2005 Comprehensive Annual Financial Report

Home Browse Search

CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Primary Government Investment Maturities in s „{ , Ye ars) Investment Market Less More Type Value Than 1 1 -2 Than 2 U.S. Treasuries and Securities $ 1,776,565 $ 1,776,565 $ - $ Investment Policies Indiana Code 5 -13 -9 authorizes the City to invest in securities backed by the full faith and credit of the United States Treasury or fully guaranteed by the United States of America and issued by the United States Treasury, a federal agency, a federal instrumentality, or a federal government sponsored enterprise. Indiana Code also authorizes the unit to invest in securities fully guaranteed and issued by a federal agency, a federal instrumentality or a federal government sponsored enterprise. These investments are required by statute to have a stated final maturity of not more than two years. Indiana Code also provides for investment in money market mutual funds that are in the form of securities of or interest in an open -end, no -load, management -type investment company or investment trust registered under the provision of the federal Investment Company Act of 1940, as amended. Investments in money market mutual funds may not exceed 50% of the funds held by the City and available for investment. The portfolio of an investment company or investment trust used must be limited to direct obligations of the United States of America, obligations issued by a federal agency, a federal instrumentality, or a federal government sponsored enterprise, or repurchase agreements fully collateralized by direct obligations of the United States of America or obligations issued by a federal agency, a federal instrumentality, or a federal government spon- sored enterprise. The form of securities of or interest in an investment company or investment trust must be rated as AAA, or its equivalent, by Standard and Poor s. Corporation or its successor orAaa, or its equivalent, by Moody's Investors Service, Inc., or its successor. The form of securi- ties in an investment company or investment trust should have a stated final maturity of one day. Additionally, the City may enter into repurchase agreements with depositories designated by the State Board of Finance as depositories for state deposits involving the unit's purchase and guar- anteed resale of any interest - bearing obligations issued or fully insured or guaranteed by the United States of America, a United States of America government agency, an instrumentality of the United States of America, or a federal government sponsored enterprise. The repurchase agreement is considered to have a stated final maturity of one day. This agreement must be fully collateralized by interest - bearing obligations as determined by their current market value. Investment Custodial Credit Risk The custodial credit risk for investments is the risk that, in the event of the failure of the counter - party to a transaction, a government will not be able to recover the value of investment or col- lateral securities that are in the possession of an outside party. The City does not have a formal investment policy for custodial credit risk for investments. At December 31, 2005, the City held investments in U.S. treasuries and securities in the amount of $1,776,565. These investments were held by the counterparty's trust department or agent but not in the City's name. Kill