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CITY OF EUGENE, OREGON
<br />Notes to Basic Financial Statements
<br />(4) Detailed Notes on All Funds, continued
<br />(A) Equity in Pooled Cash and Investments, continued
<br />Investments, continued
<br />Credit Risk
<br />The City’s policy, which adheres to State of Oregon law, is to limit its Corporate and Municipal investments as follows:
<br />Issuers within Oregon must be rated “A” (bonds) or A-2 / P-2 (commercial paper) or better by Standard and Poor’s,
<br />Moody’s Investors Service or any other nationally recognized statistical rating organization at time of purchase.
<br />Issuers not in Oregon must be rated AA / Aa (bonds) or A-1 / P-1 (commercial paper) or better at time of purchase.
<br />At June 30, 2015, the City’s investments were rated as follows:
<br />Highest Rating From
<br />Moody's Investors Service or Standard & Poor's Corporation
<br />Investment typeTotalAaa/AAAAa/AAANot rated
<br />Corporate indebtedness$27,718,739019,416,6838,302,0560
<br />Local government
<br /> investment pool21,794,21300021,794,213
<br />Municipal bonds23,699,1854,675,53619,023,64900
<br />U.S. agency securities117,975,72198,495,7300019,479,991
<br />U.S. treasury securities9,719,4789,719,478000
<br />Total$200,907,336112,890,74438,440,3328,302,05641,274,204
<br />The Oregon State Treasurer maintains the Oregon Short Term Fund (OSTF), of which the Local Government
<br />Investment Pool (LGIP) is a part. Participation by local governments is voluntary. The State of Oregon investment
<br />policies are governed by statute and the Oregon Investment Council. In accordance with Oregon Statutes, funds are
<br />invested as a prudent investor would do, exercising reasonable care, skill and caution. The LGIP was created to offer
<br />a short-term investment alternative to Oregon local governments and it is not registered with the U.S. Securities and
<br />Exchange Commission. The investments are regulated by the OSTF and approved by the Oregon Investment
<br />Council (ORS 294.805 to 294.895). At June 30, 2015, the fair value of the City’s deposits with the LGIP approximates
<br />cost. The OSTF financial statements are available athttp://www.ost.state.or.us/.
<br />The LGIP’s portfolio concentration of credit risk at June 30, 2015 included: Corporate Notes (47.1%), U.S. Treasury
<br />and Agency Securities (35.0%), Asset Backed Securities (9.9%), Municipal Bonds (4.7%), Non-US Government Debt
<br />(1.6%), Commercial Paper (0.7%), Certificates of Deposits (0.6%), and cash (0.4%). The credit risk associated with
<br />the investments was: AAA rating (9.4%), AA rating (8.8%), A rating (39.3%), BBB rating (6.5%), and not rated
<br />(36.0%).
<br />Concentration of Credit Risk
<br />The City’s policy for investing in individual issuers varies depending on the type of investments. U.S. Government
<br />Agency Securities are restricted to no more than 25.0% for any one issuer. No more than 25.0% of the total portfolio
<br />of investments may be invested in a single issuer of bankers’ acceptances or repurchase agreements. Investments in
<br />commercial paper or corporate bonds may not exceed more than 35.0% of the portfolio and investments in any one
<br />issuer may not exceed 5.0% of the investment portfolio. Investments are limited to 5.0% per depository name and
<br />may not exceed more than 25.0% of the investment portfolio. The combined limit for each depository in certificates of
<br />deposits, bankers’ acceptances, and corporate indebtedness is 10.0%.
<br />continued
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