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Elk River Municipal Utilities <br />Elk River, Minnesota <br />Notes to the Financial Statements <br />December 31, 2021 <br /> <br />Note 2: Detailed Notes on All Funds <br />A.Deposits and Investments <br />nd <br />investments may not be returned or the Utilities will not be able to recover collateral securities in the possession of an <br />outside party. In accordance with Minnesota statutes and as authorized by the Commission, the Utilities maintains <br />deposits at those depository banks, all of which are members of the Federal Reserve System. <br />Minnesota statutes require that all Utilities deposits be protected by insurance, surety bond or collateral. The fair value of <br />collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds, with the exception of <br />irrevocable standby letters of credit issued by Federal Home Loan Banks as this type of collateral only requires collateral <br />pledged equal to 100 percent of the deposits not covered by insurance or bonds. <br />Authorized collateral in lieu of a corporate surety bond includes: <br />United States government Treasury bills, Treasury notes, Treasury bonds; <br /> <br />Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation <br />service available to the government entity; <br /> <br />General obligation securities of any state or local government with taxing powers which is rated <br />national bond rating service, or revenue obligation securities of any state or local government with taxing powers <br /> <br /> <br />General obligation securities of a local government with taxing powers may be pledged as collateral against funds <br />deposited by that same local government entity; <br /> <br />Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by <br /> <br /> <br />Time deposits that are fully insured by any federal agency. <br />Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve <br />Bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or <br />controlled by the financial institution furnishing the collateral. The selection should be approved by the government entity. <br />At December 31, 2021$30,405,117 and the bank balance was $30,507,441. <br />Of the bank balance $349,991 was covered by federal depository insurance, and the remaining balance was covered by <br /> <br /> <br />34 <br />106 <br />