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City of San Leandro City Council Meeting Date: April 17, 2023 Agenda Number: 10.c. Agenda Section: CONSENT CALENDAR File Number: 23-138 File Type: Staff Report Adopt Resolution Accepting 2022-2023, Second Quarter City of San Leandro Investment Report Update SUMMARY AND RECOMMENDATIONS Staff recommends the City Council adopt the resolution accepting the City’s Investment Report for the quarter ending December 31, 2022. BACKGROUND The purpose of the City of San Leandro Investment Report is to inform the City Council of the investment portfolio status as of the quarter ending December 31, 2022. The City’s Investment Policy Statement requires quarterly reporting on specific investments, amounts invested with approved institutions, purchases, maturity dates and interest yields. DISCUSSION As of December 31, 2022, the City’s investment portfolio had a market value of $207,389,000, which is $9,205,000 higher than on September 30, 2022. The increase was mainly due to receipt of the first installment of 2022-2023 Property Tax revenues in December. Of the total market value, $56,346,000 was placed with the Local Agency Investment Fund (LAIF) and other bank accounts, and $151,043,000 was placed in the Chandler Asset Management portfolio. The rate of return for cash deposits (LAIF and bank balances) at the end of the quarter was 1.53%, while the average book yield for the Chandler managed funds was 2.14%. The cash deposit return was 0.15% higher than the previous quarter, while the Chandler return was 0.49% higher. LAIF’s investment (69% of cash deposits) return reflects a snapshot in time (the quarterly apportionment rate), while Chandler’s reflects the performance of the portfolio over the entire quarter. The City’s investment policy establishes criteria for the standard for portfolio performance. The Chandler managed fund criteria are compared with the ICE Bank of America 1-3-year US Treasury and Agency Index. This index is an unmanaged index tracking performance of direct sovereign debt of the U.S. Government having a maturity of at least one year and less than three years. The benchmark for Average Market Yield for the period ending December 31 was 4.51%. Chandler managed funds yield was 4.55%. Amounts invested with LAIF are liquid; funds can be withdrawn with minimal notice as City operations may require. The rate of return earned by LAIF follows fixed income security rates. Chandler Asset Management manages 73% of the portfolio with a market value of $151,043,000. These investments range from one to almost five years to maturity, with the average maturity at 1.89 years (marginally lower than the 1.92 duration as of September 30, 2022). Page 1 City of San Leandro Printed on 5/3/2023