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CITY OF LA PORTE, TEXAS Exhibit A-10 <br />NOTES TO FINANCIAL STATEMENTS (continued) <br /> <br /> <br />Note 2 Î Deposits and Investments (continued) <br /> <br />Cash and Cash Equivalents (continued) <br /> <br />At September 30, 2020, the carrying amount of deposits was $27,074,979 and the respective bank balances were <br />$27,980,988 . The CityÓs bank balances were fully insured or collateralized with securities held by the CityÓs agent <br />in the CityÓs name. <br /> <br />Investments <br /> <br />The City reported the following investments at September 30, 2020: <br /> <br />Internal <br />Governmental <br />Service Enterprise <br />FundFundsFundsFundsTotal <br />U.S. Government Securities1,544,212$ $ 200,539$ 256,814$ 2,001,565 <br />The City <br />categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting <br />principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs <br />are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and <br />Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as <br />of September 30, 2020: <br /> <br /> U.S. Government Securities (FHLB) of $2,001,565 were valued using a documented trade history in exact <br />security pricing model (Level 2 inputs). <br /> <br />Concentration on Credit Risk <br /> <br />The policy does not require investments to be staggered in a way that protects interest income from the volatility of <br />interest rates. The policy has not established limitations on percentages of the total portfolio that may be invested <br />in securities other than the repurchase agreements, Treasury bills and notes or insured and collateralized Certificates <br />of Deposits. <br /> <br />Draft 3-12-21 <br /> 48 Fiscal Year 2020 Annual Report <br /> <br />