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Page 4 of 5 <br />grow in the long run. The investment is made into two separate portfolios, the first one for $6.7 <br />million into a Conservative portfolio which is available to pay the annual unfunded liabilities if <br />necessary, and the second one for $21.3 million into a long-term Capital Growth portfolio. <br /> <br />In February 2020, City Council authorized Finance staff to deposit to and withdraw from the <br />Conservative portfolio an additional amount up to the total annual required CalPERS payment. <br />In March and June 2020, two additional $5.0 million contributions were deposited into the <br />Conservative portfolio for a total of $16.7 million deposited into the Conservative portfolio. <br /> <br />As presented in the chart below, the Conservative portfolio balance was $19.3 million at the <br />end of March 31, 2024, an increase of $0.04 million from the prior quarter. The Conservative <br />portfolio investment return for the quarter ended March 31, 2024, was 1.74 percent, and the <br />five-year annualized return was 3.54 percent. <br /> <br /> <br />The second portfolio (Capital Growth) addresses the longer-term pension liabilities with an <br />initial investment of $21.3 million. The focus of this portfolio is to earn a higher rate of return <br />over the next ten years or so before the City needs to draw upon it. <br /> <br />Page 211 of 720