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6.C. - Page 80 of 196
<br />CITY OF REDWOOD CITY
<br />NOTES TO THE BASIC FINANCIAL STATEMENTS
<br />For the Fiscal Year Ended June 30, 2020
<br />NOTE 2 — CASH AND INVESTMENTS (CONTINUED)
<br />A. Cash and Deposits
<br />The carrying amount of the City's cash and deposits, including restricted cash, was $352,235 at June 30,
<br />2020. Bank balances before reconciling items were $1,909,614 at June 30, 2020. Of the total bank balances,
<br />$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 first
<br />trust deed mortgage notes having a value equal to 150%. Per state law each institution must use a third party
<br />(which may be the institution's trust department) to hold the pledged collateral in a pool to secure all the
<br />institution's public fund deposits. The code states that collateral pledged in this manner shall have the effect
<br />of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for
<br />cash is considered to be held in the City's name. Banks and savings and loans in California are subject to
<br />state -mandated reporting requirements to ensure that the required levels of control are maintained. The City
<br />may waive collateral requirements for deposits, which are fully insured with each financial institution up
<br />to $250,000 by the Federal Deposit Insurance Corporation (FDIC).
<br />Cash balances from all funds are combined and invested to the extent possible pursuant to the City Council
<br />approved investment policy and guidelines and state government code. The earnings from these investments
<br />are allocated monthly to each fund based on an average of monthly opening and closing balances of cash and
<br />investments. Investments are stated at fair value. All enterprise fund investments are considered to be liquid
<br />investments for cash flow purposes.
<br />Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising interest rates,
<br />the City's investment policy provides that weighted average maturity of the general portfolio shall not exceed
<br />three years. Specific maturities of investments depend on liquidity needs.
<br />B. Investments
<br />As of June 30, 2020, the City had the following investments by maturity:
<br />Investment Maturities (in
<br />Cash and Investments
<br />Total
<br />1 year or Less
<br />1 - 2 years
<br />2- 3 years
<br />3 - 4 years
<br />5 years or More
<br />County of San Mateo Investment Pool
<br />$ 81,083,201
<br />$ 81,083,201
<br />$
<br />$
<br />$
<br />$
<br />California Local Agcncy Investment Fund
<br />84,996,904
<br />84,996,904
<br />-
<br />U.S. Agencies, Securities, and Corporate
<br />Notes:
<br />Federal Agency Securities
<br />44,294,623
<br />1,670,084
<br />9,334,737
<br />10,814,190
<br />6,739,254
<br />15,736,358
<br />U.S. Treasury Notes
<br />63,060,896
<br />-
<br />13,646,002
<br />17,299,341
<br />14,446,025
<br />17,669,528
<br />Corporate Notes
<br />31,482,877
<br />2,941,489
<br />10,081,934
<br />5,435,799
<br />7,842,640
<br />5,181,015
<br />Certificate of Deposit - Negotiable
<br />12,964,114
<br />5,343,091
<br />1,651,924
<br />5,969,099
<br />-
<br />-
<br />Municipal Bonds
<br />2,683,747
<br />-
<br />-
<br />1,042,130
<br />1,641,617
<br />-
<br />Asset-backed Securities
<br />9,831,951
<br />-
<br />857,337
<br />5,768,208
<br />2,630,250
<br />576,156
<br />Supranational Obligations
<br />5,930,635
<br />3,846,698
<br />2,083,937
<br />-
<br />-
<br />-
<br />Money Market Mutual Funds
<br />70,235
<br />70,235
<br />-
<br />-
<br />Total
<br />$ 336,399,183
<br />$ 179,951,702
<br />$ 37,655,871
<br />$ 46,328,767
<br />$ 33,299,786
<br />$ 39,163,057
<br />48 167
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