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Indian River County, Florida Board of County Commissioners Notes To Financial Statements Year Ended September 30, 2011 NOTE 2 - CASH AND CASH EQUIVALENTS - Continued C. Investments — Continued 7. Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; 8. Repurchase agreements with a term of one year or less collateralized by direct obligations of the United States Government which have maturities of three (3) years or less and a market value 103% or more of the repurchase amount. Currently, Fund B participants are permitted to withdraw scheduled amounts as assets become liquid. Full realization of the principal value of Fund B assets is uncertain and dependent upon the collateralized securities underlying each holding and is contingent upon future market conditions. Concentration Risk The Board's investment policy has established asset allocation and issuer limits to reduce concentration of credit risk in the Board's investment portfolio. The Board's investment policy does not allow for more than 20% of the entire portfolio to be invested in any one issuer, with the exception of United States Treasury Obligations and state authorized pools. No more than 10% of the portfolio may be placed in certificates of deposit and no more than $3 million of the portfolio may be placed in certificates of deposit with any one financial institution. No more than 5% of the portfolio may be placed in any one money market fund, mutual fund, or intergovernmental investment pool. Custodial Credit Risk The Board's investment policy pursuant to Section 218.415 (18), Florida Statutes requires securities to be registered and held with a third party custodian. All securities purchased, as well as all collateral obtained, by the Board shall be held in the name of the Board. The securities must be held in an account separate and apart from the assets of the financial institution. As of September 30, 2011, the Board's investment portfolio in U.S. Treasuries, U.S. Agencies, and money market fund, was held by The Bank of New York/Mellon with the exception of the following: the SunTrust NOW account, the Regions Bank Money Market, and the Florida Trust Day to Day Fund. The Florida Trust Day to Day Fund was held by UMB Bank. D. OPEB Trust Investments Funds are held in the name of the Indian River County OPEB Trust (IRCOT), an irrevocable trust, by a third party custodian, Bank of New York/Mellon. The investments are reported at fair value based upon market -close price on the last business day of each month. The Board approved a separate investment policy for the IRCOT assets on February 3, 2009 (amended on May 12, 2009). The County adopted a broadly diversified portfolio composition consisting of equity, debt, and cash and cash equivalents. Asset allocations are divided between short term and long term investments. Short term asset allocations include cash and cash equivalents with maturities of 180 days or less. Long term asset allocations range from 0-60% for equities, 0-60% for fixed income securities, and 0-100% for cash and cash equivalents. 256