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$AN <br />File Number: 15-058 <br />TO: City Council <br />FROM: Chris Zapata <br />City Manager <br />BY: David Baum <br />City of San Leandro <br />Meeting Date: February 17, 2015 <br />Finance Director <br />FINANCE REVIEW: David Baum <br />Finance Director <br />Staff Report <br />Agenda Section: CONSENT CALENDAR <br />Agenda Number: 8.F. <br />TITLE: Staff Report for Resolution Approving the Investment Report for the Quarter <br />Ended December 31, 2014 <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends that the City Council review and accept the investment report for the <br />quarter ended December 31, 2014. <br />OVERVIEW <br />At December 31, 2014, the City's investment portfolio had a market value of $85.2 million. Of <br />this total, $46.3 million was placed with the Local Agency Investment Fund (LAIF) and bank <br />accounts and $38.9 million was placed in the Chandler Asset Management portfolio. In the <br />fourth quarter of 2014, $2.7 million of maturing securities were reinvested in Treasury, Agency <br />and Corporate securities scheduled to mature between October 2017 and May 2018. <br />The rate of return for LAIF for the quarter was 0.25%, while the average book yield for the <br />Chandler managed funds was 0.91 %. 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 0.91 %, which exceeds the benchmark <br />rate of return on the 2 -year U.S. Treasury securities of 0.67%. <br />Amounts invested with LAIF are essentially liquid; funds can be withdrawn with minimal notice <br />as City operations require. The rate of return earned by LAIF generally follows fixed income <br />security rates. <br />The balance of the City's portfolio is with Chandler Asset Management. These investments <br />range from one to four years in maturity. The report notes that the City is in compliance with <br />all provisions of the City's Investment Policy. The basic strategy recommended by Chandler <br />is to gradually lengthen the average maturity of the portfolio in order to gain higher interest <br />rates. Staff is in agreement with this approach, and carefully monitors maturity dates to <br />City of San Leandro Page 1 Printed on 2/11/2015 <br />