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CITY OF ELK RIVER, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2020 <br />NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED) <br />B. Deposits (Continued) <br />The City (including Elk River Municipal Utilities) has an investment policy in place to <br />address custodial credit risk for deposits, stating all deposits and investments must be in <br />compliance with Minnesota Statutes 118A, with collateral ization levels of 110% of the <br />market value of the principal and accrued interest. <br />At year-end, the carrying amount of the City's deposits was $24,567,243 while the <br />balance on the bank records was $24,773,150. At December 31, 2020, all deposits were <br />fully covered by federal depository insurance, surety bonds, or by collateral held by the <br />City's agent in the City's name. <br />At year-end, the carrying amount of deposits for the HRA, a discretely presented <br />component unit, was $548,530 and the bank balance was $548,530. At December 31, <br />2020, all deposits were fully covered by federal depository insurance, surety bonds, or <br />by collateral held by the City's agent in the City's name. <br />C. Investments <br />Minnesota Statutes and the City's investment policy authorize the City to invest in the <br />following: <br />a. Direct obligations or obligations guaranteed by the United States or its agencies. <br />b. Shares of investment companies registered under the Federal Investment <br />Company Act of 1940 and whose only investments are in securities described in <br />(a) above. <br />c. General obligations of the state of Minnesota or any of its municipalities. <br />d. Bankers acceptances of United States Banks eligible for purchase by the Federal <br />Reserve System. <br />e. Commercial paper of the highest quality issued by United States corporations or <br />their Canadian subsidiaries and maturing in 270 days or less. <br />(48 ) <br />