Title
Staff Report for Discussion of Investment Options and Joining California Asset Management Program (CAMP)
Staffreport
COUNCIL PRIORITY
• Fiscal Sustainability and Transparency
SUMMARY
This staff report provides an overview of additional investment options available to the City to provide options that ensure funds are able to be invested as prudently as possible at all times.
RECOMMENDATIONS
Staff recommends that the City Council Finance Committee review the provided options and recommend to City Council that the City join California Asset Management Program (CAMP).
BACKGROUND
The City invests public funds not required to meet current City obligations in compliance with the State of California Government Code and the City’s Investment Policy. While these restrictions limit the investment options available, there are several organization that specialize in governmental investing and municipalities take advantage of these organizations to benefit from both their expertise and economies of scale.
Analysis
Over the summer, staff completed an analysis of several organizations that specialize in government investing. The focus of the review was to determine if there are options that could provide the City the same liquidity as the Local Agency Investment Fund (LAIF) with a higher return. The City’s long term investments are actively managed by Chandler Asset Management and were not considered during this review.
The below table compares historical returns for LAIF, California Asset Management Program (CAMP), and CalTrust.
|
|
Local Agency Investment Fund (LAIF) |
California Asset Management Program (CAMP) |
CalTrust |
|
Type |
Investment Pool (State Run) |
Investment Pool (JPA) |
Investment Pool (JPA) |
|
Rates: 1 Year 3 Year 5 Year |
3.93% 2.16% 1.78% *Average Annual Yield |
5.64% 3.13% 2.28% |
5.6% 3.34% 2.26% CalTrust offers three funds (Liquidity, Short Term and Medium Term), information is for Liquidity |
|
Holdings |
(07/24) $20.3 B |
(03/24) $192 B |
$3.9 B |
Both CAMP and CalTrust have consistently had higher returns than LAIF. While the returns are similar, the Holdings (Assets Under Management) are significantly higher with CAMP, which is held and managed by US Bank and PFM Asset Management (PFM). The City currently interacts with PFM for the reporting of the City’s 115 Trusts (Pension and OPEB).
Staff recommend that the City join CAMP to provide a second option for short term, liquid investments. Some funds will remain in LAIF so the City can leverage rates of return in both options as interest rates fluctuate.
Current Agency Policies
City of San Leandro Investment Policy (06/17/24)
Financial Impacts
There is no direct fiscal impact to joining CAMP. Over time, the goal of diversification of investments is to provide the City a higher overall rate of return than fewer investments.
ATTACHMENTS
Attachment A: Investment Options Presentation
Attachment B: CAMP Pool Fact Sheet
PREPARED BY: Heather Rowden, Interim Finance Director, Finance Department