Title
Staff Report for Acceptance of the City of San Leandro’s Investment Report for the Quarter Ended December 31, 2012
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends that the City Council review and accept the attached investment report for the quarter ended December 31, 2012.
BACKGROUND
At December 31, 2012, the City’s investment portfolio had a market value of $74.5 million. Of this total, $41.0 million was placed with the Local Agency Investment Fund (LAIF) and bank accounts and $33.5 million was placed in the Chandler Asset Management portfolio. On January 31, 2012 the Redevelopment Agency LAIF accounts were closed as a result of the dissolution of the San Leandro Redevelopment Agency. These funds were transferred to the City’s Economic Development Agency LAIF account in the amount of $9.3 million. Subsequently, the Economic Development Agency LAIF account has been transferred to a new Successor Agency LAIF account established during the quarter ended June 30, 2012. The balance in this new account is $5.9 million and has decreased since January due to debt repayments.
During September, 2012 staff transferred $4.9 million out of LAIF to be reinvested by Chandler in securities with a greater yield. Eleven securities were purchased with half of these operating a business in the City of San Leandro (Wells Fargo Bank, Coca-Cola, JP Morgan Chase, John Deere, US Bancorp). The remaining six securities are with IBM, Pepsico, HSBC USA, Ebay, General Electric and Microsoft. The average yield of this reinvestment is 0.55% which exceeds the LAIF average book yield, and the average maturity is less than two years.
The rate of return for LAIF for the quarter was 0.32%, while the average book yield for the Chandler managed funds was 0.78%. The City’s investment policy establishes three bases for the performance standard: the LAIF rate of return and the rate of return on 2-year and 5-year U.S. Treasury securities. Amounts invested in LAIF mee...
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