AgdaPkt 2016-01-11 Closed and Joint SA PFA

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City of Redwood City 6.1.E. - Page 72 Notes to the Basic Financial Statements For the year ended June 30, 2015 NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee services. The impact on the financial statements was a decrease in beginning net position as follows: Statement of Activities Governmental Business-type Activities Activities $ $ Net position-beginning of year,as previously reported 293,931,919 216,820,557 Restatement for implementation of GASB Statement No.68 (162,720,664) (16,776,426) Net position-beginning of year,as restated 131,211,255 200,044,131 NOTE 2-CASH AND INVESTMENTS A. Cash and Deposits The carrying amount of the City's cash and deposits, including restricted cash, was $3,715,819 at June 30, 2015. Bank balances before reconciling items were $1,024,505 at June 30, 2015. Of the total bank balances, $495,000 was insured or held by the City or its agent in the City's name. All cash deposits in banks are fully insured or collateralized. California state law requires that public fund deposits be collateralized by either government securities with a value equal to 110% of the deposits or first trust deed mortgage notes having a value equal to 150%. Per state law each institution must use a third party (which may be the institution's trust department) to hold the pledged collateral in a pool to secure all the institution's public fund deposits. The code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash is considered to be held in the City's name. Banks and savings and loans in California are subject to state-mandated reporting requirements to ensure that the required levels of control are maintained. The City may waive collateral requirements for deposits, which are fully insured with each financial institution up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). Cash balances from all funds are combined and invested to the extent possible pursuant to the City Council approved investment policy and guidelines and state government code. The earnings from these investments are allocated monthly to each fund based on an average of monthly opening and closing balances of cash and investments. Investments are stated at fair value. All enterprise fund investments are considered to be liquid investments for cash flow purposes. 43