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CITY OF ELK RIVER
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />DECEMBER 31, 2019
<br />NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED)
<br />C. Investments (Continued)
<br />Fair Value Measurements (Continued)
<br />Level 2 — Financial assets and liabilities are valued based on quoted prices for
<br />similar assets or inputs that are observable, either directly or indirectly, for
<br />substantially the full term through corroboration with observable market data.
<br />Level 3 — Financial assets and liabilities are valued using pricing inputs which are
<br />unobservable for the asset, inputs that reflect the reporting entity's own assumptions
<br />about the assumptions market participants would use in pricing the asset.
<br />Investment Type
<br />Negotiable Certificates of Deposit
<br />Federal Home Loan Bank
<br />Federal National Mortgage Association
<br />Federal Farm Credit Bank Bond
<br />Municipal Bonds
<br />Total Investments Measured at
<br />Fair Value
<br />Investments Measured at Amortized Cost
<br />Total Investments
<br />NOTE 4 NOTES RECEIVABLE
<br />Level Level Level Total
<br />$ $ 12,561,268 $ $ 12,561,268
<br />1,327,779 1,327,779
<br />1,501,680 1,501,680
<br />500,375 500,375
<br />19,205,047 19,205,047
<br />$ $ 35,096,149 $ 35,096,149
<br />36,954,051
<br />$ 72,050,200
<br />The City has made several business subsidy loans to local businesses, some of which were
<br />funded with grant proceeds received from the state and federal governments. The terms of
<br />repayment vary with each loan and will be repaid over a period of 10 years. Under the terms
<br />of the grant agreement, the City retains the grant repayments. Notes receivable of $375,378
<br />in the Revolving Loan fund and $414,034 in the State DEED fund are outstanding at
<br />December 31, 2019.
<br />In 2015, the City issued a $1,288,589 long-term note receivable related to the sale of
<br />property to a developer under an abatement agreement. The note shall be payable in
<br />semiannual installments as tax abatement revenues are received, commencing on
<br />August 1, 2017, and maturing February 1, 2037. A note receivable of $1,008,954 in the
<br />Development Fund is outstanding at December 31, 2019.
<br />In 2006, the HRA issued a loan to a developer to assist in the financing of a housing
<br />development for the benefit of low and moderate income residents which was funded with
<br />state grant proceeds. Repayment of the loan is deferred for 30 years, payable in one lump
<br />sum at an interest rate of 1 %. Notes receivable of $400,000 in the HRA is outstanding at
<br />December 31, 2019.
<br />(51)
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