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Page 4 of 6 <br />During the quarter, the City's investment manager, Chandler Asset Management, purchased <br />and sold securities on behalf of the City. Several securities matured during the quarter. Details <br />for the purchases, maturity and sales are found in Attachment 1, Investment Report, <br />Transaction Ledger. Certain securities were sold at a loss with the intent of reinvesting the <br />funds with higher yields, as these securities were purchased before COVID with much lower <br />yields. Staff will continue to monitor cash inflows and outflows, taking into consideration <br />anticipated construction costs for large capital projects and unexpected events. <br />Below is a listing of Certificate of Deposit activity that occurred during the quarter ending <br />March 31, 2026. For activity related to the City’s Chandler Asset Management managed <br />account, refer to Attachment 1, Investment Report, Transaction Ledger. <br />Table 3. Certificate of Deposit Purchases and Maturities <br /> <br /> <br /> Section 115 Trust Fund <br />In December 2018, the City Council approved investing $28.0 million from various reserves <br />into a Section 115 Trust Fund to help smooth the City's growing pension liabilities. The <br />investment is made in two separate portfolios: the first for $6.7 million in a Conservative <br />portfolio, which is available to pay the annual unfunded liabilities if necessary, and the second <br />for $21.3 million in a long-term Capital Growth portfolio. <br /> <br />In February 2020, the City Council authorized staff to deposit, and withdraw from, the <br />Conservative portfolio an additional amount up to the total annual required CalPERS payment. <br />In March and December 2020, two additional $5.0 million contributions were deposited into the <br />Conservative portfolio for a total of $16.7 million. <br /> <br />As presented in the chart below, the Conservative portfolio balance was $21.6 million at the <br />end of March 31, 2026, a slight increase of $0.01 million from the prior quarter. The <br />Conservative portfolio investment return for the quarter ended March 31, 2026, was 0.15 <br />percent, and the five-year annualized return was 3.71 percent. <br /> <br />Table 4. Conservative PARS Plan Account Balance <br /> <br />Page 262 of 908