Investments at June 30, 2021 included the following:
U.S. Treasury Obligations $ 14,949,928
U.S. Government Agencies 10,914,022
Corporate Bonds 5,249,591
Equity Securities 64,409,001
Mutua! Funds 17,342,639
Long-term Certificates of Deposit 6,556,929
Total $ 119,422,110
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation
to the holder of the investment. State law employs the prudent person rule whereby
investments are made as a prudent person would be expected to act, with discretion and
intelligence, to seek reasonable income, preserve capital, and, in general, avoid speculative
investments. The City’s investment policy is to minimize credit risk by limiting investments
in fixed income securities rated at A or above by Standard & Poor’s (S&P).
Concentration of Credit Risk
The City’s investment policy limits investments to 5% of the total portfolio in a specific
issuer (excluding U.S. treasuries, government agency securities) except for investments
under the direction of the Board of Trustees and the Board of Public Works Pension Fund.
The City does not have an investment in one issuer, other than U.S. Treasury bonds and
notes, greater than 5% of total investments. The Board of Public Works Pension Fund has
no investments greater than 5% of total investments.
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the greater
the sensitivity of its fair value to changes in market interest rates. The City’s formal
investment policy does not limit investment maturities as a means of managing its exposure
to fair value losses arising from increasing interest rates.
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