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6.1.D. - Page 72 <br />Notes to the Basic Financial Statements <br />For the fiscal year ended June 30, 2016 <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 $1,678,097 at June 30, <br />2016. Bank balances before reconciling items were $2,594,206 at June 30, 2016. Of the total bank <br />balances, $500,000 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 fund <br />deposits be collateralized by either government securities with a value equal to 110% of the deposits or <br />first trust deed mortgage notes having a value equal to 150%. Per state law each institution must use a <br />third party (which may be the institution's trust department) to hold the pledged collateral in a pool to <br />secure all the institution's public fund deposits. The code states that collateral pledged in this manner <br />shall have the effect of perfecting a security interest in such collateral superior to those of a general <br />creditor. Thus, collateral for cash is considered to be held in the City's name. Banks and savings and loans <br />in California are subject to state -mandated reporting requirements to ensure that the required levels of <br />control are maintained. The City may waive collateral requirements for deposits, which are fully <br />insured with each financial institution up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). <br />Cash balances from all funds are combined and invested to the extent possible pursuant to the City Council <br />approved investment policy and guidelines and state government code. The earnings from these <br />investments are allocated monthly to each fund based on an average of monthly opening and closing <br />balances of cash and investments. Investments are stated at fair value. All enterprise fund investments <br />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, 2016: <br />Government -Wide Statement of Net Position <br />Governmental <br />Business -Type <br />Fiduciary <br />Activities <br />Activities <br />Funds <br />Total <br />Cash and investments 147,841,933 <br />84,582,808 <br />- <br />232,424,741 <br />Restricted cash and investments 4,728,557 <br />6,885,855 <br />10,080,974 <br />21,695,386 <br />Total cash and investments 152,570,490 <br />91,468,663 <br />10,080,974 <br />254,120,127 <br />45 <br />