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CITY OF SAN LEANDRO NOTES TO BASIC FINANCIAL STATEMENTS For The Year Ended June 30, 2022 NOTE 2 – CASH AND INVESTMENTS The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds, which the Finance Director invests to enhance interest earnings. The pooled interest earned is allocated to the funds based on average daily cash and investment balance in these funds. A.Cash Deposits The carrying amount of the City’s cash deposits is $12,326,966 at June 30, 2022. Bank balances before reconciling items were $13,385,037, at that date, the total amount of which was insured or collateralized with securities held by the pledging financial institutions in the City’s name as discussed below. The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name. The fair value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The City, however, has not waived the collateralization requirements. The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures, and investments held in the City's Section 115 pension trust. Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund. B.Investments Under the provisions of the City’s investment policy, and in accordance with California Government Code, the City’s cash and investments as of June 30, 2022, are classified as follows: Statement of Net Position: Cash and investments 210,429,029$ Restricted cash and investments 11,031,899 Fiduciary Funds: Cash and investments 3,506,971 Cash and investments with fiscal agents 449,078 Total cash and investments 225,416,977$ Cash and investments as of June 30, 2022, are classified as follows: Deposits with financial institutions 12,326,996$ Investments 213,089,981 Total cash and investments 225,416,977$ 53