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6.1 B
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<br /> NOTE 2— CASH AND INVESTMENTS (CONTINUED)
<br /> must use a third party (which may be the institution's trust department) to hold the pledged collateral in
<br /> a pool to secure all the institution's public fund deposits. The code states that collateral pledged in this
<br /> manner shall have the effect of perfecting a security interest in such collateral superior to those of a
<br /> general creditor. Thus, collateral for cash is considered to be held in the City's name. Banks and
<br /> savings and loans in California are subject to state-mandated reporting requirements to ensure that the
<br /> required levels of control are maintained. The City may waive collateral requirements for deposits,
<br /> which are fully insured with each financial institution up to $250,000 by the Federal Deposit Insurance
<br /> Corporation (FDIC).
<br /> �
<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, 2010.
<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 100,214,672 35,729,624 135,944,296 135,944,296
<br /> Restricted Cash and Investments 10,910,311 11,913,512 22,823,823 6,488,582 29,312,405
<br /> Total Cash and Investments 165,256,701
<br /> 8. Risk Disclosures
<br /> Interest Rate Risk. 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 lune 30, 2010, the City had the following cash and investments available for operations:
<br /> Investment Maturities (in years)
<br /> Fair Value 1-2 Years 2-3 Years 3-4 Years
<br /> $ $ $ $
<br /> Demand Accounts at Banks 304,449 304,449
<br /> Certificates of Deposit 1,870,000 1,870,000
<br /> Petty Cash 11,800 11,800
<br /> County of San Mateo Investment Pool 31,151,468 31,151,468
<br /> California Local Agency Investment Fund 44,219,859 44,219,859
<br /> U.S. Agencies, Securities, and Corporate Notes:
<br /> Federal Home Loan Bank 28,166,590 7,064,380 21,102,210
<br /> Federal National Mortgage Association 21,029,690 4,000,940 17,028,750
<br /> Federal Home Loan Mortgage Corporation 9,190,440 3,150,930 6,039,510
<br /> TOTAL 135,944,296 84,621,956 7,151,870 44,170,470
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