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CITY OF SAN LEANDRO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />For The Year Ended June 30, 2019 <br /> <br /> <br />NOTE 2 – CASH AND INVESTMENTS (Continued) <br /> <br />Fair Value Hierarchy <br /> <br />The City categorizes its fair value measurements within the fair value hierarchy established by generally <br />accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value <br />of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are <br />significant other observable inputs; and Level 3 inputs are significant unobservable inputs. <br /> <br />The following is a summary of the fair value hierarchy of the fair value of investments of the City as of <br />June 30, 2019: <br /> <br /> Level 1 Level 2 Total <br />Investments By Fair Value Level: <br />-$ 27,195,934$ 27,195,934$ <br />U.S. Treasury Notes 37,623,921 37,623,921 <br />Medium-Term Notes 26,886,311 26,886,311 <br />Asset Backed Securities 7,267,010 7,267,010 <br />Supranationals 4,417,518 4,417,518 <br />Commercial Paper 3,582,336 3,582,336 <br /> Total Investments 37,623,921$ 69,349,109$ 106,973,030 <br />Investments Exempt from Fair Value Hierarchy: <br />Local Agency Investment Fund (LAIF)59,237,328 <br />Investments Measured at Amortized Cost: <br />Held by fiscal agent: <br />U.S. Treasury Money Market Funds 553,930 <br />Money Market Fund 17,234,044 <br />Total 183,998,332$ <br />Federal Agency Securities <br /> <br /> <br />U.S. Treasury Notes classified in Level 1 of the fair value hierarchy, are valued using quoted prices in <br />active markets. Federal agency securities, medium term notes, and supranationals, classified in Level 2 of <br />the fair value hierarchy, are valued using matrix pricing techniques maintained by various pricing <br />vendors. Matrix pricing is used to value securities based on the securities’ relationship to benchmark <br />quoted prices. The California Local Agency Investment Fund (LAIF) is valued based on the fair value <br />factor provided by the Treasurer of the State of California, which is calculated as fair value divided by the <br />amortization cost of the investment pool and is exempt from the Fair Value hierarchy. Fair value is <br />defined as the quoted market value on the last trading day of the period. These prices are obtained from <br />various pricing sources by the custodian bank. <br /> <br /> <br />56203