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Page 3 of 6 <br /> <br /> <br />The effective fiscal year rate of return on the portfolio was 1.87 percent, an increase of 0.21 <br />percent from 1.66 percent from last quarter and an increase of 0.35 percent from 1.52 percent <br />reported at the same time last year. As reported previously, the Federal Reserve (the Fed) <br />raised interest rates since March 2022 and halted increases in July 2023, resulting in the <br />highest federal funds rate in 25 years. This September, the Fed announced a new target rate <br />of 4.75 percent to 5.00 percent, down from 5.25 percent to 5.50 percent. Most of the City's <br />investment portfolio was purchased before 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 further <br />trimmed rates by 0.25 at the meeting this November. <br /> <br />As of September 30, 2024, the entire portfolio, exclusive of money market accounts and LAIF <br />was held in third-party safekeeping for the benefit of the City of Pleasanton at Bank of New <br />York Mellon. Bank of New York Mellon is a contractual agent for the City. <br /> <br />As of September 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 />Noe the medium term note with 3M Company is rated at A by Moody's and rated at BBB+ by <br />S&P. A rating of A indicates the investment grade is very high and a rating of BBB+ indicates <br />the investment grade is good. When this investment was purchased in 2019, it met the A rating <br />category required by the City's investment policy. This investment is scheduled to mature in <br />February 2025; staff has been monitoring this investment and will take action, such as selling <br />the security before maturity, if warranted. <br /> <br />Purchases and Maturities <br />No securities were purchased during the quarter; two securities matured, one in August and <br />one in September; and one certificate of deposit matured in September and was renewed. <br />Staff continued to be conservative on investment. Staff will continue to monitor cash inflows <br />Page 97 of 658