Sarasota County Comprehensive Annual Financial Report 2019

Sarasota County, Florida Notes to Financial Statements September 30, 2019 As of September 30, 2019, there were no redemption fees or maximum transaction amounts, or any other requirements that serve to limit a participant’s daily access to 100 percent of their account value. Custodial Credit Risk Custodial credit risk is defined as the risk that, in the event of failure of the counterparty, the County will not be able to recover the value of its securities that are in the possession of an outside party. At September 30, 2019, the County’s book balance of cash was $72,056,727 and the bank balance was $75,654,721. The County’s bank balances are insured by the Federal Deposit Insurance Corporation (FDIC) in the amount of $250,000 for each banking relationship. The remaining balances are collateralized pursuant to Chapter 280, Florida Statutes. The County’s investment policy requires that deposits be entirely covered by federal depository insurance or by collateral pledged with the State Treasurer pursuant to Chapter 280, Florida Statutes. Under this Chapter, in the event of default by a participating financial institution (a qualified public depository), all participating institutions are obligated to reimburse the governmental entity for the loss. The County’s investment policy requires that securities be secured through third-party custody in the County’s name and safekeeping procedures. All of the County’s investments are held by the counterparty’s trust department in the County’s name. Interest Rate Risk As of September 30, 2019, the County had the following investments and maturities: Investment Maturities (in Years) Cost or Fair Value Investment Type Less than 1 1-5 Greater than 5* U.S. Treasuries $ 20,080,561 $ 9,999,100 $ 10,081,461 $ - U.S. Agencies Fixed 283,001,078 57,437,745 225,563,333 - Adjustable Mortgages* 55,313,972 - - 55,313,972 Fixed Mortgages ** 102,061,194 7,712,691 11,473,883 82,874,620 GNMA Mortgages Adjustable* 138,793,146 - - 138,793,146 Fixed Mortgages ** 26,132,883 - - 26,132,883 Certificates of Deposit 60,000,000 35,000,000 25,000,000 - FLFIT 101,343,504 101,343,504 - - FLSAFE 25,802,451 25,802,451 - - FLGIT 20,680,390 20,680,390 - - FLPALM 75,234,376 75,234,376 - - Short term cash 9,809,403 9,809,403 - - Total $ 918,252,958 $ 343,019,660 $ 272,118,677 $ 303,114,621 *Adjustable Agency and GNMA securities have coupon resets ranging from 1 month to 2 years corresponding to an effective duration of 0.6 years. **Represents seasoned fixed rate mortgages that pay principal and interest monthly and have an effective duration of 3.0 years. The County limits interest rate risk by maintaining an investment portfolio with limited volatility. The policy states that no security shall have an estimated average return of principal exceeding five years, unless the investment is an adjustable rate security. Adjustable rate securities may have a final return of principal in up to 30 years. 96