6.1. SR 06-03-2013 - Laserfiche WebLink

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i CITY OF ELK RIVER,MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2012 I Note 3: DETAILED NOTES ON ALL FUNDS-CONTINUED The City's investment policy follows Minnesota State Statutes which reduces the City's exposure to credit,custodial credit and interest rate risks. Specific risk information for the City is as follows: I • Custodial credit risk-For investments,custodial credit risk is the risk that in the event of a failure of the counterparty,the government would not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. As of December 31,2012 all investments were insured or registered,or securities were held by the City or its agent in the City's name. • Credit risk-Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments in conmmercial paper that is rated in the highest quality category by at least two nationally recognized rating agencies. The City's investment policy does not further limit the ratings of their investments. • Concentration risk-Concentration risk is the risk of loss that may be caused by the City's investment in a single issuer. The City does not have a formal policy that limits the amount of investments in a single issuer. As of December 31,2012,more than 5%of the City's investments were held in the following U.S.Agencies:Federal Home Loan Bank(22%)and Federal National Mortgage Association(14%). • Interest rate risk-In accordance with its investment policy,the City diversifies its investment portfolio to eliminate the risk of loss resulting from the over-concentration of assets in a specific maturity. The maturities selected shall provide for stability of income and reasonable liquidity. The Minnesota Municipal Money Market Fund(4M Fund)is an external investment pool allowable under Minnesota Statutes and regulated by the Board of Directors of the League of Minnesota Cities. The 4M Fund is a customized cash management and investment program for Minnesota public funds designed to address the daily and long term investment needs of Minnesota cities and other municipal entities. The 4M Fund is an un•ated 2a7-like pool and the fair value of the position in the pool is the same as the value of pool shares. Financial statements of the 4M Fund can be obtained by contacting RBC Global Asset Management at 100 South Fifth Street Suite 2300,Minneapolis,MN 55402-1240. As of December 31,2012,the City had the following investments that are insured or registered,or securities held by the City or its agent in the City's name. Fair Value Credit Segmented and Quality/ Time Carrying Types of Investments Ratings(1) Distribution(2) Amount Pooled investments: Minnesota Municipal Money Market Fund N/A Less than 6 months $ 6,056,108 Broker Money Markets N/A Less than 6 months 7,673,757 Total pooled investments 13,729,865 Non-pooled investments: U.S.Government Securities AAA 1 to 5 years 1,040,059 AAA More than 5 years 16,556,728 Total U.S.Government Securities 17,596,787 U.S.Treasury Securities AAA Less than 6 months 1,553,188 Municipal Securities AA 1 to 5 years 250,870 AA More than 5 years 502,400 AAA 1 to 5 years 248,250 AAA More than 5 years 1,982,239 Total Municipal Securities 2,983,759 45