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CITY OF LA PORTE, TEXAS <br /> Notes to the Financial Statements <br /> September 30, 2010 <br /> 2. Cash, Cash Equivalents and Investments - Continued <br /> Interest Rate Risk <br /> At year -end, the City had the following investments subject to interest rate risk disclosure, under U.S. <br /> generally accepted accounting principles, by investment type: <br /> Fair Weighted Average <br /> Value Maturity (Months) <br /> Public funds investment pools $38,593,618 2.37 <br /> Federal Home Loan Bank (FHLB) 2,005,016 0.97 <br /> Total fair value $40,598,634 <br /> Portfolio weighted average maturity 3.35 <br /> The City's investment policy specifies the maximum stated maturity, from the date of purchase; for any <br /> individual investment may not exceed 5 years and the maximum dollar- weighted average maturity for <br /> the pooled fund group (investment portfolio) may not exceed 2 years. <br /> Concentration of Credit Risk <br /> The policy does require investments to be staggered in a way that protects interest income from the <br /> volatility of interest rates. The policy has not established limitations on percentages of total portfolio that <br /> may be invested in securities other than repurchase agreements, Treasury bills and notes or insured <br /> and collateralized Certificates of Deposits. <br /> Percentage <br /> of Total <br /> Investment Type Fair Value Portfolio <br /> Investment Pools $ 38,593,618 70% <br /> Certificates of deposit 10,623,069 25% <br /> US Agency Securities 2,005,016 5% <br /> $ 51,221,703 100% <br /> Credit Risk <br /> At year -end balances in TexPool, a privately managed public funds investment pool was rated AAAm by <br /> Standard & Poor's, balances in TexStar, a privately managed public funds investment pool was rated <br /> AAAm by Standard & Poor's and balances in Logic, a privately managed public funds investment pool <br /> was rated AAAm by Standard and Poor's. <br /> Federal Home Loan Bank (FHLB) agency notes were rated AAA by Standard & Poor's, and AAA by <br /> Moody's Investors Service. <br /> All credit ratings met acceptable levels required by legal guidelines prescribed in both the PFIA and the <br /> City's investment policy. Legal guidelines require an Al rating by Standard & Poor's and a P -1 rating by <br /> Moody's Investors Service for investments in commercial paper. <br /> 55 <br />