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6.1.C. - Page 3 <br />issuance is down significantly year-to-date, but offers positive diversification to the <br />portfolio. Negotiable certificates of deposits (CD) and ABS offer attractive incremental <br />income compared to government security alternatives. Short-term money market <br />investments such as commercial paper and CDs have a steep yield curve, offering <br />opportunities to extend maturities and add to allocations in this space. <br />PFM will continue to monitor incoming economic data, federal policy, and sector <br />relationships to identify market opportunities. PFM has provided an in-depth market <br />summary and discussion on their investment strategy and outlook in the attached <br />investment report. <br />ALTERNATIVES <br />The Council can ask staff to provide the investment report in a different format, or <br />include different information. Staff could return at a future Council meeting with an <br />updated report. <br />FISCAL IMPACT <br />The City's portfolio received $761,389 in net interest earnings over the last quarter. All <br />interest earnings are allocated monthly through a preset methodology that spreads <br />earnings to the appropriate funds. Fees for PFM's services during this period were <br />$23,750, and are deducted from the total interest earnings. <br />ENVIRONMENTAL REVIEW <br />This activity is not a project under CEQA as defined in CEQA Guidelines, section <br />15378, because it has no potential for resulting in either a direct or reasonably <br />foreseeable indirect physical change in the environment. <br />SYLVIA BRAVO PETERS <br />DEPUTY TREASURER <br />U <br />KIMBRA MCCARTHY <br />ASSISTANT CITY MANAGER of ADMINISTRATIVE SERVICES <br />