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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 />With the exception of pass-through funds, the maximum amount of pooled investments to be placed in the
<br />Local Government Investment Pool is limited by Oregon Statute to $42,523,082, which will increase
<br />proportionately to the Portland Consumer Price Index. The limit can be temporarily exceeded for ten business
<br />days and does not apply either to pass-through funds or to funds invested on behalf of another governmental
<br />unit.
<br />Credit Risk
<br />The City’s policy, which adheres to State of Oregon law, is to limit its Corporate and Municipal investments as
<br />follows: Issuers within Oregon must be rated “A” (bonds) or A-2 / P-2 (commercial paper) or better by Standard
<br />and Poor’s, Moody’s Investors Service or any other nationally recognized statistical rating organization at time
<br />of purchase. Issuers not in Oregon must be rated AA / Aa (bonds) or A-1 / P-1 (commercial paper) or better at
<br />time of purchase.
<br />At June 30, 2009, the City’s investments were rated as follows:
<br />Highest Rating From
<br />Moody's Investors Service or Standard & Poor's Corporation
<br />Investment type Total Aaa/AAA Aa/AA A/A Not rated
<br />Corporate securities $ 7,210,902 2,054,523 5,156,379 0 0
<br />Local government
<br /> investment pool 29,508,897 0 0 0 29,508,897
<br />Municipal bonds 12,711,182 4,556,780 6,175,236 1,979,166 0
<br />U.S. agency securities 102,211,952 102,211,952 0 0 0
<br />U.S. treasury securities 2,089,591 2,089,591 0 0 0
<br />Total $ 153,732,524 110,912,846 11,331,615 1,979,166 29,508,897
<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
<br />investment policies are governed by statute and the Oregon Investment Council. In accordance with Oregon
<br />Statutes, funds are invested as a prudent investor would do, exercising reasonable care, skill and caution. The
<br />LGIP was created to offer a short-term investment alternative to Oregon local governments and it is not
<br />registered with the U.S. Securities and Exchange Commission. The investments are regulated by the OSTF
<br />and approved by the Oregon Investment Council (ORS 294.805 to 294.895). At June 30, 2009, the fair value
<br />of the City’s deposits with the LGIP approximates cost. The OSTF financial statements are available at
<br />http://www.ost.state.or.us/.
<br />The LGIP’s portfolio concentration of credit risk at June 30, 2009 included: U.S. Agency securities (43.6%),
<br />Corporate Bonds (26.7%), Commercial Paper (16.8%), Government Guaranteed Corporate Securities (11.0%),
<br />Certificates of Deposits (1.0%), and Bank Notes (0.9%). The credit risk associated with the investments was:
<br />AAA rating (55.4%), AA rating (26.1%), A rating (16.5%), BBB rating (0.7%), ratings withdrawn (0.3%), and not
<br />rated (1.0%).
<br />Concentration of Credit Risk
<br />The City’s policy for investing in individual issuers varies depending on the type of investments. Agency
<br />securities are restricted to no more than 25% for any one issuer. No more than 25% of the total portfolio of
<br />investments may be invested in a single issuer of bankers’ acceptances. Investments in commercial paper or
<br />corporate bonds of any one issuer may not exceed 5% of the investment portfolio.
<br />continued
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