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Presentation regarding update on the City of South San Francisco's investment portfolio (Frank Risso, Treasurer, Karen Chang, Director of Finance, Carlos Oblites, Chandler Asset Management)
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RECOMMENDATION
Recommendation
Staff recommends City Council receive a presentation on the investment portfolio.
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BACKGROUND/DISCUSSION
California Government Code Section 53600 et seq., strictly governs the investment activities related to public funds. Code provides guidance and restrictions related to permitted investment sectors, concentration limits, minimum credit quality, and maximum maturities permitted. Public agencies may only invest in fixed income securities. The purchase of stock is prohibited. Therefore, the City primarily invests in highly rated debt securities such as U.S. Treasury obligations, federal agency and government sponsored enterprise debt, as well as obligations issued by high credit quality, non-governmental entities such as corporations, and issuers of passthrough securities, and supranational issuers.
California Government Code also specifies that the investment objectives of public agency investment programs shall be safety, liquidity, and return, in that order. As such, the safety of principal is the foremost objective of the City's investment program. The investment program must remain sufficiently liquid to enable the City to meet all cash requirements. The City collaborates with its registered investment advisor, Chandler Asset Management, in managing the City's funds. The City's investment program totals nearly $352 million, of which Chandler Asset Management currently manages $272 million. The Chandler-managed portion comprises the City's Mid-Term Portfolio targeting a duration of 2.76 years ($200,593,548), Limited Maturity Portfolio, which is structured to achieve competitive yields for a portion of the City's most liquid funds ($65,818,779), and a smaller Pension Reserve Portfolio ($5,847,635). The remainder compris...
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