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City of San Leandro <br />City Council <br />Meeting Date: October 16, 2023 <br />Agenda Number: 5.d. <br />Agenda Section: CONSENT CALENDAR <br />File Number: 23-462 <br />File Type: Staff Report <br />Adopt a Resolution to Accept the 2022-2023 Fourth Quarter City of San Leandro Investment Report <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends the City Council adopt a resolution accepting the City Investment Report <br />for the quarter ended June 30, 2023. <br />BACKGROUND <br />The purpose of the City of San Leandro Investment Report is to inform the City Council of the <br />City’s investment portfolio status as of the end of the fourth quarter (and fiscal year), June 30, <br />2023. The City’s Investment Policy Statement requires quarterly reporting on specific <br />investments, amounts invested with approved institutions, and purchase and maturity dates <br />and interest yields. <br />DISCUSSION <br />As of June 30, 2023, the City’s investment portfolio had a market value of $243,375,000, <br />which is $14,363,000 higher than the prior quarter, March 31, 2023. The increase was mainly <br />due to receipt of monthly sales tax revenue during the quarter. Nearly $85,091,000 of the <br />total market value was placed with the Local Agency Investment Fund (LAIF) and bank <br />accounts. A total of $158,283,000 was placed in the Chandler Asset Management portfolio. <br />The rate of return for cash deposits (LAIF and bank balances) at the end of the quarter was <br />1.51%, while the average book yield for the Chandler managed funds was 2.67%. The cash <br />deposit return was 0.02 percentage points higher than the previous quarter, while the <br />Chandler return was 0.27 percentage points higher. LAIF’s investment (46% of cash <br />deposits) rate reflects a snapshot in time (the quarterly apportionment rate), while Chandler’s <br />reflects the performance of the portfolio over the entire quarter. <br />The City’s investment policy establishes criteria for the standard for portfolio performance. <br />The Chandler managed fund criteria are compared with the ICE Bank of America 1-3-year US <br />Treasury and Agency Index. This index is an unmanaged index tracking performance of <br />direct sovereign debt of the U.S. Government having a maturity of at least one year and less <br />than three years. The benchmark for Average Market Yield for the period ending June 30 is <br />5.02%. Chandler managed funds yield for the period is 5.07%. <br />Amounts invested with LAIF are liquid; funds can be withdrawn with minimal notice as City <br />operations may require. The rate of return earned by LAIF follows fixed income security rates. <br />Chandler Asset Management manages the balance of the portfolio having a market value of <br />$158,283,000, 65% of the total portfolio. These investments range from one to almost five <br />years to maturity, with the average maturity at 1.96 years (a slightly lower duration than 1.99 <br />years on March 31, 2023). <br />Page 1 City of San Leandro Printed on 12/21/2023