Information regarding the quality and maturity dates of fixed income securities is as
follows:
Average Average
Total Duration Rating
U.S. Treasury Obligations $ 14,949,928 4.83 Aaa
U.S. Government Agencies $ 10,914,022 3.08 Aaa
Corporate Bonds $ 5,249,591 7.29 Al
Foreign Currency Risk
Foreign currency risk is the risk that changes in foreign exchange rates will adversely affect
the fair value of an investment. The City does not have formal investment policies related
to foreign currency risk.
Fair Value
The City categorizes its fair value measurements within the fair value hierarchy established by
Governmental Accounting Standards Board Statement No. 72 Fair Value Measurement
and Application (GASB 72).
The hierarchy is based on the valuation inputs used to measure the fair value of the asset
and give the highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs
(level 3 measurements). The hierarchy categorizes the inputs to valuation techniques used
for fair value measurement into three levels as follows:
¢ Level |] — inputs that reflect quoted prices (unadjusted) in active markets for identical
assets or liabilities that the fund has the ability to access at the measurement date.
e Level 2 — inputs other than quoted prices that are observable for an asset or liability
either directly or indirectly, including inputs in markets that are not considered to be
active. Because they must often be priced on the basis of transactions involving similar
but not identical securities or do not trade with sufficient frequency, certain directly held
securities are categorized as level 2.
e Level 3 — unobservable inputs based on the best information available, using
assumptions in determining the fair value of investments and derivative instruments.
In instances where inputs used to measure fair value fall into different levels in the fair
value hierarchy, fair value measurements in their entirety are categorized based on the
lowest level input that is significant to the valuation.
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