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City of San Leandro <br />Notes to Basic Financial Statements <br />For the year ended June 30, 2010 <br />NOTE 2 - CASH AND INVESTMENTS, Continued <br />B. Investments, Continued <br />Investments Authorized by the City's Investment Policy and California Government Code <br />The table below identifies the investment types that are authorized for the City by the City's Investment Policy. The <br />table also identifies certain provisions of the California Government Code that address interest rate risk, credit risk, <br />and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are <br />governed by the provisions of the related bond documents. <br />Investment Type <br />Maximum Maturity <br />Maximum Percentage of *Portfolio <br />U.S.Treasury Obligations <br />5 years <br />None <br />U.S. Agency Securities <br />5 years <br />None <br />Local Agency bonds <br />5 years <br />None <br />Bankers Acceptances <br />180 days <br />40% <br />Commercial Paper <br />270 days <br />30% <br />Negotiable Certificate of Deposit <br />5 years <br />30% <br />Repurchase Agreements <br />1 year <br />20% <br />Reverse Repurchase Agreements <br />92 days <br />20% of base value <br />Medium Term Notes <br />5 years <br />10% <br />Mutual Funds <br />N/A <br />20% <br />Money Market Mutual Funds <br />N/A <br />20% <br />Mortage Pass -Through Securities <br />5 years <br />20% <br />County Pooled Investment Funds <br />N/a <br />None <br />Local Agency Investment Fund (LAIF) <br />N/A <br />$40 million per account <br />Other investment pools <br />N/A <br />None <br />*excluding amounts held by bond trustee <br />that are not subject to California <br />Goverrment Code restrictions. <br />Investments in Local Agency Investment Fund <br />As of June 30, 2010, the City had $50,497,593 (estimated fair value) invested in LAIF accounts, which had invested <br />5.42% of the pooled investments in structured notes and asset -backed securities. <br />The City invests in the Local Agency Investment Fund (LAIF), a State of California external investment pool. LAIF <br />determines fair value on its investment portfolio based on market quotations for those securities where market <br />quotations are readily available and based on amortized cost or best estimate for those securities where market value is <br />not readily available. <br />The City valued its investments in LAIF as of June 30, 2010, at the fair value. The fair value is calculated by <br />multiplying the account balance with LAW times a fair value factor of 1.001643776 which is determined by LAIF. <br />This fair value factor was determined by dividing all LAIF participants' total aggregate amortized cost by total <br />aggregate fair value. <br />50 <br />