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CURRENT INVESTMENT STRATEGY: The effective rate of return on the portfolio was 1.19 percent, a decrease of 0.03 percent from 1 .22 percent from last quarter and a decrease of 0.13 percent from 1.32 percent reported at the same time last year, because of the pandemic negative impact. During fiscal year 2021/22 last quarter, staff continued to be conservative on investment, with only one certificate of deposit replacement purchase, to ensure liquidation. Similar to 3rd quarter condition, no investment in the portfolio was called during 4th quarter due to the callable investments' interest rates are lower than the current market's interest rates. Per Investment Status Report enclosed, only one investment will be matured in the next quarter, making future cash inflow limited to operating cash receipts. Staff will continue monitoring closely to ensure that cash is first available to meet all obligations for the next six months, and then investments. SECTION 115 TRUST FUND In June 2018, the City Council approved the investment of $28 million of various reserves into a Section 115 Trust Fund to help smooth the pension liabilities which are expected to grow in the long run. The investment is made into two separate portfolios, the first one for $6.7 million into a Conservative portfolio which is available to pay the annual unfunded liabilities if necessary, and the second one for $21 .3 million into a long-term capital growth portfolio. In February 2020, City Council authorized City staff to allocate up to the City's total annual required CaIPERS payment, and to withdraw up to the total annual required CaIPERS payment from the Conservative portfolio. In March and June 2020, two additional $5 million contributions were deposited to the Conservative portfolio for a total of$16.7 million deposited into the Conservative portfolio. As described in the chart below, the Conservative portfolio's balance was $17.63 million, a slight decrease over the March 31, 2022 balance of$18.14 million. The Conservative portfolio's investment return for the quarter ending June 30, 2022 was (2.74)percent.