />
<br />2.A. CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
<br />
<br />Investments
<br />
<br />The City may also invest idle funds as authorized by Minnesota Statutes as follows: direct obligations guaranteed by the United
<br />States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that
<br />received the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of
<br />the investments have a final maturity of 13 months or less; general obligations rated “A” or better; revenue obligations rated
<br />“AA” or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ acceptances of
<br />United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States
<br />corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating
<br />agencies, and maturing in 270 days or less; Guaranteed Investment Contracts guaranteed by a United States commercial bank,
<br />domestic branch of a foreign bank, or a United States insurance company, and with a credit quality in one of the top two highest
<br />categories; repurchase or reverse purchase agreements and securities lending agreements with financial institutions qualified
<br />as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization
<br />exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York,
<br />or certain Minnesota securities broker-dealers. The City does not have any investment policies that would further limit
<br />investment choices.
<br />
<br />The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally
<br />accepted in the United State of America. The hierarchy is based on the valuation inputs used to measure the fair value of the
<br />asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable
<br />inputs; Level 3 inputs are significant unobservable inputs.
<br />
<br />Investment balances at December 31, 2023 are as follows:
<br />
<br />
<br />
<br />The investments of the City are subject to the following risks:
<br />
<br />• Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are
<br />provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota Statutes
<br />limit the City’s investments. The City’s policy to minimize credit risk includes limiting investing funds to those
<br />allowable under Minnesota Statute 118A, annually appointing all financial institutions where investments are held,
<br />and diversifying the investment portfolio. This is measured by the assignment of a rating by a nationally recognized
<br />statistical rating organization.
<br />
<br />S & P's
<br />Credit Fair Value Fair Less
<br />Investment Type Rating Level Value Than 1 1 - 5 6 - 10
<br />Money Market Funds N/A N/A 1,068,433$ 1,068,433$ -$ -$
<br />U.S. Government Bonds AA+ Level 2 8,167,665 4,449,294 3,718,371 -
<br />Municipal Bonds A to AAA Level 2 3,482,216 443,620 2,470,534 568,062
<br />Brokered Certificates of Deposit NR Level 2 3,819,039 2,569,814 1,249,225 -
<br />Totals 16,537,353$ 8,531,161$ 7,438,130$ 568,062$
<br /> Investment Maturities (in Years)
|