Comprehensive Annual Financial Report June 30, 2011 - Western ...

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WESTERN VIRGINIA WATER AUTHORITY Notes to Financial Statements as of June 30, 2011 and 2010 (Continued) Note 2—Deposits and Investments: A summary of the Authority's deposits and investments at June 30, 2011 is as follows: Pollution Water Control Total Petty cash $ 3,150 $ 2,950 $ 6,100 State Non-arbitrage Pool (SNAP) 2,400,112 1,714,591 4,114,703 Local Government Investment Pool 63,619 1,014,201 1,077,820 Bank Deposits 9,665,059 17,928,598 27,593,657 Certificates of Deposit 2,004,825 1,002,863 3,007,688 Totals $ 14,136,765 $ 21,663,203 $ 35,799,968 Deposits Deposits with banks are covered by the Federal Deposit Insurance Corporation (FDIC) and collateralized in accordance with the Virginia Security for Public Deposits Act (the “Act”), Section 2.2-4400 et. Seq. of the Code of Virginia . Under the Act, banks and savings institutions holding public deposits in excess of the amount insured by the FDIC must pledge collateral to the Commonwealth of Virginia Treasury Board. Financial Institutions may choose between two collateralization methodologies and depending upon that choice, will pledge collateral that ranges in the amounts from 50% to 130% of excess deposits. Accordingly, all deposits are considered fully collateralized. Investments Statutes authorize the Authority to invest in obligations of the United States or agencies thereof, obligations of the Commonwealth of Virginia or political subdivisions thereof, obligations of the International Bank for Reconstruction and Development (World Bank), the Asian Development Bank, the African Development Bank, “prime quality” commercial paper and certain corporate notes, banker’s acceptances, repurchase agreements and the State Treasurer’s Local Government Investment Pool (LGIP). Custodial Credit Risk (Investments) The Authority’s investment policy provides that securities purchased for the Authority shall be held by the Authority Treasurer or by the Treasurer’s custodian. If held by a custodian, the securities must be in the Authority’s name or in the custodian’s nominee name and identifiable on the custodian’s books as belonging to the Authority. Further, if held by a custodian, the custodian must be a third party, not a counterparty (buyer or seller) to the transaction. At June 30, 2011 all of the Authority’s investments were held in accordance with this policy. -41-
WESTERN VIRGINIA WATER AUTHORITY Notes to Financial Statements as of June 30, 2011 and 2010 (Continued) Note 2—Deposits and Investments: (Continued) Credit Risk of Debt Securities The Authority’s investment policy for credit risk is consistent with the investments allowed by statute as detailed above. The Authority’s rated debt investments as of June 30, 2011 were rated by Standard & Poor’s and the ratings are presented below using the Standard & Poor’s rating scale. Authority's Rated Debt Investments' Values Fair Quality Ratings AAAm State Non-arbitrage Pool (SNAP) $ 4,114,703 Local Government Investment Pool 1,077,820 Total $ 5,192,523 Concentration of Credit Risk The Authority’s investment policy limits the investment in bankers’ acceptances to 40% of total funds available for investment. Not more than 35% of the Authority’s total investments may be in commercial paper and not more than 5% of commercial paper investments in the obligations of any one issuing corporation. Interest Rate Risk All Authority investments must be in securities maturing within five years to reduce the volatility associated with interest rate risk. Investment Maturities (in years) Greater Fair 1-5 6-10 than Investment Type Value 1 Year Years Years 10 Years State Non-arbitrage Pool (SNAP) $ 4,114,703 $ 4,114,703 $ - $ - $ - Local Government Investment Pool 1,077,820 1,077,820 - - - Total $ 5,192,523 $ 5,192,523 $ - $ - $ - -42-
Page 1 and 2: COMPREHENSIVE ANNUAL FINANCIAL REPO
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Page 13 and 14: Profile (Continued) The Authority
Page 15 and 16: Major Initiatives and Accomplishmen
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Page 19 and 20: Relevant Financial Policies Account
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Page 29 and 30: Overview of the Financial Statement
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This report is intended solely for
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