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City of San Leandro <br />Meeting Date: May 16, 2016 <br />Staff Report <br />Agenda Section:File Number:16-232 CONSENT CALENDAR <br />Agenda Number:8.M. <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, 2016 <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends that the City Council review and accept the investment report for the <br />quarter ended March 31, 2016. <br />OVERVIEW <br />On March 31, 2016, the City’s investment portfolio had a market value of $98.5 million. Of the <br />total $98.5M, $53.9 million was placed with the Local Agency Investment Fund (LAIF) bank <br />accounts and $44.6 million was placed in the Chandler Asset Management portfolio. In this <br />quarter (January 2016) an additional $5M was contributed to the portfolio and invested in ten <br />new securities (five Treasury notes, four Agency notes and one corporate note), and $2.6 <br />million of maturing securities were reinvested and scheduled to mature from May 2018 <br />through March 2020. <br />The rate of return for LAIF for the quarter was 0.46%, while the average book yield for the <br />Chandler managed funds was 1.12%. 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 1.12%, which exceeds the benchmark <br />rate of return on the 2-year U.S. Treasury securities of 0.73%, and is close to the 5-year U.S. <br />Treasury securities of 1.21%. <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Amounts invested with LAIF are essentially liquid; funds can be withdrawn with minimal notice 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 />Page 1 City of San Leandro Printed on 5/10/2016