►
Description
San Bruno City Council Meeting September 25, 2012
10b. Report on City's Investment Portfolio
B
Honorable
mayor
and
council
members,
as
you
know,
every
year
the
city's
investment
portfolio
is
presented
to
the
council
for
review.
As
of
jun
30,
the
city
had
on
deposit
the
following
60
excuse
me:
15.8
million
with
the
san
mateo
county
investment
pool,
16.2
million,
with
the
local
agency
investment
fund
and
10.5
million
on
deposit
at
union
bank.
Those
are
being
those
are
individual
securities.
The
portfolio
has
experienced
a
significant
amount
of
turnover,
as
creditors
have
taken
advantage
of
low
interest
rates
by
refinancing
their
existing
debts.
B
As
a
result,
the
city's
had
several
bond
positions
called
early
and
for
all
three
accounts,
the
average
yield
has
been
approximately
one
percent.
It
is
important
to
note
that
all
city
holdings
are
income-oriented
and
these
yields
are
in
line
with
current
market
rates.
In
this
most
recent
statement,
the
Federal
Reserve
expressed
the
desire
to
keep
interest
rates
at
their
current
levels
for
the
foreseeable
future.
Indeed,
the
current
rates
are
also
being
kept
at
current
levels
worldwide.
In
the
past
year
alone,
there
have
been
259
rate
easing
moves
by
various
central
banks.
B
This
is
being
done
to
support
a
generally
weak
economic
recovery.
That
would
be
compromised
by
higher
interest
rates.
I
bring
these
facts
to
life,
because
I
believe
it
supports
the
realistic
expectations
that
current
levels
of
interest
rates
are
to
be
in
place
for
at
least
the
next
two
years
in
april
of
this
year.
As
you
know,
the
city
settled
with
PG&E,
resulting
in
a
transfer
of
68
million,
seven
hundred
fifty
thousand
dollars
into
an
account
at
wells
fargo.
B
The
city
is
acting
as
to
as
a
temporary
custodian
for
these
funds
until
a
non-profit
is
organized
once
in
place.
This
nonprofit
will
assume
control
of
these
monies.
Currently
that
portfolio
consists
of
three
six
and
nine
month
T
bills,
in
accordance
with
the
investment
policy
adopted
by
the
council.
As
these
securities
mature,
a
similar
duration
securities
purchased,
this
latter
portfolio
is
structured,
is
intended
for
maximum
flexibility
for
the
nonprofit
once
that
is
established
and
to
assure
the
safety
of
the
principal
amount.
Should
the
council
wish
to
explore
other
investment
options?
A
B
B
That
question
is
better
answered
once
we,
the
nonprofit,
is
established
and
the
goals
for
the
money
are
more
clearly
defined
if
they
want
to
treat
it
as
a
unit
like
a
University
endowment
type
of
investment
portfolio.
I
would
certainly
not
be
doing
this
no
question
about
it
at
this
point,
I
think
the
the
return
of
the
principal
is
a
little
bit
more
important
than
the
to
return
on
the
principle,
because
we're
acting
as
a
as
a
custodian
right,
so
once
a
non
profits
established
and
they
provide
direction.
It
certainly
would
be
more.
B
I,
don't
understand
no
Stan,
something
no
I,
think
36
or
91
t-bills
in
this
environment.
You
know
you're
not
necessarily
keeping
pace
with
inflation.
So,
but
at
the
point,
like
I
said
you
know,
the
return
of
the
principal
is
more
important
than
to
be
turned
on
at
this
point
until
the
board
is
established
and
they
provide
direction
again
if
they
want
to
treat
it
like
an
endowment.
That
certainly
would
be
a
lot
of
different
portfolio
makeup
than
what
we
have
now.
Okay,
without.