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CITY OF SAN LEANDRO
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />For The Year Ended June 30, 2016
<br />
<br />
<br />NOTE 2 - CASH AND INVESTMENTS (Continued)
<br />
<br /> Asset-backed Securities, the bulk of which are mortgage-backed securities, entitle their
<br />purchasers to receive a share of the cash flows from a pool of assets such as principal and interest
<br />repayments from a pool of mortgages (such as CMOs) or credit card receivables.
<br />
<br />Concentration of Credit Risk
<br />
<br />The City’s Policy states that the investment portfolio shall be designed with the objective of attaining a
<br />rate of return throughout budgetary and economic cycles, commensurate with the City’s investment risk
<br />constraints and the cash flow characteristic of the portfolio. Purchases of mutual funds must not exceed
<br />20% of the value of the portfolio. Investments in U.S. agencies exceed 5% of total portfolio, and Federal
<br />agency investments exhibited below exceeded 5% percent or more of the total investments in any one
<br />issuer:
<br />
<br />U.S. Agencies Amount Invested
<br />Percentage of
<br />Investments
<br />Federal agency securities:
<br />Federal National Mortgage Association (FNMA) 5,957,681$ 5.69%
<br />Federal Home Loan Bank (FHLB) 5,947,471 5.68%
<br />Total 11,905,152$ 11.37%
<br />Disclosures Relating to Credit Risk
<br />
<br />Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder
<br />of the investment. This is measured by the assignment of a rating by a nationally recognized statistical
<br />rating organization. Presented below is the minimum rating required by (where applicable) the California
<br />Government Code, the Entity’s investment policy, or debt agreements, and the actual rating as of year-end
<br />for each investment type.
<br />
<br />The City’s policy requires that the management company of mutual funds must have attained the highest
<br />rating provided by not less than two of the three largest nationally recognized rating organizations.
<br />
<br /> Fair
<br />Minimum
<br />Legal Exempt From
<br />Investment Type Value Rating Disclosure Not Rated AAA AA+
<br />Federal Agency Securities 18,458,907$ N/A 18,458,907$
<br />Money Market Fund 10,014 N/A 10,014$
<br />U.S. Treasury Notes 14,563,897 N/A 14,563,897$
<br />Local Agency Investment Fund 55,352,984 N/A 55,352,984$
<br />Medium-Term Notes 9,731,434 A 1,102,912
<br />Supranationals 1,938,801 AA 1,938,801
<br />Held by fiscal agent:
<br /> U.S. Treasury Money Market Funds 4,608,891 A 4,608,891
<br />Total 104,664,928$ 14,563,897$ 55,352,984$ 1,948,815$ 24,170,710$
<br /> AA AA- A+ A A-
<br />Medium-Term Notes 528,497$ 2,412,908$ 1,532,783$ 3,171,082$ 983,252$
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