|
NOTE 3
<br />CITY OF ELK RIVER
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />YEAR ENDING DECEMBER 31, 2016
<br />DEPOSITS AND INVESTMENTS (CONTINUED)
<br />C. Investments (Continued)
<br />A schedule of the maturities and ratings of the City's investments as of December 31,
<br />2016 is as follows:
<br />Maturity and Rating Breakdown of Investments:
<br />Maturity Duration
<br />in Years
<br />Investment Type
<br />Total
<br />Less Than 1
<br />1 to 5
<br />More Than 5
<br />No Maturity
<br />Rating
<br />U.S. Treasury Notes
<br />$ 20,951
<br />$ 20,951
<br />$ -
<br />$ -
<br />$ -
<br />Negotiable Certificates of Deposit
<br />10,243,800
<br />3,487,814
<br />6,755,986
<br />-
<br />-
<br />Not Rated
<br />Federal National Mortgage Association
<br />12,864,776
<br />9,263,352
<br />2,600,914
<br />1,000,510
<br />-
<br />AA+/Aaa
<br />Federal Farm Credit Bank Bond
<br />500,630
<br />500,630
<br />-
<br />-
<br />-
<br />AA+/Aaa
<br />Municipal Bonds
<br />17,804,343
<br />502,065
<br />6,152,550
<br />11,149,728
<br />-
<br />AA-toAAA
<br />UBS Select Prime Institutional Money Market
<br />994,781
<br />-
<br />-
<br />-
<br />994,781
<br />Not Rated
<br />Minnesota Municipal Money Market (41M Fund)
<br />3,781,083
<br />-
<br />-
<br />-
<br />3,781,083
<br />Not Rated
<br />Other Money Market Funds
<br />33,324
<br />33,324
<br />Total Investments
<br />�, ,-,
<br />77�,8i'f
<br />—7—TTTM=,
<br />—7-7$�15, ,
<br />Custodial Credit Risk — For an investment, the custodial credit risk is the risk that in the
<br />event of a failure of the counterparty to an investment transaction (typically a broker-
<br />dealer) the City would not be able to recover the value of its investments or collateral
<br />securities that are in the possession of an outside party. The City typically limits its
<br />exposure by purchasing insured or registered investments, or by the control of who
<br />holds the securities. As of December 31, 2016 all investments were insured or
<br />registered, or securities were held by the City or its agent in the City's name.
<br />Concentration Risk — This is the risk associated with investing a significant portion of
<br />the City's investment (considered 5% or more) in the securities of a single issuer and no
<br />more than 50% of the City's total investment portfolio may be invested in certificates of
<br />deposit or commercial paper.
<br />At December 31, 2016, the following is a list of investments which individually comprise
<br />more than 5% of the City's total investments:
<br />4k AKMqwv Percent of
<br />Total Fair Value
<br />Federal National Mortgage Association $ 12,864,776 27.82%
<br />Minnesota Municipal Money Market (4M Fund) 3,781,083 8.18%
<br />Fair Value Measurements
<br />The City uses fair value measurements to record fair value adjustments to certain assets
<br />and liabilities and to determine fair value disclosures.
<br />The City follows an accounting standard which defines fair value, establishes framework
<br />for measuring fair value, establishes a fair value hierarchy based on the quality of inputs
<br />used to measure fair value, and requires expanded disclosures about fair value
<br />measurements. In accordance with this standard, the City has categorized its
<br />investments, based on the priority of inputs to the valuation technique, into a three-level
<br />fair value hierarchy. The fair value hierarchy gives the highest priority to quotes and
<br />prices in active markets for identical assets and liabilities (Level1) and the lowest priority
<br />to unobservable inputs (Level 3). If the inputs used to measure the financial instruments
<br />fall within different levels of the hierarchy, the categorization is based on the lowest level
<br />input that is significant to the fair value measurement of the instrument.
<br />(50)
<br />
|