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6.B. - Page 3 of 46 <br />to assess emerging news and market trends. They have undertaken a wholesale review of all issuers on <br />the approved list and redoubled ongoing monitoring and due diligence efforts. Although the portfolio's <br />allocation to credit instruments negatively impacted the portfolio on a total return basis, the portfolio <br />remains of high credit quality and comprises issuers that we believe will weather the current situation. <br />Interest rates are likely to stay ultra-low through the crisis impacting the portfolio as investments mature <br />and are reinvested in a lower rate environment. The current maturity distribution has less than 6% of the <br />portfolio expected to mature within the next year, but, PFM's strategy has been, and will continue to be <br />to focus on security and liquidity, and "stick with the plan". <br />The situation remains fluid and will continue to be until the virus is contained and full economic activity <br />can resume. PFM has provided an in-depth market summary and discussion on their investment strategy <br />and outlook in the attached investment report. <br />FISCAL IMPACT <br />The City's portfolio received $1,819,987 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 $26,750 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 City 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 City 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 />61 <br />