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CITY OF ORONO. MINNESOTA <br />Notes to Financial Statements (continued) <br />December 31. 1994 <br />NOTE 2 - DEPOSITS AND iNVESTNffiNTS <br />A.Deposits <br />In accordance with ^plicable Minnesota Statutes, the City maintains deposits at depository banks <br />authorized by the City Council. <br />Minnesota Statutes require that all deposits be protected by insurance, surety bond, or collateral. The <br />market value of collateral pledged must equal 110% of the deposits covered by insurance or bonds (140% <br />in the case of mortgage-backed collateral). <br />Authorized collateral includes the legal investments described below, as well as certain first mortgage <br />notes and certain other state or local government obligations. Minnesota Statutes require that securities <br />pledged as collateral be held in safekeeping by the City or in a financial institution other than that <br />furni.shing the collateral. <br />Deposits consist of checking accounts, savings accounts, and certificates of deposit held in a bank or <br />savings institution. <br />At year-end. the carrying amount of the City’s depi^sits was $707,782. while the balance on the bank <br />records was $804,066. At December 31, W4, all deposits for the City were insured i>r collateralized <br />by securities held by the City’s agent in the City’s name. <br />B.Cash on Hand <br />Cash in the possession of the City, consisting of petty cash and change funds, at year-end totaled $360, <br />C.Investments <br />The City may also invest idle funds as authorized by Minne.stita Statutes, as follows: direct obligations <br />or obligations guaranteed by the United States or its agencies; shares of investment companies registered <br />under the Federal Investment Company Act of 1940 and whose only investments are in securities <br />de.scribed above; general obligations of the State of .Minnesota or any of its municipalities; bankers’ <br />acceptances of United States’ banks eligible for purchase by the Federal Reserve System; commercial <br />paper issued by United States’ corporations or their Canadian subsidiaries, of the highest quality, and <br />maturing in 270 days or less; repurchase or reverse purchase agreements with banks that are members <br />of the Federal Reserve Sy.stem with capitalizatiim exceeding S 10.000.0(K). a primary reporting dealer in <br />U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities <br />broker-dealers; and futures contracts sold under authority of Minnesota Statutes § 471.56. Subd. 5. <br />-39-