2007 CAFR Part 3 - Laserfiche WebLink

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COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 deposits were exposed to custodial credit risk. Custodial credit risk is the risk that in the event of a bank failure,the County's deposits may not be returned to it. For demand or checking accounts and time certificates of deposit,the County requires, in accordance with State statutes,that the depository banks pledge collateral based on the available bank balances to limit its exposure to custodial credit risk. All securities pledged as collateral are held by the County's fiscal agents in the name of the County. The County also requires that no more than 60%of the County's total funds available for deposit may be deposited in any one financial institution,in accordance with State statutes. Investments The County holds investments both for its own benefit and on behalf of some of the Fiduciary Funds. The County's investments of funds not required for immediate payments are predominately comprised of U.S.government securities(all rated AAA),while equity securities are held by the fiduciary fund. The County's investments and maturities at June 30,2007 are as follows: Maturity(in years) Fair Value Less than 1 1 -5 Investments—Primary Government: Certificates of deposit $ 85,410,110 $ 85,410,110 $ -- U.S.government securities 69,003,295 44,003,295 25.000,000 $154,413,405 $129,413,405 $25,000.000 Investments—Fiduciary Funds: Certificates of deposit $1225,932 $3,225,932 Equity securities SU04,658 Interest Rate Risk: As a means of limiting its exposure to fair value losses arising from rising interest rates,the County's investment policy generally limits maturities on investments to not more than five years from the date of investment. Credit Risk: The County's investment policy limits investments in state and U.S.Treasury securities,time certificates of deposit,U.S.government or agency obligations,repurchase agreements,commercial paper,bankers' acceptances,and money market funds,or other securities maintaining a Triple-A rating. Custodial Risk.- For an investment,custodial risk is the risk that,in the event of failure of the counterparty,the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The County's investments are held by its fiscal agent and the securities held by the fiduciary fund are held by the County. In -55 -