AgdaPkt 2019-09-09 Joint SA PFA - Laserfiche WebLink

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6.A. - Page 3 of 44 rates has reduced the likelihood of outperformance as it increases the probability of a call before maturity). AAA—rated asset backed securities had declined to 10 -year lows through the first quarter, but have recently widened back to levels that offer attractive incremental income compared to similar duration government securities, and PFM will seek to maintain those allocations. The range of short-term, high quality credit has continued to shrink, and careful maturity selection around the Fed meeting expectations will be an important consideration going forward, particularly with both the Treasury and credit yield curves inverted. PFM will continue to focus the credit allocation on high quality issuers with relatively less exposure to international trade risks. The corporate spread curve remains positively sloped, offering modest value for extending corporate maturities. PFM will continue to monitor incoming economic data, federal policy, and sector relationships to identify market opportunities. PFM has provided an in-depth market summary and discussion on their investment strategy and outlook in the attached investment report. FISCAL IMPACT The City's portfolio received $1,645,773 in net interest earnings over the last quarter. All interest earnings are allocated monthly through a preset methodology that spreads earnings to the appropriate funds. Fees for PFM's services during this period were $24,925, and are deducted from the total interest earnings. There is no additional budget appropriation required. ENVIRONMENTAL REVIEW This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably foreseeable indirect physical change in the environment. PUBLIC NOTICE Public Notification was achieved by posting the agenda, with the agenda items being listed, at least 72 hours prior to the meeting. After approval, the Quarterly Investment Report will be posted on the City Website under Financial Information — Investments at the following link: Redwood City Investments ALTERNATIVES The Council can ask staff to provide the investment report in a different format, or to include different information. Staff could return at a future Council meeting with an updated report. City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org 7