Laserfiche WebLink
CITY OF HUGO, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS (CONTINUED) <br />3. Detailed Notes on All Funds <br />A. Deposits and Investments <br />In accordance with applicable Minnesota statutes, the City maintains deposits at depository <br />banks authorized by the City Council. All such depositories are members of the Federal <br />Reserve System. <br />Minnesota statutes require that all deposits be protected by insurance, surety bond, or <br />collateral. The fair value of collateral pledged must equal 110% of the deposits not covered by <br />insurance or surety bonds. <br />Authorized collateral includes certain state or local government obligations and legal <br />investments described in the investment policy section. Minnesota Statutes require that <br />securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial <br />institution other than the institution furnishing the collateral. <br />The City's deposits in banks at December 31, 2015 were entirely covered by federal depository <br />insurance or by collateral held by the City or its agent in the City's name. <br />Investment Policy <br />The City does not maintain a formal investment policy that limits investment maturities as a <br />means of managing its exposure to fair value losses arising from increasing interest rates or that <br />would limit its investment choices as a means of managing its exposure to credit risk. <br />The City is authorized by Minnesota Statutes to invest idle funds as follows: <br />(a) Direct obligations or obligations guaranteed by the United States or its agencies. <br />(b) Shares of investment companies registered under the Federal Investment Company Act of <br />1940 and whose only investments are in securities described in (a) above. <br />(c) General obligations of the State of Minnesota or its municipalities. <br />(d) Bankers acceptances of United States banks eligible for purchase by the Federal Reserve <br />System. <br />(e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of <br />the highest quality, and maturing in 270 days or less. <br />(f) Repurchase agreements with banks that are members of the Federal Reserve System with <br />capitalization exceeding $10,000,000, a reporting dealer to the Federal Reserve Bank of <br />New York, or certain Minnesota securities broker-dealers. <br />42 <br />