Laserfiche WebLink
City of San Leandro <br />Meeting Date: March 4, 2019 <br />Staff Report <br />Agenda Section:File Number:19-117 CONSENT CALENDAR <br />Agenda Number:8.G. <br />TO:City Council <br />FROM:Jeff Kay <br />City Manager <br />BY:David Baum <br />Finance Director <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:Staff Report for a City of San Leandro City Council Resolution to Approve the <br />Investment Report for the Quarter Ended December 31, 2018 <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends that the City Council review and accept the investment report for the quarter ended <br />December 31, 2018. <br />OVERVIEW <br />At December 31, 2018, the City’s investment portfolio had a market value of $149.1 million. Of the total <br />$149.1 million, $67.9 million was placed with the Local Agency Investment Fund (LAIF) and bank <br />accounts and $81.2 million was placed in the Chandler Asset Management portfolio. <br />The rate of return for LAIF for the quarter was 2.40%, while the average book yield for the Chandler <br />managed funds was 2.29%. The City’s investment policy establishes three bases for the performance <br />standard: the LAIF rate of return and the rate of return on 2-year and 5-year U.S. Treasury securities. <br />Amounts invested in LAIF meet this performance standard. The Chandler managed funds average book <br />yield was 2.29%, which is below the benchmark rate of return on the 2-year U.S. Treasury securities of <br />2.48%, and the 5-year U.S. Treasury securities of 2.51%. <br />Amounts invested with LAIF are essentially liquid; funds can be withdrawn with minimal notice as City <br />operations require. The rate of return earned by LAIF generally follows fixed income security rates. <br />The balance of the City’s portfolio is with Chandler Asset Management. These investments range from <br />one to four years in maturity. The report notes that the City is in compliance with all provisions of the <br />City’s Investment Policy, and the City is able to meet its cash obligations during the next six-month <br />period. The basic strategy recommended by Chandler is to gradually lengthen the average maturity of <br />the portfolio in order to gain higher interest rates. Staff is in agreement with this approach, and carefully <br />monitors maturity dates to ensure that both short and long-term liquidity needs are met. <br />PREPARED BY: David Baum, Finance Director, Finance <br />Page 1 City of San Leandro Printed on 2/26/2019