Laserfiche WebLink
City of Redwood City 7.1.A. - Page 67 <br /> Notes to the Basic Financial Statements <br /> For the year ended June 30, 2014 <br /> NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br /> F. Cash and Cash Equivalents <br /> The City pools cash resources from all funds in order to facilitate the management of cash. The balance <br /> in the pooled cash account is available to meet current operating requirements. Cash in excess of <br /> current requirements is invested in various interest - bearing accounts and other investments for varying <br /> terms. <br /> In accordance with GASB Statement No. 40, Deposit and Investment Disclosures (Amendment of GASB <br /> No. 3), certain disclosure requirements for Deposits and Investment Risks were made in the following <br /> areas: <br /> • Interest Rate Risk <br /> • Credit Risk <br /> o Overall <br /> o Custodial Credit Risk <br /> o Concentrations of Credit Risk <br /> In addition, other disclosures are specified including use of certain methods to present deposits and <br /> investments, highly sensitive investments, credit quality at year -end, and other disclosures. <br /> In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments <br /> and for External Investment Pools, highly liquid market investments with maturities of one year or less <br /> at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market <br /> value is used as fair value for those securities for which market quotations are readily available. <br /> The City participates in an investment pool managed by the State of California titled Local Agency <br /> Investment Fund (LAIF) which has invested a portion of the pooled funds in Structured Notes and Asset - <br /> Backed Securities. LAIF's investments are subject to credit risk with the full faith and credit of the State <br /> of California collateralizing these investments. In addition, these Structured Notes and Asset - Backed <br /> Securities are subject to market risk as to the change in interest rates. <br /> Cash equivalents are considered amounts in demand deposits and short -term investments with a <br /> maturity date within three months of the date acquired by the City and are presented as "Cash and <br /> Investments" in the accompanying Basic Financial Statements. <br /> For purposes of the statement of cash flows, cash equivalents are defined as investments with original <br /> maturities of 90 days or less, which are readily convertible to known amounts of cash. The City <br /> considers all pooled cash and investments (consisting of cash and investments and restricted cash and <br /> investments) held by the City as cash and cash equivalents because the pool is used essentially as a <br /> demand deposit account from the standpoint of the funds. The City also considers all non - pooled cash <br /> and investments (consisting of cash with fiscal agent and restricted cash and investments held by fiscal <br /> agent) as cash and cash equivalents because investments meet the criteria for cash equivalents defined <br /> above. <br /> 39 <br />