Fort Walton Beach Council agenda — 03-19-12--special--audit — reading text

balance of public deposits greater than capital. In the event of default by a qualified public depository, excess losses over insurance and collateral will be recovered through assessments to all qualified public depositories of the same type as the depository in default. Under this method. all City deposits, including certificates of deposit. are considered fully insured. At year -end, the value of the City' s deposits was $ 25, 892, 684, all of which was held by qualified public depositories or permitted investments under Chapter 280, Florida Statutes. investments As of September 30, 2011 the City's investments consist of those held in the various pension trust funds. The types of investments, which can be made by the City. are restricted by state statutes. retirement fund plan documents, and other contractual agreements. A description of the requirements and the types of investments allowed can be found in Note 1 - E. As of September 30, 2011 the City held the following investments and related maturities T FS YFAkS 20_15 15. 0 U 15 5 - I" I10 I5 1520 Fvir VUWe I Inv s„ bina m Caryo' d bl # 9916 1115 S 7' 5, 193 5'_ 406505 % h? 99594 $ dA064 S 5500" S 41 117 47' 99 5 TI_' 19 5 4G 414 Coq US. Trt.... eC.", I11075 - 4928245 19914 '_ 45'] 95 4 1, 4'_ 9451 -- 0. 11 69 ___. 28005 3d - a]] Ih N9 a0: USGa" emmanAfenao 1910, 991 160'_6 1. 504210 5:" 1- OS . G 1 N11- 1 59' 115% : 2h 6'_. 162 18q. 166 80 - i P- 1, 18611' 1612014 _ 80- 51 IS(, I] 2 % 636290 S81 a55] S$ 9J 5] 9621 SI 6181 55 ? 5 5] 9 N00 Imsubled m inmoest umk 5 3195266 C rymudclthes d, Muwal fmitls 16, 16. 580195 44' 51 i95 62. 664695 Tmul $ 44  3.3. 1a,.1a,. City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2012 NOTE 3 - DEPOSITS AND INVESTMENTS ( CONTINUED) Investments ( Continued) Interest Rate Risk - The City' s investment policy does not limit its investment maturities as a means of managing its exposure to fair value losses arising from changes in interest rates. The City' s policy encourages shorter -term investments for operating funds in order to meet the anticipated cash flows requirements. The investment policies for the pension plans do not specifically address interest rate risk. Credit Rate Risk - State law limits investments of surplus public funds to those investments described above. According to the City's General Employees' Pension Plan investment Policy. investment in all domestic corporate fixed income securities is limited to those securities rated " A" or higher by Moody, S & P, or Fitch, except that up to 10% of the fixed income securities may have a rating below " A" but not less than " Batt". As of September 30, 2012, the General Employees' Pension Plan held no investments whose rating was below Batt; the Plan's intent, in compliance with Florida Statutes 1 1'.661( 5)( 6). is to sell any investment, whose rating falls below the policy threshold, as soon as it is economically feasible. Investments in the General Employees' Pension Plan whose rating was less than A" at September 30. 2012, comprised 7. 48% of the total cost of fixed income securities in the Plan. The Police Officers' Pension Fund limits investment in fixed income securities to those rated Tlaa/ BBB" or higher by a major rating service. The Firefighters' Pension Fund limits investment in fixed income securities to those securities rated " Baa/ BBB" or higher by a major rating service. All Pension Plans were in compliance with its respective investment policy regarding credit rate risk as of September 30, 2012. The Moody's rating ranges of the different investment classes held by each respective plan at September 30, 2012, are as follows: General Pension Police Pension Plan Plan Fire Pension Plan Money market funds Aaa -A Aaa A Aaa -A Corporate CMOs Aaa -Aal N/ A N/ A Corporate debt Aaa -Baa3 Aa2 -A3 Aa2 -Baa2 U. S. Treasury Aaa Aaa Aaa U. S. government agencies Aaa -A2 Aaa Aaa U. S. government pools AI N/ A N/ A ConcentrationConcentration CreditCredit RiskRi- sk - TheThe CityCity placesplaces nono limitlimit onon thethe amountamount thatthat maymay bebe investedinvested inin anyany oneone issuer,issuer, inin regardsregards toto itsits generalgeneral operationsoperations investments.investments. TheThe CityCity encouragesencourages portfolio portfolio diversification diversification toto minimizeminimize eacheach ofof thethe typestypes ofof riskrisk relatedrelated toto investments.investments. 4545  F3 1-a City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2012 NOTE 3 - DEPOSITS AND INVESTMENTS ( CONTINUED) Investments ( Continued) Concentration Credit Risk ( Continued) The General Employees' Pension Fund limits investment of fixed income securities of any single issuer to no more than 5% of the cost of all fixed income securities. Investments in collateralized mortgage obligations are limited to 15% of the market value of the total fixed income portfolio and must be backed by mortgage securities rated " Aaa" by Moody's or AAA" by Standard & Poor's and Fitch rating services. As of September 30, 2012, the largest investment in a single corporate issuer of debt was below 4% of the cost of all fixed income securities. Total investments in collateralized mortgage obligations ( CMOs) were 14. 20% of the total market value of the total fixed income portfolio. No more than 5% of the market value of the total fixed income portfolio in the Police Officers' Pension Fund may be invested in the securities of any single corporate issuer. Investments in collateralized mortgage obligations are not specifically permitted by the policy. As of September 30, 2012, the largest investment in a single corporate issuer of debt was 8. 26% of the value of all corporate fixed income securities. The Police Officers' Pension Fund did not hold any investments in collateralized mortgage obligations as of September 30, 2012. No more than 5% of the market value of the total fixed income investments may be held in the Firefighters Pension Fund may be held in any single corporate issuer. Investments in collateralized mortgage obligations are limited to 15% of the market value of the total fixed income portfolio and are restricted to issues backed by securities issued by the Government National Mortgage Association ( GNMA), the Federal Home Loan Mortgage Corporation FIILMC), or the Federal National Mortgage Association ( FNMA), or that are rated " Aaa" by Moody's or " AAA" by Standard & Poor's rating services. As of September 30, 2012. the largest investment in a single corporate issuer of debt was 7. 65% of the market value of all fixed income securities; the Plan's intent, in compliance with Florida Statutes 112. 661( 5)( 6), is to sell any investments that exceed the policy threshold when it is economically feasible. Total investments in collateralized mortgage obligations were 7 % of the total market value ofthe total fixed income portfolio. 46  3.1. a City of Fort Walton Beach, Florida NOTES TO FINANCIAL STATEMENTS September 30, 2012 NOTE 3 - DEPOSITS AND INVESTMENTS (CONTINUED) Deposits Held in Florida State Board ofAdministration' s Local Government Investment