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City of San Leandro <br />Meeting Date: May 20, 2013 <br />Staff Report <br />Agenda Section:File Number:13-153 CONSENT CALENDAR <br />Agenda Number:8.G. <br />TO:City Council <br />FROM:Chris Zapata <br />City Manager <br />BY:David Baum <br />Finance Director <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:Staff Report on the Investment Report for the Quarter Ended March 31, 2013 <br />RECOMMENDATION <br />Staff recommends that the City Council review and accept the attached investment report for <br />the quarter ended March 31, 2013. <br />OVERVIEW <br />As of March 31, 2013, the City’s investment portfolio had a market value of $68.3 million. Of <br />this total, $34.7 million was placed with the Local Agency Investment Fund (LAIF) and bank <br />accounts and $33.6 million was placed in the Chandler Asset Management portfolio . On <br />January 31, 2012 the Redevelopment Agency LAIF accounts were closed as a result of the <br />dissolution of the San Leandro Redevelopment Agency . These funds were transferred to the <br />City’s Economic Development Agency LAIF account in the amount of $9.3 million. <br />Subsequently, the Economic Development Agency LAIF account has been transferred to a <br />new Successor Agency LAIF account established during the quarter ended June 30, 2012. <br />The balance in this new account is $5.9 million. <br />During September, 2012 staff transferred $4.9 million out of LAIF to be reinvested by <br />Chandler in securities with a greater yield. Eleven securities were purchased with half of <br />these operating a business in the City of San Leandro (Wells Fargo Bank, Coca-Cola, JP <br />Morgan Chase, John Deere, US Bancorp). The remaining six securities are with IBM, <br />Pepsico, HSBC USA, EBay, General Electric and Microsoft. The average yield of this <br />reinvestment is 0.55% which exceeds the LAIF average book yield, and the average maturity <br />is less than two years. <br />The rate of return for LAIF for the quarter was 0.28%, while the average book yield for the <br />Chandler managed funds was 0.76%. The City’s investment policy establishes three bases <br />for the performance standard: the LAIF rate of return and the rate of return on 2-year and <br />5-year U.S. Treasury securities. Amounts invested in LAIF meet this performance standard. <br />The Chandler managed funds average book yield was 0.76%, which exceeds the benchmark <br />Page 1 City of San Leandro Printed on 5/14/2013