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City of Redwood City
<br />Notes to the Basic Financial Statements
<br />For the fiscal year ended June 30, 2016
<br />NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
<br />Investment Type
<br />Total
<br />Securities of U.S. Government
<br />$
<br />Treasury and Agencies:
<br />Federal Home Loan Bank
<br />14,014,690
<br />Federal national Mortgage Association
<br />20,041,220
<br />Federal Home Loan Mortgage Corporation
<br />80,139,790
<br />Federal Farm Credit Bank
<br />21,019,590
<br />San Mateo County Investment Pool
<br />50,325,003
<br />California Local Agency Investment Fund
<br />45,194,491
<br />Subtotal
<br />230,734,784
<br />California Local Agency Investment Fund (Restricted)
<br />8,114,449
<br />Total investments subject to levelling disclosure
<br />238,849,233
<br />6.1.D. - Page 77
<br />Fair Value Measurement Using
<br />Levell Leve12 Leve13
<br />14,014,690
<br />20,041,220
<br />80,139,790
<br />21,019,590
<br />50,325,003
<br />45,194,491
<br />230,734,784
<br />8,114,449
<br />238,849,233
<br />Treasury securities categorized as Level 1 are valued based on prices quoted in active markets for those
<br />securities. Federal Farm Credit Bank Bonds, Federal Home Loan Banks, Federal Home Loan Mortgage
<br />Corporate Notes, Federal National Mortgage Association Notes and Corporate Notes categorized as Level
<br />2 are valued based on matrix pricing which use observable market inputs such as yield curves and market
<br />indices that are derived principally from or corroborated by observable market data by correlation to
<br />other means.
<br />The City's fair value for its investment in the State of California Local Agency Investment Fund (LAI F) and
<br />the San Mateo County Investment Pool (SMCIP) is based on the fair market value factors provided by
<br />LAIF and SMCIP that are calculated based on the total fair market value of the pool. LAIF includes
<br />investments categorized as Level 1 such as United States Treasury securities, Federal Agency securities,
<br />and supranational debentures that are valued based on prices quoted in active markets and investments
<br />categorized as Level 2 such as negotiable certificates of deposit and bank notes that are based on market
<br />corroborated pricing utilizing inputs such as yield curves and indices that are derived principally from or
<br />corroborated by observable market data by correlation to other means. SMCIP includes investments in
<br />LAIF, Treasury securities, Federal Agency securities, U.S. Instrumentalities, floating rate securities, and
<br />corporate bonds. SMCIP utilizes a pricing service that uses valuation techniques that utilizes observable
<br />market inputs such as yield curves and market indices that are derived principally from or corroborated
<br />by observable market data by corroborated by observable market data by correlation to other means.
<br />The City categorized its investments in LAIF and in the SMCIP based on the lowest significant input used
<br />to determine the fair market value of the total pool.
<br />50
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