Title
Adopt a Resolution to Accept the Calendar Year 2024, Second Quarter City of San Leandro Investment Report
Staffreport
COUNCIL PRIORITY
• Fiscal Sustainability and Transparency
SUMMARY AND RECOMMENDATIONS
Staff recommends that the City Council accept the City’s Investment Report for the quarter ended June 30, 2024.
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, June 30, 2024. The City’s Investment Policy Statement requires quarterly reporting on specific investments, amounts invested with approved institutions, purchases, maturity dates and interest yields.
Analysis
As of June 30, 2024, the City’s investment portfolio had a market value of $234,905,779, which is $2,656,672 higher than the prior quarter, ending on March 31, 2024. A total of $10,908,718 of the market value was placed with the Local Agency Investment Fund (LAIF) and other bank accounts. The Chandler Asset Management portfolio totaled $202,389,343 on the same date.
The rate of return for cash deposits (LAIF and bank balances) at the end of the quarter was 4.55%, while the average book yield for the Chandler managed funds was 4.99%. LAIF’s investment (33.5% of cash deposits) return reflects a snapshot in time (the quarterly apportionment rate), while the Chandler portfolio shows 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 June 30 was 4.54%. The Chandler managed funds yield was 4.93%.
Amounts invested with LAIF are liquid, such that funds can be withdrawn with minimal notice as City operations may require.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 86% of the portfolio with a market value of $202,389,343. These investments range from one to almost five years to maturity, with the average maturity at 2.07 years (no change from the prior quarter).
The report notes compliance with all provisions of the City’s Investment Policy and the City can meet its cash obligations during the next six months. Chandler’s strategy is gradually lengthening the average maturity of the portfolio to gain higher interest rates.
REVIEW BY FINANCE COMMITTEE
The City of San Leandro Investment Report for the quarter ended June 30, 2024, was reviewed by the City Council Finance Committee on October 23, 2024. The Finance Committee unanimously recommended the Investment Report be moved to the City Council for acceptance.
ATTACHMENTS
Attachment A: Resolution Accepting June 30, 2024 City Investment Report
Attachment B: June 30, 2024 Investment Report, prepared by Chandler Asset Management
PREPARED BY: Heather Rowden, Interim Finance Director, Finance Department