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CITY OF PARIS, TEXAS <br />Notes to Financial Statements (Continued) <br />September 30, 2021 <br />IV. Detailed Notes on All Activities and Funds <br />A. Cash and Cash Equivalents <br />Custodial Credit Risk for deposits is the risk that in the event of a bank failure, the City's deposits may not be <br />returned or the City will not be able to recover collateral securities in the possession of an outside party. The <br />City's policy requires deposits to be secured by collateral valued at market or par, whichever is lower, less the <br />amount of the Federal Deposit Insurance Corporation (FDIC) insurance. Collateral agreements must be <br />approved prior to deposit of funds as provided by law. <br />At September 30, 2021, the City had deposits with a carrying amount of $34,660,384, and the bank's balances <br />were $36,299,426. The City was not exposed to custodial credit risk since deposits are insured or collateralized <br />with securities held by the pledging financial institution's agent in the name of the City. <br />B. Investments <br />As of September 30, 2021, the City had the following investments: <br />Weighted <br />Weighted <br />Average <br />Average <br />Credit <br />Maturity <br />Maturity <br />Type of Security <br />Fair Value <br />Rating <br />(Years) <br />(Days) <br />Primary Government <br />Federal Home Loan Mortgage Corporation <br />$ 594,828 <br />AA+ <br />6.92 <br />Federal National Mortgage Association <br />3,112,419 <br />AA+ <br />5.83 <br />Certificates of Deposit <br />97,962 <br />Not Rated <br />.58 <br />U.S. Treasury Bills OID <br />10,999,310 <br />.23 <br />U.S. Treasury Notes <br />39,066,289 <br />1.81 <br />Paris Economic Development Corporation <br />Texas Class Investment Pool <br />2,114,248 <br />AAAm <br />89 <br />Totals <br />$ 552985,056 <br />The City invested in the Texas Local Government Investment Cooperative (LOGIC) Liquid Asset Portfolio. <br />LOGIC is a public funds investment pool managed by Southwest Securities Group, Inc. LOGIC uses amortized <br />cost rather than market value to report net position to compute share prices. Accordingly, fair value of the <br />position of LOGIC is the same as the net asset value of LOGIC shares. LOGIC issues an annual report that can <br />be obtained upon request. The accounts remain open at September 30, 2021. However, the City had a zero <br />balance at year end. <br />The City invested in Texas Cooperative Liquid Assets Security System (Texas CLASS) Trust. Texas CLASS <br />was created as an investment pool for its participants pursuant to Section 2256.016 of the Public Funds <br />Investment Act, Texas Government Code, or other laws of the State of Texas governing the investment of funds <br />of a participant or funds under its control. Texas CLASS is administered by Cutwater Investor Services Corp. <br />with Wells Fargo Bank Texas, NA as the Custodian. Texas CLASS is supervised by a Board of Trustees who <br />are elected by the participants. Texas CLASS uses amortized cost rather than market value to report net position <br />to compute share prices. Accordingly, the fair value of the position in Texas CLASS is the same as the net asset <br />value of Texas CLASS shares. Texas CLASS issues a publicly available annual report that can be obtained at <br />www.texasclass.com. <br />Interest rate risk is the policy of the City to invest public funds in a manner which will provide the highest <br />investment return with the maximum security while meeting the daily cash flow demands of the entity and <br />conforming to all state and local statutes governing the investment of public funds. The City's investment <br />portfolio is designed with the objective of attaining an acceptable rate of return throughout budgetary and <br />economic cycles and commensurate with the City's investment risk constraints and the cash flow characteristics <br />37 <br />