124 / 373
38p
The GTA owns a percentage of the City's total investment pool. Accordingly, investment balances of the GTA are included
in the following table:
Valuation Measurement
Weighted Average
Investment Type
Method
Reported/Fair Value
Maturity (Year)
U.S. Government Agencies
Fair Value - Level 2
246,815,204
$
1.48
Commercial Paper
Fair Value - Level 2
9,958,983
0.0003
OPEB - STIF
Amortized Cost
3,932,561
0.003
OPEB - LTIF
Fair Value - Level 2
1,665,344
0.003
OPEB - Equity
Fair Value - Level 1
9,581,656
0.003
NCCMT Cash Portfolio
Amortized Cost
33,369,226
0.003
NCCMT TermFund
Fair Value - Level 1
10,564,204
0.003
Total Fair Value
315,887,178
$
Portfolio Weighted Average Maturity
0.51
All investments are measured using the market approach: using prices and other relevant information generated by market
transactions involving identical or comparable assets or a group of assets.
Level of fair value hierarchy:
Level 1: Financial instruments are valued using directly observable, quoted prices (unadjusted) in active markets for identical
assets.
Level 2: Financial instruments are valued using inputs that include quoted prices for similar assets and liabilities in active
markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of
the financial instrument.
The Street Improvements Bond Fund-Series 2010 has $1,206,639 in checks in excess of cash and the Parks & Recreation-
Series 2008 has $2,082 in checks in excess of cash, which are reflected in the liability section of these financial statements.
Interest Rate Risk
In accordance with the formal approved City of Greensboro’s Charter, Article III, Section 4.71, the Investment Manager
(Assistant Treasurer) prepares a memo describing investment transactions in detail as they are purchased. This memo is sent
to the Mayor, the City Manager and the Finance Director (Treasurer) for signature approval and then returned to the
Investment Manager. Although the investment policy has not been formally approved by the City Council, the City has an
investment policy guideline, an internally approved Finance Department document that follows North Carolina General
Statute 159-30. As a means of limiting the City’s exposure to declines in fair market values from rising interest rates, the
City limits the weighted average maturity of its investments to less than 3.5 years. Also, the City purchases securities in a
structured ladder with stated maturity dates to limit interest rate risk.
Credit Risk
North Carolina General Statute 159-30 limits investments in U.S. Governmental Agencies and commercial paper to those
with top ratings issued by NRSRS. The City has no formal investment policy regarding credit risk, however in practice, it
follows NCGS 159-30, and in effect the City limits its investment types to those with top ratings issued by NRSRS. As of
June 30, 2016, the City had investments in the NCCMT Cash Portfolio, which is rated AAAm by Standard and Poor’s, and in
U. S. Government Agencies, all of which were rated AAA by Standard and Poor’s. The City also had investments in the
NCCMT Term Portfolio, which is not rated. Investments in commercial paper by the City are rated either A1/P1 by Standard
and Poor’s or Moody’s Investors Service.
Custodial Credit Risk
For an investment, the custodial risk is the risk that in the event of the failure of the counterparty, the City will not be able to
recover the value of its investments or collateral securities that are in the possession of an outside party. The City has no
formal policy on custodial credit risk, but the City utilizes a separate third party custodial trust agent for all book-entry
transactions, all of which are held in the City’s name.