|
CITY OF EUGENE, OREGON
<br />Notes to Basic Financial Statements
<br />(4) Detailed Notes on All Funds continued
<br />(A) Eouity in Pooled Cash and Investments, continued
<br />Investments, continued
<br />With the exception of pass-through funds, the maximum amount of pooled investments to be placed in the
<br />Local Government Investment Pool is limited by Oregon Statute to $42,220,131, which will increase
<br />proportionately to the Portland Consumer Price Index. The limit can be temporarily exceeded for ten business
<br />days and does not apply either to pass-through funds or to funds invested on behalf of another governmental
<br />unit.
<br />Credit Risk
<br />The City's policy, which adheres to State of Oregon law, is to limit its Corporate and Municipal investments to
<br />the following: Issuers within Oregon must be rated "A" (bonds) or A-2 / P-2 (commercial paper) or better by
<br />Standard and Poor's, Moody's Investors Service or any other nationally recognized statistical rating
<br />organization at time of purchase. Issuers not in Oregon must be rated AA / Aa (bonds) or A-1 / P-1
<br />(commercial paper) or better at time of purchase.
<br />At June 30, 2008, the City's investments were rated as follows:
<br />Highest Rating From
<br />Moody's Investors Service or Standard & Poor's Corporation
<br />Investment tvpe Total Aaa/AAA Aa/AA A/A Baa/BBB B/B Not rated
<br />Corporate securities
<br />Local government
<br />investment pool
<br />Municipal bonds
<br />U.S. agency securities
<br />U.S. treasury securities
<br />Total
<br />$ 11,099,433 4,095,352 0 5,022,581 1,981,500 0 0
<br />13,420,322 0 0 0 0 0 13,420,322
<br />8,096,486 2,727,014 2,043,474 2,019,766 0 1,306,232 0
<br />120,874,978 120,874,978 0 0 0 0 0
<br />4,168,209 4,168,209 0 0 0 0 0
<br />$ 157,659,428 131,865,553 2,043,474 7,042,347 1,981,500 1,306,232 13,420,322
<br />The Oregon State Treasurer maintains the Oregon Short Term Fund (OSTF), of which the Local Government
<br />Investment Pool (LGIP) is a part. Participation by local governments is voluntary. The State of Oregon
<br />investment policies are governed by statute and the Oregon Investment Council. In accordance with Oregon
<br />Statutes, funds are invested as a prudent investor would do, exercising reasonable care, skill and caution.
<br />LGIP was created to offer ashort-term investment alternative to Oregon local governments and it is not
<br />registered with the U.S. Securities and Exchange Commission. The investments are regulated by the OSTF
<br />and approved by the Oregon Investment Council (ORS 294.805 to 294.895). At June 30, 2008, the fair value
<br />of the City's deposits with the LGIP approximates cost. The OSTF financial statements are available at
<br />http://www.ost.state.or. us/.
<br />The LGIP's portfolio concentration of credit risk at June 30, 2008 included: U.S. Agency securities (52.7%),
<br />Corporate Bonds (26.2%), Commercial Paper (16.4%), Bank Notes (3.2%) and Certificates of Deposits (1.5%).
<br />The credit risk associated with the investments was: AAA rating (53.6%), AA rating (24.9%), A rating (18.4%),
<br />and not rated (3.1 %).
<br />Concentration of Credit Risk
<br />The City's policy for investing in individual issuers varies depending on the type of investments. Agency
<br />securities are restricted to no more than 25% for any one issuer. No more than 25% of the total portfolio of
<br />investments may be invested in a single issuer of bankers' acceptances. Investments in commercial paper or
<br />corporate bonds of any one issuer may not exceed 5% of the investment portfolio.
<br />continued
<br />51
<br />
|