Comprehensive Annual Financial Report FY 2016

The GTA owns a percentage of the City's total investment pool. Accordingly, investment balances of the GTA are included in the following table:

Valuation Measurement

Weighted Average

Investment Type

Method

Reported/Fair Value

Maturity (Year)

U.S. Government Agencies

Fair Value - Level 2 Fair Value - Level 2 Fair Value - Level 2 Fair Value - Level 1 Amortized Cost

$

246,815,204 9,958,983 3,932,561 1,665,344 9,581,656 33,369,226 10,564,204 315,887,178

1.48

Commercial Paper

0.0003

OPEB - STIF OPEB - LTIF OPEB - Equity

0.003 0.003 0.003 0.003 0.003

NCCMT Cash Portfolio NCCMT TermFund

Amortized Cost

Fair Value - Level 1

Total Fair Value

$

Portfolio Weighted Average Maturity

0.51

All investments are measured using the market approach: using prices and other relevant information generated by market transactions involving identical or comparable assets or a group of assets. Level of fair value hierarchy: Level 1: Financial instruments are valued using directly observable, quoted prices (unadjusted) in active markets for identical assets. Level 2: Financial instruments are valued using inputs that include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. The Street Improvements Bond Fund-Series 2010 has $1,206,639 in checks in excess of cash and the Parks & Recreation- Series 2008 has $2,082 in checks in excess of cash, which are reflected in the liability section of these financial statements. Interest Rate Risk In accordance with the formal approved City of Greensboro’s Charter, Article III, Section 4.71, the Investment Manager (Assistant Treasurer) prepares a memo describing investment transactions in detail as they are purchased. This memo is sent to the Mayor, the City Manager and the Finance Director (Treasurer) for signature approval and then returned to the Investment Manager. Although the investment policy has not been formally approved by the City Council, the City has an investment policy guideline, an internally approved Finance Department document that follows North Carolina General Statute 159-30. As a means of limiting the City’s exposure to declines in fair market values from rising interest rates, the City limits the weighted average maturity of its investments to less than 3.5 years. Also, the City purchases securities in a structured ladder with stated maturity dates to limit interest rate risk. Credit Risk North Carolina General Statute 159-30 limits investments in U.S. Governmental Agencies and commercial paper to those with top ratings issued by NRSRS. The City has no formal investment policy regarding credit risk, however in practice, it follows NCGS 159-30, and in effect the City limits its investment types to those with top ratings issued by NRSRS. As of June 30, 2016, the City had investments in the NCCMT Cash Portfolio, which is rated AAAm by Standard and Poor’s, and in U. S. Government Agencies, all of which were rated AAA by Standard and Poor’s. The City also had investments in the NCCMT Term Portfolio, which is not rated. Investments in commercial paper by the City are rated either A1/P1 by Standard and Poor’s or Moody’s Investors Service. Custodial Credit Risk For an investment, the custodial risk is the risk that in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City has no formal policy on custodial credit risk, but the City utilizes a separate third party custodial trust agent for all book-entry transactions, all of which are held in the City’s name.

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