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NOTE 2—CAS�AND INVESTMENTS (CONTIl�T�JED)
<br /> loans in California are subj ect to state-mandated reporting requirements to ensure that the required levels
<br /> of control are maintained. The City may waive collateral requirements for deposits, which are fully
<br /> insured with each financial institution up to $100,000 by the Federal Deposit Insurance Corporation
<br /> (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 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, 2007.
<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 103,409,131 32,165,488 135,574,619 135,574,619
<br /> Restricted Cash and
<br /> Investments 21,467,692 30,793,347 52,261,039 8,187,722 60,448,761
<br /> Total Cash and Investments 196,023,380
<br /> B. Rl,sk Dlsclosures
<br /> Interest Rate Rlsk. As a means of limiting its exposure to fair value losses arising from rising interest
<br /> rates, the City's investment policy provides that final maturities of securities cannot exceed three years.
<br /> Specific maturities of investments depend on liquidity needs.
<br /> As of June 30, 2007,the City had the following cash and investments and maturities:
<br /> Investment Maturities(in years)
<br /> Fair Value 1 Year or Less 1-2 Years 2-3 Years
<br /> $ $ $ $
<br /> Demand Accounts at Banks 1,187,522 1,187,522
<br /> Certificates of Deposit 1,325,000 1,325,000
<br /> Petty Cash 11,785 11,785
<br /> Securities of U.S. Government Treasury Agencies:
<br /> Federal Home Loan Bank 35,298,480 11,405,340 5,998,140 17,895,000
<br /> Federal National Mortgage Association 34,090,920 19,302,780 8,910,960 5,877,180
<br /> Federal Farm Credit 5,987,820 3,000,000 2,987,820
<br /> US Treasury Securities 8,882,820 2,993,670 2,979,150 2,910,000
<br /> County of San Mateo Investment Pool 17,595,339 17,595,339
<br /> California Local Agency Investment Fund 31,194,933 31,194,933
<br /> TOTAL 135,574,619 88,016,369 17,888,250 29,670,000
<br /> Credlt Rlsk—Defined as the loss due to failure of the issuer of a security, shall be mitigated by investing
<br /> in investment grade securities and by diversifying the investment portfolio so that failure of any one issue
<br /> does not unduly harm the City's capital base and cash flow.
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