Page 72 - Hudson CAFR Report 2018

HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2018

NOTE 3 - DEPOSITS AND INVESTMENTS - (Continued)

C. Investments

As of June 30, 2018, the District had the following investments and maturities:

Measurement/ Measurement Less than Maturities More than
Investment Type Value 1 year 1-2 years 2 years

Fair value: $ 8,004,179 $ 8,004,179 $- $-
Commercial paper 21,611,244 17,148,024 - 4,463,220
U.S. Treasury notes 3,816,417 - - 3,816,417
FFCB notes 33,979,962 - 1,469,556
FHLB notes 10,971,585 - 32,510,406
FHLMC notes 171,899 171,899 - 10,971,585
U.S. Government money market - -

Amortized cost: 13,688,503 13,688,503 - -
STAR Ohio $ 92,243,789 $ 39,012,605 $ 32,510,406 $ 20,720,778

Total

The District’s investments measured as fair value are valued using quoted market prices in markets
that are not considered to be active, dealer quotations or alternative pricing sources for similar assets or
liabilities for which all significant inputs are observable, either directly or indirectly (Level 2 inputs).

Interest Rate Risk: As a means of limiting its exposure to fair value losses arising from rising interest
rates and according to State law, the District’s investment policy limits investment portfolio maturities
to five years or less, unless matched to a specific obligation or debt of the District. The weighted
average maturity of investments is 1.41 years.

Credit Risk: The commercial paper investments are not rated. The investments in U.S. Treasury notes,
federal agency securities, and U.S. Government money market are rated AA+ and Aaa by Standard &
Poor’s and Moody’s Investor Services, respectively. Standard & Poor’s has assigned STAR Ohio an
AAAm money market rating. Ohio law requires that STAR Ohio maintain the highest rating provided
by at least one nationally recognized standard rating service. The District’s investment policy does not
specifically address credit risk beyond requiring the District to only invest in securities authorized by
State statute.

Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the
failure of the counterparty, the District will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. The District has no investment
policy dealing with investment custodial risk beyond the requirement in State statute that prohibits
payment for investments prior to the delivery of the securities representing such investments to the
treasurer or qualified trustee.

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