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10
City of Pleasanton
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CITY CLERK
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AGENDA PACKETS
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2022
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021522
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2/10/2022 9:37:27 AM
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2/10/2022 9:01:52 AM
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CITY CLERK
CITY CLERK - TYPE
AGENDA REPORT
DOCUMENT DATE
2/15/2022
DESTRUCT DATE
15Y
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CURRENT INVESTMENT STRATEGY: <br /> The effective rate of return on the portfolio for the recent month was 1 .24 percent, a <br /> decrease of 0.08 percent from 1 .32 percent from last quarter and a decrease of <br /> 0.32 percent from 1.56 percent reported at the same time last year, because of the <br /> pandemic negative impact. <br /> During the last quarter, as inflation continued to rise, and the Federal Reserve <br /> Open Market Committee doubled its pace of tapering, from $15 billion in its <br /> November announcement, to $30 billion in December announcement, bond yield <br /> has been increased. The current strategy is to take advantage of the rising rate <br /> environment, and purchase as many new investments at higher rates, as the City's <br /> cashflow forecast allows. However, the current higher rate also causes no calls of <br /> bonds, and only three bonds, for a total of $5.2 million will mature by the end of <br /> March 2022, leaving cash available for investment dependent on the City's <br /> upcoming revenue receipts. Staff will monitor closely to ensure cash is first available <br /> to meet all current obligations, and then investments. <br /> Section 115 Trust Fund <br /> In June 2018, the City Council approved the investment of $28 million of various <br /> reserves into a Section 115 Trust Fund to help smooth the pension liabilities which <br /> are expected to grow in the long run. The investment is made into two separate <br /> portfolios, the first one for $6.7 million into a Conservative portfolio which is available <br /> to pay the annual unfunded liabilities if necessary, and the second one for $21 .3 <br /> million into a long-term capital growth portfolio. <br /> In February 2020, City Council authorized Finance staff to deposit to and withdraw <br /> from the Conservative portfolio an additional amount up to the total annual required <br /> CaIPERS payment. In March and June 2020, two additional $5 million contributions <br /> were deposited to the Conservative portfolio for a total of $16.7 million deposited <br /> into the Conservative portfolio. <br /> As described in the chart below, the Conservative portfolio's balance was $18.66 <br /> million, a slight increase over the September 30, 2021 balance of $18.55 million. The <br /> Conservative portfolio's investment return for the quarter ending December 31 , 2021 <br /> was 0.7 percent. <br />
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