Deficit Fund Batance
Certain individual funds reflected deficit balances as of June 30, 2021.
Nonmajer Governmental Funds:
Fire Projects $ (1,293,023)
Public Works Projects (4,848,536)
City Building Projects (718,590)
Property Revaluation Projects (621,844)
School Department Projects (8,575,489)
Total $ (16,057,482)
It is anticipated that the deficits in these funds will be eliminated through future bond
proceeds.
Deposits and Investments
Custodial Credit Risk — Deposits
Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not
be returned to it. RSA 48:16 states that “deposits in any one bank shall not at any time exceed
the sum of its paid-up capital and surplus, except that a City with a population in excess of
50,000 is authorized to deposit funds in a solvent bank in excess of the paid-up capital surplus
of said bank.” The City’s investment policy for custodial credit risk related to deposits
requires collateral on all deposits and short-term investments (in excess of FDIC). Pledged
collateral must be in writing and held at an independent third-party institution.
As of June 30, 2021, the City’s entire bank balance was fully insured or collateralized.
Custodial Credit Risk - Investments
Custodial credit risk for investments is the risk that in the event of a failure of the counterparty
(e.g., broker-dealer) to a transaction, a government will not be able to recover the value of
the investment or collateral securities that are in the possession of another party. The City’s
investments are exposed to custodial risk. The City’s investment policy limits its exposure to
custodial credit risk by requiring that all security transactions entered into by the City be
conducted on a delivery-versus-payment basis to ensure that securities are deposited in an
allowable financial institution prior to the release of funds. Securities will be held by an
independent third-party custodian selected by the City as evidenced by safekeeping receipts
in the City’s name. The safekeeping institution shall annually provide a copy of their most
recent report on internal controls.
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