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Collateral is required for demand deposit accounts, time deposit accounts and certificates of deposit at 100 percent of all deposits not covered by Federal deposit insurance. The Town has entered into custodial agreements with the various banks which hold their deposits. These agreements authorize the obligation that may be pledged as collateral. Obligations that may be pledged as collateral are outlined in Chapter 623 of the laws of the State of New York. Cash and cash equivalents at December 31, 2024 are presented below: Governmental Custodial Funds Funds Total Petty cash (uncollateralized) $ 500 $ - $ 500 Deposits 8,492,745 5,790 8,498,535 Total $ 8,493,245 $ 5,790 $ 8,499,035 Deposits—All deposits are carried at fair value, and are classified by custodial credit risk at December 31, 2024 as follows: Bank Carrying Balance Amount FDIC insured $ 250,000 $ 250,000 Uninsured: Collateral held by bank's agent in the Town's name 8,359,069 8,248,535 Total $ 8,609,069 $ 8,498,535 Custodial Credit Risk—Deposits—Custodial credit risk is the risk that in the event of a bank failure, the Town’s deposits may not be returned to it. As noted above, by New York State Statute all deposits in excess of FDIC insurance coverage must be collateralized. At December 31, 2024, the Town’s deposits were either FDIC insured or collateralized with securities held by the pledging bank’s agent in the Town’s name. Investment Rate Risk—In accordance with its investment policy, the Town manages exposure by limiting investments to low risk type investments governed by New York State Statute. Restricted Cash and Cash Equivalents—Restricted cash and cash equivalents represents amounts to support fund balance restrictions and amounts with constraints placed on their use by either external parties and/or statute, as well as unspent proceeds of debt and unearned revenue. At December 31, 2024, the Town reported $3,984,390 of restricted cash and cash equivalents within its governmental funds. Restricted Investments—All investments are reported using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy, established by GAAP, requires that entities maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs used to measure fair value are presented below: Level 1. Quoted prices for identical assets or liabilities in active markets to which the Town has access at the measurement date. - 26 -