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S.B. - Page 3 of 59 <br />we have also seen spreads widen between Treasuries and all other sectors and so, while the portfolio <br />should have a positive total return for the quarter ended March 31, 2020, it will likely underperform the <br />City's all Treasury benchmark. <br />PFM remains focused on the safety and liquidity of the portfolio. Despite spiking interest rate spreads on <br />sector products (corporate notes, etc.) they are cautious about adding these types of securities to holdings <br />and have put new credit purchases on hold for the time being. PFM will assess and evaluate their stance <br />on credit continuously as the situation remains fluid and will continue to be until the virus is contained <br />and economic activity can resume. <br />PFM has provided an in-depth market summary and discussion on their investment strategy and outlook <br />in the attached investment report (Attachment A), but this information is now out of date thus a market <br />update as of March 25th is attached to this report for your reference (Attachment B). <br />FISCAL IMPACT <br />The City's portfolio received $1,527,816 in net interest earnings over the reporting period. All interest <br />earnings are allocated monthly through a preset methodology that spreads earnings to the appropriate <br />funds. Fees for PFM's services during this period were $26,949, and are deducted from the total interest <br />earnings. There is no additional budget appropriation required. <br />ENVIRONMENTAL REVIEW <br />This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA <br />Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably <br />foreseeable indirect physical change in the environment. <br />PUBLIC NOTICE <br />Public notification was achieved by posting the agenda, with the agenda items being listed, at least 72 <br />hours prior to the meeting. <br />ALTERNATIVES <br />The Council can ask staff to provide the investment report in a different format, or to include different <br />information. Staff could return at a future Council meeting with an updated report. <br />Page 3 of 4 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />12 <br />