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City of San Leandro <br />Meeting Date: May 4, 2015 <br />Staff Report <br />Agenda Section:File Number:15-250 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 for Resolution Approving the Investment Report for the Quarter <br />Ended March 31, 2015 <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends that the City Council review and accept the investment report for the <br />quarter ended March 31, 2015. <br />OVERVIEW <br />At March 31, 2015, the City’s investment portfolio had a market value of $89.1 million. Of this <br />total, $49.98 million was placed with the Local Agency Investment Fund (LAIF) and bank <br />accounts and $39.2 million was placed in the Chandler Asset Management portfolio. In the <br />first quarter of 2015, $3.5 million of maturing securities were reinvested in Treasury, and <br />Corporate securities scheduled to mature between November 2017 and March 2018. <br />The rate of return for LAIF for the quarter was 0.26%, while the average book yield for the <br />Chandler managed funds was 0.95%. 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 0.56%. <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Amounts invested with LAIF are essentially liquid; funds can be withdrawn with minimal notice 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, and the City is able to meet its cash obligations <br />during the next six-month period. The basic strategy recommended by Chandler is to <br />Page 1 City of San Leandro Printed on 4/28/2015