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8F Consent 2012 0716
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8F Consent 2012 0716
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7/24/2012 4:16:05 PM
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7/11/2012 11:35:53 AM
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CM City Clerk-City Council
CM City Clerk-City Council - Document Type
Staff Report
Document Date (6)
7/16/2012
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_CC Agenda 2012 0716 CS+RG
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\City Clerk\City Council\Agenda Packets\2012\Packet 2012 0716
Reso 2012-093
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\City Clerk\City Council\Resolutions\2012
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File Number: 12 -386 <br />2. Page 4, VII. Authorized Financial Dealers and Institutions - enhanced and clarified <br />this section regarding authorization and selection of financial dealers and institutions. <br />3. Page 5 -6, VIII. Authorized and Suitable Investments - <br />• added Certificate of Deposit Account Registry Service ( CDARS) <br />• changed the word "agency" to "City" throughout this section <br />• deleted the last sentence in the Money Market Mutual Funds section regarding <br />commissions since these funds do not have commissions; eliminates confusion. <br />4. Page 8, "Performance Standards" added additional performance objective for the <br />portfolio to earn a total rate of return over a market cycle which is approximately equal <br />to the return on a Market Benchmark index of similar risk characteristics. <br />5. Page 8, "Reporting" corrected wording in the beginning of the second paragraph <br />relating to California Government Code Section 53646 that "states that" the Finance <br />Director "may render" a quarterly report. The previous version stated that this was a <br />requirement. <br />6. Page 9, Appendix A <br />• Added CDARs <br />• Corrected minimum rating for Medium -Term Corporate Notes to coincide with <br />page 6 policy requirement for Medium -Term Corporate Notes <br />7. Pages 11 -12, Appendix B <br />• Added CDARs definition <br />• Added Market Benchmark Index definition <br />At the Finance Committee meeting on June 1, 2012, the Committee asked about the portfolio <br />guidelines regarding "authorized and suitable investments" (Investments). The Investments <br />are recommended by Statute. The limits for Investments were questioned. For example, the <br />permitted investments include corporate notes, which must hold a credit rating of at least "A" <br />and may comprise up to 30% of the portfolio. Currently, the list of companies that would be <br />suitable Investments would include such corporations as United Parcel Service, Wells Fargo <br />and Coca Cola. The yields on these investments typically exceed US Agency securities by <br />20 -100 basis points. If the average portfolio balance is $75 million, the additional yield could <br />generate $150,000 to $750,000 per year. <br />The $64.2 billion Local Agency Investment Fund (LAIF) managed by the State Treasurer's <br />Office makes similar Investments to those in San Leandro's portfolio. One major difference is <br />that LAIF has 58% invested in US Treasury and Agency securities versus the San Leandro <br />portfolio, which invests 100% in these federal government- backed securities. As of 3/31/12, <br />the City had invested $48.2 million in LAIF and $28.3 million in US government- backed <br />securities. <br />Previous City Council Action(s) <br />The Investment Policy is reviewed annually and was last reviewed by the City Council on June <br />20, 2011 by Resolution No. 2011 -111. <br />City of San Leandro Page 2 Printed on 711012012 <br />
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