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<br />CITY OF SAN LEANDRO <br /> <br />MEMORANDUM <br /> <br />DATE: <br /> <br />June 15,2007 <br /> <br />TO: <br /> <br />Finance Committee <br /> <br />VIA: <br /> <br />John Jermanis, City Manager <br /> <br />SUBJECT: <br /> <br />Jesse Baloca, Finance Dire~ <br /> <br />Investment Program Overview and Portfolio Manager Performance <br /> <br />FROM: <br /> <br />Staff recommends Finance Committee approval of the City of San Leandro Investment Policy. <br />The Policy is approved annually and includes two changes regarding investment thresholds for <br />commercial paper and medium-term corporate notes. <br /> <br />Back2,round and Discussion <br /> <br />California Government Code Section 53600 et seq., and Section VIII of the San Leandro <br />Investment Policy requires the City Council to annually review and approve the City's <br />Investment Policy. This policy was last adopted on June 19, 2006. <br /> <br />The City of San Leandro Investment Policy (Investment Policy) provides specific guidelines for <br />the City's investment management functions and remains in compliance with the model policy <br />approved by the Association of Public Treasurers of the US & Canada. The investment policy <br />serves as a guide for setting and achieving investment objectives, defines rules and established <br />benchmarks, prohibits and/or restricts investment instruments and reduces exposure to liability of <br />both staff and Council. Compliance with the policy is an element of 11scal discipline considered <br />by the auditors and rating agencies during their respective reviews. Following Finance <br />Committee and City Council approval, the City's Investment Policy will be submitted toMI A <br />for its 5-year recertification. <br /> <br />City Council performs an annual review of the Investment Policy during the budget preparation <br />process to ensure that the policy remains in compliance with the City's fiscal policies and <br />California law. Council also reviews at this time any proposed amendments and/or revisions to <br />the Investment Policy as recommended by staff. Although a number of recommendations were <br />suggested by the City's Portfolio Manager, Chandler Asset Management, (see attached) staff is <br />only recommending implementation of two changes as follows: <br /> <br />Page 5. Commercial Paper - removal of a sentence that is not congruent with current State <br />Code and changing the threshold from. . . <br />"total portfolio purchases shall not exceed 15% of idle funds or 30% jf the average <br />maturity of commercial paper holdings does not exceed 31 days" <br />to ... <br />"No more than 25% of the portfolio can be invested in commercial paper" <br />