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