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Elk River Municipal Utilities <br /> Elk River, Minnesota <br /> Notes to the Financial Statements <br /> December 31, 2017 <br /> Note 2: Detailed Notes on All Funds (continued) <br /> Investments <br /> The Utilities' investment balances were as follows for December 31, 2017: <br /> Credit Segmented <br /> Quality/ Time Fair Value Measurement Using <br /> Types of Investments Ratings(1) Distribution(2) Amount Level 1 Level 2 Level 3 <br /> Pooled Investments <br /> Broker Money Markets N/A less than 6 months $ 30,064 <br /> Non-pooled Investments <br /> Negotiable certificates of deposits N/A less than 6 months 1,464,627 $ - $ 1,464,627 $ <br /> Negotiable certificates of deposits N/A 6 months to 1 year 726,425 - 726,425 <br /> Negotiable certificates of deposits N/A 1 to 3 years 1,388,772 - 1,388,772 <br /> Total Non-pooled Investments 3,579,824 - 3,579,824 <br /> Total Investments $ 3,609,888 $ - $ 3,579,824 $ <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. <br /> A reconciliation of cash and temporary investments as shown in the financial statements for the Utilities follows: <br /> 2017 <br /> Deposits $ 15,528,074 <br /> Investments 3,609,888 <br /> Cash on Hand 800 <br /> Total $ 19,138,762 <br /> Cash and Temporary Investments <br /> Unrestricted $ 18,141,102 <br /> Restricted 997,660 <br /> Total $ 19,138,762 <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. Ratings <br /> are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota <br /> statutes and the Utilities' investment policy limit the Utilities' investments to the list on page 30 of 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' portfolio <br /> maturities shall be staggered to avoid undue concentration of assets with one broker-dealer or financial institution. <br /> 35 <br /> Aq <br />