06-09-1997 Council Packet - Laserfiche WebLink

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■i-v, : ,t-i k- CITY OF ORONCi, MINNESOTA Notes to Financial Statements (continued) December 31, 1996 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The City also carries commercial insurance for certain other risks of loss, including employee health insurance and liquor liability. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. NOTE 2 - DEPOSITS AND INVESTMENTS A. Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depositoiy banks authorized by the City Council. Minnesota Statutes require that ail deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits covered by insurance or bonds (140% in the case of mortgage-backed collateral). Authorized collateral includes the legal investments described below, as well as certain first mortgage notes and certain other state or local government obligations. Minnesota Stamtes require that securities pledged as collateral be held in safekeeping by the City or in a financial institution other than that furnishing the collateral. Deposits consist of checking accounts, savings accounts, and certificates of deposit held in a bank or savings instinition. At year-end, the carrying amount of the City ’s deposits was $597,895, while the balance on the bank records was $751,561. At December 31, 1996, all deposits for the City were insured or collateralized by securities held by the City ’s agent in the City ’s name. B. Cash on Hand Cash in the possession of the City, consisting of petty cash and change funds, at year-end totaled $360. C. Investments The City may also invest idle funds as authorized by Minnesota Stamtes, as follows: direct obligations or obligations guaranteed by tlie United States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described above; general obligations of the State of Minnesota or any of its municipalities; bankers’ acceptances of United States’ banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States’ corporations or their Canadian subsidiaries, of the highest quality, and mamring in 270 days or less; repurchase or reverse purchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers; and fumres contracts sold under authority of Minnesota Stamtes § 471.56, Subd. 5. -35-