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CITY OF ST. ANTHONY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2011 Interest rate risk — Interest rate risk is the risk that changes in interest rates of debt investments could adversely affect the fair value of an investment. The City's investment policy requires the City to diversify its investment portfolio to eliminate the risk of loss resulting from over concentration of assets in a specific maturity. The policy also states the City's investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. Credit Risk — Credit risk is the risk that an issuer or other counterparty to an investment will be unable to fulfill its obligation to the holder of the investment. State law limits investments in commercial paper to those rated in the highest quality category by at least two nationally recognized rating agencies; in any security of the State of Minnesota or any of its municipalities which is rated "A" or better by a national bond rating service for general obligation and rated "AA" or better for a revenue obligation; a general obligation of the Minnesota Housing Finance Agency to those rated "A" or better by a national bond rating agency; mutual funds or money market funds whose investments are restricted to securities described in MS 118A.04. The City's investment policy does not place further restrictions on investment options. Concentration of credit risk — Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government's investment in a single issuer. The City places no limit on the amount the City may invest in any one issuer. The City does not have exposure to a single issuer that equals or exceeds 5% of the overall portfolio and, therefore, there is no concentration of credit risk. Note RECEIVABLES Significant receivables balances not expected to be collected within one year of December 31, 2011 are as follows: Major Funds Street Water Improvement HRA HRA Filtration & Nonmajor General Debt Service Debt Service Projects Purification Funds Total Special assessments receivable $ - $1,027,000 $ - $ - $ - $500,000 $1,527,000 Delinquent property taxes 18,200 5,800 2,700 6,000 3,500 36,200 $18,200 $1,032,800 $2,700 $6,000 $0 $503,500 $1,563,200 54