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CITY COUNCIL FINANCE COMMITTEE <br />May 3, 2006 <br />4:00 p.m. — 5:30 p.m. <br />San Leandro City Hall <br />835 East 14th Street <br />San Leandro, California <br />(Sister Cities Gallery) <br />HIGHLIGHTS <br />Committee Members: (Chair) Mayor Young, Councilmembers Starosciak and Stephens <br />City Staff Present: Assistant City Manager Hollister, Finance Director Baloca, Deputy <br />Finance Director Rodriguez, Budget and Compliance Manager Chan, <br />Senior Accountant Galvin <br />Public Present: Chamber of Commerce representatives Finberg <br />The meeting was called to order at 4:00 p.m. <br />1. Discussion Regarding Investment Report <br />Finance Director Baloca reported on the performance of the City's investments as of March 31, <br />2006. The City's investment portfolio had a market value of $75.3 million, which represents an <br />increase of $15.9 million from December 31, 2005. The City's LAIF investments account for <br />34% of the City's total investments. The investment portfolio managed by Chandler had an <br />average book yield of 3.53%. <br />Baloca explained that the City will continue with the strategy of purchasing shorter -terra <br />investments due to the current environment of rising interest rates and flattened Treasury rates, <br />where long-term rates are the same as short-term rates. By purchasing shorter term investments, <br />the City is able to maintain liquidity and turn around matured securities sooner and reinvest at <br />higher interest rates. As of March 31, 2006, the LAIF yield of 4.03% exceeds the City's <br />earnings of 3.53% on Chandler's portfolio. The City will continue to evaluate upcoming <br />maturities and its reinvestments with LAM, Chandler Asset Management, or other investment <br />managers. <br />2. Discussion Regarding FY 2005-06 Third Quarter Performance Report <br />Finance Director Baloca reported on the City's Third Quarter Performance. As of the third <br />quarter, the City's General Fund utilized $2.5 million from available reserves. However, a <br />reduced year-end operating shortfall of approximately $1.3 million is projected as opposed to the <br />$3 million estimated a year ago. <br />G:ADEPTVCommittees\FinanceAHighlights\CITY COUNCIL FINANCE COMMITTEE 05-03-06 FINAL.doc <br />