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City of Redwood City 7.1.A. - Page 71 <br /> Notes to the Basic Financial Statements <br /> For the year ended June 30, 2014 <br /> NOTE 2 — CASH AND INVESTMENTS <br /> A. Cash and Deposits <br /> The carrying amount of the City's cash and deposits, including restricted cash, was ($2,405,628) at June <br /> 30, 2014. Bank balances before reconciling items were ($41,574) at June 30, 2014. Of the total bank <br /> balances, $495,000 was insured or held by the City or its agent in the City's name. <br /> All cash deposits in banks are fully insured or collateralized. California state law requires that public <br /> fund deposits be collateralized by either government securities with a value equal to 110% of the <br /> deposits or first trust deed mortgage notes having a value equal to 150 %. Per state law each institution <br /> must use a third party (which may be the institution's trust department) to hold the pledged collateral <br /> in a pool to secure all the institution's public fund deposits. The code states that collateral pledged in <br /> this manner shall have the effect of perfecting a security interest in such collateral superior to those of a <br /> general creditor. Thus, collateral for cash is considered to be held in the City's name. Banks and <br /> savings and loans in California are subject to state - mandated reporting requirements to ensure that the <br /> required levels of control are maintained. The City may waive collateral requirements for deposits, <br /> which are fully insured with each financial institution up to $250,000 by the Federal Deposit Insurance <br /> Corporation (FDIC). <br /> Cash balances from all funds are combined and invested to the extent possible pursuant to the City <br /> Council approved investment policy and guidelines and state government code. The earnings from <br /> these investments are allocated monthly to each fund based on an average of monthly opening and <br /> closing balances of cash and investments. Investments are stated at fair value. All enterprise fund <br /> investments are considered to be liquid investments for cash flow purposes. <br /> The following is a summary of pooled cash and investments, including cash and investments with fiscal <br /> agent at June 30, 2014: <br /> Fiduciary Fund <br /> Financial <br /> Government -wide Statement of Net Assets Statements <br /> Fiduciary Funds <br /> Governmental Business -Type Statement of <br /> Activities Activities Total Net Assets Total <br /> $ $ $ $ $ <br /> Cash and Investment 126,898,699 71,821,704 198,720,403 198,720,403 <br /> Restricted Cash and <br /> Investments 5,477,181 7,467,946 12,945,127 9,781,132 22,726,259 <br /> Total Cash and Investments 221,446,662 <br /> 43 <br />