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ELK RIVER MUNICIPAL UTILITIES <br /> ELK RIVER,MINNESOTA <br /> NOTES TO THE FINANCIAL STATEMENTS <br /> DECEMBER 31,2014 <br /> Note 2: DETAILED NOTES ON ALL FUNDS-CONTINUED <br /> Investments <br /> The Utilities' investment balances were as follows for December 31,2014: <br /> Fair Value <br /> Credit Segmented and <br /> Quality/ Time Carrying <br /> Types of Investments Ratings(1) Distribution(2) Amount <br /> Pooled investments <br /> Broker Money Markets N/A less than 6 months $ 5,962 <br /> Non-pooled investments <br /> U.S.Government Agency Securities AA+ 1 to 5 years 79,470 <br /> Brokered CD's N/A less than 6 months 320,672 <br /> Brokered CD's N/A 6 months to 1 year 345,018 <br /> Brokered CD's N/A 1 to 5 years 2,740,230 <br /> Total non-pooled investments 3,485,390 <br /> Total investments $ 3,491,352 <br /> (1) Ratings were 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 or available. <br /> A reconciliation of cash and temporary investments as shown in the financial statements for the Utilities follows: <br /> 2014 <br /> Deposits $ 12,286,839 <br /> Investments 3,491,352 <br /> Cash on hand 400 <br /> Total $ 15,778,591 <br /> Cash and temporary investments <br /> Unrestricted $ 15,288,091 <br /> Restricted 490,500 <br /> Total $ 15,778,591 <br /> The investments of the Utility are subject to the following risks: <br /> • Credit Risk.Is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. <br /> Ratings are provided by various credit rating agencies and where applicable,indicate associated credit risk. <br /> Minnesota Statutes and the Utilities' investment policy limit the Utilities'investments to the list on page 28 of <br /> the notes. <br /> • Custodial Credit Risk.The custodial credit risk for investments is the risk that,in the event of the failure of the <br /> counterparty to a transaction,a government will not be able to recover the value of investment or collateral <br /> securities that are in the possession of an outside party.According to their investment policy the Utilities' <br /> portfolio maturities shall be staggered to avoid undue concentration of assets with one broker-dealer or financial <br /> institution. <br /> 86 <br />