Laserfiche WebLink
Page 3 of 6 <br />March 2022 but halted rate increases in July 2023. In 2022, the Fed raised rates seven times <br />for a total of 425 basis points, and in 2023 the Fed raised another 100 basis points in total, with <br />federal funds rate in a range of 5.25 percent to 5.50 percent, the highest levels in 25 years, <br />resulting in even higher comparative market rates. Most of the securities in the City’s <br />investment portfolio were purchased before the rate hikes, and the overall investment return is <br />expected to be lower than the market rates in the near term. As securities mature and funds <br />are reinvested, the City will be able to achieve higher investment returns. The Fed has hinted <br />at possible trimming of borrowing costs as early as this September assuming economic data <br />continues to show cooling inflation. <br /> <br />As of June 30, 2024, the entire portfolio, exclusive of money market accounts and LAIF was <br />held in third-party safekeeping for the benefit of the City of Pleasanton at Bank of New York <br />Mellon. Bank of New York Mellon is a contractual agent for the City. <br /> <br />As of June 30, 2024, all investments in the portfolio are authorized by State of California <br />Government Section 53600 et. Seq. and the City's investment policy. <br /> <br />Securities rated below "AA-/AA3" <br /> <br />Please note that the medium term note with 3M Company is rated at A by Moody's and rated <br />at BBB+ by S&P. A rating of A indicates the investment grade is very high and a rating of <br />BBB+ indicates the investment grade is good. When this investment was purchased in 2019, it <br />met the A rating category required by the City's investment policy. This investment is <br />scheduled to mature in February 2025. Staff has been monitoring this investment and will take <br />action, such as selling the security before maturity, if warranted. <br /> <br />Purchases and Maturities <br />No securities were purchased during the quarter, and one security matured in May, and the <br />two certificates of deposits both matured in April and were renewed. Staff continued to be <br />conservative on investment. Staff will continue to monitor cash inflows and outflows, taking into <br />consideration anticipated construction costs for large capital projects and unexpected events. <br /> <br />Page 285 of 454