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CITY OF ELK RIVER <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2019 <br />NOTE 2 STEWARDSHIP AND ACCOUNTABILITY <br />A. Deficit Fund Balance <br />The following funds had deficit fund balances at December 31, 2019: <br />Fund Fund Balance <br />Capital Projects Funds: <br />Park Dedication $ (208,560) <br />TIF Districts (2,229,030) <br />NOTE 3 DEPOSITS AND INVESTMENTS <br />A. Components of Cash and Investments <br />Cash and investments are presented in the financial statements as follows: <br />Primary Component Total Primary <br />Government Unit - HRA Gov and CU <br />Statement of Net Position <br />Cash and Investments $ 92,196,460 $ - $ 92,196,460 <br />Restricted Cash and Investments 1,261,359 - 1,261,359 <br />Cash and Investments - Discrete CU - 831,014 831,014 <br />Total $ 93,457,819 $ 831,014 $ 94,288,833 <br />B. Deposits <br />In accordance with applicable Minnesota Statutes, the City maintains deposits at <br />depository banks authorized by the City Council, including checking accounts and <br />certificates of deposit. The following is considered the most significant risk associated <br />with deposits: <br />Custodial Credit Risk — In the case of deposits, this is the risk that in the event of a bank <br />failure, the City's deposits may be lost. Minnesota Statutes require that all deposits be <br />protected by federal deposit insurance, corporate surety bond, or collateral. The fair <br />value of collateral pledged must equal 110% of the deposits not covered by federal <br />deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills, <br />notes, and bonds; issues of U.S. government agencies; general obligations rated "A" or <br />better; revenue obligations rated "AX or better; irrevocable standard letters of credit <br />issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes <br />require that securities pledged as collateral be held in safekeeping in a restricted <br />account at the Federal Reserve Bank or in an account at a trust department of a <br />commercial bank or other financial institution that is not owned or controlled by the <br />financial institution furnishing the collateral. <br />(47) <br />