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<br />u <br />i <br />~~ <br /> <br /> <br /> <br /> <br /> <br />i <br /> <br /> <br /> <br />0 <br /> <br />i <br /> <br /> <br /> <br />CITY OF ELK RIVER, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2009 <br />Note 3: DETAILED NOTES ON ALL FUNDS -CONTINUED <br />• Concentration risk -Concentration risk is the risk of loss that maybe caused by the city's investment in a single <br />issuer. The City does not have a formal policy that limits the amount of investments in a single issuer. As of <br />December 31, 2009, more than 5% of the City's investments v~ere held in the following U.S. Agencies: Federal <br />National Mortgage Association (27%), Federal Home Loan Bank (24%}, Federal Home Loan Mortgage <br />Corporation (20%), and Federal Farm Credit (2%). <br />• Interest rate risk - In accordance with its investment policy, the City diversifies its investment portfolio to <br />eliminate the risk of loss resulting from the over-concentration of assets in a specific maturity. The maturities <br />selected shall provide for stability of income and reasonable liquidity. <br />The Minnesota Municipal Money Market Fund (4M Fund) is an external investment pool allowable under Minnesota <br />Statutes and regulated by the Board of Directors of the League of Minnesota Cities. The 4M Fund is a customized cash <br />management and investment program for Minnesota public funds designed to address the daily and long term investment <br />needs of Minnesota cities and other municipal entities. The 4M Fund is an unrated 2a7-like pool and the fair value of the <br />position in the pool is the same as the value of pool shares. Financial statements of the 4M Fund can be obtained by <br />contacting Voyageur Asset Management at 100 South Fifth Street Suite 2300, Minneapolis, MN 55402-1240. <br />As of December 31, 2009, the City had the following investments that are insured or registered, or securities held by the <br />City or its agent in the City's name. <br />Fair Value <br />Credit Segmented and <br />Quality/ Time Carrying <br />Types of Investments Ratings (1) Distribution (2) Amount <br />Pooled investments: <br />Minnesota Municipal Money Market Fund N/A Less than 6 months $ 7,213,376 <br />Non-pooled investments: <br />U.S. Treasuries N/A Less than 6 months 2,660,556 <br />U.S. Government Securities AAA Less than 6 months 503,750 <br /> AAA 1 to 5 years 18,856,556 <br /> AAA More than 5 years 1,524,712 <br />Total U.S. Government Securities 20,885,018 <br />Negotiable CD's N/A Less than 6 months 2,211,201 <br /> 6 to 12 months 42,000 <br /> 1 to 5 years 6,740,869 <br />Total negotiable CD's 8,994,070 <br />Money Market Funds N/A Less than 6 months 1,053,828 <br />Total investments 40,806,848 <br />Deposits 8,831,767 <br />Cash on hand 4,725 <br />Total cash and investments $ 49,643.340 <br />(1) Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. <br />(2) Interest rate risk is disclosed using the segmented time distribution method. <br />N/A Indicates not applicable. <br />45 <br />