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CITY OF SOUTH BEND <br />NOTES TO FINANCIAL STATEMENTS <br />(Continued) <br />Interest Rate Risk <br />Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an <br />investment. The City must follow state statute and limit the stated final maturities of the invest- <br />ments to no more than two years. <br />Credit Risk <br />Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obliga- <br />tions. U.S. Treasury securities are guaranteed by the full faith and credit of the U.S. government <br />and are recognized as the safest investment available. <br />Concentration of Credit Risk <br />Concentration of credit risk is the risk of loss attributed to the magnitude of a government's <br />investment in a single issuer. The City does not have a policy in regards to concentration of credit <br />risk. United States of America government and United States of America governmental agency <br />securities are exempt from this policy requirement. <br />Foreign Currency Risk <br />The City does not have a formal policy in regards to foreign currency risk. The City does not have <br />any foreign currency. <br />B. Receivables <br />The following receivable accounts have timing and credit characteristics different from typical ac- <br />counts receivable. <br />As of December 31, 2005, City funds recognized the following loan receivable balances. The sched- <br />ule shows the total receivable and the portion that is not due within one year. These loans were for <br />economic development projects. <br />Fund <br />Receivable Noncurrent <br />Special revenue funds: <br />Economic Development State Grants $ 4,089,987 $ 3,890,831 <br />Community Development 1,972,735 1,206,286 <br />Industrial Revolving 5,015,183 4,354,973 <br />Totals <br />C. Capital Assets <br />$ 11,077,905 $ 9,452,090 <br />Capital asset activity for the year ended December 31, 2005, was as follows: <br />37 <br />