Title
Recommendation to Accept the Investment Report for the Quarter Ending September 30, 2016. (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Recommendation to Accept the Investment Report for the Quarter Ending
September 30, 2016
BACKGROUND
Each quarter of the fiscal year, an Investment Report is provided to the City Council for review, per the Investment Policy. Attached is the Investment Report for the fiscal quarter ending September 30, 2016, which includes detailed information on the City's cash and investments. This statement does not reflect the council direction on February 21, 2017 to divest Wells Fargo investments. On April 18, 2017 the City Treasurer provided the Council an update that included actions that have been taken to implement Council's direction.
DISCUSSION
The investment report includes all cash and investments as summarized in the nine categories listed below as of September 30, 2016. The City utilizes U.S. Bank as its third-party custodian for safekeeping of all investments with the exception of investments held by Bond Trustees. The City also utilizes the Local Agency Investment Fund (LAIF) as a money market fund administered by the State Treasurer. LAIF has many governmental agency participants and holds securities through its own administrator. Investments held by Bond Trustees are administered in accordance with individual bond indentures.
As of September 30, 2016, the investment portfolio average yield (before adjustments for changes in market value) was 0.89%, which is higher than the rate for two-year U.S. Treasury bills at 0.77 % and the LAIF average monthly rate of 0.63%.
The investments in Certificates of Deposit, Federal/Agency Issues, Medium Term Notes/Commercial Paper, Asset Backed Securities and Supranationals are managed by PFM Asset Management (PFM) and Chandler Asset Management (Chandler), the City's two registered investment advisors. S...
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