Finance Highlights 2008 1118 - Laserfiche WebLink

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CITY COUNCIL FINANCE COMMITTEE November 18, 2008 4:00 p.m. - 5:30 p.m. San Leandro City Hall 835 East 14t~' Street San Leandro, California (Sister Cities Gallery) HIGHLIGHTS Committee Members: Mayor Santos, Councilmember Gregory City Staff Present: Interim City Manager Hollister, Interim Assistant City Manager Diaz, Interim Finance Director Carter, Public Works Director Bakaldin, Deputy Finance Director Rodriguez, Budget & Compliance Manager Perini, and Administrative Assistant III Perez Public Present: None The meeting was called to order at 4:02 p.m. 1. Discussion Regarding Investment Report -Quarter Ended September 30, 2008 Interim Finance Director Carter provided an overview of the City's portfolio and explained that the market value was approximately $87.0 million. Of this amount, 57% or $49.6 million is in the Local Agency Investment Fund (LAIF) and $37.4 million is in the Chandler Asset Management program. The return for LAIF was 2.77%, which continues to miss the five-year Treasury yield of 2.98%. However the return on the Chandler managed funds of 3.94%, continue to exceed the City's Investment Policy benchmarks using the two and five year US Treasury securities of l .98% and 2.98% respectively. The Chandler Investment Report indicates that the City is in compliance with all provisions of the City's Investment Policy. Carter focused on the overview and informed the Committee that the strategy recommended by Chandler is to gradually lengthen the average maturity of the portfolio to capture higher interest rates and reminded the Committee that Chandler Asset Management advises the City but does not make final decisions on investments. Carter reminded the Committee that the report presented was as of September 30, 2008 and therefore the situation has changed. Carter explained that due to the economic downfall, the Consumer Price Index had jumped from 2.0% in August 2007 to 5.4% in August 2008, indicating inflation. Carter stated that the economy is volatile and uncertain and therefore the City will maintain a conservative approach to all investments as yield is not a priority but rather the security and liquidity of funds. Carter also reassured the Committee that the City did not have investments that lost value and no exposures to investments such as Lehman Bros.